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This Week In Crypto: Uncertainty Hurts Investor Sentiment
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This Week In Crypto: Uncertainty Hurts Investor Sentiment

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The broader crypto market has continued to consolidate and move sideways, as investor sentiment lingers around the “extreme fear” territory.  Despite this, there continue to be positive developments in the crypto space.

BTC Consolidates Below $30,000

Bitcoin (BTC) is currently stuck in a tight range, with the seminal cryptocurrency remaining under pressure as the Federal Reserve signals more interest rate hikes lie ahead. The largest cryptocurrency by market capitalization has been struggling to sustain itself above the $30,000 resistance level since the start of this month. 

Due to the uncertainty regarding how many rate hikes the Federal Reserve will implement to control inflation, crypto and equity markets are moving sideways. While some investors expect a relief rally to arrive in the coming days, derivatives data highlights that BTC positions with open interest worth $1.81 billion are set to expire on May 27th and might further impact BTC’s price.

Meanwhile, a newly-published report from Arcane Research shows that the daily Bitcoin spot trading volume has again fallen to around $4 billion after its recent big surge. This suggests that BTC market activity is on the decline and that the general interest in BTC is diminishing.

Dominant Altcoins are Facing an Uphill Battle

Solana (SOL) has lost around 15% of its value this week, pushing its total valuation down by more than 75% year-to-date (YTD). Over the past 24 hours, trading volume in Solana has rocketed higher by about 60%. Despite its bounce from recent lows of $40.00, SOL’s price continues to trade within a bearish technical pattern. 

Another popular altcoin, Avalanche (AVAX), has lost around 18% of its value over the past seven sessions. Earlier this month, the Avalanche Foundation stated in a Forbes interview that it lost around $60 million following the Terra ecosystem crash.

The Avalanche Foundation had partnered with Terraform Labs to improve interoperability between the two networks. However, Terra’s crash impacted its native AVAX token, sparking more than 60% losses over the past 30 days.

Another underperformer, Algorand (ALGO), gave up nearly 13% of its value this last week. While the value of ALGO rallied sharply following the network’s partnership with FIFA, it has since shed all gains and recorded new lows, with the network’s native token struggling to ward off bears.

Small-Cap Altcoins Sidestep the Bearish Bias

Even with market volatility hanging over sentiment, some lower capitalization altcoins managed to register impressive growth this week. Over the past seven sessions, Tron (TRX) has gained nearly 18%, mainly due to the launch of its USDD stablecoin.

Amid this momentum, Tron (TRX) has overtaken Shiba Inu (SHIB) to become the 14th biggest cryptocurrency by market value. As the broader market struggles to recover, TRON chain’s TVL (total value locked) is displaying promising growth, surging more than 33% this month to reach $5.5 billion.

Amid weakening market confidence, Monero (XMR) stood out this week, with its value surging by nearly 16.6% over the last seven sessions. As a privacy-focused cryptocurrency, the Monero network is witnessing increased user activity, leading to a sharp rise in the native token’s value.

Other notable gainers of the week include Tezos (XTZ) and The Sandbox (SAND). The value of XTZ increased 9% this week, primarily due to the launch of eBay’s sports NFT collection on the Tezos-powered NFT platform OneOf. Sandbox (SAND) is up about 7% this week. SAND’s 24-hour trading volume has also rocketed, rising almost 123%. 

Global Adoption Continues Despite Unfavorable Conditions

Irrespective of the volatile market backdrop, investment in blockchain technologies continues apace. Underlining this point, venture capital firm a16z successfully raised its fourth crypto-focused fund worth $4.5 billion, bringing the total sum allocated by the firm to digital currencies and blockchain to more than $7.6 billion.

In addition to early-stage ideas, the new investment vehicle will also invest in more mature projects. According to the firm, approximately $1.5 billion of the latest funding will be aimed at seed investments, while $3 billion will be devoted to venture investments.

Following the approval of Bitcoin as legal tender in the Central African Republic (CAR), CAR President Faustin-Archange Touadera has announced the construction of the first legal crypto hub, Sango, thereby making crypto accessible to all. 

Finally, Japanese crypto exchange Bitbank, in partnership with Sumitomo Mitsui Trust Holdings, is all set to establish the Japan Digital Asset Trust (JADAT) to offer custodial services, auditing, and wallet insurance to facilitate the entrance of institutional players into the Japanese digital asset market.

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