Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
The Ethereum Foundation has retired the terms ‘Ethereum 1.0’ and ‘Ethereum 2.0’ and will now refer to them as Ethereum’s ‘execution layer’ and ‘consensus layer’, respectively. This signifies an effort to avoid confusion over terminology and to prevent scammers trying to exploit such misunderstandings. The ‘execution layer’ refers to the proof-of-work blockchain also known as Ethereum, while the ‘consensus layer’ refers to the proof-of-stake Beacon Chain meant to take over the consensus process following the two blockchains merging in June this year. These will then collectively be known as ‘Ethereum’.
Goldman Sachs has predicted that the metaverse could be an $8 trillion opportunity. In a recent episode of Exchanges at Goldman Sachs, analyst Eric Sheridan explained said the digital economy today is “roughly about 20%, 25% of the global economy” and will continue to grow alongside a “virtual economy”. He added: “That’s how we came up with the number for various outcomes of anywhere from $2 trillion to $12 trillion, with $8 trillion at the midpoint of all potential outcomes.”
The US will seemingly be going ahead to create its own central bank digital currency (CBDC), according to the Bank of America, whose crypto strategists Andrew Moss and Alkesh Shah wrote in a note yesterday that CBDCs “are an inevitable evolution of today’s electronic currencies”. They expect stablecoin adoption and use for payments to rise considerably over the next few years “as financial institutions explore digital asset custody and trading solutions, and as payments companies incorporate blockchain technology into their platforms”.
Myanmar’s military government is proposing laws that will see virtual private network (VPN) users imprisoned for one to three years and digital currency users imprisoned for six months to a year. The proposed regulations will also compel service providers to disclose the personal information of these offenders as requested by the authorities. Permanent secretary of the military’s Transport and Communications Ministry, Soe Thein, has signed a draft bill that will be open to comments from citizens until 28 Jan. Opposition to the coup by the military has relied on VPNs and crypto and encouraged citizens to boycott junta businesses.
Show me the money
According to data from Huobi Global, BTC rallied overnight — with strong support below 33,000 — to its current position near 36000. Daily charts show signs of a downward trend, though upside resistance is higher. Similarly, ETH rallied overnight to reach a high of 2,440 before falling in the morning and then bouncing back to near 3,400, though daily charts show clear signs of a down-trend.
Still, ETH’s price is now down by over 50% from its all-time high. It is now close to fulfilling one of the strongest bearish entry conditions in the Ichimoku Kinko Hyo indicator, and any support could set off a tremendous rally. If it sees a weekly close at $2,100 or lower, it would fulfil all the necessary conditions for an Ideal Bearish Ichimoku Breakout short entry. However, there are some indications that the current price sell-off may reverse and that any further selling may be seen as a ‘false’ move. Should ETH fail to hold above $2,100 on the weekly chart, there could likely be a move to the 50% Fibonacci retracement at $1,800.