In today’s bitcoin and cryptocurrency news, discover that it’s possible that the time for price capitulation has passed, and that now we’re just stuck in a holding pattern until the market turns. Meanwhile, with crypto markets falling and tech businesses lowering their growth projections, cryptocurrency exchange Coinbase said on Tuesday that it will lay off around 20 percent of its staff. Lastly, Ethereum may provide the stability and development prospects that investors need.
A Waiting Game for the Return of Interest in Bitcoin
Original Source: Bitcoin: A Waiting Game For Interest To Return
After a recent retreat, we wish to emphasize Bitcoin (BTC-USD) volume and volatility as we enter 2023. In October’s “The Bitcoin Ghost Town,” we warned that a period of low activity and volatility in Bitcoin price, Grayscale Bitcoin Trust (OTC:GBTC), and the options market was a warning sign for the next leg lower. This occurred in early November.
Low volatility and falling volume are back. This might indicate another move lower in the market, but it’s more likely a complacent, devastated market that few want to touch.
Even the November 2022 capitulation phase had unusually low volatility. Waiting for a trend change might hurt the market the most. We haven’t seen the market volatility explosion that has defined market pivots and large directional changes, therefore the Bitcoin price is causing that agony.
September and November 2021 were the busiest months for Bitcoin volume, regardless of how it is defined, classified, or estimated. Since then, volume has steadily declined in both spot and perpetual futures markets.
After the fall of FTX (FTT-USD) and Alameda, market depth and liquidity have also suffered. Due to a shortage of market makers, their destruction has created a massive liquidity hole.
Bitcoin is currently the most liquid cryptocurrency or “token” market, but because the industry has been battered in recent months, it’s still somewhat illiquid compared to other financial markets. Lower market depth and liquidity make assets more volatile since single, big orders can have a greater influence on market price.
Apathy on Chain
On-chain data shows increasing market complacency, as predicted in the present situation. Over the past few months, the number of active addresses—unique addresses used as senders or receivers—has remained pretty stable. The figure below shows the previous year’s 14-day moving average of active addresses falling below the running average. Active address growth has exceeded the tendency in past bull markets.
Address data contains problems, therefore Glassnode’s data for active entities exhibits the same pattern. Many variables, including new users and on-chain activity, cause bear markets to reverse.
To determine if on-chain activity and momentum are rising or decreasing compared to the trend, we can examine transfer volume moving averages across different time periods. Before the exchange rate recovery cycle begins, on-chain activity has increased relative to trend in preceding weak markets.
When comparing the 30-day and 365-day moving averages, on-chain transactional activity is decreasing today. This does not suggest that the asset will fall in price or deteriorate, but that a substantial trend change has yet to occur.
Finally, we can calculate the seller exhaustion constant by multiplying the fraction of Bitcoin supply in profit by the 30-day realized volatility. Given low profitability and historically low volatility, the metric’s name aptly describes its goal: to assess when sellers may be fatigued.
In our July 11 publication “When Will The Bear Market End?”, we argued that the price-based surrender had already been felt, but the true anguish lay ahead in the shape of a time-based collapse.
“Bitcoin bear market cycles include two separate surrender phases:
“The first is a price-based surrender, through a series of violent selloffs and liquidations, as the asset falls down anywhere from 70 to 90% below prior all-time high levels.
The time-based capitulation, where the market eventually finds an equilibrium of supply and demand in a deep depression, is the second phase.
Today, we feel we’ve capitulated. Given the macroeconomic headwinds that remain, exchange rate pressures can certainly intensify over the short term, but the conditions that look likely to persist over the short and medium term are a sustained period of chop with extremely low volatility that leaves traders and HODLers wondering when volatility and exchange rate appreciation will return.
Market chop may be expected in the next months, but time-based capitulation has historically been a rare buying phase for individuals with great faith in Bitcoin’s long-term value proposition.
Coinbase Fires an Additional 20% of Its Employees
Original Source: Coinbase Lays Off Another 20% of Its Employees
As crypto markets teetered and tech businesses reassessed their development plans, the cryptocurrency exchange eliminated roughly a fifth of its personnel in June.
Coinbase, the cryptocurrency trading platform, announced on Tuesday that it will lay off 20% of its staff as crypto markets fall and tech businesses slash their growth projections.
In June, the firm laid off 1,100 workers, roughly a quarter of its workforce. Now, it’s firing off 950 more.
Coinbase CEO Brian Armstrong wrote in the message that “in hindsight, we could have trimmed deeper” in last year’s layoffs. He also hinted that FTX’s collapse, which shook the crypto market, was affecting Coinbase.
