News
05
Apr
crypto market review

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 4/5: Bearish signals after a long uptrend

Bitcoin’s price met heavy resistance and started a downtrend a week ago as we predicted. Bitcoin has recovered quite a bit in the past few days. Solana was the best-performing blue-chip altcoin. Terra and Cronos are going strong in the DeFi sector.

Bitcoin’s price met a strong resistance

Bitcoin’s price is $46,600 at the time of writing this article. This number was $47.500 a week ago, which translates to about a 2% fall in price. In general, the past week was uneventful.

The graph below shows Bitcoin’s price development with daily candles. There is also the important 50-day moving average (blue) and the 200-day moving average (purple). You can also see a channel formation Bitcoin has created during 2022.

btc-0504

Bitcoin’s price was at a critical juncture a week ago. It had climbed to meet “the roof” of the channel and also met lots of resistance from the 200-day moving average. At that time, Bitcoin had produced eight consecutive green daily candles.

We wrote a week ago that one should expect a correction. This is exactly what happened. Bitcoin’s price started to go down the very next day after our market overview. However, many were surprised by the size of the correction. Bitcoin dropped close to $44,000 which is only 10 percent from the high-water mark. Analysts expected the price to fall 25 to 30 percent and possibly touch the bottom of the channel.

In recent days, Bitcoin’s price has been on the rise again. Four out of the previous five daily candles are green. It looks like Bitcoin is going to hit the same resistance again in a couple of days. This time it’s different?

In fact, the Bitcoin rocket might get some extra fuel from Miami. That is where the Bitcoin 2022 takes place between the 6th and 9th of April.

Many of our readers remember the highlights of the Bitcoin 2021 conference. That is when Jack Mallers revealed that El Salvador is going to make Bitcoin legal tender. Mallers is one of the speakers again. There is a lot of speculation around his upcoming announcement.

There are lots of rumors saying Apple-related news will be revealed. Apple could purchase Bitcoin as a reserve asset just like Tesla and/or integrate the Bitcoin lightning network. If we see news like this, Bitcoin’s price could easily rally above $50,000.

Crypto investors are generally in between two different market signals. You can find lots of data to support an upcoming crypto rally in the short term, but longer-term macro trends look really worrying.

We write about the U.S. yield curve inversion in our news summary. This “flippening” of short-term and long-term yields has signaled a recession every single time in the past 40 years.

On top of that, we still have Fed raising interest rates, war in Ukraine, potential food and energy crisis, etc. There are lots of potential risks on the horizon and we don’t have any proof yet of Bitcoin being able to rally against a stock market pullback. This is something investors should keep in mind.

Solana is rallying

Let’s take a wider look at the crypto market. Bitcoin’s dominance has fallen from 42.7% to about 41.6% in the previous seven days. When Bitcoin is losing market share it means altcoins are performing better. This is the case again. Let’s look at the so-called blue-chip cryptos first.

The list below shows the 15 largest cryptocurrencies by market cap and their performance against Bitcoin in the previous 24h / 7d / 30d.

altcoins-0504

Almost every single top 15 cryptos is performing better than Bitcoin. The only exceptions are XRP and Shiba Inu.

Solana has had the biggest rally. We don’t see a single news item behind this, but it could be a combination of different factors. One of them could be the Solana ETP that was launched already two weeks ago. It is a fund very much like an ETF that purchases “physical” SOL-tokens instead of futures.

Solana has also been in a great position from a technical point of view. The third factor is probably the announcement made by the NFT marketplace OpenSea. It was revealed that Solana NFTs will be integrated into OpenSea.

Terra Luna is another coin that stands out in the top 15 ranking list. It’s being boosted by the ever-increasing popularity of the UST stablecoin. Luna is burned every time UST is minted.

We wrote a week ago about how Terra has decided to build (purchase) a 10-billion-dollar Bitcoin reserve for UST. This has increased investors’ confidence in UST, which in turn drives the price of Luna higher. Terra purchased 139 million dollars worth of Bitcoin to its reserve last week.

The best performer in the top 100 list is Stepn and its GMT token. If you have never heard of Stepn you are not the only one.

stepn

Stepn is a play-to-earn game built on BNB Chain. The project calls itself a Web3 lifestyle app. The price of GMT has rallied a little over 100% compared to Bitcoin.

Other great performers include Moonbeam and smart contract platforms Celo & Skale. Zilliqa is still rallying in a 7-day period even if the price of ZIL has fallen 11% in the previous 24 hours.

The DeFi sector has followed the altcoin market

Now it’s time to jump into DeFi. We have seen this sector rally against Bitcoin’s falling price in the past week. The TVL is up 5% in seven days. It means that the DeFi sector has followed the altcoin market instead of Bitcoin.

The TVL sits at 236.15 billion dollars today. We are only 10% short of the all-time high!

defi-tvl-0504

Please check the up-to-date information from defillama.com.

Let’s dive deeper into the protocol level. The change has now happened we expected to take place a week ago. MakerDAO has fallen to fourth place and was overtaken by Anchor protocol.

defi-prot-0504

The second-placed Lido jumped over Maker already a week ago. It took a bit longer for Anchor to do the same. This was mainly because Maker had a really bad week. It was the only protocol in the top 15 which lost more than five percent of TVL.

Anchor moving third is the only change at the protocol level.

When we look at blockchains, the top of the list is unchanged. There has been some action at the bottom of the rankings, though.

defi-chain-0504

Waves has been rallying a lot in recent weeks. Now it looks like coming back to earth. This smart contract platform has lost over 20% of its liquidity (TVL) in one week. It almost resulted in Waves being kicked out of the top ten.

Polygon has jumped above Tron and Waves and claimed the seventh spot.

Cronos is also doing well. This is the smart contract platform Crypto.com launched in November 2021. It has been one of the best performers for many weeks. Cronos and Terra are the only blockchains with over 10% TVL growth. If Cronos keeps growing like this, the sixth place is not out of the question in the short term.

eToro banner