News
29
Mar
crypto market overview

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Market overview 3/29: Prices keep moving higher!

Cryptocurrencies are still in an uptrend and follow the stock market closely. Bitcoin’s price is now at a critical point after meeting the 200-day moving average. Cardano, VeChain, and Zilliqa have performed well in the altcoin market. Lido switched places with Maker in the DeFi sector.

Bitcoin’s price is at a critical juncture

Bitcoin’s price is 47.500 at the time of writing this article. The price was 42.900 dollars a week ago and just 38.700 dollars two weeks back. Bitcoin is in a strong uptrend which is clearly visible in the price graph as well.

The graph below shows Bitcoin’s price with the 50-day (blue trend line) and the 200-day (purple trend line) moving averages.

btc-290322

The price is at a critical juncture from the technical analysis point of view. Bitcoin has formed a rising channel in the past few months, which is now being tested at the top. A channel like this might feel like a promising pattern, but it actually looks like a bearish flag.

When you compare the graph above and the definition of a bearish flag, it’s hard not to see the similarities. Though, we must remember, that there are always multiple ways to draw technical patterns. Nothing is 100 percent clear.

Bitcoin’s price is also finding resistance from the 200-day moving average. It’s traditionally seen as the border between bull and bear trends. It might be difficult to break this resistance anytime soon since there are lots of traders who believe the price will turn down from here.

It’s not surprising to see Bitcoin’s price move up when we look at how the stock market is doing. For example, the Nasdaq 100 index is up 15% in just two weeks. You typically see stock indexes move 15% in a year.

One must remember that nothing goes up forever. Bitcoin has printed eight green daily candles in a row and 11 out of the previous 14 days have been green. We are bound to get a correction soon. When looking at the price graph above, it wouldn’t surprise us if we see some red candles in the coming days.

The mood on social media is extremely positive. More and more investors believe in Bitcoin’s spring rally. At the same time, we should remember that macro risks haven’t disappeared anywhere. One might say they are even stronger than ever!

The war on Ukraine, 40-year high inflation, rising interest rates, recession threat in the U.S. & Europe. Just to name a few. It’s interesting how high stocks can really rise in this environment. Bitcoin’s price is still strongly correlated with the stock market.

We advise investors to remain cautious. Fundaments are there for a new rally in the crypto market, but that’s not enough if stocks won’t keep going up.

Cardano was one of the strongest altcoins

Bitcoin’s dominance has moved up and down the past week. Eventually, it ended up where it started, around 42.7 percent. This means altcoins have generally moved hand in hand with Bitcoin. Of course, there are always some exceptions.

The list below shows the top 15 cryptocurrency rankings and every coin’s performance against Bitcoin (24h, 7d, 30d).

alts-290322

There is one coin that stands out and that’s Cardano. It’s the only major coin with a better than a 10% move against Bitcoin. ADA is up 28% percent in dollar terms in the past seven days. There are several potential reasons behind this rally, which we have covered in our news article.

It seems that every top 100 coin is up in dollar terms except for Waves. The reason probably is that Waves has moved up so much in recent weeks that a correction was simply due.

The best-performing cryptocurrency is Zilliqa. It is one of many smart contract platforms. Zilliqa was actually the first platform to launch a MainNet with sharding technology. Despite this, it has been in the shadows of other platforms in recent years.

Zilliqa’s native token ZIL has rallied because of metaverse-related news. It is up a whopping 166 percent in seven days in dollar terms.

Zilliqa’s upcoming Metapolis is a MaaS meaning Metaverse-as-a-Service. There is limited information available at this point, but it looks like Metapolis offers tools for software developers to build their own metaverses on Zilliqa. It is using the popular Unreal Engine, which many gamers might know from Fortnite.

There are a dozen of different coins behind Zilliqa with 30 to 50 percent gains. VeChain is currently the number two performer with a 52% price rise in dollar terms. It seems like there are two reasons for the rally: the first-ever VeChain hackathon and the partnership with billionaire Tim Draper.

We mention Apecoin as a third strong performer. It was also one of the rockets of the previous week. Apecoin entered the market with a big buzz just two weeks ago. The APE token is up more than 42% in dollar terms.

It doesn’t seem like there is a specific reason behind this. Many investors are currently speculating about Apecoin’s future applications in the Yuga Labs metaverse. Any investors should always remember the potential selling pressure from Bored Apes owners who received massive amounts of APE tokens as airdrops.

DeFi sector also looking strong

The DeFi sector has moved up with the rest of the market. The total liquidity of the market is a little over 227 billion dollars. Last week the TVL was 216 billion, which translates to a growth of about five percent. The TVL growth has been strongly correlated with the crypto market this year.

defi-290322

Every single top 10 protocol has green color in the 7-day TVL column. We have also seen changes in the top three as we predicted a week ago. We saw MakerDAO fall behind Lido & Anchor to fourth. This turned out to be partially true. Maker did fall but it kept the third place.

Lido is a liquidity protocol running on Terra & Ethereum. It is now the second-largest DeFi app. Lido is the only protocol with clearly higher than 10% TVL growth in the past seven days. Anchor couldn’t keep up and hence, it stays behind MakerDAO.

defi-prot-290322

We also mentioned the upcoming change to the Anchor protocol in our news review. The fixed 20% yield for UST stablecoin becomes dynamic. The yield can change a maximum of 1.5% up or down in one month. Time will tell whether this is going to reduce the popularity of Anchor.

Terra has so far paid part of the yield from its own pocket. This has helped to create massive demand for UST and Terra’s Luna token, which is burned each time UST is created. The dynamic yield is going to bring the yield to a more sustainable level.

Finally, let’s look at the blockchain rankings. There are no changes in the top positions this week.

defi-chains-290322

It’s a bit surprising that both Fantom and Avalanche have lost TVL. When it comes to Fantom, this is a trend we’ve seen already in previous weeks. Avalanche has done well in 2022 but it has lost liquidity from several key protocols in the past seven days. Though, Avalanche still holds fourth place with a wide margin.

Waves keeps rallying at the bottom of the list, even though the native token was the only coin on minus in the top 100 list. Waves platform has grown its TVL by 262% in just one month.

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