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This Week in Crypto: Bitcoin Dips
Stock Analysis & Ideas

This Week in Crypto: Bitcoin Dips

Amid a relatively quiet news week, major cryptos remain on the back foot as tumult in U.S. markets bleeds into the blockchain universe.

While most networks and protocols are trending in the red, Cardano is outperforming peers while Google steps up its efforts in the crypto payments space.

Bitcoin’s Brief Bounce Fades

After weeks of trending between $40,000 and $44,000, Bitcoin prices show few signs of mounting a rally as the largest cryptocurrency by market capitalization struggles to trend above $42,000 after slipping around 4% week-over-week.

Nevertheless, analysts and banks are forecasting substantial upside in the coin, with Max Keiser, financial pundit and the host of the Keiser Report, predicting that Bitcoin will reach $220,000 before the end of 2022.

Even renowned Chess Grandmaster Gary Kasparov has thrown his hat into the ring, citing Bitcoin’s use as a means to protect against government overreach.

Still, a host of developments could keep Bitcoin under renewed pressure, like Singapore’s latest decision to shutter all the country’s Bitcoin ATMs.

Moreover, a possible European Union ban on mining proof-of-work blockchains has been proposed by the European Securities and Markets Authority (ESMA), potentially denting Bitcoin mining within the Union.

On the upside, only 12% of all Bitcoin supply available is sitting with exchanges at the moment, potentially creating renewed conditions for a supply shock that helps spark a rally higher in the BTCUSD pair. In the meantime, the Crypto Fear & Greed Index remains in “Extreme Fear” territory.

Cardano Performance Outpaces Peers

While most crypto market majors have been pulled lower over the last week, one of the notable exceptions has been Cardano, which has bucked the trend lower to reach its highest point since early December before retracing lower.

The network’s modest gains in price were partly due to the flurry of announcements and activity that have unfolded, especially as interest grows over the forthcoming SundaeSwap DEX launch of an Initial Stake Pool Offering (ISO).

More interestingly, the network is benefiting from a rapid rise in transaction volume, which has flipped Ethereum. On January 17, Cardano recorded transactions that topped Ethereum’s comparable figure by 1.5 billion.

Still, Cardano’s fee revenue remains well below the comparable amounts on Ethereum, highlighting the affordability of transacting atop the network as more dApps and DeFi move in to leverage the blockchain’s smart contract infrastructure.

Broader Correction Continues

Most of the major networks resumed the trend lower over the course of the week, led lower by ChainLink and Polygon. Despite major Ethereum whale purchases of ChainLink and Polygon the prior week, the two networks have been the most impacted by the declines, tumbling nearly 16.5% and 14.%, respectively, over the last seven sessions. 

Another big loser this week was Shiba Inu. Although the memecoin is gradually sapping Bitcoin’s strength in the payments space, this development could not shift the memecoin’s three-month correction lower.

Bitcoin’s payment dominance fell to 27% between August and December as Ethereum, Dogecoin, and Shiba Inu eat away at its market share, according to figures from Bitpay, 

In other news, Crypto.com found itself the victim of a hack that cost well into the tens of millions of dollars worth of Ethereum and Bitcoin. While the extent of the breach was initially believed to be around $15 million due to the theft of 4,600 Ether, crypto sleuths believe the figure is much higher.

The suspicious movement of 444 Bitcoin from the exchange’s payout wallet has raised some eyebrows despite no formal confirmation from Crypto.com. 

Google Dips Its Toes into Crypto Pool

Google has begun hiring in the payments space in a development that briefly helped Bitcoin and the aggregate crypto market edge higher on Wednesday.

This follows efforts to strike relationships with Coinbase and Bitpay to help Google Pay support fiat payments and crypto storage. Former PayPal executive Arnold Goldberg has been tapped to run its payments and emerging market division. 

This latest move contrasts sharply with Google’s hesitance in the market over the years, after previously banning crypto ads before reversing course back in August 2021 to allow approved wallet advertisements on its platform.

In the meantime, Google has expressed no steps designed to begin accepting crypto payments, although it left the door open for its digital card initiative to shift into crypto depending on how digital commerce evolves.

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