Crypto Weekly: 11 – 17 April 2022
An increasing number of new stablecoins have emerged to challenge established players like USDT, BUSD, and USDC. Perhaps the most prominent of these emerging stablecoins is TerraUSD (UST), the decentralized algorithmic stablecoin of the Terra blockchain. UST has cemented itself as one of the leading stablecoins in the crypto space thanks to its rapid growth spurred on by its unique minting mechanics and the growing number of tools available in the Terra ecosystem.
The Luna Foundation Guard (LFG) recently announced that it had bought $100 million worth of AVAX using its UST stablecoin in an over-the-counter trade with the Avalanche Foundation. The AVAX purchase by LFG marks the second Layer 1 token to be added to LFG’s crypto reserve, making AVAX the first major crypto-asset besides BTC to be added to the UST Reserve. Furthermore, according to the official Terra Twitter account, Terraform Labs executed an additional $100 million LUNA-to-AVAX token swap, further aligning the Avalanche and Terra ecosystem incentives.
Recently rumors have been spreading that Near Protocol is gearing up to launch its own stablecoin, USN. Speculation surrounding USN first began in earnest when Zoran Kole, founder of Zorax Capital, claimed that Near Protocol would be launching a stablecoin that will offer 20% APY, similar to UST. While no timeline or official statement regarding the rollout of UST has been shared at the moment, interest in NEAR is high.
In contrast, US Treasury Secretary Janet Yellen delivered her first full-length speech regarding cryptocurrencies following Biden’s crypto-focused Executive Order earlier this year. Stablecoins appear to be an area of concern for US regulators, with Yellen highlighting the need for more robust legislation towards stablecoin to ensure that consumers and the broader US financial system are protected from potential risk. In particular, she notes that while most providers claim to back their stablecoins with traditional assets, no legislation ensures that stablecoins can be converted back to their fiat counterparts.
Noted crypto bulls Michael Saylor, CEO of MicroStrategy, and Cathie Wood, CEO of Ark Invest, both remained optimistic about the future of BTC and the market at the Bitcoin 2022 conference in Miami. Wood maintains Ark Invest’s $1 million BTC price target by 2030 despite recent corrections, while Saylor notes that the attitude in Washington towards crypto is largely positive, with Biden’s Executive Order likely to have a positive impact on the growth of the crypto industry moving forward.
Meanwhile, according to a report published by Arcane Research, publicly listed miners’ share of the Bitcoin hashrate is 19%, up from only 3% in January 2021. Since 2021, the number of mining companies going public has grown significantly, with the number of publicly listed mining companies at 26 currently compared to the scant handful at the start of 2021. The US is still the global BTC hashrate leader, with the country accounting for 44.95% of BTC’s total hashrate.
A report from Bloomberg argues that the upcoming merge between the Ethereum mainnet and the Beacon Chain test system scheduled for sometime in Q2 this year could skyrocket ETH prices to the all-new levels as DeFi’s leading Smart Contract platform transitions from Proof-of-Work consensus to Proof-of-Stake.
On-chain Bitcoin analytics firm Glassnode reports that Bitcoin outflow from exchanges has reached a new high of approximately 96.2k BTC/month. This suggests that BTC accumulation is growing and is a bullish sign for the market as the number of long-term investors grows.
Finally, according to a report from Gemini, crypto ownership in the US, Latin America, and Asia Pacific region has nearly doubled in 2021. The report cites inflation as the primary driver behind the rapid growth in crypto adoption.
Weekly Technical Analysis: 11 – 17 April 2022
Bitcoin (BTC)
BTC underwent a mild correction, but the $41,700 support level remained intact. However, BTC could see a retracement to the $37,000 level if support is broken this week. If BTC can remain above the support level, it will look to target resistance at the $48,000 mark. Risk-averse traders are advised to be cautious, as BTC’s immediate trend remains highly volatile due to the lack of news/factors that would support a rally or a correction.
Ethereum (ETH)
ETH faced a similar correction to BTC, with its short-term support remaining intact. If the support at $3,000 is broken, look for ETH to enter a downtrend. Assuming prices can remain above the support level, ETH will be targetting resistance at the $3,600 mark this week.
Balancer (BAL)
BAL is up +7.5% from last week overall; however, there has been a mild decline from last week’s peak. Keep an eye on the 500 baht support level. If it breaks, BAL may struggle to get a chance to rally again. The resistance level is the original high of 740 baht; breaking through resistance will confirm BAL’s uptrend.
Dogecoin (DOGE)
Dogecoin is up by +5.2% from last week following the news surrounding Elon Musk. Overall, DOGE is still in a bearish trend. The key support to use as a buy-in point is 4.40 baht. Traders are advised to be ready to cut losses if prices fall through the support. The short-term resistance is at 6.20 baht.
Trading and Investment Considerations For The Week
Minutes from the previous FED meetings revealed that many regulators are pushing for a 0.5% interest rate hike at the upcoming meeting and tapering the FED’s QE program to $95 billion per month. While these rumors have impacted the market, nothing official has been announced yet, and a degree of uncertainty remains regarding the monetary policy moving forward.
Traders and investors are advised to keep an eye on the upcoming release of the US Consumer Price Index (CPI) figure on 12 April. If CPI is greater than last month’s 7.9%, this could force the FED to enact more conservative monetary policies imminently, which could have a negative impact on the market.
The Bitcoin 2022 conference in Miami had little effect on the market, with the gathering failing to spark any sort of rally. Overall, the market trend remains sideways, with the next clear catalyst for change being the aforementioned CPI figures later this week. Traders and investors who do not wish to deal with volatility or uncertainty are advised to wait for the market trend to become clearer before investing further.
Historically, BTC tends to post positive performances from April to June, with the market often stagnating around July to September. If Bitcoin can remain above its $41,500 support level and US inflation figures are relatively reasonable, the market could return to its bullish ways this April.
Many altcoins have undergone price corrections and have dropped to very attractive price points without losing their uptrend. If the market can recover, consider this a golden opportunity to enter positions for short-to-long term gains.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
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