Market Picture
The cryptocurrency market has not been embarrassed by the lacklustre performance of US equities, gaining 1.8% in the last 24 hours to $3.56 trillion. This is the high of the current week but below the market’s centre of gravity during the consolidation period from 17 to 26 January. The market is still hesitant to storm to all-time highs, facing increased activity from those looking to lock in profits from last year’s crypto rally.
The crypto market sentiment index has been in confident greed territory throughout the week without much change. This is unlike previous periods of euphoria, where FOMO momentum lifted the index into the 90 area vs the current 70.
Bitcoin rose to 105,000, entering the area of sustained highs in December and January. Earlier in the week, bulls protected BTC from consolidating under the 50-day moving average, forcing the latest dynamic to be seen as a consolidation rather than a break of an upward trend.
Ethereum also successfully fought off the bears, defending against a dip under 3000. This is not the first time this has happened since the second half of November. The major altcoin has emerged from the ranks of market drivers but is clearly in no hurry to be a bargaining chip.
News Background
In December 2024, the monetary aggregate M2 in the US rose to $21.5 trillion, approaching an all-time high, CoinDesk notes, noting the strong positive correlation of money supply with risk appetite.
The head of the Czech National Bank suggested diversifying the state reserve by placing up to 5% of its €140bn of assets in Bitcoin. At the same time, he did not rule out that investments in cryptocurrency could be bad. The Bank’s board of directors will consider the initiative.
Trump’s media company, Trump Media, announced the launch of its financial arm, Truth.Fi, and the allocation of up to $250 million to invest in traditional and digital assets, including Bitcoin, cryptocurrencies and related securities.
Since 1 November, the number of active Ethereum addresses has increased 37% to 575,000. The catalyst was institutional investors’ renewed interest in DeFi.
Kazakhstan President Tokayev recommended changing the approach to the circulation of cryptocurrencies and urgently creating infrastructure for their wider legal circulation. According to him, 95% of Kazakhstani crypto investors operate in the ‘grey’ zone.
