13 Feb, 23

Weekly Crypto Market Wrap, 13th February 2023

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Week in Review

Winners & Losers

Data source: Tradingview

Macro Environment

  • Balance of Trade numbers from Australia (AUS) and the United States (US), released earlier in the week embodied shifting global cost pressures, and the effects of China’s resurgence as a major manufacturing and export powerhouse, following the abolition of its COVID Zero policy late last year. The seasonally adjusted balance on goods and services in/out of Australia fell $1.2 billion to $12.2 billion AUD in December, displacing expectations for a fall in surplus to $12.5 billion AUD. Australian imports rose by $445 million, whilst exports shrunk by $793 million – a move synonymous with a decreased global demand for Australian minerals, and easing supply chain bottlenecks. 
  • The US on a similar note, realised a widening of its trade deficit to – $67.4 billion in December. More notably, on an annualised basis the US trade deficit grew to -$948.1 billion in 2022 – a new record print. Analysts attributed the $425.7 billion annual surge in import expenditure to a cost associated with supply chain diversification, and rising costs of energy inputs. US Crude Oil Imports rose $65.1 billion alone in 2022. Also in the US, Initial Jobless Claims (released weekly) exhibited a jump in unemployment benefits claims  (+196,000) for the week ending February 4 – rebounding off of the January 29th 9-month low of +183,000.
  • The Reserve Bank of Australia (RBA) paired market forecasts with a rise in the cash rate of 25 bps to 3.35% in its February meeting.  In its statement on monetary policy released on Friday, the RBA touched upon the state of the global economy, citing “Global inflation is still very high but looks to have peaked.” Both the RBA and FED are aligned in their views that the pricing of goods appears to be normalising and largely disinflationary; with a halt in energy price increases, easing supply chain issues and lesser “upstream cost pressures.” Despite this, services side inflation continues to be sticky,  rising costs of rent amongst other core contributors have seen “the prices of market services 7% higher YoY.” Current RBA projections place inflation returning to the target band of 2-3%, in mid-2025 – with continued rate hikes imminent.
  • Despite looming recession fears, US consumer optimism edged slightly higher in February – the preliminary results for the Michigan Consumer Sentiment index rising 1.5 points higher to 66.4. On the other hand, the release of more robust labour force data saw inflationary expectations climb higher to 4.2% vs 3.9% the month prior – amidst an uptick in short-term inflationary expectations.

Market Analysis


Data source: Tradingview
  • Rolling into the new week, BTC persisted sideways, remaining elevated above the 22,800 level yet failing to make notable grounds above 23,000. Volatility picked up late during Tuesday’s session and action seesawed with BTC marking weekly highs above 23,400 before retracing lower. Alongside negative momentum, BTC shifted lower, finding support at the 21,600 level and closing at a -5.03% WoW. An overarching propensity toward risk-off suggests price may favour the downside in the short term. The 20,500 level marks the next notable support, a break here and we may face consolidation at the 19,000 level before any notable moves higher are justified.


Data source: Tradingview
  • In tandem with BTC, ETH remained confined until Tuesday’s session where the price ascended above the monthly resistance placed at 1,680 before quickly reverting lower. The 1,610 support showed signs of strength until growing sell volumes on Thursday sent the price toward 1,500. Price struggled to ascend higher into the weekend and ETH closed -6.99% WoW at 1,515. The 1,500 support now acts as key short-term support, with a lack of support until 1,300.
  • The fallout from the prior Friday’s NFP data continued to impact markets last week. As participants continued to reevaluate the possibility of extended tightening of monetary conditions, equities and bonds moved lower early in the week with DXY moving higher. The topheavy effects of this readjustment was reflected in ETH and BTC’s inability to make notable gains early on.
  • While markets ascended following Fed Chair Powell’s speech on Tuesday, hawkish undertones of numerous Fed speakers weighed in on risk assets as the week progressed. By Friday, the US 2Y Treasury note yield ascended to yearly highs as participants assigned a higher likelihood to continued hikes. Correspondingly, BTC and ETH moved lower into the weekend.


Data source: Tradingview
  • Following on from a prior week of strength, ETH/BTC initially continued to move higher. ETH’s early relative outperformance pushed the pair beyond the 0.072 level. However, a flip in attitudes and strong de-risking across the board caused the pair to move below 0.070, a level that acted as key resistance in late January. While a weekly close below 0.070 may not fare well for sentiment, the pair was strongly bid down to 0.0690 and hence, we may see this support sustain relevance into the short term.
  • Since the turn of the year, BTC’s hash rate has continued to climb higher. A recent production update from publicly listed miners shows that the number of BTC obtained from mining operations has generally increased for leading BTC mining entities. This includes CoreScentific and Riot as well as CleanSpark who increased production by 50% in January. While this increase suggests we’ve entered the early stages of a bull market, it is also suggestive that we may see firmer hands, such as miners, sell into strength.
Data source: Glassnode
  • Contrastingly, since markets rolled into 2023, we’ve seen the number of Ethereum addresses with greater than 32 ETH diminish. As Shanghai creeps closer, we may see a continuation of this trend as participants unwind ETH positions into the event.
Data source: Glassnode