“In 2022, the crypto market trended downhill along with the larger macroeconomy,” Mr. Armstrong stated. “We also witnessed the impact of dishonest people in the business, and there might be additional contagion.”
Coinbase, which went public in 2021 and swiftly expanded throughout the epidemic, is under pressure from the bitcoin decline. Since 2021, Bitcoin’s price has dropped about 70%.
Amazon, Meta, and Salesforce have lately announced layoffs, with several, like Coinbase, stating they hired too aggressively in the early phases of the epidemic. High interest rates, persistent inflation, and other factors that have slowed the economy since then have pushed many executives to reassess their plans.
Coinbase claimed the new cuts were part of a quarter-long strategy to lower costs by 25%. Coinbase claimed the layoffs would cost between $149 million and $163 million. Layoffs receive at least 14 weeks of base salary, health insurance, and job placement assistance from the firm.
However, Mr. Armstrong said the demise of “a significant competitor” in the crypto industry may “end up benefiting Coinbase greatly.”
The Following Cryptocurrencies Will Be the Hottest in 2023
Original Source: These Will Be the Hottest Cryptocurrencies in 2023
Last year, these two cryptos dropped 67% and 81%.
2021 was a banner year for cryptocurrencies. Over $3 trillion was market worth. Bitcoin and Shiba Inu soared. In 2022, everything changed. As major stock indexes fell and inflation rose, investors fled risky assets like cryptocurrencies.
Why is crypto dangerous? Since it’s young and we don’t know what the terrain will look like in a few years. But there’s good news. Today’s economic issues may be weighing on crypto, but they haven’t impacted what each participant offers. That suggests you should still be hopeful about crypto’s future if you were in 2021. Which cryptocurrencies may be trendy this year? Let’s see.
The second-largest cryptocurrency is Ethereum (ETH 0.50%). The most developers and decentralized apps are on it (dApps). Ethereum also leads in selling non-fungible tokens.
Ethereum is used a lot. In a sea of thousands of cryptocurrencies, that’s crucial. It may also reassure investors who are wary of the crypto sector yet want to test it. In 2023, Ethereum may be the cryptocurrency that attracts investors.
Ethereum’s improvement may appeal both cautious and aggressive investors. High energy utilization, transaction fees, and sluggish performance were Ethereum’s three main issues. To fix these vulnerabilities, the blockchain is upgrading.
Last year’s migration to proof-of-stake transaction validation reduced energy utilization by more than 99%. Sharding, or horizontally partitioning a database, will be introduced this year to lower prices and speed up transactions.
Investors will enjoy Ethereum upgrades since they will attract more users. Last year, Ethereum dropped 67%. However, the crypto’s future is brightening. At today’s pricing and considering Ethereum’s progress, this player might become a crypto investor favorite.
2. Cardano Last year, Cardano (ADA 0.73%) fell 81%. Cardano, like Ethereum, may offer a safety option for apprehensive investors. No, Cardano isn’t a leader yet. However, Cardano may attract investors because to its careful blockchain development.
Before updating, Cardano employs peer review. This maintains stability but slows progress. That may appeal to investors in today’s market. Since its introduction, Cardano has never missed a block of data during validation or had a network breakdown during updates.
Other reasons exist to favor Cardano presently. The crypto upgraded last year to advance in dApps. According to Coingate, Cardano was one of the top 10 payment cryptos last year. People are utilizing Cardano more. Cardano adoption should increase with the launch of two stablecoins early this year.
Finally, Cardano engineers are working on something amazing that might make the network one of the quickest. The Hydra Head upgrade. These Hydra Heads should be able to conduct some transactions off the main chain. Congestion is reduced and speed is increased.
Cardano is a young player with a lot of potential, and its development gives some protection. This combination may appeal to investors in 2023. And it might make Cardano one of the hottest players.
Summary of today’s bitcoin and cryptocurrency news
Simply put, a decline in the number of active addresses and organizations indicates a decline in Bitcoin popularity. It looks like there will be a lot of chop for a long time in the near and middle future.
Meanwhile, Coinbase says that the recent layoffs are part of a quarter-long plan to cut costs by 25%. According to Coinbase, the cost of layoffs might be as high as $163 million. Employees who have been laid off will get health insurance, unemployment benefits, and help seeking new employment in addition to their regular base salary for a minimum of 14 weeks.
Lastly, Cardano, a relatively new participant, is making significant strides in several key areas, including the creation of a scaling solution.