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Market overview 4/26: A week full of volatility

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Bitcoin’s price crashed to 38,000 dollars but recovered back inside an important trend channel. Dogecoin and Apecoin have performed well. Terra’s DeFi apps are still growing fast. Is Near Protocol going to show similar performance in the coming months?

Bitcoin’s price recovered back to above 40,000 dollars

Bitcoin’s price is $40,400 at the time of writing this article. The price was $41,500 a week ago and $40,200 two weeks back. This shows that we’ve mostly seen slow downtrend and sideways action in April.

The past week was full of volatility. Even if the price is above the 40K mark today, the situation was different on Monday afternoon. Bitcoin crashed to almost $38,000 and fell out of a major trend channel.

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The graph above shows Bitcoin’s price development on daily candles. It has also the important 50-day (blue) and the 200-day (purple) moving averages.

What we have now is a very interesting setup. Bitcoin’s price fell out of the trend channel already on Saturday and closed outside also on Sunday. It looked like the price would keep falling on Monday until there was a big reversal. It was, once again, triggered by a major move in the stock market.

The Monday candle looks like a hammer, which signals a trend reversal. The situation was identical a week ago. Bitcoin fell out of the channel on Monday but climbed back and formed a hammer. There was indeed a trend reversal but trend reversed indeed but only for a couple of days.

The latest downtrend was (unsurprisingly) caused by the Fed. This time it was the chairman Jerome Powell who gave aggressive statements regarding rate hikes at Thursday’s IMF meeting. His comments made markets tumble and Bitcoin followed.

As we have written for months, Bitcoin’s correlation to Nasdaq (tech stocks) is at a very high level. Cryptocurrencies are seen as a high-risk investment in the current climate.

Last week’s price fall was somewhat surprising because Powell didn’t really signal anything unusual. Fed has been informing about its intentions for months. The market was spooked by Powell’s statements anyway and sold off. It might be that some of this overreaction has been taken out this week.

Nothing has really changed in the big picture. Bitcoin’s price is still below the 50-day and 200-day moving averages. It’s barely back in the trend channel too. It’d only take about a two percent drop for Bitcoin to fall out again. This would make the short-term outlook very bearish.

It’s important for investors to remain calm and realistic. There are lots of macro risks in the market that are not going anywhere in the near term. The climate is completely different from what investors have been used to since the 2008 financial crisis.

Elon Musk’s Twitter deal helped Dogecoin’s price to move

Now it’s time to look at the broader crypto market. Bitcoin’s dominance has stayed largely unchanged again, so one shouldn’t expect any major moves in the blue-chip altcoin market. We can see both winners and losers in the top 15 rankings.

The list below shows the 15 biggest cryptocurrencies with the price-performance against Bitcoin (24h, 7d, 30d).

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Last week there was just one cryptocurrency with a 5%+ move against Bitcoin. That was Terra Luna. The same coin is one of the best performers again.

We have mentioned Terra Luna almost every week in the past few months. It is constantly boosted by the growth of the UST stablecoin. UST is already the 12th biggest cryptocurrency by market cap. It’s moving fast towards the top 10.

The best performer of the top 15 coins was Dogecoin. This meme coin went up more than 25% yesterday (4/25) due to the news of Elon Musk purchasing Twitter. We wrote more about this in our news overview.

Investors are speculating about the possible use of Dogecoin in the Musk-owned Twitter. Maybe it could be a currency, maybe it could be used for tipping, who knows. There is no official information about any of this.

The best performer on the top 100 list is, again, the Apecoin. The APE token was also the hottest cryptocurrency a week ago. Apecoin has climbed about 50 % against Bitcoin in seven days. The price moves higher due to an NFT mint by Otherside metaverse.

The upcoming NFT sale requires APE tokens for payment, which is why the demand has been high. You can use Apecoins to buy virtual land in the Otherside metaverse.

Kava is a smart contract platform, which hasn’t received much attention in recent years. Its native token KAVA got a nice price bump last week because of a new software upgrade and Ethereum-Kava token bridge. Kava is up more than 25% against Bitcoin.

Kyber Network Crystal (KNC) and Curve (CRV) complete the list of best-performing altcoins.

Curve is about to lose the number one spot in the DeFi market

We haven’t seen too much action in the DeFi sector. The TVL number of the entire DeFi market is 213.36 billion dollars today. We were looking at 216.5 billion a week ago. You can find the up-to-date stats at defillama.com.

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When we look at the protocol rankings, we can see there is a change coming up. Lido is growing fast and threatening Curve’s number one position at any day now. There are less than one billion dollars separating the two in TVL.

Lido and Anchor have grown really fast in the year 2022. They are both rising because of the popularity of the UST stablecoin, which has given a big boost to the Terra platform. Lido and Anchor gained more TVL last week than other top 10 protocols.

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There has been just one change in the protocol list: Aave has fallen to sixth place below Convex Finance. Aave used to hold the number one position for quite a while, but now it’s far from the top protocols in terms of TVL. Aave token has also been a poor investment in the past year.

There hasn’t been much action on the blockchain rankings either. Just Polygon and Tron have traded places (7th and 8th).

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The growth of Lido & Anchor protocols can be seen in this list as well. It looks like Terra is building a bigger and bigger gap against the third-placed BNB Chain.

We should also take a look right outside the top ten, where we have Near Protocol at 12th place with 1.7 billion dollars in TVL. Liquidity on the Near platform has grown 157% in one month!

We should see Near Protocol in the top 10 shortly. This is because the project launched its own algorithmic stablecoin, USN, this week. We have already seen how much UST has helped Terra to grow. If USN is anywhere near as popular, it could boost Near Protocol to new heights. Investors should keep an eye on this.

You should also read our Near Protocol beginner’s guide for more information about the project.

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