RekTimes Weekly Markets
10 April 2022: Global markets experienced a modest rally recently after an extended decline. This is especially true in the cryptocurrency market, as hype has grown for coming releases (most notably the Ethereum merge with PoS).
Despite this increase in value, many assets are showing at least temporary top signals. Probabilities are beginning to favor another coming decline in markets, one that has the potential to be more significant (>5% in markets such as the US500 or Bitcoin).
Alongside market analysis, there have been some growing news developments within the cryptocurrency market, especially as the "metaverse" continues to grow in popularity. This trend has been similar to the trend with NFTs last year in 2021.
In a rush? Here are this week's key takeaways:
- Probability of at least a temporary decline in markets soon grows
- Ronin Bridge hacked for over $600 billion USD, biggest ever
- Russia looks to avoid bankruptcy and continue debt payments
Top Headlines
The global economy is still feeling the affects of rampant inflation. The United States and Europe are reeling under massive price hikes. For example, the German retail associated suggested that prices may be set to increase between 20-50%. The US still has heightened prices in nearly every single sector.
Within blockchain markets, most of the talk has been centered around two main points: the coming Ethereum merge to PoS and the recent Ronin bridge hack that has effectively been the single largest hack in the history of cryptocurrencies.
Ethereum's coming merge to PoS is expected to bring radical changes to the network, including a near 99% efficiency boost and ETH going fully deflationary due to EIP-1559. The Ronin bridge hack resulted in $600 million USD worth of ETH (and some USDC). Axie Infinity, the protocol associated with the bridge, stated that $150 million USD had been raised via Binance to restore lost funds.
It remains unclear as to how the remaining deficit will be raised.
Further Reading - In the Know
-
US Stops Russian Bond Payments (Reuters)
-
Russia serves debt in the ruble for first time (Ghana News Agency)
- Update on Chainlink integrations (Twitter / Chainlink)
- Russia holds over $130 billion USD in cryptocurrencies (CoinTelegraph)
Crypto-Economy & Markets
After a substantial run up to the 200 day moving average (DMA), the Total Crypto Market has cooled off. Markets remain elevated at just under $2 trillion USD.
Additionally, market sentiment has declined to a status of 'Fear', down from a neutral status just last week.
The full Fear & Greed Index chart is shown below:
Total Market
On the weekly chart, the Total Crypto Market fell significantly and looks poised to close below its 50 weekly moving average (WMA). This decline put it down on the daily chart and raises the probability of a coming decline.
The Crypto Total Market Cap is shown below:
Bitcoin
Bitcoin currently sits at strong support, but has limited upside. Bitcoin remains at a price point above $43,000 USD.
The Bitcoin daily chart is shown below:
Alt Coins
The altcoin market (total crypto market cap minus Bitcoin) has some room to run as it sits between its 200 and 50 DMA. This chart remains dominated by Ethereum.
The total market cap, minus Bitcoin, is shown below:
Summary
There is a singificant probability of a coming decline in all markets, most notably the cryptocurrency market and the US500 stock index. How deep the decline will be is impossible to tell. It is also worth noting that certain assets with the cryptoeconomy has already had significant declines.
With Russia attempting to hold off total bankruptcy and the Ruble down tremendously since the Russia-Ukraine War began, the most valuable currency they have left is an estimated $130 billion USD worth of cryptocurrencies (mostly estimated to be Bitcoin). Should Russia need to liquidate, substantial selling pressure will be placed on Bitcoin and the greater cryptocurrency market.
Keep in mind that a decline in Bitcoin now means a decline in multiple markets. Terra has billions in Bitcoin as its UST reserves, El Salvador essentially relies on the price of Bitcoin remaining elevated to stay solvent, and companies like Tesla openly hold Bitcoin on their balance sheets outright.
With momentum declining, expect at least a temporary decline in market prices with the highest probability occuring sometime over the next 1 to 2 weeks.
Coming RekTimes Articles:
- Article on Near Network
- Article on Ronin Bridge hack
- Article on MakerDAO (recently delayed but a fresh piece is coming in 1-2 weeks)
- RekTimes Weekly Markets 1.30
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