Crypto Weekly: 15 – 21 May 2023
The combined market value of BRC-20 tokens on the Bitcoin network has successfully surpassed the $1 billion threshold, with a daily average trading volume of approximately $207.7 million. The network boasts only slightly over 14,000 BRC-20 tokens, a stark contrast to Ethereum’s 400 million tokens.
The transaction value on the Litecoin network has surged due to the increasing costs and network congestion resulting from the popularity of BRC-20 tokens on the Bitcoin network. As a result, users are seeking alternative networks for their transactions. The transaction value on the Litecoin network has grown more than fivefold since the beginning of the year.
Paypal’s first quarterly digital currency holdings for this year were revealed to total $943 million, representing a 56% increase from the previous quarter. Bitcoin constituted the highest proportion, followed by Ethereum, Bitcoin Cash, and Litecoin. Despite the unchanged holding quantity, the total asset value has increased due to rising market prices.
Tether disclosed that Bitcoin holdings accounted for 2% of its reserve assets in the first quarter of this year, amounting to $1.5 billion. In contrast, gold reserves stood at 4%. Additionally, Tether recorded a net profit of $1.48 billion in the first quarter and saw a 20% increase in the circulation volume of its tokens.
According to market analysis platform, Santiment, the supply of Bitcoin held in exchanges has fallen below 6%, standing at 5.84%. This is the lowest level since December 2017, possibly due to investors’ distrust of storing digital assets in centralized exchanges (CEX).
Data from CCData indicates a drop of over 48% in the trading volume in Binance’s Spot market in April, in line with a roughly 40% decline in the broader crypto market trading value to $287 billion. This represents the second-lowest level since 2021, due to macroeconomic conditions and several bank collapses in the United States.
Grayscale has filed documents with the United States Securities and Exchange Commission (SEC) to establish three new ETFs investing in digital assets: Grayscale Ethereum Futures ETF, Grayscale Global Bitcoin Composite ETF, and Grayscale Privacy ETF. However, it has faced consistent rejections in the past.
Trading volume on Uniswap has surpassed centralized exchange (CEX) Coinbase for the fourth consecutive month, with a transaction value of $37 billion in April, while Coinbase stood at $34 billion. On the whole, both decentralized exchanges (DEX) and CEX saw a decline in volume.
S&P Global’s latest report suggests that the correlation between the crypto market and the broader economy is “slight.” The report opines that the crypto market can yield good returns during periods of monetary easing but does not address potential occurrences like a Crypto Winter.
MakerDAO has launched Spark Protocol, a lending solution for DAI coin users. In its initial phase, it will serve as a lending marketplace supporting coins such as ETH, stETH, DAI, and sDAI, aiming to offer users competitive interest rates.
Weekly Technical Analysis: 15 – 21 May 2023
Bitcoin (BTC)
BTC has seen less supporting activity coming into this week, causing BTC price to adjust downwards towards a critical support level at 870,000 THB. Caution should be exercised by traders around this support level. If support can remain intact, there is a chance for a rebound so BTC can attempt to test the resistance at 960,000 THB. If BTC fails to break through, there is a possibility of further downward corections.
Ethereum (ETH)
ETH continues to move sideways with no clear direction, following Bitcoin’s downward trend. The critical support level remains at 58,000 THB. If it falls below this level, the trend could turn bearish. However, if support can remain intact, the resistance target remains at 64,000 THB. In the short term, the market may trade within this price range.
Lido DAO (LDO)
LDO has adjusted upwards by +11.6%, recovering from its recent low of 52 THB. This week, keep an eye on the aforementioned support level, as strong support offers a chance for a rally. The weekly resistance target is at 74 THB, if surpassed, LDO’s trend may become bullish.
Gala (GALA)
GALA is up by +3% over the past week, but its overall trend remains bearish due to a lack of buying pressure to support price. A potentially appealing stop-loss level could be at the 0.90 THB support level. If the price falls through GALA’s support level, the market may slow down investment. However, if it can break through the resistance at 1.10 THB, we could potentially see an upwards refersal for the GameFi token.
Trading and Investment Considerations For The Week
April’s US Consumer Price Index (CPI) was reported at 4.9%, slightly lower than the previous month’s figure. The unemployment rate also fell slightly from the previous month. Overall, these figures are in line with market expectations, which has allowed Bitcoin and gold prices to remain steady, while the Dollar Index has rebounded.
A primary factor contributing to the resilience of the cryptocurrency market, including Bitcoin, are potential liquidity issues, as reported by CNBC. This follows the withdrawal of major US cryptocurrency market makers, Jane Street and Jump Crypto, due to increasing regulatory scrutiny. Additionally, the collapse of Silvergate and Signature Bank, which focus on crypto transactions, also contributed to the market situation.
Uncertainties regarding the US SEC’s cryptocurrency market regulation have been a significant factor pressuring the crypto market. The market is expected to remain resilient, trending towards a downturn until new positive factors come to support it.
This week, there are no significant economic announcements, but on Friday, May 19, the Federal Reserve Chairman will make a statement about the economic conditions and monetary policy. This could reflect views on the decreasing inflation rate and the future monetary policy.
Overall, the market tends to trade large-cap coins such as Bitcoin (BTC) and Ethereum (ETH) due to the decrease in trading liquidity. This has resulted in the lack of momentum for mid-cap projects or tokens.
Disclaimer:
-Cryptocurrency and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.
– Past Returns/Past Performance does not guarantee future returns/performance.
*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.
Sources:
- https://cointelegraph.com/news/brc-20-tokens-surpass-1b-market-cap-as-wallet-providers-prepare-integration
- https://www.coindesk.com/markets/2023/05/09/litecoin-transactions-hit-record-high-as-bitcoin-fees-surge-amid-brc-20-frenzy/
- https://cointelegraph.com/news/paypal-s-crypto-holdings-increased-by-56-in-q1-2023-to-nearly-1b
- https://www.theblock.co/post/230115/grayscale-ethereum-futures-bitcoin-etf-sec
- https://cointelegraph.com/news/tether-has-1-5b-in-bitcoin-reserves-bdo-italia
- https://www.coindesk.com/markets/2023/05/10/crypto-exchange-binance-trading-volume-fell-almost-50-in-april/
- https://cryptopotato.com/bitcoin-held-on-exchanges-drops-to-5-year-lows-santiment/
- https://www.coindesk.com/markets/2023/05/11/decentralized-exchange-uniswap-trading-volume-outpaces-coinbase-for-4th-consecutive-month/
- https://cointelegraph.com/news/s-p-global-attempts-to-assess-crypto-assets-susceptibility-to-macroeconomics
- https://cointelegraph.com/news/makerdao-launches-spark-protocol-a-new-defi-lending-solution-for-dai-users
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