Some crypto pundits have argued that the current market is bearish, but many sectors have gained rather than retreated. Some altcoins in key sectors have outperformed the current downturn. These coins continue to highlight the maturity of the cryptocurrency market, where fundamentals and utility will always rise above the hype.
The AI and computing sectors remained strong as their innovation continued to attract investors, with some tokens jumping by more than 42%. The AI sector has been improving efficiency across various sectors, particularly computing, including data center infrastructure and specialized hardware. Quantum computing, semiconductors, and accelerators have also contributed to this influx of AI-driven capital.
GPU as a service is also expanding, thereby increasing demand for computing power. The urgency of higher energy demand is compounding, and the market is continually seeking technologies to alleviate current restraints; AI appears to be addressing these issues incrementally.
Bitcoin Inflows Reverse Negative Trend
Bitcoin, at the time of writing, has dropped below the psychological trading level of 70k USD (trading around 69k USD). However, the price drop has caused the sharpest increase in BTC accumulation so far this year. On Feb. 6th, whales accumulated 67k BTC, the largest single-day inflow this year.
This suggests that supply is dwindling and that liquid circulation is being removed rather than a near-future selloff. Strategy bought another 1,142 BTC on February 9th, at 78k USD, which is below its average acquisition cost, increasing its commitment to BTC. The scale of the buys also signals aggressive positioning of whales and institutions, even though the market is quite volatile.
BTC spot ETF outflows reversed on Feb. 9th, as 370m USD in inflows ended the negative streak, with BlackRock accounting for more than 63% of those inflows. Analysts have stated that, although this reversal is positive, it will take a few additional trading sessions to confirm the trend. The buying can be traced back to technical buying signals (from whales), the BTC price chart, favorable comments from regulatory authorities and institutional buyers reconfiguring their investments. The rebound will be monitored closely by analysts to assess momentum in the coming week and determine whether the uptrend has legs.
Innovation and Adoption Expands ETH
Innovation on the Ethereum chain continues to grow the DeFi and L2 sectors. Yesterday, MegaETH (a high-performance blockchain) launched on the ETH network to enable almost instantaneous transactions on ETH applications. The L2 blockchain has stated that it will target 100k transactions per second, whereas ETH currently processes approximately 30 tps. L2 will settle transactions on its network rather than bundle them and settle on the ETH base layer.
Ethereum fundamentals remained strong, with hash rates near record levels due to the network’s robust security protocols. Miners continue to produce and profit despite ongoing energy costs. Institutions continued to utilize the ETH network for their digitally traded products as ING Deutschland integrated its traditional banking products with digital assets. ING will waive transaction fees on orders above 1k USD to encourage adoption and enable customers to invest with no execution fees for long-term portfolio building.
Ethereum dipped below 2k USD in the past week but is currently trading at 2k USD with strong resistance levels at 2.1k USD.
Litecoin in Consolidation Phase
The trading charts and indicators indicate that Litecoin is oversold, as the Relative Strength Index (RSI) has fallen below 30. This indicates that the coin is undervalued and may rebound in the coming days. Some analysts believe this is a perfect setup for a breakout and may reach 71 USD in the short term. There was a strong uptick last Friday before pulling back to its current trading level of 53.30 USD.
There has been increased demand for LTC following SBI’s expansion of its lending portfolio by adding Litecoin. Another crypto payment gateway, Coingate, adopted LTC several months ago, and it accounts for 18% of all payment transactions. These developments reflect sustained demand for Litecoin, but it will need to overcome the broader selling pressure under the current market conditions.
LTC will need to test the 20-day Exponential Moving Average (EMA) of 56.60 USD to move above the 60 USD level. It will be imperative that it reach this level; otherwise, it may retreat to May 2022 levels of 50 USD or lower.
Doge Army Remains Optimistic
Dogecoin remained upbeat in the past week as the ‘Doge Army’ on X and other social media platforms kept the meme coin’s narrative in the news. Followers of Doge remained optimistic as the coin dipped 12% to 0.09 USD. Engagement with the community was very high, as new campaigns, giveaways, and charity drives kept the coin’s X presence among the most active.
The Doge Foundation continued to promote real-world applications of Doge by promoting merchant integrations and tipping bots (enabling users to send small amounts of cryptocurrency via Telegram, Discord, and GitHub). Active wallet addresses increased by 36% this week, and transactions reached 150k, suggesting a bullish trend. Elon Musk announced that SpaceX will launch a mission to the Moon, named DOGE-1, next year, prompting Dogecoin to surge on the announcement. Musk said that DOGE-1 will be fully funded by Dogecoin and that a physical Dogecoin would be laid on the lunar surface to mark the occasion.
The crypto market continues to move on quiet optimism, with certain sectors gaining ground while others continue to consolidate. The AI and accompanying sectors are creating a positive buzz that is attracting investors keen to ignore the ‘bear market’ that some analysts have predicted. Innovation continues to expand the market and attract capital, creating long-awaited upside.
