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Bitcoin: How To Survive January 2025

Trading Pit Jan 14, 2025

In the January 14 episode of the Trading Pit:

  • Market sentiment is cautious due to recent market volatility and uncertainty surrounding upcoming events, such as the CPI print and the new US president's inauguration.

  • Bitcoin is showing signs of stability, with a key support level identified around 96,000. As long as this level holds, there is potential for upward price movement.

  • On-chain data for Bitcoin reveals weakness, with declining transaction fees and lackluster ETF inflows, suggesting a lack of strong demand.

  • Ethereum is facing multiple headwinds, including a decrease in its “moneyness ratio” due to significant ETH being unstaked from the Beacon Chain, particularly by Coinbase. This trend indicates a weakening demand for ETH as collateral or for use in DeFi protocols.

  • Outflows from Ethereum ETFs are contributing to the negative pressure on ETH price.

  • Ethereum is experiencing low network demand, evident in the extremely low gas fees. This lack of demand raises concerns about the utility and adoption of the Ethereum network despite ongoing efforts to improve scalability.

  • Solana is showing unexpected resilience, driven by activity in the AI agent ecosystem. Despite a general market downturn, Solana's on-chain activity, particularly related to AI agent development and transactions, is supporting its price and network usage.

  • Binance is accumulating a significant amount of Solana, suggesting potential plans for increased involvement in the Solana ecosystem.

  • The success of the Ethereum-based structured product, Ethena, is viewed as both positive and negative. While it demonstrates demand for ETH as a yield-generating asset, it is also absorbing a significant amount of ETH, potentially suppressing its price.

  • The potential for AI agents to drive meaningful on-chain activity and demand for ETH is still uncertain. While the concept holds promise, current applications are mostly focused on superficial aspects, lacking substantial real-world utility.

  • Traders are advised to exercise caution and manage risk effectively in the current market environment. This involves using appropriate leverage, setting stop-loss orders, and avoiding impulsive trading decisions driven by fear or hype.

TL:DR

While Bitcoin shows signs of potential stability, Ethereum is facing significant challenges. The emergence of Solana as a resilient force and the potential of AI agents offer some optimism, but it remains to be seen if these factors can drive sustained growth in the market.

great time to be in the market.


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Disclosure Statement This content is for entertainment purposes only. Nothing shared during this broadcast is or should be considered financial advice. The views and thoughts shared here are simply opinions. Do your own research and consult a registered financial advisor before making any investments.

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