News
15
Mar

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Market overview 3/15: A slow week in the market

The price of Bitcoin has barely moved in the past week. Investors are full of uncertainty ahead of Fed’s rate hikes. Terra’s Luna token and UST stablecoin are performing well. The DeFi apps of the Terra platform are also gaining popularity. THORCin’s RUNE token was the biggest winner of the week.

Bitcoin’s price is unchanged

Bitcoin’s price is $38,700 at the time of writing this article. The price was $38,900 a week ago, which means it’s basically unchanged. One can say that the past days have been uneventful in the crypto world.

The graph below shows Bitcoin’s price development in the past six months. The blue trend line is the 50-day moving average and the purple trend line is the 200-day moving average. These trends are traditionally signaling a bull market.

btc-150322

Bitcoin’s price is still clearly below the 200-day moving average, while the 50-day moving average is acting as a resistance for the possible price rise.

We witnessed small movement above and below the $39,000 price level in the previous week. The only exception was Thursday when Bitcoin’s price printed the classic “Bart pattern”.

While Bitcoin is still heavily correlated with the stock market, there are some differences. The Nasdaq 100 index has made lower lows each week since early February. Bitcoin, on the other hand, has been moving sideways.

When we look at the big picture, there are no major changes since last week. The war in Ukraine is as bad as ever and bothering most people in Europe. Investors are trying to price in the long-term impact of Russia’s sanctions. There is also possible energy and food crisis looming on the horizon.

China has also made headlines lately. Not only because of China’s relationship with Russia, which is a whole another topic. The Chinese stock market has looked bad for some time now. Take a look at the stock price of Alibaba below.

We have also witnessed a steep rise in COVID infections. There are tens of millions of people in China in a lockdown, again. One of the closed cities is Shenzhen, which is an important technology hub. New lockdowns might cause more stress to global supply chains.

The Federal Reserve is also in the spotlight this week. Fed is expected to announce first interest rate hikes in years. We wrote about this topic in detail in our news summary. Historically high inflation is forcing the Fed to take action even if the stock market is already tumbling.

There are still tons of question marks and uncertainties in the market. Since cryptos are generally seen as high-risk investments, they are suffering along with the stock market. We recommend a cautious approach until the skies are clearer.

Terra Luna had a strong week again

Bitcoin’s dominance is currently 43.6%. It hasn’t really changed since last week. This is reflected in the altcoin market, where significant price moves are absent. Below is the list of the top 15 cryptocurrencies and their price performance against Bitcoin (24h,7d, 30d).

altit-150322

There is one name that sticks out of the crowd: Terra Luna. This crypto took a breather last week, but it’s flying high again. Luna is boosted by the constant growth of Terra’s UST stablecoin.

Luna tokens are needed (and burned) for creating UST. It looks like Terra’s stablecoin will soon become the third-largest stablecoin in the market. The market cap of UST has grown over $700 million in the past seven days alone. It has grown almost 50% in the year 2022.

Terra founder Do Kwon made also a million-dollar bet about the price of the Luna token. He is betting against a trader called Sensei Algod, who has a very bearish outlook for Luna.

There are also other well-performed altcoins in the top 100 list. The best altcoin was THORChain’s RUNE token with a wide margin. RUNE has gone up almost 84% against Bitcoin in one week. It is the only crypto in the top 100 list with over 20% growth against Bitcoin.

THORChain is boosted by the launch of synthetic assets.

THORChain’s synthetic assets are derivatives, which are backed 50% by the underlying asset and 50% by the RUNE token. You can read more about THORChain from our beginner’s guide.

Privacy coins Zcash (+16%) and Monero (+10%) have also performed well compared to the rest of the market. The reason for this run might be investor speculation regarding Russia’s sanctions. Privacy coins could be one way for the oligarchs to try to avoid sanctions. Though, in practice, the liquidity just isn’t there.

Terra and Cronos are the winners of the DeFi sector

Let’s look at the DeFi market. We haven’t seen any major events here either in the past seven days. The TVL number was 195 billion dollars a week ago. Today we sit at 197 billion. Hence, the DeFi sector has moved sideways with the rest of the market.

Check defillama.com for up-to-date values.

The success of Terra is clearly visible at the protocol level. Lido and Anchor are the only protocols with significant TVL gains in the past seven days. Anchor is 100% running on Terra while about half of Lido’s TVL is also on Ethereum.

When we look at the 30-day performance, the difference is even bigger. There are no other major DeFi protocols with positive TVL growth in the past month. Lido and Anchor stand out from the crowd. Not only they are growing, but the growth rate has also been impressive when considering the market conditions.

defi-prot2-150322

Lido was already at the third position last week, but now it’s followed by Anchor at fourth. It seems like it’s only a matter of time before Lido and Anchor move past Maker.  The Curve protocol is still leading the pack with a nice margin.

There have been some changes at the bottom of the list but that is because WBTC and Multichain are missing.

Finally, let’s look at the DeFi market at the blockchain level. Terra is the only major chain with more than 10% growth last week. The liquidity stored in Terra is now more than 100% bigger compared to the third-placed BNB Chain.

defi-chains-150322

Fantom’s downfall has continued. This is because of the surprise departure of star developer Andre Cronje, which we wrote about a week ago. Fantom has lost more TVL than any other top 20 blockchains. It has also fallen behind Solana to sixth place.

Crypto.com’s smart contract platform Cronos has had the biggest gains. It seems that the DeFi ecosystem is growing rapidly at Cronos. There are multiple dapps with 20%+ TVL growth numbers on the platform.

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