Market Picture
The cryptocurrency market continues to remain sidelined, failing to join the rising stock and metal markets. Suddenly, cryptocurrencies no longer seem like an alternative to fiat money and a hedge against the somewhat irresponsible financial policies of the largest states. The weak performance of cryptocurrencies has been met with a sharp increase in interest in precious metals following their prices. As a result, cryptocurrencies temporarily appear to be a source of funds to strengthen positions in gold and silver. At the same time, cryptocurrencies are not giving up important local support levels, both in terms of market capitalization as a whole and individual coins – Bitcoin, Ethereum, XRP, Solana.
In Bitcoin on Wednesday evening, another batch of sales was executed as the market attempted to rise above $90K, failing once again to return above the 50-day moving average. This curve is gently turning down, further strengthening bearish arguments. On the other hand, BTC has not yet started an active decline after consolidation. A formal signal for the start could be a break of support near $85K. An important question is whether a sharp downturn in metals will help cryptocurrencies regain interest or harm them further? We lean towards the second option due to potential deleveraging, which is dangerous for all risk assets in the initial stage. This is a state of zugzwang, where the next move only worsens the situation.
News background
Bitcoin is trading slightly above $86,600, which is the average entry price for spot ETF buyers, according to CryptoQuant. A drop below this 'psychological barrier' will deprive holders of their 'profit buffer' and trigger accelerated fund selling.
Glassnode reports a market recovery after the October deleveraging. The key trend is a shift in focus from aggressive risk to defensive strategies. Traders have reallocated capital from perpetual futures to the options market.
In January, precious metals outpaced cryptocurrencies in popularity on social media, notes Santiment. Investor attention has shifted to gold and silver due to a sharp rise in their quotes.
Tether holds about 140 tons of gold worth $23 billion in a former nuclear bunker in Switzerland, said company head Paolo Ardoino. This makes Tether the largest private stockpile of physical gold in the world. Last year, the company acquired over 70 tons of precious metal and intends to continue purchasing.
In early February, Fidelity will launch its own stablecoin on the Ethereum blockchain. The creation of the asset will be a response to the growing demand from clients and part of a strategy to expand the practical utility of blockchain-based financial instruments.
Ripple has introduced Ripple Treasury — a platform for corporate treasury management. The solution allows for the management of traditional cash and digital assets within a single system to simplify cross-border payments and liquidity management.