Bitcoin Clings On to Critical Support
Amid the broader horizontal market trend, Bitcoin (BTC-USD) sustained its sideways momentum this week. The flagship currency jumped from last week’s lows to reach a high of $19,889.15 and is currently holding above the $19,100 mark.
The latest on-chain data from CryptoQuant highlights that approximately 48,000 BTC have been withdrawn from Coinbase throughout the week. This massive outflow is the biggest since June 2022, with exchange outflows typically viewed as a bullish sign. Nevertheless, the technical price action does suggest that Bitcoin might have further room to fall as it nears a breakout.
According to market analysts, BTC has been rangebound for quite some time and is still unable to find a clear breakout past the critical $20,000 resistance level. With U.S. inflation now at a 40-year high and further interest rate hikes expected, risk appetite has consistently declined. Amid this macroeconomic backdrop and the U.S. Dollar still strengthening, Bitcoin might come under renewed pressure as additional rate hikes approach.
Altcoins Stage a Comeback
Many major altcoins have been able to hold on to their positions this week and inch higher, with a few low and mid-cap altcoins registering double-digit gains. Polygon (MATIC) delivered the best performance among the top-ten altcoins by capitalization. Other low and mid-cap altcoins like Uniswap (UNI), Quant (QNT), Elrond (EGLD), Maker (MKR), Synthetix (SNX), and Lido DAO (LIDO) also registered double-digit gains this week.
Over the last seven sessions, MATIC rose approximately 13.8% after newly inked strategic relationships sparked the upward momentum. The ecosystem has achieved tremendous adoption growth throughout 2022, and this latest upturn in the token’s valuation comes amid a tie-up with Brazilian fintech organization Nubank.
Earlier this week, Nubank revealed that it would launch its digital token “Nucoin” on the Polygon blockchain. Additionally, over three million Reddit users decided to create Polygon accounts to scoop up Reddit’s Collectible Avatar NFTs, acting as another catalyst behind the latest price surge.
That said, this week’s top gainer is Aave (AAVE). The token’s value surged by nearly 23.2% over the week as the DeFi protocol prepares to join the first wave of projects to deploy Polygon’s new zkEVM testnet – an Ethereum-equivalent ecosystem focused on cross-compatibility. Another prime catalyst behind this week’s climb was the successful completion of the community vote for the Aave version three deployment on Ethereum.
Axie Infinity, ETHPoW, and USTC Spiraling Lower
Although broader market volatility quieted, play-to-earn (P2E) game Axie Infinity saw its own token lose 5.1% of its value this week. The lingering bearish momentum and the recent Ronin Bridge exploit have impacted the platform’s daily active users. The latest report from ActivePlayer underlines that average monthly users dropped to 701,447 – the lowest since January 2021.
Meanwhile, the newly-launched Ethereum Proof-of-Work (ETHPoW) chain – the blockchain created following a hard fork during Ethereum’s transition to Proof-of-Stake (PoS) – is facing an uphill battle. The value of the chain’s native ETHW token has dropped by roughly 10% over the last seven sessions despite Binance launching a new mining pool for ETHPoW miners.
Following an impressive rebound last week, the value of TerraClassicUSD (USTC) has tumbled nearly 25.5% this week. This comes at the heels of mounting legal pressure on Terra founder Do Kwon, who is allegedly on the run. According to sources, a group of nearly 4,400 Terra investors has formed the UST Restitution Group to track down Kwon, who is currently wanted in South Korea for financial fraud.
Interpol’s Crypto Taskforce, New Tax Filings, and More
As countries ramp up their efforts to crack down on purported crypto crime, the International Criminal Police Organization (Interpol) is introducing a dedicated crypto department to address this growing area of interest. Per the latest developments, Interpol has already set up a special task force in Singapore to help governments fight digital asset crimes.
Taking aim at the confusion surrounding crypto taxation, the United States Internal Revenue Service (IRS) has introduced a new draft filing featuring a broader and more well-defined category covering digital assets and NFTs for 2022 IRS tax forms. The measure is a bid to overcome the complexity involved with filing taxes and declaring crypto assets to authorities.
In regulatory developments, South Africa’s Financial Sector Conduct Authority (FSCA) added a definition of crypto assets to the country’s 2002 Financial Advisory and Financial Intermediary Services Act (FAIS). The decision is the first of its kind to regulate crypto assets in South Africa, bringing the sector under government oversight for the first time.
Last but not least, Japan’s Virtual and Crypto Assets Exchange Association, which regulates crypto assets in the country, has revealed plans to ease crypto laws to attract more cryptopreneurs. By March 2024, the regulator wants to implement a flexible screening process and eliminate the lengthy pre-screening process.