News
16
Aug
crypto-market-review-5

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 8/16: The uptrend continues

Bitcoin’s price tested 25,000 dollars last week. The entire crypto market is still in a general uptrend. The biggest meme coins have performed well! Acala is rising fast in the DeFi sector.

Bitcoin’s price touched 25,000 dollars briefly

Bitcoin’s price is 24,000 dollars at the time of writing this article. The price was 400 dollars lower a week ago. This translates to around a two percent move. In general, the past week was uneventful despite Bitcoin making a brief move to 25,000 dollars.

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

btc-1608

Bitcoin’s price is still in a general uptrend that started two months ago. We haven’t seen much development in the past 3-4 weeks, though.

The price has stayed above the 50-day moving average for three weeks. While this is a positive sign, there is still a long way to go until we reach the 200-day moving average. This would happen if the price went all the way to 33,000 dollars. One should also note that the 200-day moving average is still trending downward.

This summer rally has gone hand in hand with the stock market. This is not surprising, since Bitcoin has followed the Nasdaq index closely for the entire year. What is interesting is how much this rally is heating emotions in the investment community. It’s even called the most hated rally ever.

That is because most investment professionals don’t believe in it. Lots of hedge funds are short of the market. In fact, they haven’t been this short since the March 2020 crash.

Markets are supposed to cause maximum pain to investors. The bears are certainly feeling it now. Why isn’t this bear market rally ending!? Hedge funds are soon forced to close their shorts and “FOMO in” with even higher prices. Logically thinking this would be the point where the market turns down and causes maximum pain.

Even if bears are beginning to panic, it’s good to remember, that there is nothing surprising in 20% bear market rallies. They happen all the time in longer bear markets, like the one we have now. Hence, we remain cautious. Bitcoin hasn’t gone up that much in percentage terms either.

It also seems that investors have misinterpreted Fed’s monetary policy. For example, Neal Kashkari made comments last week about how Fed is nowhere near winning the fight against inflation. He feels there is no reason to start slowing down rate hikes. It’s going to be an interesting Q3 for sure.

If we look at Bitcoin as a long-term investment, current prices are certainly appealing. As long as Bitcoin is clearly below the 200-day moving average, there’s a sale going on. Long-term buyers are happily deploying capital at these levels. Even if we’d see one more leg down later in this quarter.

Meme coins have woken up

Altcoins are trending higher for the third week in a row. Bitcoin has lost about half a percentage point of its market share. It’s interesting that famous meme coins have woken up after a months-long cooldown period.

The list below shows the top 15 cryptocurrencies and their performance vs. Bitcoin.

alts-1608

One should pay attention to second-placed Ethereum, which is up 7.5% vs. Bitcoin. The ETH/BTC ratio has increased by more than 24% in one month. Ether is being boosted by the upcoming The Merge update. We had again some positive news regarding that last week.

The biggest movers are the meme coins, though. Dogecoin is up almost 20% and Shiba Inu is almost 27% vs. Bitcoin. It looks like Dogecoin is moving because of news about Dogechain.

Dogechain has launched just a few days ago. Wrapped DOGE tokens are needed for trading, hence the price boost for Dogecoin. There is currently very little information available about Dogechain.

Investors are loving Shiba Inu because of the upcoming Shiba Eternity game. There is also Shibarium Layer 2 solution coming soon. You can find more information about Shiba Inu on Youtube. The SHIB token is the fourth-best performer in the top 100 list this week.

Some investors might interpret the rise of meme coins as a sign of a new bull market. This would be a false interpretation because these coins are moving up based on actual news. You want to see irrational price movements of meme coins instead.

The best performer of the top 100 coins is Ankr. This is a staking infrastructure project. It is now possible to stake the native token Ankr, which is why investors are throwing money at it. Ankr has gained over 56% vs. Bitcoin this week.

The CEL token is the second-best performer. It’s quite surprising considering Celsius is going through bankruptcy hearings at the moment. Looks like the short squeeze on the token is still very much going on. We reported this already last week.

The CEL token has moved from 0.2 dollars to 2.7 dollars in just two weeks. At its peak, the token was trading at 4.2 dollars just 24 hours ago.

Lido is making moves in the DeFi sector

There has been some drama in the DeFi sector recently, but it hasn’t led to major changes in the rankings. When we look at the whole sector, we can see that the TVL number is at last week’s level. The graph below and all ranking lists can be found at defillama.com

defi-1608

Lido looks good at the protocol top protocol rankings. We have mentioned this liquid staking protocol before. Lido has become increasingly popular with Ethereum’s The Merge update approaching. It will soon challenge Maker for the number one spot.

Fifth-placed Curve hasn’t fallen despite the fact that it suffered a DNS attack last week. This was not an attack on the Curve protocol but on the domain instead. The hacker tried to get Curve users to connect their wallets to a wrong smart contract which then stole all funds. This is a very popular method in the world of DeFi hacks.

Luckily, losses were quite small. Binance founder Changpeng Zhao tweeted that his exchange managed to recover and freeze more than 80% of the stolen funds.

defi-prot-1608

We’d also mention Acala Swap at the 11th position. This is a new DEX that launched last weekend in the Polkadot ecosystem. Acala’s aUSD stablecoin was also attacked and lost 99.9% of its value right after the launch. Read more about this incident from this week’s news overview.

Finally, let’s look at the blockchain rankings.

defi-chains-1608

The previously mentioned Acala has jumped all the way to 6th place! It has received 1.6 billion dollars of liquidity out of nowhere. This is the first Polkadot-based blockchain with significant liquidity.

Solana has lost half a billion dollars and dropped to 7th place. It has lost two positions since last week when Acala and Polygon both gained ranks. One should also note that Fantom is now out of the top 10. This platform has lost popularity for quite a long time.

eToro banner