News
27
Sep
crypto-market-review-11

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9/27 Market overview: Lots of uncertainty in the market

Bitcoin’s price made a surprise move to 20.000 dollars last night. Yet, the overall mood of the market remains uncertain. There haven’t been many winners in the altcoin market. Only Compound and XRP stand out. There is not much to report from the DeFi sector except for one hack.

Bitcoin’s price moved above 20.000 dollars

Bitcoin’s price is about 20.000 dollars at the time of writing this article. The price is 1000 dollars higher than seven days ago, which translates to a move of about five percent. Unfortunately, we haven’t seen a major change in the trend. The move is due to some positive price action in the midnight hours of Tuesday.

The graph below shows Bitcoin’s price development in the past six months on daily candles. The blue line is the 50-day moving average and the purple line is the 200-day moving average.

btc-2709

The overall trend is still negative. Both the 50-day and the 200-day moving averages are trending downwards and Bitcoin’s price isn’t above either of them. The four percent move we’ve seen today has at least brought Bitcoin’s price to a striking distance of the 50-day moving average.

In the big picture, Bitcoin has moved sideways over the past month. There was a brief pump & dump period in early September, which saw the price return quickly to the 18,500-19,500 dollar support zone. This support level has been under constant stress for three months. So far it’s holding.

Bitcoin’s price has done surprisingly well in the past 4-5 days. The traditional market was in full panic mode last Friday. We haven’t seen anything similar since the March of 2020. Major fiat currencies are crashing, interest rates are surging, and the bond market is about to blow up.

Major U.S. indices have also reached June lows. Bitcoin, however, keeps resisting. The price of BTC hasn’t fallen through the 18,500-19,500 dollar support zone. Bitcoin is actually 15 % above June’s bottom after today’s move. There seems to be a decoupling going on between BTC and the stock market.

The entity behind the latest market action is, once again, the Federal Reserve. Chairman Jerome Powell used harsh language in the press conference, which followed the FOMC meeting. Fed is going to crush inflation even if it would cause pain to the markets and to the U.S. economy.

Powell also revealed that the Fed is going to hike rates by another 0.75 percentage points. This was what the market had expected, but the ultra-hawkish tone of Jerome Powell spooked the investors anyway.

The United States dollar index (DXY) has also kept its parabolic run higher. The dollar is crushing all major fiat currencies on its path. The British Pound Sterling is the latest victim. The GBP has fallen to 37-year lows against the dollar and is soon reaching parity. A strong dollar has usually been a major hurdle for Bitcoin’s price.

It seems like the state of the macroeconomy is getting worse. Hence, it’s a bit surprising how Bitcoin’s price has been holding on in the past 1-2 weeks. However, we are worried about the constant testing of the previously mentioned support zone. The more the support zone is tested, the more likely it will be broken. In this scenario, Bitcoin’s price would reach the June lows and probably fall further.

Few winners in the broader market

Let’s look at the broader crypto market, which has few winners this week. Bitcoin’s dominance has gone up and down but it has ended up more or less unchanged from seven days ago. This means there haven’t been any major movements in the altcoin market.

When we look at the top 15 list, we can see that most coins have made small gains or losses against Bitcoin.

alts-2709

Just one token stands out: Ripple’s XRP. It has beaten Bitcoin by more than 20 percent – just like XRP did a week ago. The reason behind the move hasn’t changed either. Investors are betting on a positive outcome from the Ripple vs. SEC court case.

Time will tell if investors’ optimism was unfounded or not. The fact is that the price of XRP has moved up more than 45% in two weeks. This is a significant gain for a coin this size in these marked conditions. We are in the depth of the bear market where you rarely see top 10 coins make such moves.

XRP is the second-best performer even in the top 100 list. It was beaten only by Compound’s native token COMP, which has gained 22.16% against Bitcoin in the past seven days. Compound seems to be getting a boost from a new loan service it has launched.

One should remember that COMP is a governance token. Hence, its price is not derived from the usage of the Compound platform. The same goes for all DeFi tokens. This move is just pure investor speculation.

XRP and COMP are the only coins in the top 100 list with higher than 20% gains vs. Bitcoin.

We should also mention Cardano. Its native token ADA has barely moved an inch despite the fact that Cardano successfully launched the Vasil hard fork last week. This was probably the most important upgrade in Cardano’s history. You can read more about it from this week’s news overview.

Ethereum went through an even bigger upgrade a week earlier. Yet, the market didn’t reward either project with positive token price movements. On the contrary! Ethereum has been one of the worst performers in the past two weeks.

Green colors in the DeFi market

The DeFi market has gone sideways for more or less three months. The previous seven days haven’t offered any significant moves, but at least the top protocols have gained some liquidity. The TVL of the entire DeFi sector is up about 1.5 billion dollars from last week. Today’s value is 56 billion USD.

defi-2709

The top 10 ranking list is unchanged from last week. All major protocols have had small TVL gains, but Curve DEX is standing out from the crowd. Just like it did a week ago. Curve moved to a third place then and is now challenging second-placed Lido.

Convex Finance has recorded the second-highest gains in TVL.

defi-chains-2709

There was a new hack reported in the DeFi sector last week. A major market maker company, Wintermute, lost 160 million dollars worth of wealth. Since Wintermute is a centralized company and not a DeFi protocol, the hack didn’t have any direct impact on the DeFi market.

The Wintermute hacker sent 111 million dollars worth of stablecoins to Curve’s pool. The point of this move was to avoid Tether’s (USDT) and Circle’s (USDC) sanctions. These operators have the possibility to freeze any funds in the system. Time will tell if the hacker will be able to cash out the funds from Curve successfully.

The blockchain top 10 list is also unchanged from seven days ago. All major smart contract platforms have recorded small TVL gains.

defi-chains-2709

The previously mentioned Cardano is currently ranked 27th. The Vasil upgrade is not going to give Cardano’s DeFi ecosystem a quick fix, but we can expect Cardano to move up in the ranks in the coming months (and years).

Defillama is tacking only 81 million dollars worth of TVL on Cardano. This is a very weak number compared to the major players in the business.