Sirwin
Sirwin

The Stablecoin Market is Shaking! What’s happening with Bitcoin?


The stablecoin market is shaking ahead of the most important week for the US economy. Justin Sun TRON’s algorithmic stablecoin USDD has fallen, and the current price is 0.971 US dollars. This is not the first time that USDD lost its dollar peg, we’ve already seen it happen multiple times, the most recent one during the FTX crash. USDN, the stablecoin of WAVES ecology, has also fallen sharply in the past 12 hours, and the current price is only $0.78.

 

Bitcoin, however, held its overnight gains, having hit a three-week high at $17,300 on Dec. 5. The weekly close was encouraging for some, forming Bitcoin’s highest since the FTX scandal broke. Traders were hoping that the upside would continue toward $20,000, with various resistance zones in play, However, it didn’t go according to plan.

In a note to investors, Standard Chartered suggested that “The financial-market surprises of 2023” will include Bitcoin price diving to $5,000 at some point in the year. On Dec. 7, Bitcoin hit new month-to-date lows at $16,736 as Asian markets fell during trading. But shortly after, Bitcoin managed to reach the psychological level of $17,000

There were no major market-moving events or announcements, besides the PPI, which came at 0.3% higher and pushed the price down $200. Overall, it was a boring week for Bitcoin traders, but the stability of the market may be a positive sign for the future.

Meanwhile, some big banks are moving into or out of the crypto market. Signature Bank, the only crypto-friendly bank on Wall Street until this week, announced that it will leave the crypto market. The company will shrink their crypto-related deposits by $8B to $10B in the face of recent instability(FTX again). At the same time, Goldman Sachs is looking to deploy some real cash. The investment bank has prepared tens of millions to purchase bargain crypto companies after the prices dropped during the FTX crash. The hunt has begun!

To be fair, Goldman Sachs is not the only company with the cash prepared to be injected into the crypto market. Gate.io has established a $100 million industry liquidity support fund for all the crypto companies that face liquidity crises. This is the third biggest liquidity support fund in the crypto industry!

More news from Alameda and Sammy! Not only did Alameda’s investment portfolio got leaked this week, but we’ve also found out that The Block was given $43M in loans since 2021. The Block’s CEO, Michael McCaffrey, immediately resigned after the loans came to light. Also, it’s important to mention that Canada’s largest pension fund, has abandoned research on the crypto market. The fund manages about $388B for 20 million Canadians. Guess who’s to blame here!

The NFT market isn’t doing any better. To be fair, November has been the worst month since 2021 for the NFT market. November’s volume on the top five NFT marketplaces was $394.02M, down by over $100M or -20% compared to October. Furthermore, November’s monthly sales volume is the lowest in 2022. The 24-hour NFT trading volumes have fallen as well, from $349M on Nov. 1 to $8M on Dec. 1.

The NFT market is not only using cash but also active addresses. The number of addresses that traded NFTs also trended downward this year. In October it ranged from 155K addresses to 135K addresses, while in November it ranged from 120K addresses to 124K.

But hey, if the web3 companies will continue building, we should be fine. The thing is, that’s exactly what Decentralnd is doing right now. As of today, Decentraland has announced that owners of lands can rent them to other users. The new system ensures the safety of both LAND owners and tenants to rent LAND. The LAND will be stored in a server managed by the Decentraland Foundation (off-chain).

Bitcoin is trading at $16,940 at the moment, down 1.48% in the last 24 hours as investors wait for the release of the Consumer Price Index (CPI) on December 13. Traders seem to have booked profits before the busy economic calendar this week. The S&P 500 index dropped 3.37%, but a minor positive for the cryptocurrency markets is that Bitcoin has not followed the equities markets’ lower.

With just a couple of occasions, the largest cryptocurrency by market capitalization has held firmly above $17,000 for the past two weeks as the fallout from crypto exchange FTX’s implosion and other industry debacles have slowed.

But enough of the past week, let’s talk about what waits for us in the next one!

Firstly, on the 13th of December, we’ll have the FOMC meeting associated with a Summary of Economic Projections. The Federal Reserve may scale back the pace of its interest rate hikes already in December, which will have an impact on the crypto prices and level of interest for crypto investments. The Crypto Fear Index, which sits at 26 right now, will skyrocket again as the authorities fail to deliver on their promise not to hike the interest rates.

On the 15th of December, we’ll also witness the interest rates for the UK and Europe. European Central Bank policymakers agreed that the central bank should continue normalizing and tightening monetary policy to combat high inflation, even in the event of a shallow recession. Therefore, we should wait for higher interest rates. The same goes for the Bank of England, which will raise the interest rates by another 75 bps.

The crypto world also has some interesting news to share. Binance will introduce an Ape NFT Staking Program on its NFT platform. Users may start depositing their Ape NFTs to Binance using the newly optimized deposit process to prepare for the program’s launch or purchase Ape NFTs at the Binance NFT Marketplace.

What to expect from Bitcoin in the next week? While some analysts anticipate a Christmas rally to push Bitcoin toward $19,000, others are not so optimistic. With Bitcoin markets still calm compared with November’s intense volatility, analysts continued to look for upcoming macro cues.

These were firmly in the form of this week’s United States Consumer Price Index print, due Dec. 13. A 50-basis-point rate hike had a 77% probability of occurring, according to CME Group’s FedWatch Tool. The critical level to watch on the upside is $17,622. If buyers kick the price above this level, the BTC/USDT pair could start a stronger recovery that could carry it to the downtrend line. The bears are expected to defend this level aggressively. On the downside, the bears may gain strength if the price breaks below $16,678. The pair could then drop to $15,995.

So, this is it for today. Hope you liked it! Don’t forget to follow us on Twitter for the latest crypto news!

 

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