News Updates January 13 & 14, 2023

1. Bitcoin breaks $21,000 alongside $255m of 24-hour spot purchases. Bitcoin has broken $21,000.

According to Coingecko data, BTC was valued at $21,083 at 12:59 a.m. UTC on Jan. 14. Its market cap was $403 billion. That change represents a 12% increase in 24 hours.

Data also shows that $245 million of shorts have been liquidated over the past 24 hours, while $255 million of Bitcoin was bought on spot markets today.

There are no major events that could have had an obvious positive effect on investor activity. Rather, changing investor sentiment may be due to a lack of bad news — and due to the fact that major crises like FTX’s collapse are fading into the past.

Furthermore, Bitcoin’s gains today represent ongoing growth over the past several days. This week, positive anticipation and sentiment toward a Consumer Price Index (CPI) announcement appeared to contribute to Bitcoin’s price growth.

The round number of $20,000 also represents a psychological barrier, and as such, investors may be optimistic now that Bitcoin has crossed it.

Bitcoin typically leads the crypto market, and its performance today contributed to the crypto market’s overall growth. The entire crypto market cap was up 8% over the past 24 hours, and it now has a market cap of $1.02 trillion.

Both Bitcoin and the entire crypto market outperformed the stock market today. The Dow Jones was up 0.3% today, while the S&P 500 was up 0.4%.

However, some altcoins have seen modest growth compared to Bitcoin. Ethereum was up 9.8%, while XRP, BNB, and Polygon each gained close to 6%. It remains to be seen whether the crypto market will continue to trend upward.

2. Crypto Traders Are Already Placing Bets on Ethereum’s 'Shanghai Hard Fork'

The Ethereum blockchain's "Merge" last year turned into a focus of frenzied speculation in crypto markets. Now digital-asset traders are starting to handicap various market scenarios ahead of Ethereum's next big milestone.

Ethereum’s historic shift last year to a proof-of-stake network – known as “the Merge” – was one of the biggest stories of the year in crypto markets.

Now all eyes are on Ethereum’s next major upgrade, expected to take place in March, known as the “Shanghai hard fork,” which will allow participants on the network to unlock ether (ETH) they had staked on the blockchain, inaccessible for months.

The decision to push forward with Shanghai was announced in December, overshadowed at the time by sour sentiment as the crypto industry dealt with fallout from the epic collapse of Sam Bankman-Fried’s FTX exchange.

A new year has arrived, perhaps bringing a clean slate, and crypto analysts are sharpening their pencils to figure out how ether might trade through Ethereum’s next big milestone.

Ether was recently trading up 12% so far in 2023 to $1,410. Several governance tokens of top liquid staking products also rallied, with Lido DAO (LDO) jumping 53% in the past seven days and 92% in the past 30 days, according to data from CoinGecko.

But the uncertainty regarding Ethereum’s upgrade has also been floating around the market, with some traders commenting on the blockchain's current low staking ratio compared to other proof-of-stake blockchains. Will ETH stakers dump their tokens on the open market once they’re unlocked, or will they double down in a new era of widespread blockchain staking?

3. Top Crypto Analyst Says Bitcoin Mirroring 2019 Pattern That Preceded Massive 240% Rally – Here Are His Targets

A popular crypto strategist says that the current Bitcoin (BTC) rally is mirroring a pattern that preceded the king crypto’s massive eruption in 2019.

Pseudonymous analyst Smart Contracter tells his 218,100 Twitter followers that Bitcoin is likely to dominate the crypto markets in a repeat performance of its 2019 burst.

“BTC finally broke its $18,400 horizontal highs. BTC dominance going on run and most conditioned to be all in alts. [Definitely] starting to feel more and more like an April 2019 moment every day.”

BTC opened in April 2019 at $4,102 and ended in June 2019 having hit a high of $13,970 – a 240% gain.

