RekTimes Weekly Markets
4 June 2022: Since the global pandemic, the cryptocurrency market rose in value by literally trillions of dollars prior to the major contractions in May 2021 and November 2021. In 2019, the market went through a major maturity stage - functionality developed, interoperability began to rise up, and the space went from speculative protocols to a full-fledged world economy.
The crypto space has moved beyond developers simply coding protocols and now has tens of thousands of individuals quite literally working in the cryptoeconomy and spending crypto as the functioning medium of exchange. It is easier than it has ever been to live and work within the cryptoeconomy exclusively - fiat no longer required.
This was the original dream and motivation behind the creation of Bitcoin in the first place - to give the world an alternative when abuse and malpractice occurs in the economy - exactly what the 2008 Global Financial Crisis showed us. Big banks got bailouts and the people suffered. Satoshi Nakamoto said no more.
Weekly Take Away - The 2022 Cryptoeconomic Recession
With the latest major market contraction, the cryptoeconomy has shown something within its newfound complexity that more or less did not exist before - this is no longer a speculative market crash but a full economic recession.
Companies like Coinbase - an easily identifiable web3 company - has implemented a full on hiring freeze and even rescinded previously awarded offers. A major cryptoeconomic protocol in Terra Luna outright failed - and wiped out the savings of tens of thousands of individuals.
As protocols struggle and die, people literally are being laid off and the job market is becoming increasingly more hostile towards workers. This is no longer just devs and coders anymore but a massive pool of working individuals.
Further Reading - In the Know
- Coinbase Implements Major Hiring Plan Overhaul (CNBC)
- Solana Network Stops Again Due to Consensus Bug (CoinGeek)
- BAYC Faces Another Devastating Multi-Million Dollar Hack (Watcher.Guru)
- The Graph Announces Plan to Sunset Host Service by Q1 2023 (The Graph)
- Coinbase to List Ampleforth's wAMPL Asset (Coinbase)
- New York State Moves to Ban "Dirty" Bitcoin Mining (Time)
Crypto-Economy & Markets
The market overall is due for a bounce after nine consecutive weeks of declining value. Momentum has fallen quite significantly and looks to be heading for a bottom before a bounce.
This does NOT mean the final market bottom is about to be in. It simply indicates that the market is building towards a bear market bounce before prices can fall significantly lower should that be the case. This will be expanded on in the final Market Analysis section.
The Fear & Greed index has remained constant at a low value of 14 points, remaining in a state of 'Extreme Fear'.
The full Fear & Greed Index chart is shown below:
Total Market
The Total Crypto Market remains down a full 60% since the November 2021 peak, a loss of $1.8 trillion overall. Since the Total Crypto Market lost its hold on the 50 MA (moving average), it has sold off nine consecutive weeks, a historic sell-off trend.
The 200 MA is approximately down another $359 billion (~30% loss) from current levels.
The Crypto Total Market Cap is shown below:
Bitcoin
Bitcoin has in fact held up better and even minted a green weekly candle (thus far), breaking away from the overall market trend. This was something we actively discussed in our last issue of Weekly Markets.
Presently, Bitcoin has retained its valuation of ~$29,500 but remains 57% off all time highs.
Bitcoin is roughly 24% above its 200 MA and appears to have slowing selling pressure. Should a bounce occur in the market, look for Bitcoin to lead it.
The Bitcoin/USD Weekly chart is shown below:
Total Altcoin Market (excludes Bitcoin)
The Total Altcoin Market has taken a loss of 63% since November 2021, finally eclipsing a $1 trillion loss. The Total market has another 34% to go before it reaches its 200 MA that is now trending along significant long term price support.
Ethereum finally sunk against Bitcoin in the overall market, falling well $2,000 after failing to break through previously. Ethereum now stands at $1,770 and looks poised to at least make an attempt at reaching $1,250 levels.
The Total Altcoin Market Cap is shown below:
The Ethereum/USD Weekly Chart is shown below:
True Total Altcoin Market (excludes Bitcoin, Ethereum)
True altcoins have actually shown more stability over the past two weeks versus the market. Ethereum has been responsible for the largest loss of capital, with the True Total Altcoin Market remaining 62.5% down from all time highs and 33% above the 200 MA.
This could end up being a temporary level of consolidation but it entirely depends on the risk tolerance of external investors and the probability of a Bitcoin rally in June.
The True Total Altcoin Market Cap is shown below:
Markets Analysis
There is a growing probability of a relief rally coming to the cryptocurrency market. While this is never a 100% guarantee, after such tremendous selling pressure and the MACD being at extremely low levels, a reversal of some kind appears highly likely to essentially trap more bullish investors prior the next leg down.
Bitcoin appears the strongest to lead such a rally into late June. It is the only asset versus the market to make effective gains. Of course, all of this entirely depends on the health of the macro-economic environment. The long term outlook remains unchanged - expect more pain economically around the globe as the economy continues to weaken.
RekTimes is recommending a hold with respect to current prices. Expect short to medium term gains but more long term losses as the market continues through the latest recessionary market contraction.
Coming RekTimes Articles:
Our research piece on Germany & Blockchain Adoption is complete and will be released Monday, June 6. We have also been asked to pause our release on the AMPL/SPOT adoption as more details have been made available that will be incorporated.
Look for Weekly Markets 1.36 to be released June 10 and our Q2 Summary Report to come out July 1st.
- Germany & Blockchain Adoption - JUNE 6 RELEASE
- RekTimes Weekly Markets 1.36 - JUNE 10 RELEASE
Long Term Projects
- Investigation on MOBI
- Proposal Report on Ampleforth - COMPLETE
- Q2 Summary Report - JULY 1 RELEASE
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