By Omkar Godbole (All times ET unless indicated otherwise)
The cryptocurrency market is experiencing a positive trading environment as significant risks associated with Federal Reserve events have been mitigated. Investors are now focusing on optimistic factors, including a crypto-friendly president in the White House, a resurgence in Tether’s market, and the bullish momentum related to the Chinese New Year.
Among cryptocurrencies with market valuations exceeding $5 billion, Litecoin (LTC) stands out as a top performer. Since early Asian trading hours, LTC has risen over 11%, outpacing broader market gains of 1% to 3%. Its recent surge can be attributed to the SEC’s acknowledgment of Canary Capital’s Litecoin ETF proposal, which is now open for public feedback, hinting at potential approval in the coming months.
Bloomberg Senior ETF analyst Eric Balchunas noted on X, “This is the first altcoin ETF filing to get acknowledged,” indicating its progress in regulatory requirements. The prospect of a listing could have a similarly positive impact on LTC as previously seen with Bitcoin (BTC) and Ethereum (ETH). However, despite a price jump to $130, LTC remains below its record high of $410 achieved in 2021. The price chart presents a constructive outlook (see Technical Analysis section below).
Additionally, on-chain activity tracked by Glassnode indicates a lower level of retail participation in BTC compared to last November, which is encouraging for bullish traders seeking validation of whether the latest uptick above $100,000 is sustainable. Meanwhile, Lombard Finance is emerging as a dominant player in the Bitcoin staking landscape, capturing a significant share of total BTC staked this week.
A resurgence in Ethereum usage is also evident, with active addresses on the network recently surpassing a March 2024 high, according to IntoTheBlock data. Ether’s price is hovering above $3,200 but has yet to breach the bearish trendline formed between the December 16 and January 6 highs.
In the traditional markets, the yield on the benchmark U.S. 10-year Treasury note has dipped to 4.50%, reflecting bullish sentiment for risk assets. BTC investors may be hoping for a softer-than-expected U.S. core PCE inflation reading later today, which could further pressure bond yields downward. Additionally, the upcoming fourth-quarter GDP data and weekly jobless claims reports are crucial indicators to monitor. European gas prices have surged to a 15-month high, potentially introducing volatility into risk assets.
What to Watch
Crypto:
- Jan. 31: Crypto.com will suspend purchases of multiple cryptocurrencies in the EU to comply with MiCA regulations.
- Feb. 2, 8:00 p.m.: Major upgrade for core blockchain Athena hard fork network (v1.0.14).
- Feb. 4: Pepecoin (PEPE) halving event.
Token Events:
Governance: Rarible DAO is voting on collaboration with the Rari Foundation for multichain protocol fee collection, while CoW DAO is considering a large allocation of COW tokens for liquidity and development.
Market Movements:
As of the last update, BTC is up 0.86% to $105,190.06, while ETH has risen 2.63% to $3,134.98. The overall CoinDesk 20 index is up 1.74% to 3,826.50. Traditional assets like Gold and Silver also show positive movements as market conditions remain favorable.
Conclusion
The cryptocurrency market appears to be steadily recovering with positive investor sentiment and key developments signaling potential growth. As market dynamics change, it is crucial for participants to remain informed about regulatory shifts, macroeconomic indicators, and upcoming token events to make well-informed decisions in this volatile landscape.
