Bitcoin’s key support level is holding up despite last week’s volatility. The familiar names from last week have performed the best of the altcoins. The DeFi market has seen drama in the wake of hacks. Solana has been hit hard by the Mango Market’s collapse.
Bitcoin’s important support level is holding up!
At the time of writing, the price of Bitcoin is around $19,500. A week ago, it was $19,000 which means the price has risen by a couple of percents. The big picture is a continuation of the same sideways movement that has been going on for more or less four months.
The chart below shows the price performance of Bitcoin over the last year or so, with weekly candles.
The blue zone is the key support level for Bitcoin. It can be plotted between $18,500 and $19,500. No weekly candle has clouded below $18,500 this year, although the price has briefly traded below it.
This also happened last week, when the Bitcoin price dipped to as low as $18,300. The backdrop was the recent inflation data from the US. The CPI reading released last Thursday was 8.2%. Although it wasn’t considerably higher than predicted, the market expressed its disappointment with a sharp decline.
For a while, it looked like Bitcoin was about to plunge to new lows in 2022. However, the market suddenly took a sharp turn for the better. The price of bitcoin outpaced the rally in equities and rose to almost $20,000.
Why did such a big turnaround happen? One explanation could be that the major US equity indices fell to key support levels from a technical analysis point of view. In any case, it was a historic swing in the stock market, which the Bitcoin price naturally followed.
After a dramatic Thursday, there has been very little movement. There has been more volatility in equities, but less volatility in Bitcoin. This same trend has been in place for several weeks. Bitcoin has become almost stablecoin compared to equities.
However, there is nothing to suggest that the correlation between Bitcoin and the stock market has changed significantly. If stock indices continue to fall and the bear market deepens, it is difficult to see Bitcoin holding on to its support level.
The next step in the stock market is the earnings season. In the coming weeks, we will see Q3 results for publicly listed companies and announcements on the outlook for Q4. Volatility in the market is expected again.
The crypto market is now in a wait-and-see mode. Sooner or later, the bitcoin price will either have to break a key support level or start a clear uptrend. Which of these scenarios will come true? We will soon find out.
What will be the market cap of Aptos?
Let’s look at the altcoin market. Bitcoin’s dominance has moved up just 0.3 percentage points from last week’s 41.5%. So, no major changes have been seen in the altcoin market.
The list below shows the top 15 ranking of cryptos. As usual, the price performance is relative to Bitcoin, not the dollar.
Nothing worth mentioning has happened in the Top 15. All movements fall between -5% and +5% except for Cardano’s ADA token. It is down about 9.5% compared to Bitcoin.
The reason for the fall may be the Vasil hard fork a couple of weeks ago. Some investors bought ADA tokens in anticipation of a boost in the price. Now that the hard fork has been seen and there has been no price rise, they have sold their coins. Ethereum also fell sharply after The Merge update.
The Aptos platform is by far the most interesting altcoin this week. We also mentioned Aptos in our news review. Aptos is a new smart contract platform that launched its MainNet yesterday. Its APT token will be available for trading on FTX and Binance exchanges, among others, from the 19th of October.
Aptos Labs, the company running the project, published a tokenomics overview post today. It’s worth noting that the number of APT tokens in circulation will multiply in the coming years through for example staking rewards.
1/ Creating a network for the people requires a tokenomics designed with the community and fairness at its center.
The overview of that tokenomics is available here: https://t.co/KeU7RXANkd
— Aptos (@AptosFoundation) October 18, 2022
Aptos could be one of the most talked-about cryptocurrencies for the rest of the year if the social media influencers start to shill for it in a big way. This is possible, as there are not many other options available. We recommend caution.
The top two climbers in the Top 100 are familiar from the last week’s review: Casper Network’s native token CSPR and the Huobi Token (HT). The reasons behind the rise are probably the same as last week.
Casper recently released a new NFT standard, and the token’s rise to the top 100 has attracted new speculators. Huobi, on the other hand, got a boost from an acquisition. HT is a token of the Huobi exchange, and its new owners are keen to raise its status.
The third best performer is Quant Network’s QNT token. It has risen 24% in a week and 83% in a month compared to Bitcoin. Quant has received a lot of hype in the past week after being featured at the Sibos conference in the financial sector. Quant could be one of the upcoming CBDC platforms.
Central bank digital currencies could improve our global payments infrastructure and support financial inclusion, but they need to be properly configured and implemented, writes @gverdian in @RiskRegulator.
— Quant (@quant_network) October 8, 2022
Quant is a project that is years old. It has built its own blockchain operating system (Overledger), which allows blockchains to be linked together. The project is strongly oriented towards the business world, as evidenced by the Overledger’s annual fee.
If you are interested in investing in the above-mentioned cryptocurrencies (Casper Network, Huobi Token, Quant), you can find them all at KuCoin. There is also a comprehensive beginner’s guide available for those who want to know more about KuCoin.
Drama in the DeFi sector
Finally, let’s look at the events in the DeFi sector. In the future, instead of just rankings, we will take a more general look at the DeFi and NFT world and highlight some interesting events.
Last week was full of drama as several DeFi services were hit in one day. The largest of these was an attack on the Mango Markets protocol worth over $110 million. The dapp in question is built on the Solana platform. We covered the issue in more detail in this week’s news overview.
The case eventually ended with one of the attackers coming forward and making a deal with Mango Markets. He ended up keeping about $47 million of the $114 million hit for himself. Quite a “bug bounty”.
Statement on recent events:
I was involved with a team that operated a highly profitable trading strategy last week.
— Avraham Eisenberg (@avi_eisen) October 15, 2022
Avraham Eisenberg did not do anything illegal in his opinion but used the protocol according to its rules. There was about 114 million dollars worth of liquidity in Mango Markets at the time of the attack which means the vulnerability wiped out the whole protocol.
Mango Markets was the fifth-largest DeFi app in Solana at the time of the event. As a result, Solana’s total TVL fell by more than 30%, and its ranking dropped from fifth to eighth place in the ranking of the smart contract platforms.
The most popular DEX (decentralized exchange) in the market is Uniswap. This protocol received a light update to its look and feel a week ago. In addition to an improved search function, the Token page now provides useful statistics on the most frequently traded coins on the exchange.
In the big picture, the DeFi market has continued the same sideways movement as in previous weeks.
The TVL for the whole sector is in the range of USD 50-55 billion. The top 10 list of protocols is also completely unchanged from last week. In the blockchain rankings, the biggest change was the aforementioned Solana’s fall to eighth place.