Smart Contracter’s charts also include the Bitcoin Dominance index (BTC.D). The BTC.D chart tracks how much of the total crypto market capitalization belongs to Bitcoin. A bullish BTC Dominance suggests Bitcoin is rising faster than other crypto assets, or altcoins are losing value while the leading crypto surges.

In a strategy session video update, the analyst says that for now, traders should keep a close watch on Bitcoin.

“I do believe Bitcoin is going to outperform alts… Bitcoin dominance looks like it’s having a nice strong bounce here. I think this is a fairly significant move on Bitcoin dominance. It’s obviously still in an uptrend. So I do think Bitcoin dominance is going to outperform. Now that we’ve got confirmation, in my opinion, that Bitcoin is going to go higher, I think it’s going to be time to focus on Bitcoin and not alts.”

At time of writing, Bitcoin is valued at $20,956, up over 11% in the last 24 hours.

4. Why The Crypto Market Is Up Today? Here Are Top Reasons.

Bitcoin climbed above $21,000 in the early hours of Saturday. It did so in response to market sentiments and improved consumer price index. That was the highest it had reached since early November. A combination of investors’ expecting a bottom and signs of peaked inflation is believed to be behind the surge.

Data from Coinmarketcap shows that Bitcoin rose to $21,047 in the early hours of the day. It climbed above $20,000 for the first time since November 8, 2022. Along with Bitcoin, Ethereum surged above $1,500, dragging other altcoins like Cardano and Dogecoin with them. Both altcoins added more than 11% within 24 hours as Cardano climbed to $0.366, and Dogecoin rose to $0.089.

Today’s price surge rippled across the entire cryptocurrency market which swelled by $86 billion in market capitalization. At the time of writing, the cryptocurrency market capitalization was over $992 billion. A value that it had not achieved since early November.

The consumer prices report released in the U.S. shows declining inflation from December 2022 to January 2023. According to economic analysts, the impact of this report should see the Feds slow down on interest rate spikes. That has helped to boost risk assets like cryptocurrencies. These assets were already riding the wave of improved jobs data for the past week.

Cryptocurrencies surged alongside other risk assets like the Nasdaq 100 stock index, which has registered profit for six straight days. That supports the growing belief that there is a correlation between cryptocurrencies and the macroeconomy. Unlike in the past, when crypto served as an alternative to mainstream stocks, both entities now follow each other. Perhaps, the influx of institutional investors in recent years has had a lot to do with this.

Sean Farrell, head of digital asset strategy at Fundstrat, explained that crypto assets performed well following the soft CPI print. In his opinion, crypto’s correlation to macro is not going away anytime soon. He expressed delight over how market price action has responded in the past week, noting that the absolute bottom might be in already for crypto prices.

5. What’s happening with Binance’s $2 billion recovery fund?

After the collapse of FTX, Binance enjoyed several weeks of glowing press coverage about its commitment to spend $1 billion on helping the crypto industry. However, it appears that the wallet in question still holds nearly $1 billion BUSD and hasn’t spent anything.

In its initial announcement on November 24, 2022, Binance claimed that 150 companies had applied to this so-called Industry Recovery Initiative so it’s possible that Binance is still evaluating applicants and will disburse funds sometime in the future.

The exchange claimed to have an additional $50 million in commitments from other companies including Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group.

Coincidentally, it looks like Binance.US is on the verge of acquiring Voyager Digital’s assets for approximately $1 billion. That acquisition recently received one of the required bankruptcy court approvals and could close by April 2023. However, it’s unclear whether it will be funded by Binance.com’s fund.

Binance also committed to a second $1 billion Industry Recovery Initiative. While Protos couldn’t find any wallet containing this promised second tranche, there’s a wallet identified as “Binance 7,” which follows Etherscan’s naming convention for Binance hot wallets.

This wallet does contain 1 billion BUSD, however, Binance hasn’t officially identified it as being related to its Industry Recovery Initiative. Likely an exchange hot wallet, it is the only other wallet containing

approximately 1 billion BUSD.