News
08
Mar

This website has affiliate links. We may receive compensation if you visit partners we recommend. Read more about our advertising principles from the About Us page.

Market overview 3/8: Crypto market following the stock market down

Bitcoin’s price has crashed below $40.000 again. Cryptocurrencies are still heavily correlated with the stock market, which has been in a downfall due to the oil price surge. The high oil price has traditionally been signaling recession. Meme coins are losing ground while stablecoins gain more market share. The Waves platform is once again performing well.

Bitcoin’s price is back below $40.000

Bitcoin’s price is $38.900 at the time of writing this article. The price was $43.600 a week ago, which is 12% higher than the current price. Bitcoin’s uptrend was cut short last Thursday and Friday. The price hasn’t been able to recover from this dive yet.

The graph below shows Bitcoin’s price with the 50-day (blue) and 200-day (purple) moving averages. We can see that the price has returned again below the 50-day moving average. The 200-day moving average, which is often a signal of a bull market, is far above the current price levels.

btc-080322

The mood was quite different a week ago. Bitcoin had just made the biggest daily candle in more than a year. This joy was short-lived, though. The downfall started on Thursday and escalated on Friday when Bitcoin was down almost 10%.

The price move is not surprising when we look at the stock market. The S&P 500 index has fallen several percentages since Thursday. Yesterday (Mon 3/7) was in fact the worst day for the stock market. Bitcoin survived that with surprisingly small damage.

Markets are going down due to the war in Ukraine. Not because there is a war but because of its side effects. The price of oil is going through the roof now. Many investors fear it signals a new recession. The last time we saw an oil price this high was 2008 – just before the market crash.

Ukraine and Russia are also gigantic wheat exporters. The war might cause food prices to go up at least in Europe. Russia is also threatening to close the gas pipelines, which could cause an energy crisis. All this is happening while the United States economy was already slowing, and the inflation is at a 40-year high.

The macro picture looks extremely blurry. The situation is getting so tricky the Fed might even have to cancel its upcoming rate hikes.

The February CPI numbers will be published on Thursday. If we break the previous figure, which is expected, the market might turn even further red.

It seems that the war in Ukraine is not moving the markets much unless we get some dramatic news. The market is now trying to price up the impacts of sanctions and everything connected to Russia & Ukraine’s economy.

This means we’re going to see more uncertainty and volatility. Bitcoin looks actually quite decent compared to the stock markets. The price of Bitcoin is far higher than it was at January’s bottom. There is no need to panic, but it’s difficult to see a new bull market starting in an environment like this.

Meme coins are losing ground

Last week’s price crash took down Bitcoin’s dominance as well. Not significantly, though, since it still stands at 43.5%. Bitcoin’s market share has gone steadily up since the January 16th bottom (39.1%).

Even if the Bitcoin dominance has fallen slightly from the previous week, altcoins are mostly in the red compared to Bitcoin. It means money has been flowing from Bitcoin to stablecoins. There are also a few altcoin projects that have performed really.

The picture below shows the top 15 cryptocurrencies and how they have performed against Bitcoin (24h / 7d / 30d). There are no clear winners on this list when we exclude stablecoins.

altcoins-080322

Recently re-branded BNB Chain has made some gains. The same can be said about XRP, which seems to move up and down based on news of the Ripple vs. SEC trial. This process has been ongoing since December 2020.

Two themes stand out in the top 15 ranking list: the fall of the meme coins and the strength of the stablecoins. Dogecoin and Shiba Inu have performed shockingly well in this bear market. Now they are finally in danger of falling out of the top 15 list. DOGE is 84% and SHIB 74% down from the ATH.

While traditional cryptos are going down, stablecoins are slowly moving up in rankings. We might soon see three stablecoins in the top 10. Terra’s UST also made it to the top 15 list recently.

The biggest winner of the week has been Waves. We mentioned this project already a week ago. The native token of the Waves platform (WAVES) has gone up 52% against Bitcoin. There doesn’t seem to be any other obvious reason for the price surge except the fact the project has a Ukrainian background.

Besides Waves, there is just one coin in the top 100 list with over 20% gains against Bitcoin: Celo. It is also a smart contract platform – one of the many. The CELO token is probably boosted by the upcoming Espresso hard fork. After this upgrade, the platform will be even more compatible with Ethereum.

The DeFi sector is falling with the rest of the market

The DeFi market wasn’t able to resist the broader trend. The TVL (Total Value Locked) has fallen from 195 billion dollars to 209 billion a week ago. We are now back where we left two weeks ago.

defi-080322

Even if the market share of stablecoins is going up, there are no signs of fresh liquidity being added to DeFi protocols. Though, the dollar value of other collateral coins (ETH, WBTC, etc.) is going down, which might overshadow stablecoin inflows.

The previous report included lots of action. This time we haven’t seen any changes in the top 10 DeFi protocols.

defi-prot-080322

This list was full of green color a week ago. Especially Terra-based protocols such as Lido and Anchor stood out. Now those two are following the broader market. Lido and Anchor haven’t lost the new rankings they achieved a week ago.

There have been some changes in the blockchain rankings. Fantom and Waves are clearly standing out.

defi-chains-080322

Fantom has lost more than a third of its TVL in one week. There is a good reason behind this crash. Investors are nervous because of the sudden departure of Andre Cronje. He was one of the head developers of Fantom and was also involved in many Fantom-based dapps. You can read more about this incident from our news summary.

Fantom dropped to fifth place due to this TVL bleeding. Previously mentioned Waves has moved up to the tenth place. The TVL growth of Waves is coming almost entirely from Neutrino and Vires Finance protocols.

eToro banner