Stocks and Crypto Retreat as Investors Eye Key Events

DAILY MARKET OVERVIEW

Inflation Fears

👋 Hey Crypto Enthusiasts! We’re kicking off the week with a rollercoaster of market moves. Stocks slipped on renewed inflation concerns, altcoins took a beating amid heavy liquidations, AI agent tokens are in full retreat, and MicroStrategy just can’t stop stacking Bitcoin. Let’s dive in! 🚀

Stocks Slip as Key Inflation Data Looms 📉 

The Crypto market U.S. stocks mostly fell on Monday, extending last week’s slump sparked by a stronger-than-expected jobs report.

Bitcoin briefly dipped below $90k while the S&P 500 and NASDAQ both sank. Investors now await Wednesday’s Consumer Price Index (CPI) report, with analysts predicting an annual inflation rate of 2.9%, up from 2.7%. If inflation comes in hot, it could reinforce the idea that the Federal Reserve will keep rates higher for longer, dashing hopes for near-term rate cuts.

Meanwhile, several major U.S. banks are due to kick off earnings season this week, which may reveal how large institutions are coping with tighter financial conditions.

Liquidations & AI Tokens Experience a Sharp Correction 🤖 

Cryptocurrencies faced a whirlwind 24 hours as bearish sentiment triggered over $328 million in liquidations - most of them from traders betting on higher prices. Ethereum, Solana, and Cardano each took double-digit losses over the last week, reflecting a broader move away from riskier assets for the time being.

AI tokens also suffered significant declines. Projects that soared in recent months, like ai16z and Virtuals protocol, lost nearly half their value in the past week, suggesting the hype around AI-driven tokens may be slowing down for now.

Some see this as a much-needed cooling off that allows truly promising AI projects to stand out in an otherwise crowded field. For now, the slide highlights just how quickly speculative markets can turn, especially when macroeconomic pressures are pushing investors toward safer bets.

MicroStrategy Continues Its Bitcoin Buying Spree 🟢 

Amid the broader market uncertainty, MicroStrategy once again made headlines by purchasing 2,530 more bitcoins for $243 million at an average price of $95,972. The company now holds a staggering 450,000 BTC - about 2.1% of Bitcoin’s total supply.

While many see MicroStrategy’s relentless acquisition strategy as a bullish signal for the crypto space, others caution that the firm’s extensive use of share sales and debt raises questions about long-term sustainability. Nonetheless, its commitment to Bitcoin remains one of the market’s most-watched stories.

Looking Ahead 🔮 

With inflation data on deck, traders and investors across all markets are bracing for possible volatility. Bank earnings will shed light on whether the financial sector anticipates a more challenging 2025, and crypto participants will be watching for any sign that the liquidations and sell-offs have run their course.

As always, stay alert, stay informed, and navigate these markets with care. We’ll be back soon with more updates - until then, invest responsibly!

THIS NEWSLETTER IS BROUGHT TO YOU BY:
OPENWALLET

Next-level security for your digital assets

Experience top security with Open Wallet. Your wallet blends user-friendliness with strong security.

SOCIAL SENTIMENT

Social Expectations

Market conditions have been rough lately, but what do traders and analysts expect?

Many experienced market watchers currently anticipate Bitcoin finding a floor at around $86,000 and Ethereum at $2,800. In a more extreme (black swan) scenario, Bitcoin could dip to $75,000, which we see as a worst-case outcome.

Meanwhile, the altcoin chart is approaching critical support. Based on current indicators, a 10–15% pullback for major altcoins seems likely before they potentially find a bottom.

It’s important to keep a close watch on economic data coming out in January, as we expect this month to be bearish overall. However, February is shaping up to look more promising.

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

UK Prime Minister to Turbocharge Economy with AI Plan
Prime Minister Keir Starmer’s "AI Opportunities Action Plan" aims to boost Britain’s economy by £47 billion annually through AI-driven jobs and innovation.

U.S. States Consider Strategic Bitcoin Reserves
Five U.S. states, including Texas and Pennsylvania, are exploring Bitcoin reserve proposals, aiming to hedge inflation and foster digital asset innovation.

New York to Serve Crypto Scam Lawsuit via NFT
Attorney General Letitia James plans to serve a $2.2M crypto scam lawsuit through NFT, targeting alleged fraudsters exploiting remote job seekers.

Singapore Blocks Polymarket Over Gambling Laws
Singapore’s regulator has banned access to Polymarket, citing gambling law violations, as the crypto prediction platform faces mounting global scrutiny.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

DataDash - Bitcoin & Altcoins Are Collapsing | It's Time To Pay Attention... (13.01.2025 Summary)

DataDash believes Bitcoin and altcoins are showing clear signs of weakness and may be poised for a correction. He points out that Bitcoin has struggled to hold above its 21-day moving average, a key indicator that previously supported higher price levels. In his view, the fact that the moving average now acts as resistance indicates there is more selling pressure than buying support. He warns that if Bitcoin cannot reclaim that level soon, it could drop to the 100-day moving average around 85 to 87 thousand dollars or even down to the 200-day near 75 to 80 thousand.

He also highlights shrinking inflows from key players like MicroStrategy, once a major buyer during Bitcoin’s upward run. According to him, MicroStrategy’s slowdown, combined with lower ETF inflows, suggests that the strong buy-side demand needed to keep pushing Bitcoin higher has weakened. DataDash sees a similar story in the altcoin market. He notes that altcoins have fallen below important moving averages, and major coins like Ethereum have been unable to break resistance against Bitcoin. He expects altcoins to underperform Bitcoin if a correction occurs.

DataDash believes it is not just crypto showing signs of stress. He points out that stocks, including the S&P 500, the NASDAQ, and the Russell 2000, are also failing to hold above their own moving averages. Because he sees Bitcoin as a risk-on asset, he thinks further declines in equities could spill over into crypto, bringing prices down.

Still, DataDash is not entirely pessimistic. He emphasizes that corrections are part of normal market cycles and can offer good buying opportunities. In his view, having cash on hand and waiting for clearer signs of market strength is a safer strategy than staying fully invested. He also suggests paying attention to other emerging sectors outside of crypto that may provide larger gains over time.

Benjamin Cowen - Bitcoin: Bull Market Support Band (13.01.2025 Summary)

Benjamin Cowen believes Bitcoin’s bull market support band keeps rising because the price is still above both the 20-week SMA and the 21-week EMA. He points out that this band sits somewhere between 81 thousand and 84 thousand dollars. According to Cowen, Bitcoin has stayed above 90 thousand dollars through December and into January, which reminds him of a similar sideways period in a past cycle. However, he warns that history does not always repeat itself.

He pays close attention to the 100-day moving average, currently near 86 thousand dollars. He thinks Bitcoin might meet this average either by dropping down to it or by letting the average climb up to match the price. A quick drop and strong bounce would be similar to early 2024, while a slower dip under recent lows would mirror 2023, when Bitcoin briefly returned to its earlier breakout point before moving higher again.

Cowen also notes that in previous years like 2017 and 2021, Bitcoin had mid-cycle corrections of about 30 percent in January. Even though Bitcoin has remained above its bull market support band this time, he makes it clear that nothing guarantees it will continue to do so.

He believes the 10-year yield is a major factor. When the yield rises, it can put pressure on risk assets such as Bitcoin. In the past, Bitcoin’s dips sometimes lined up with increases in the 10-year yield. Despite this uncertainty, Cowen highlights the importance of good risk management. He encourages having a plan for various outcomes and knowing when to buy or sell. Since nobody can predict the future with certainty, he feels that staying balanced and prepared is the best approach.

CRYPTO MEMES