TL;DR

• BTC is down & ETH is down

• BTC over-performed ETH this week 

• Bitcoin dominance is down

• The hot coin we look at this week is $MOVE

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BTC & ETH Market Update 📈

Crypto is down this week, with BTC down by 1.3% and ETH down by 1.9%:

Bitcoin dominance has decreased over the week, starting from 55.2% to a high of 56.04% and ending at 54.8%. Investor sentiment, regulatory changes, technological advancements, and the overall growth of the cryptocurrency sector shape Bitcoin's market dominance. Its reputation as "digital gold" also enhances its position, making it a key player in the market.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

Bitcoin has regained momentum after dropping to $92,458 on December 23, rising 6.5% to its current level near $95,659.

However, it faces strong resistance at $98,000, which it must surpass to sustain a move toward $105,000. Market optimism remains evident, supported by derivatives data and broader economic trends.

Bitcoin’s 2-month futures contracts are trading at a 12% premium over spot prices, signaling high demand for long positions. Similarly, put options trade at a 2% discount to calls, indicating limited concern over price declines. This bullish sentiment persists despite recent volatility.

Macro trends favor Bitcoin’s potential rally. The S&P 500 recovered losses on December 24, and the U.S. 10-year Treasury yield rose to 4.59%, reflecting inflation concerns. Such environments often benefit scarce assets like Bitcoin, although rising yields could curb risk appetite.

A TradingView glitch on December 26 briefly displayed Bitcoin dominance as zero, triggering a 4% price dip to $95,000 and liquidating $33 million in long positions. The market quickly stabilized, but the incident highlights the sensitivity of investor sentiment.

Analysts see breaking $98,000 as key to unlocking a rally toward $105,000, with some targeting $120,000 by early 2025. Bitcoin’s 64% correlation with the S&P 500 suggests broader market trends could influence its trajectory.

The Federal Reserve’s reduced rate-cut projections add uncertainty, with just two cuts expected in 2025 instead of four.

Margin markets show a bullish 25:1 long-to-short ratio, reflecting confidence but raising caution about leverage-driven volatility.

A sustained rally will depend on breaking key resistance levels while navigating macroeconomic risks like inflation and economic stagnation. Traders should monitor technical indicators and broader financial signals closely.

Ethereum (ETH) fell to $3,337, wiping out recent gains amid a broader market pullback. A 4% Bitcoin (BTC) decline triggered $34 million in ETH liquidations. Despite struggles to hold above $3,500, ETH futures maintain an 11% annualized premium, signaling steady trader confidence.

Macroeconomic pressures weigh heavily on markets. The U.S. dollar index (DXY) hit a two-year high as investors shift to cash, driven by recession fears and fading hopes for early Federal Reserve rate cuts. Trade tariff concerns and questionable U.S. employment data revisions add to the uncertainty.

Onchain metrics reflect Ethereum’s resilience. Total value locked (TVL) remains stable at 20 million ETH, with platforms like Ethena and Morpho showing growth. Stablecoins in China trade near parity, suggesting no major outflows. However, Maker saw a 12% deposit decline.

Analysts expect Ethereum to outperform Bitcoin in early 2025, with the ETH/BTC ratio at 0.0356 and a potential rise above 0.04. This could ignite an altcoin rally.

Spot Ethereum ETFs are also gaining traction, hinting at stronger inflows. While macro risks persist, solid onchain activity and bullish derivatives data suggest ETH could reclaim $4,000 with improved economic conditions.

Ethereum (ETH) Analysis:

As of December 27, 2024, Ethereum is trading at $3,337 after breaking below key support at $3,500. The price is consolidating within a descending trend channel, suggesting bearish momentum in the short term.

Immediate support lies at $3,300, with resistance at $3,500 and a critical level at $4,000. Derivatives data indicates traders maintain a neutral-to-bullish stance, while steady onchain activity suggests potential recovery if broader market conditions stabilize.

Bitcoin (BTCUSD) Analysis:

As of December 27, 2024, Bitcoin (BTC) is trading at $95,659. Key support is at $92,000, with resistance at $98,000. A break above $98,000 could target $105,000, while losing $92,000 risks a drop to $90,000.

Medium-term support is at $85,000, with a $105,000 target intact. The long-term trend remains bullish, with resistance at $120,000 indicating potential gains into 2025.

Expected Trading Ranges:

• Ethereum (ETH): Support at $3,300; Resistance at $3,500, with extended resistance at $4,000.

• Bitcoin (BTC): Support at $92,000; Resistance at $98,000.

Market Outlook:

Bitcoin remains bullish, supported by strong derivatives demand and favorable macro trends. A break above $98,000 could drive further gains, while macroeconomic risks like inflation and rate policy may influence volatility.

Ethereum shows resilience despite recent declines, supported by steady onchain metrics and bullish derivatives data. However, macroeconomic pressures, including a strong U.S. dollar and recession fears, may limit short-term upside. A move above $4,000 depends on improved global market conditions.

BTC/ETH ratio has seen a decrease:

Over the last 6 days, the BTC to ETH conversion rate has experienced a general decrease. Starting at 29.17 ETH on December 21, 2024, it dropped to 28.68 ETH by December 26, 2024, representing a decline of 1.69 ETH. The largest drop occurred on December 23, 2024, with a 4.36% decrease, while the most recent increase was a 0.90% rise on December 26. Overall, despite some daily

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Hot Coin: MOVE 🔥

In this week’s newsletter, we dive into Movement’s token with the ticker: $MOVE.

The price action and volume have been growing consistently and don’t seem to stop any time soon:

What is the project about?

The Movement Project is a blockchain platform designed to enhance Ethereum's capabilities by introducing a Layer 2 (L2) solution. By operating on top of Ethereum, it seeks to improve transaction speed and scalability while maintaining efficiency.

Central to the project is the adoption of the Move programming language, initially developed by Meta for the Diem/Libra blockchain.

Known for its resource-oriented programming, Move strengthens security and optimizes blockchain application development.

The Movement Project also prioritizes interoperability and addresses security vulnerabilities, aiming to deliver a more seamless and robust blockchain experience.

Why is the project exciting now?

There are four main reasons why we feature this project in this week’s newsletter and look at it as an attractive buy right now:

• Innovative Technology Foundation

• Ecosystem Expansion through Grants

• Strategic Positioning in Web3

• Customizability and Interoperability

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