News
12
Jul
crypto-market-review-11

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Market overview 7/12: Prices have fallen after a promising week

Bitcoin’s price was moving up nicely until a downfall started late last week. Altcoins have had a tough week as well, only Quant is standing out as a strong performer. Nothing major has happened in the DeFi sector.

Bitcoin’s price had a rare positive week

Bitcoin’s price is $19,700 at the time of writing this article. The price was almost exactly the same a week ago. Even if there hasn’t been a major change, Bitcoin has been through a small rollercoaster.

The graph below shows Bitcoin’s price development on daily candles. The blue line is the 50-day moving average and the purple line is the 200-day moving average.

btc-1207

The market looked positive last up until Thursday. Bitcoin’s price reached $22,500 and was up 16% on the week. The price started to get close to the 50-day moving average as well. The trend turned on Friday, though. We have now seen the price fall for four days in a row.

Even though Bitcoin lost half of its weekly gains during the weekend, we got a green weekly candle. Bitcoin’s price was up 8% last week. This was the best week since March and only the third green weekly candle during the previous 15 weeks.

weekly bitcoin

Bitcoin’s price has now fallen back to where it was a week ago. The downtrend was triggered, once again, by the US stock market.

The US stock market is down because of two main reasons. The new CPI (inflation) number is published tomorrow and it’s not looking good. The market expects inflation to remain between 8.5% and 9.0%. This means the Federal Reserve must keep hiking rates.

Interestingly, it seems that inflation is no longer the hottest topic in the investing community. Investors are increasingly concerned about the recession. All public companies will be releasing Q2 reports in the coming weeks. It’s widely speculated that there will be some nasty surprises.

All this means more trouble for the Fed. The high inflation forces the US central bank to hike rates, but how much further they can slow the economy? Soon the unemployment rate starts to pick up as well. Many investors believe that the Fed is reaching a point where it can’t hike rates any longer.

The next bull market (in stocks & crypto) cannot begin until the Fed is supporting the markets again. Fed cannot change its current policy until inflation shows real signs of slowing down or the economy crashes.

Many investors feel that Fed can hike rates only one more time. This means that we could be reaching the bottom of this bear market. Even so, we recommend all investors be prepared for one more leg down.

Altcoins have performed poorly

The altcoin market looked poor a week ago and it doesn’t look any better today. Things were different late last week, but Bitcoin’s recent price trajectory has crashed altcoins even more.

Below is a list of the top 15 cryptocurrencies in the market. Only Shiba Inu has outperformed Bitcoin in the previous seven days. Even SHIB is just marginally on the green.

altit-1207

The top 100 list doesn’t look that great either. Only 17 coins have outperformed Bitcoin and just four of them with more than ten percent.

The best coin by far has been Quant Network’s native token QNT. It is up 42% against Bitcoin in the previous seven days. QNT is also up 14% just in the previous 24 hours.

It looks like the recent software update is boosting the token.

Quant Network has updated its Overledger product. This enables the building of decentralized apps on various blockchains. It’s also likely that many short-term traders have jumped into the QNT train and try to profit from this move.

The popular DeFi app Aave is one of the best performers. The AAVE token is up after the project launched a new stablecoin, GHO. This is how the founder Stani Kulechov tweeted about the matter.

Stablecoins are a hot topic currently, despite the recent collapse of Terra’s UST. The previously mentioned Shiba Inu also revealed its own stablecoin last week.

Polygon (+12.5% vs. BTC) and Internet Computer (+18.1% vs. BTC) have also done. However, we’ll mention the fifth-placed Uniswap, which is up +8.5% vs. Bitcoin despite some FUD that was released on early Tuesday.

Binance founder Changpeng Zhao made the following tweet about Uniswap. He scared the market by saying there could be a vulnerability in the app. This crashed the UNI token price briefly.

Many criticized CZ for jumping the gun on releasing the news since there was no vulnerability. Luckily for investors, this tweet didn’t cause further damage.

There was an Ethereum whale who had become a victim of a phishing attack. This resulted in a quick draining of 3278 ETH tokens (worth $3.5 million) from the wallet. Phishing attacks have become very popular in 2022 and caused hundreds of millions of losses for investors.

No major events in the DeFi sector

There hasn’t been any major drama in the DeFi industry in the past seven days. The liquidity of the DeFi sector has settled to the $70-$75 billion range. We are still in this range with today’s TVL value of $73.28 billion. This number is $1.5 billion lower than we had last week.

defi-1207

Maker is still holding the number one spot with a wide margin. This “OG DeFi app” has dominated the industry after Terra’s collapse.

The top six positions are unchanged from last week. However, JustLend has made some progress in the lower part of the list and jumped from ninth to the seventh position.

defi-prot-1207

JustLend was also the only dapp with major gains last week.

It’s interesting that many DeFi tokens have performed well. For example, Aave, Uniswap, Convex Finance, Curve, and Compound have all outperformed Bitcoin by 4 to 14%. This is great performance when considering how altcoins have generally done.

It just shows that the token price and TVL growth don’t go hand in hand. Even if many protocols have seen gains in their governance tokens, it hasn’t boosted the TVL. This we have mentioned many times before. it also works in reverse; growth in TVL does not result in a higher token price.

Finally, let’s look at the blockchain rankings.

defi-chains-1207

The previously mentioned JustLend is boosting Tron again. The TVL of Tron isn’t much behind BNB Chain anymore. It could be that Tron claims the second position next week.

There are no changes in the blockchain rankings since last week. In general, the DeFi sector has been quite stagnant for a few months now. The rise of Tron is the only exception.

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