Bitcoin’s second attempt to set both feet above the $17,000 spot mark during Friday’s trading session came to nothing. The restrained action disappointed onlookers looking forward to an inspiring close over the target that has remained elusive since Dec 16. Here is a recap of everything you missed and a spotlight on the market this weekend.
Solana steals the limelight from unexciting Bitcoin and Ether
Following Wednesday’s snub at $17K, Bitcoin price retraced towards the familiar $16,740 grounds, which handed bulls a favorable opportunity to regroup. The US economic data released on Friday interrupted the show, but traders nonetheless held firm. December non-farm payrolls and unemployment figures came in better than projections from Wall Street economists perking up some US equities. In the digital assets market, an uninspiring end-of-week display marked the third week of the BTC/USD pair being held off the level.
The market set off with little volatility around the price of the leading crypto yesterday as bulls balked at a steep correction. Bitcoin and the majority of altcoins have teetered around their Friday price for the most part. Ethereum’s native token (ETH) symbol has remained unchanged and is currently on pace for a modest appreciation of roughly 5.35% in the last seven days.
In contrast, Solana (SOL) token enjoyed a much-needed price rally this week on the hype of Solana’s dog coin version, BONK, which drew massive social interest following its airdrop in the last week of December. The headline-grabbing Shiba Inu-themed token cheered the Solana market, delivering adventitious gains. This assuaging, albeit fleeting, progress northwards injected steam in SOL price whilst calming weak hands. The midweek green candles on the SOL/USD chart came in timely for holders after an upsetting performance in the advanced stages of Q4.
Distressing reports around the liquidity status of the now-bankrupt FTX exchange inspired heavy losses across the broader crypto market on Nov 8, with Solana (SOL) bearing the brunt of the sector-wide sell-off. Though the SOL token, spotted at $13.58 at press, has established a firm footing in the double-digit territory, it remains far off its November high of $37.80 per CoinMarketCap data.
To learn more about Solana, visit our Investing in Solana guide.
This week’s biggest gainers wind up rallies
Metaverse and non-fungible (NFT) niche lead tokens Ape Coin (APE) and Axie Infinity (AXS) equally traded well this week, hitting weekly highs of $4.24 and $7.09, respectively. AXS has since been kicked out of the biggest gainers while APE has retained its spot among the day’s top 10 gainers on Sunday. Other tokens that saw a strong week are The Sandbox (SAND) and Decentraland (MANA), ranking as the biggest top gainers on Saturday.
The MANA token price has recorded approximately 19.65% gains since Monday, while the former is up about 10% in the same period. Ethereum Classic (ETC), another top performer this week, has sustained its run above $20 and is trading within yesterday’s range.
Midweek top performers (OKB) and Huobi (HT) exchange tokens have cooled off after a modest rally earlier this week, the latter currently hovering below $30. The Graph (GRT) and Lido DAO (LDO) are top on Sunday’s gainer list – up 10.45% and 6.76% in the last 24 hours.
To learn more about these tokens, visit our Investing in The Graph and Investing in Lido DAO guides.
Slow trading activity
While this holiday-concluding week is poised to see a green close, spot trading activity has thus far been wanting. Trading volume in the crypto sector, observed on centralized exchanges, shrunk by 45.74% last year, according to a report from CryptoCompare. The spot trading volume of Bitcoin, the most popular and traded coin, scaled down by 31% across the year as the asset logged a 64% year-over-year loss. Market analysts have forecast this grim picture to persist in the coming month, citing the impact of US Federal Reserve policies on interest rates. A battered macroeconomy and a range of other explicit factors acting within the industry have already decapitated demand from the institutional side. Retail volume figures have neither impressed. This incertitude of participants from dipping their toes into the sector has left risk-tolerant traders as the majority among market actors.
Macroeconomic pressure to last through the first half of 2023
The current state of affairs in the crypto market has drawn comparisons with the late 90s dot-com period associated with the breakthrough of the internet. The stock market tech bubble deflated following interest rate adjustments by the Federal Reserve in the early 2000s. The resulting massive crash after the Feds hit the brakes on its interest rate increases in May 2000 lasted until October 2002. Notably, the Nasdaq Composite stock market index (^IXIC) declined from a then-peak of 5,030 points in March 2000 to around 1,200 points when the pain eased at the end of the recession.
The perceived similitude of crypto as another technology-inspired boom hints at a sour outcome. The ^IXIC index posted a record-high figure briefly after surpassing 16,000 in Nov 2021, around the same time when Bitcoin price peaked. The index has since been steadily declining to 10,569 as of Jan 6. A dicey future for crypto, i.e., uncertainty around when positive sentiment will overcome the prevailing carnage, presents another worry. Recent volatility in the crypto market has made it difficult to accurately call out a bottom – equivalent to a burst going by the tech bubble analogy. The average of previous similar bubble cycles suggests that the current market depression could last until the second half or even the entirety of the year. Still, traders exploring the sector can target gains from minor breakouts or settle for shorts from these temporary price rallies.
Read More: news.google.com