Mooners and Shakers: Bitcoin on thin ice as US dollar claws its way up; Frax Share and Lido DAO pump

Bitcoin and the crypto market have largely been holding on to excellent January gains, but plenty of analysts have indicated they’re expecting a dip.

And to fuel that idea, you only need to look as far as the inversely correlated US Dollar Index (DXY), which has been trending back in the green after surprisingly strong jobs data out of the US on Friday.

It doesn’t necessarily mean Bitcoin and pals are due to absolutely tank, but some level of pullback wouldn’t be unexpected at this point given the market’s recent rise.

Bitcoin doing the ‘contango’, or skating on thin ice?

Still, eToro market analyst suggests that Bitcoin has been in a state of “contango”, with funding rates at highest levels since 2021. This can indicate bullish sentiment in the market, but how long will that last, is the question.

“The bitcoin funding rate – which measures the bitcoin future price against the spot price, is at its strongest level since December 2021, despite the price level looking far lower, according to Glassnode, noted Peters in some analysis shared with Stockhead this morning.

“The current bitcoin market conditions resemble a commodity price ‘contango’ – where the futures price is higher than the spot price for the asset,” Peters continued. “This typically happens with commodities such as oil or copper when traders are willing to pay more for the asset in the future than take on the carry costs at today’s price.

“In bitcoin, this situation has come about thanks to a short squeeze and the market breaking above average withdrawal price for many investors.”

Meanwhile, popular crypto chart watcher Rekt Capital is pointing at BTC stalling out at US$23,400, and has been theorising that for bullish continuation to occur, it’s important to close out this week above that level.

$DXY 1W

It appears the dollar is attempting to reclaim its yearly uptrend. This is bad news for #crypto & #stocks because it will indicate a pullback / continuation of bear market.

This week is very important. A reclaim of trend, $SPX loses 4100, & I turn back to macro bearish. pic.twitter.com/Iuo0SrRIll

— Roman (@Roman_Trading) February 6, 2023

Bitcoin has not only found resistance at the level Rekt Capital was talking about, but also it seems at the rounder number of US$23,000. All top 10 majors appear to have stalled for now as well.

While the Fed’s recent thin attempt at hawkish rhetoric and smaller rate hike buoyed markets, the spectre of possible recession hasn’t disappeared, and not everyone is prepared to buy in to Powell’s soft landing goal.

Those stuck on th never-ending Fed-dominated narrative, are already turning eyes to next week’s US CPI data release for January. Just how much it supports (or doesn’t support) the weakening inflation narrative will be yet again crucial for market direction.

Uppers and downers: 11–100

Sweeping a market-cap range of about US$10.8 billion to about US$459 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at press time. (Stats accurate at time of publishing, based on CoinGecko.com data.)

DAILY PUMPERS

• Frax Share (FXS), (mc: US$904 million) +24%

• Lido DAO (LDO), (market cap: US$1.9 billion) +10%

• Baby Doge Coin (BABYDOGE), (mc: US$501 million) +9%

• Synthetix (SNX), (mc: US$869 million) +8%

• Rocket Pool (RPL), (mc: US$795 billion) +7%

Hmm, Ethereum-based liquid staking derivatives (LSD) projects are pumping again today. And this means Frax Share, Lido DAO and Rocket Pool on that list. Can’t keep a good narrative down it seems.

What are these? We covered it recently and why they’ve been surging this year in a chat with Apollo Crypto, which you can check out here.

But essentially they’re an an alternative to locking up a user’s stake on the Ethereum mainnet, meaning users can earn staking rewards while still having access to their funds via a derivative token.

The upcoming Shanghai upgrade for Ethereum is playing into this surging narrative, because it’s deemed the unlocking of staked ETH post upgrade will see liquid staking protocols benefit with increased demand for their greater utility-focused staking services.

DAILY SLUMPERS

• LEO Token (LEO), (market cap: US$3.14 billion) -6%

• Fantom (FTM), (market cap: US$1.5 billion) -5%

• Radix (XRD), (mc: US$536 million) -4%

• Aptos (APT), (mc: US$2.41 billion) -3%

• Arweave (AR), (mc: US$559 billion) -3%

Around the blocks

Some pertinence and randomness that stuck with us on our morning moves through the Crypto Twitterverse.

#Bitcoin pic.twitter.com/bkpjlMBlY2

— naiive (@naiivememe) February 6, 2023

the evolution of crypto pic.twitter.com/0re6i8S83d

— LilMoonLambo (@LilMoonLambo) February 5, 2023

why does harry styles look like an NFT? pic.twitter.com/sUel1b0lZv

— LilMoonLambo (@LilMoonLambo) February 6, 2023

kid wins 10 grand making a layup, free throw, three pointer, and half-court shot

legend pic.twitter.com/NM1wiDIoeL

— Shibetoshi Nakamoto (@BillyM2k) February 6, 2023

The post Mooners and Shakers: Bitcoin on thin ice as US dollar claws its way up; Frax Share and Lido DAO pump appeared first on Stockhead.

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