Crypto Market Forecast: Week of January 18th 2021

A choppy week in crypto markets ended with the ecosystem’s two largest assets trending down.
The Bitcoin price dropped by ~6% and the Ethereum price was down ~4% over the week. The USD40,000 BTC price level was met with strong resistance and rejected for a second week in a row as the Bitcoin price ranged from USD39726 and USD35339 for 24 hours between Thursday and Friday last week.

Elsewhere amongst large caps, the Ripple price (XRP) fell by ~10% while staking assets Cardano (ADA) and Polkadot (DOT) had stellar weeks rising ~29% and ~93% respectively.

Despite the recent volatility of bitcoin, retail buyers remain undeterred and continue to flock to mainstream retail platforms. On January 12th Paypal cleared USD242 million in crypto sales through its exchange partner ItBit, this is more than double its previous trading record. The growing traction of the company’s crypto strategy is also gathering backers from traditional finance. Dan Dalov, analyst at Mizuho, upped his price target for Paypal holdings Inc.’s stock from USD290 to USD350 citing the recent momentum of the payment giant’s crypto product set. Dolev sees the potential for Paypal to generate nearly USD 2 billion from crypto activity in 2023 adding nearly 10% to its adjusted net revenue.

"Both our survey and management commentary unveil a dramatic increase in engagement due to crypto," Dolev says."As evidence, PayPal recently said that 50% of its crypto users are opening the PayPal app daily."

Israeli trading and investing platform Etoro warned customers in Europe on Friday of possible limitations on crypto purchasing over the weekend. In an email the exchange said: “The unprecedented demand for crypto, coupled with limited liquidity, presents challenges to our ability to support buy orders over the weekend. In light of this, it may be necessary for us to place limitations on crypto buy orders.”

Digital asset research firm Delphi Digital noted on January 12th that the Bitcoin supply on exchanges dropped from 2.418 million to 2.344 million during last week’s sell-off with blue-chip American exchange Coinbase accounting for 80% of those outflows.

Charts from blockchain data provider CryptoQuant show that the total amount of ETH held on all exchange wallets has steadily declined since late June 2020. If the amount of Bitcoin and crypto available on exchanges continues to diminish, a supply-side crisis may emerge that will weaken the amount of selling pressure across the market. More crypto being held privately as opposed to on exchanges is a sign of strong investor holding sentiment and is a potentially bullish signal.

Crypto news for the week ahead

January 18th – Leverj.io UI release

Leverj, a decentralized crypto exchange that offers fast derivatives trading using Ethereum layer 2 technology, launches a three-pronged user interface update. The update will come with a new asset selection tab and search, an improved layout on its trading page, and a new wallet page. The exchange has experienced a surge in trading volume since it launched perpetual contracts four weeks ago. The price of the platform’s native token, Leverj Gluon (L2), has risen ~73% in the last week.

January 19th – Crypto.com delists XRP

Hong Kong-based exchange Crypto.com will officially delist and suspend trading of XRP for customers in the United States this Tuesday. The blog post announcing the delisting states that withdrawals will not be affected.

Top 10 Crypto Summary

It was a mixed week for large-cap assets on the Brave New Coin market cap table. Some assets in the top enjoyed eye-catching gains, with Chainlink (LINK) positioned as the top gainer rising 42% in the last week. The price pickup has been supported by strong fundamentals. Santiment reported on January 16th that the network had just had its highest day of active address activity in 5 months.

Bitcoin Price Chart

It was a typically volatile price week in crypto markets with the Bitcoin price ranging between USD30,748 and USD39,762. While the BTC price on exchanges continues to be volatile, fundamentals for the network remain robust. The number of Bitcoin addresses holding at least 1,000 hit a new all-time high last week while other key metrics like hashrate continue to rise steadily.