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This Week in Crypto: Downward Momentum Eases
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This Week in Crypto: Downward Momentum Eases

Nearly every major cryptocurrency that briefly bounced back from the prior week’s losses has since retreated from earlier gains to trend horizontally. Even though fear has encircled the market to an extent, the latest FOMC decision may trigger some relief for bulls.

BTC Struggles to Break Resistance Amid Uptick in Volatility

Leading cryptocurrency by market capitalization Bitcoin (BTC-USD) has experienced another volatile week as BTC prices moved sideways while awaiting the outcome of the latest U.S. Federal Reserve meeting.

Despite repeatedly trying to retake the $50,000 level, the BTC-USD pair has continued trending between $46,000 and $50,000 amid monetary policy uncertainty. Prices quickly bounced to $49,000 after the Fed rolled out a new policy roadmap for 2022 that includes multiple rate hikes and a more rapid drawdown of stimulus measures. Still, this more confident outlook for policy failed to buoy prices, with BTC unable to sustain a brief spurt of momentum. At the same time, BTC volatility remains elevated, with the latest figures indicating volatility at its highest point since mid-October.

The Crypto Fear & Greed Index, too, hasn’t deviated much from last week. It is currently standing still at 29, indicating that extreme levels of fear cloud the market. However, despite the ongoing medium-term downtrend, data from Glassnode indicates that BTC net flows have mostly been negative over the last couple of months, turning positive just before the December 4th crash, before reversing to negative again.

Dogefather Elon Musk’s Announcement Sparks DOGE Rally 

While the entire crypto market is trying its best to level out and recoup from the bloodbath earlier this month, memecoin DOGE skyrocketed by almost 23% earlier this week. The sudden spike in prices of DOGE was largely driven by Elon Musk’s recent announcement that Tesla (TSLA) will soon start accepting DOGE as payment for some of its merchandise.

DOGE gave up its spot in the top ten cryptocurrencies list earlier this month. However, with the 23% spike, DOGE is rapidly moving back up through the rankings. The memecoin has already surpassed LUNA to rise to the 11th rank and is quickly closing in on Avalanche (AVAX) to rejoin the coveted top ten list.

While DOGE had a great run earlier this year, it has since plummeted sharply, dropping more than 70% from its all-time high. The announcement by Elon Musk played a crucial role in helping DOGE regain some of its lost momentum. However, the overall market still isn’t convinced of the underlying value of a coin that originally began as a joke. As such, the future of DOGE remains uncertain, leaving investors to gather cues from the market.

December Shocks Arweave as it Drops by > 50%

Since December began, the crypto market has taken a serious step backward, and this week’s price movement hasn’t added much relief for crypto bulls. Despite BTC, ETH (ETH-USD), and ADA managing to level out over the last seven sessions, nearly every cryptocurrency has given up significant value over the prior two weeks.

Arweave (AR) stands out as one of the biggest losers of the lot, with its native token down over 50% in the last couple of weeks, trading close to its recent four-month low. At the same time, Arweave total market capitalization dipped sharply from $2.8 billion to $1.4 billion. 

Other altcoins like Luna and Polygon also suffered significant price drops as the market witnessed widespread sell-offs. Experts forecast a wild ride ahead, especially for altcoins, as low volume and weak risk appetite from traders drive price momentum ahead of the holidays.

Bitcoin SV Spirals after Court Demands Founder Pay $100 Million

Monday, December 12th, a Florida court directed self-proclaimed Bitcoin founder Craig Wright to pay $100 million compensation to the estate of his deceased business partner Dave Kleiman, prompting a sharp decline in already struggling BSV prices. The lawsuit, which wound its way through court since 2018, weighed heavily on the overall market value of BSV.

While the token price surged by 10% following the judgment, the decision didn’t leave a lasting impact on the overall valuation of the token, with prices ripping lower just as quickly as they pumped higher. Since reaching the all-time high of $491.64 in April 2021, BSV has lost more than 74% of its value, currently trading near the $125 mark.

Despite some media outlets interpreting the verdict to suggest that Craig Wright might be the sole creator of BTC, even though the identity of Satoshi Nakamoto wasn’t debated throughout the case, crypto evangelists were quick to point out that this statement remains unfounded. As such, speculation surrounding the identity of the elusive, pseudonymous creator of Bitcoin remains high as the trial leaves many questions unanswered.

Disclosure: At the time of publication, Reuben Jackson did not have a position in any of the securities mentioned in this article.

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