RekTimes Weekly Markets
13 May 2022: The cryptocurrency market is reeling from the complete collapse of the third largest stablecoin in UST and top ten project in LUNA going to zero. With tens of billions wiped out within just days, many investors have begun pulling out of the crypto market entirely.
The cryptocurrency market as a whole fell nearly $500 billion since the beginning of May and shed nearly $2 trillion since the market topped out in November 2021. This comes as the entire global economy is heading full steam towards a new recession.
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Crypto-Economy & Markets
With Terra Luna failing, the crypto market has fallen even further on the Fear & Greed Index.
Market sentiment has remained in a status of ' Extreme Fear'.
The full Fear & Greed Index chart is shown below:
The Total Crypto Market is now down nearly $2 trillion from its peak in November and still has lower lows to mint before an official bottom.
With the latest leg down, the market is firmly under the 50MA. The 200MA is ~35% down from current levels at ~$850 Billion.
The Crypto Total Market Cap is shown below:
Over the past week, Bitcoin actually minted a candle as low as $25,000 after a bounce brought it back under $30,000.
We are projecting a bottom around the 200 MA about $20,000-$22,000 USD.
Bitcoin is down ~57% and is only another ~24% from our anticpated bottom. See our summary below for additional info.
The Bitcoin/USD Weekly chart is shown below:
Ethereum and the altcoin market, despite falling signficantly already, still has a projected 40% to fall before it hits support at its 200 MA.
It should be noted that Ethereum has held up rather well against the market, but altcoins (including alt L1 chains such as AVAX) still has pain ahead.
The collapse of Terra Luna has helped drag down the rest of the Total Altcoin Market substantially over the past week.
The Total Altcoin Market Cap is shown below:
Many investors within the cryptoeconomy at this point are rightfully burned out. LUNA going to zero essentially destroyed a tight community of well-respected builders, developers, and enthusiasts. We are still projecting losses within the crypto market between 24% (BTC) and 40% (Total Altcoin Market).
Keep in mind - while Ethereum is expected to perform relatively well against the rest of the altcoin market, this by no way means that any altcoins you own may only have another 40% before it bottoms. This could happen much sooner or much, much later.
There will ultimately be many altcoins projects, particuarly small caps, that simply do not have the reserves to weather such a bear market. These projects will disappear.
With all of this in mind, we are recommending cautious buys on Bitcoin and Ethereum. Expect to take losses on both of these coins, but with much of the market 60% down or lower, holding buys from these levels into the future will become profitable over time.
ANYONE who bought cryptocurrencies in 2021 and 2022 should be dollar cost averaging investments down. DO NOT try and time a bottom. We are 70% confident in our projected bottoms for Bitcoin and the altcoin market, but cannot guarantee this.
Please keep in mind this is not financial advice, but merely observations and free analysis. We cannot predict the future, but are confident in the long term technicals & fundamentals.
Coming RekTimes Articles:
- Article on El Salvador
- RekTimes Weekly Markets 1.34
Long Term Projects
- Investigation on MOBI
- Research report on Ampleforth Stablecoin
- Q2 Summary Report
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