  • With the recent cooling of short-term price action, the falling implied volatility (IV) of Bitcoin has led to a steeper contango term structure. The positive correlation between IV and Bitcoin’s spot price, which was evident in the early months of 2023, has started to weaken. As expected, the market is anticipating increased volatility for the CPI evident in the near-term strikes. Although, compared to previous CPI reporting dates and subsequent intra-day moves, the current volatility appears to be relatively low and cheap. 
Data source: Deribit
  • The long open interest on the decentralised trading platform, GMX, has almost been reduced by half, from $165 million to $73 million, in the past week. With large long positions opened at the start of the year now being closed and realising profits, open interest is neutral for the first time since early December. The imbalance between longs and shorts can often reflect retail sentiment and positioning, and can often be paired well with other momentum-based indicators to gauge the strength of price movements.
Data source: GMX
  • Last week, we saw moves heavily dictated by adjustments in expectations for January’s U.S. inflation print, scheduled for release on February 14. The prior Friday’s better-than-expected NFP data set the tone early for possible extended hikes, words to this effect following from various Fed speakers. Price is currently residing at an inflection point. Newsflow and macro pricing will play into the short and medium-term moves, and we expect some more downside volatility before the next leg up across all risk assets.

Ecosystem Highlights

  • Lido, a popular liquid staking platform, has plans to enhance its staking rewards and architecture with the launch of Lido V2. The upgrade will feature a new modular staking router, allowing a wider range of node operators to join and make the protocol more adaptable. The release of Lido V2 is planned for early 2023, with testing and a withdrawal credential rotation ceremony already in the works. Lido Finance, the leading decentralised finance protocol with over $8 billion in staked value, is paving the way for the DeFi industry as we move into 2023.
  • The Sandbox, a metaverse gaming platform, entered into a confidential agreement with the Saudi Arabia Digital Government Authority. The partnership was announced by Sandbox’s COO and Co-Founder, Sebastien Borget, at the Leap Tech Conference held in Riyadh. Both Saudi Arabia and the United Arab Emirates have been focused on investments and policies related to cryptocurrency, web3, and the metaverse. The Sandbox raised a significant amount of capital, with a Series B funding round that brought in $93 million in 2021, and there have been rumours that the company is seeking additional funds, with a rumoured valuation of $4 billion.
  • To resolve SEC allegations of providing unregistered securities to US customers through its staking platform, the cryptocurrency exchange Kraken has agreed to pay $30 million. As a result of the SEC filing a lawsuit in federal court, Kraken will be ending its staking services and programs for US customers immediately. The staking platform had previously offered yields of up to 20% per year, however, the SEC considered it a high-risk investment with limited protection for investors. Kraken will be unstaking all assets held by US clients, excluding staked Ether, which will remain staked until after the Ethereum Network’s Shanghai upgrade. This move is part of Kraken’s efforts to comply with the SEC’s requirements and resolve the allegations.
  • Brian Armstrong, CEO of Coinbase, is concerned about potential SEC regulations on cryptocurrency staking for retail investors, which he believes would have a negative impact on the US. SEC Chairman, Gary Gensler, has stated that cryptocurrencies enabling staking could be considered securities, however, the CFTC has designated Ether as a commodity.
  • Ethereum is preparing to implement the Shanghai + Capella (Shapella) mainnet upgrade to make full withdrawals available for exited validators, while partial withdrawals will be available for active validators with balances over 32 ETH. The public testnets are currently in the final stage. Tim Beiko, a member of the Ethereum Foundation, has stated that if all goes well, another testnet is expected to launch in mid-March, with a possible mainnet launch in late March or early April. 
  • The Uniswap DAO recently held a vote to determine the deployment of Uniswap v3 on the BNB Chain. The results showed that 66% of DAO delegates voted in favour of the deployment, with major players such as ConsenSys and Compound Finance founder Robert Leshner supporting the proposal. However, Andreessen Horowitz, a well-known venture capital firm, cast a vote against the proposal. The debate surrounding the vote has led to the creation of a bridge assessment committee for Uniswap, which will develop a framework for future cross-chain deployments. The deployment of Uniswap v3 on the BNB Chain is aimed at capturing PancakeSwap’s market share, which is the leading decentralised exchange on the BNB Chain and controls $2.4 billion in total value locked. The deployment is also urgent as Uniswap’s business licence for its v3 iteration expires on April 1, which prevents other platforms from launching forked protocols.
  • The Ordinals protocol has enabled the integration of non-fungible tokens (NFTs) with the Bitcoin network. Launched in January, it allows data and images to be inscribed directly on the Bitcoin blockchain, leading to new NFTs being minted and fetching high prices. Bitcoin software upgrades Taproot and SegWit provided the necessary infrastructure for NFTs to be inscribed. Stacks, a Bitcoin sidechain, also has a growing NFT ecosystem of its own and has seen a surge in trading volume in recent days.

What to Watch 

  • US and UK’s CPI, on Tuesday and Wednesday respectively.
  • US’ Core PPI, on Thursday.


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* Index used:

  Bitcoin    EthereumGoldEquities        High Yield Corporate Bonds      CommoditiesTreasuryYields
BTCETHPAXG        S&P 500, ASX 200, VT      HYG  SPGSCIU.S. 10Y

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