Over the last seven days, most major cryptocurrencies have regained lost ground despite the poorest start to a year on record for cryptocurrencies. Still, questions remain as to whether the market can sustain the bounce, given the prevailing fearful sentiment.
BTC in Relief Rally Mode amidst Recovering Market Sentiment
Following last week’s bloodbath, BTC prices bounced back from the lows at around $39,000 to briefly rise past the $44,000 mark on January 12th. This upward movement comes at the heels of the U.S. CPI (Consumer Price Index) report, which said that inflation stands at 7% for December 2021. The newly released CPI highlighted inflation at a 49-year high, helping fuel Bitcoin’s rebound.
Over the last five days, BTC has gained nearly 1%, indicating that a bullish reversal may be around the corner. Meanwhile, the Crypto Fear & Greed Index is stuck at 21, suggesting “extreme fear” is still gripping the market.
Following BTC’s recent price correction, during which it lost almost 15% in a matter of days, miners have begun accumulating BTC in large sums again. In its weekly on-chain report, CryptoQuant clarifies that investors have started to withdraw substantial Bitcoin quantities from exchanges, amounting to 30,000 BTC (roughly $1.3 trillion) – the highest since September 2021.
Meanwhile, legendary traditional finance (TradFi) professionals continue to highlight their growing fondness for Bitcoin, with famed billionaire stock investor Bill Miller noting that half of his net worth is denominated in BTC, underscoring his positive outlook.
DASH & BIT Dominate Leaderboard as Broader Market Rebounds
While many tokens are still trying to recover the losses from earlier this year, DASH, an open-source blockchain with a native cryptocurrency token, has had a stellar run over the last week. The value of DASH rose by more than 18% last week, helping the token outpace the performance of major peers. However, it has fallen in the past five days.
Likewise, BitDAO (BIT) also delivered a promising 12% rally over the last seven days. The project maintained by a group of contributors holding BIT tokens is quickly expanding its dominance by partnering with existing and emerging projects through token swaps, indicating that its bullish run will continue in the coming days.
Despite the pressure on the aggregate market, other altcoins have also maintained their upward movements this week, including Chainlink’s LINK token, which sustained its recent trajectory higher after adding nearly 10.00% week over week. However, it started to drop in the past four days.
Solana Faces Blockages, as DeFi also Feels the Pinch
Amidst slow transaction speeds and network congestion in recent weeks, Solana (SOL) is finding it difficult to break out higher. Binance confirmed the difficulty encountered by the Solana network earlier this week, after a spate of transaction failures and sluggish transfers. The troubles facing the network have hammered SOL’s value nearly 35% lower from its all-time high of $260.06 as it struggles to remain above support at $150. However, a positive note from Bank of America (BAC), citing its potential to become the “Visa of Crypto,” has helped SOL tokens regain some lost ground.
Besides for Solana’s difficulties, the DeFi ecosystem has been targeted by sellers, as the aggregate crypto downturn over the last few weeks combined with the decline in total value locked (TVL) across DeFi dents the valuation of major protocols.
Ethereum Asserts its Dominance Yet Again
While speculation is high that Ethereum might lose the lion’s share of the DeFi ecosystem to third-generation blockchains, the original smart contract platform is bouncing back hard, shaking off the threats clouding its outlook. As the platform prepares for its much-hyped switch to a more sustainable proof-of-stake (PoS) mining model, experts are claiming that Ethereum’s dominance will continue and won’t face much of a challenge from the alleged “Ethereum killers.”
As per the latest on-chain data, over 9 million ether tokens (ETH) have already been staked in the ETH 2.0 deposit contract, which amounts to around $30 billion in capital. These 9 million ETH tokens represent 280,000 active validators – a number that’s growing at around 1% week-on-week. At the same time, decentralized staking providers like Lido and RocketPool have also aligned their goals with Ethereum, helping Ethereum 2.0 Beacon Chain reach a new staking milestone.
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