January hasn’t favored the crypto market despite the U.S. Federal Reserve’s latest decision to keep benchmark interest rates on hold instead of raising them to fight inflation.
Despite multiple attempts to bounce from steep losses last weekend, major cryptos have yet to mount a full recovery as fear remains high.
Bitcoin Retreats Following Fed Decision
The price of Bitcoin briefly jumped to an intraday high of $38,820 this week after the U.S. Federal Reserve left interest rates unchanged during its January meeting before reversing earlier gains as it struggles to rebound, sliding over 13% week-over-week.
Earlier this week, BTC prices dipped below $33,000, triggering a massive sell-off. Per analysts, there may be further declines through the end of the month, potentially pushing BTC’s value below the $30,000 mark.
In the meantime, the U.S. SEC has extended its window for approval of the ARK21Shares Bitcoin ETF, which was originally submitted in July of 2021.
The SEC has rescheduled the deadline for approving or denying the proposal for another 60 days, from February 2 to April 3, 2022. While the crypto market continues to suffer, MicroStrategy’s stock price has plummeted by almost 30% in tandem, with the U.S. SEC objecting to the company’s BTC-related accounting strategy.
The company has accumulated 124,391 BTC to date, and plans to continue buying this year.
The good news is that the latest data from Arcane Research shows a significant increase in the BTC spot trading volume over the last week. Even though BTC has lost around 13% value over the past seven days, the 24-hour trading volume has increased by more than 17%.
Only Unknown Altcoins Book Gains
Renewed hope in the market earlier this week was quickly dashed as the aggregate crypto universe pulled lower, leaving few altcoins spared.
Ignoring stablecoins, out of the top 100 coins by market capitalization, the only gainer over the last week was decentralized entertainment platform Bora, which managed to scratch out a near 10% gain over the previous seven days.
Among the top performers with a capitalization of over $1 billion was Alitas (ALT), an infrastructure provider for network protocols seeking stable and secure protocol development and deployment environments. The ALT token registered an increase of almost 75% in the past seven days, alongside a 50% increase in 24-hour trading volume.
Meanwhile, Polygon (MATIC) attempted to reverse higher, matching a synchronous rebound across the crypto market, with its price rising almost 17% on January 26 to reach an intraday high of $1.825 before the Federal Reserve’s decision erased earlier gains.
Part of the catalyst for its rapid bounce to a market capitalization of $13.58 billion from $9.77 billion on January 24, was news of YouTube’s former head of gaming, Ryan Watts, joining Polygon Studios.
Solana Outages Persist
Solana (SOL), one of the best performing networks of 2021, is facing an uphill task of regaining lost ground. Owing to the platform’s ongoing issues with frequent outages and network congestion, the value of SOL has dropped by almost 35% in the past seven days.
With SOL prices dipping quickly, many traders, especially those who borrowed USD using SOL as collateral, witnessed significant liquidations as the collateral’s price dropped as much as 120% of the borrowed amount.
Tweets from FTX CEO Sam Bankman-Fried underlined that the network processed more transactions than every other major network combined over the period, and he also was quick to cite the network’s room for improvement despite the outages that reflect the network’s growing pains.
Other tokens, primarily those in the top 100 by market capitalization, have also suffered significant double-digit losses. Prominent cryptocurrencies like ETH, BNB, ADA, XRP, LUNA, DOGE, DOT, AVAX, and several others witnessed double-digit drops as the market bled out.
Dogefather Musk Pushes DOGE Yet Again
Memecoin $DOGE became the most traded token on BSC (Binance Smart Chain) as whales jumped in to benefit from Elon Musk’s latest tweet where he suggested McDonald’s start accepting DOGE as payment. The tweet came shortly after Tesla started accepting DOGE payments on its website.
Compared to the other cryptocurrencies in the top 10 list, DOGE is among the top gainers, seemingly undeterred by McDonald’s “rejection” of Musk’s proposal. Albeit a weak limp forward, DOGE has re-established itself among the top 10 cryptocurrencies by market cap.
At the same time, a McDonald’s response to Musk’s tweet, where the brand suggested that it will start accepting DOGE if Tesla starts accepting “Grimacecoin,” opened the door for opportunists to cash out.
A fake token created just after the tweet surged as high as 285,641% within a few hours. Almost 10 different Grimacecoins were created on the Binance Smart Chain alone.
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