February 14, 2022

$BTC 24 Hour High $42,780 / Low $41,882 | $BTC +0.3% Past 24 hours; +1.8% Past 7 days

Setting for a bull trap as calls mount

Good morning. $BTC saw an uneventful weekend as it continued to trade sideways and failed to break the key resistance levels that had started to form. Stay cautious for a potentially volatile week ahead of the Fed’s unexpected “emergency meeting” on Monday, with interest rates the only item on the agenda. In addition, the market sentiment also continues to turn sour as tensions in Ukraine mount after the White House urged Americans to leave Ukraine within 48 hours. With fundamental news being predominantly bearish, more investors have started to view this move as a bull trap.

At present, $BTC is consolidating on the 50D MA while breaking the downward trend. If the support level at $41,740 fails to hold, we expect a move down towards $39,700. On the off chance that it plunges below the ultimate support at $36,990, we may consider invalidating the BTC’s entire bullish price structure. However, we aren’t entirely opposed to a retest of the downward-trending resistance-turned-support either. $BTC’s current price action is still incredibly similar to the impulse move in July of last year. It’s worth noting that the decoupling of $BTC and $ETH from tradfi has become more evident based on a decline in positive correlation. Thus, any price action in the traditional finance market will have a less aggressive impact on the digital asset market. For this reason, any short-term pullbacks could be potential top-up opportunities.

Compared to $BTC, the call for a bull trap is much more visible in $ETH’s chart. Though we see a breakout of the downward-trending resistance line (refer to the log chart), prices didn’t move higher. We are now retracing to the 0.618 Fibonacci retracement levels at $2,870. Given the relative weakness of altcoins in the last few days, we shouldn’t discount the possibility of a move to $2,718. Nevertheless, we are still witnessing some desirable price action since prices bottomed out in January. We are still making higher highs and higher lows, and retesting previous resistance areas as support. This recovery trend is still intact until $ETH plunges below $2,575, so rest assured that we are some way off that still.

According to PwC’s recent report, digital asset-related M&As soared from $1.1B in value in 2020 to $55B in 2021, a staggering 50x jump. 2021 saw more activity shift back to the Americans, and the region increased its share of M&A deals from 41% to 51%. EMEA saw $25.5B worth of deals done, with APAC having the smallest slice of the M&A pie at only $5B. The average M&A size also grew significantly from $53M to $180M though the averages were pulled up by a couple of mega-billion dollar special purpose acquisition company (SPAC) deals concluded. Fundraising efforts were also notable, jumping 645%, from $4.5B to $26.3B.

Learn more from today’s Trader View video.

Digital assets market:

  • Total crypto market capitalization stands at $1.97T, -0.5% from yesterday
  • $BTC is +0.19% at time of writing; 24H liquidations and funding rates: $13.40M, +0.00768% average
  • $ETH is +0.61% at time of writing; 24H liquidations and funding rates: $17.26M, +0.00915% average
  • Stablecoins market dominance: USDT 43.64%; USDC 29.09%; BUSD 9.78%; TerraUSD 6.39%; DAI 5.46%

Alts and DeFi watch:

  • DeFi TVL: $202.04B (-0.36% over last 24h)
  • $SOL -2.5% in the last 24 hours, -18.5% in the past week
  • $SHIB +4.5% in the last 24 hours, +34.2% in the past week
  • $SAND -2.8% in the last 24 hours, -6.3% in the past week
  • $ENJ -3.2% in the last 24 hours, -9.4% in the past wee

More news that caught our eye:

OSL Trader View is contributed by Stefan von Haenisch & Ethan Fu.

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