News
05
Jul
crypto market overview

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Market overview 7/5: A quiet week in the market

We haven’t seen significant changes in the price of Bitcoin since the previous market overview. Investors are waiting for the next inflation print from the US. There have been a couple of good performers in the altcoin market. Tron is the only major platform doing well in DeFi.

No major moves in the price of Bitcoin

Bitcoin’s price is 19,700 dollars at the time of writing this article. The price was about 500 dollars higher a week ago. Hence, we’ve seen some negative development in price, but generally, there has been little action in the past seven days.

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

btc-0507

The downward trend is painfully clear here. Both moving averages are also pointing down. Bitcoin’s price hasn’t been above the 200-day moving average since the early days of 2022. It’s also been several months since the price was above the 50-day moving average.

It looks like the price range of 18,500 to 19,000 dollars is becoming a support zone. The price was testing these levels successfully last week. Though, it’s dangerous to make any stronger assumptions about the strength of this zone just yet.

Bitcoin is still moving parallel with the stock market, which had also a quiet week. This is the main reason why the price seems to be forming a bottom or a support zone.

The stock market is in a waiting mode. Investors have set their sights on Wednesday the 13th when the next CPI print is published in the US. July is also a slow month due to summer vacations. It’s unlikely we see any major movements in the next five to ten days.

There was one important number published last week. The GDPnow of the Atlanta Fed has been a good forecast for the GDP of the US. The latest print was minus 2.1% for the second quarter!

The official definition of a recession is two consecutive negative quarters. The Q1 has been already confirmed to be minus 1.6% GDP. If the Atlanta Fed’s GDPnow is correct, it means that the US has been in recession for the whole year.

The official confirmation comes out in late July. This could cause some shocks for investors with Q2 results that are being released. If the recession is real and major companies are showing weak growth, the stock market will crash. This would impact the crypto market too.

The Fed chairman Jerome Powell has claimed the entire 2022 that the US economy is so strong it can tolerate higher interest rates. The latest GDP forecast puts central bank economists in a bad light. Are these guys ever correct with their predictions?

No major events in the altcoin market

If Bitcoin had a boring week, the same can be said about the altcoin market. The biggest coins have moved in tandem with Bitcoin. The list below shows the top 15 cryptos and their performance against Bitcoin.

alts-0507

There isn’t one top 15 coin that would be up or down more than 10% against Bitcoin. If we don’t count stablecoins, Tron’s TRX is the only coin up more than 5% vs. Bitcoin.

There are a couple of better performers in the top 100 list. Convex Finance, Arweave, and Cosmos (ATOM) are three projects with over 20% gains against Bitcoin.

Convex Finance has made its gains almost entirely today. It seems that investors are eager to buy the CVX token due to a new governance proposal. It is about the algorithmic Frax stablecoin.

Arweave is boosted by the launch of ANS – Arweave Name System.

Cosmos is probably up because of news that came out early last week. It is about the new interchain security feature. This is a major security improvement on the Cosmos ecosystem.

The purpose of Cosmos is to be a hub for hundreds of blockchains. It is possible for each dapp to create a purposely built blockchain in the Cosmos ecosystem. All these blockchains are then connected via the Cosmos hub. This solution is very similar to what Polkadot has built.

In the future, all blockchains will be able to leverage the Cosmos hub validators with interchain security. It’s a major improvement to the security of the smaller blockchains. This will also give the transaction fees to Cosmos hub validators.

All is quiet in the DeFi front

The DeFi sector has suffered greatly from the bear market of 2022. The collapse of Terra Luna, Celsius, and 3AC have increased the loss of liquidity from DeFi protocols.

There hasn’t been any major positive news in the past seven days. The TVL of the entire DeFi sector is up one billion dollars from the previous week. We are looking at 74.88 billion dollars at the moment.

defi-0507

There is just one change in the top 10 ranking list of protocols. Tron platform’s JustLend protocol has increased its liquidity by 51%. This has helped JustLend to move past Instadapp to 9th place.

defi-prot-0507

Maker has dominated the DeFi rankings since the collapse of Terra in May. There has been a clear gap to second-placed Aave, which is unchanged. Third-placed Curve is the protocol that dominated the DeFi sector for months before Maker.

The blockchain rankings are almost unchanged as well. Only Waves and Fantom have traded places since last week. The TVL gap is less than 10 million dollars, though.

defi-chains-0507

Tron is the only platform with significant gains in TVL. The reason is the previously mentioned JustLend protocol. Tron has been boosted by the algorithmic USDD stablecoin for two months now. It was launched just days before the collapse of Terra’s algorithmic UST stablecoin.

USDD has reached a market cap of 700 million dollars.

We mentioned Cardano’s Vasil hard fork in our news overview this week. The purpose is to significantly improve Cardano’s smart contract capabilities. Technical restrictions are currently preventing the growth of the DeFi ecosystem.

Cardano is at 28th place in blockchain rankings with just 120 million dollars of TVL.

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