Bitazza Crypto Weekly: Global Demand For Bitcoin Still High Despite Market Downturn -

Crypto Weekly: 1 – 7 August 2022

Alejandro Zelaya, El Salvador’s finance minister, continues to express his country’s continued confidence in the future of Bitcoin, expressly stating that Bitcoin adoption has been beneficial to El Salvador’s unbanked population. Zelaya also stated that El Salvador will revisit the $1 billion Bitcoin bond proposed earlier this year once market conditions improve.

According to Glassnode, on-chain metrics reveal that Bitcoin stored on crypto exchanges has continued its decline. Bitcoin balance on exchanges has fallen to 2.4 million BTC, approximately 12.6% of the total circulating supply. In comparison, there was around 3.15 million BTC on exchanges during March 2020. While the Crypto Winter and investors selling off their BTC is one potential factor, on a macro level, many investors are choosing to store their BTC for the long-term in offline wallets rather than with exchanges.

Research and Markets published a report that estimates the global cryptocurrency ATM market will be worth $472 million by 2027, from its current value of $46.4 million currently. The report estimates a compound annual growth rate of 59% for the industry from 2022-2027. The projected growth’s main drivers include remittances and fund transfers in developing countries, fluctuating monetary regulations, and an increase in crypto ATM installations worldwide. The US remains the most significant market for cryptocurrency ATMs, with the country accounting for 88% of total crypto ATM installations.

CME Group’s crypto derivatives posted record open interest and higher than average daily volumes (ADV) during the second quarter — even as the sell-off in digital assets markets intensified. In Q2 2022, Bitcoin and Ether futures contracts posted ADVs of 10.8K and 6.6K, respectively, with Ether’s performance representing an ATH for the futures contract at CME and a +27% performance from Q1 earlier this year.

A report from Absolute Reports projects that the Play-to-Earn NFT GameFi industry will see a $2.8 billion valuation in the next six years, a compound annual growth rate of 20.4% for the industry in that period.

The Sandbox has announced its partnership with renowned global gaming company “Gravity” to bring popular MMORPG Ragnarok to The Sandbox’s metaverse platform. Through this partnership, Ragnarok LAND will be built in The Sandbox metaverse, as well as various content and NFTs using Ragnarok IP. Furthermore, the users can participate in the future Game Jam themed on the Ragnarok universe and its characters.

ARK Invest has offloaded 1.4 million Coinbase shares in a single day across three of its exchange-traded funds. This sell-off is likely to have been prompted by faltering confidence in Coinbase, with the US-based crypto exchange currently facing an investigation by the SEC into whether they have improperly let Americans trade assets that should have been registered as securities. COIN Shares are down by 21%, with prices falling to all-time lows of $53 per share, down from the $400 IPO price.

Hong Kong-based Babel Finance has lost about $280 million in proprietary trading using customers’ funds. Babel lost around 8,000 Bitcoin (BTC) and 56,000 Ethereum (ETH) due to forced liquidation as Bitcoin’s price plunged below $20,000 in June.

Finally, an Aave community proposal to launch a native crypto-based stablecoin, GHO, was passed over the weekend with 99% votes in favor of the proposal. The fully-collateralized stablecoin is native to the Aave ecosystem and will be initially available on the Ethereum network and will allow Aave users to mint GHO against their supplied crypto collateral.

Weekly Technical Analysis: 1 – 7 August 2022

Bitcoin (BTC)

BTC remains in a sideways up trend, with prices creating higher lows but unable to break through the first resistance at the $25,000 level. If this initial resistance can be successfully challenged, the next resistance is at the $29,000 mark. BTC has its short-term support set at the $22,000 mark.

Ethereum (ETH)

ETH’s short-term uptrend continues, with any dips potentially representing profitable entry points. Its support level at $1,200 remains strong, and ETH will look to maintain/improve its momentum and challenge the short-term resistance at the $2,000 level.

Optimism (OP)

OP is up by +78.6% from last week and has successfully managed an upwards reversal. That being said, OP prices have risen dramatically, so investors are advised against chasing the price and instead wait for prices to fall below the 48 baht level before entering with a potential short-term profit target of 80 baht.

Yearn Finance (YFI)

YFI is up by +62.8% over the past week and is showing signs of being able to reverse into an uptrend. YFI has a key resistance at the 60,000 baht level. Even if YFI faces a mild correction, so long as prices remain above the 36,000 baht support, its uptrend should be maintained.

Trading and Investment Considerations For The Week

Following last week’s FOMC meeting, the US FED has raised benchmark interest rates by 75 points to combat inflation, which is hovering around its highest levels in 40 years. Furthermore, Q2 2022 reports revealed that the US economy shrank at an annual rate of -0.9% in the second quarter, signaling an official recession for the US economy.

The recent unprecedented interest rate hikes and the weak US economy have had beneficial effects on the Crypto market, with many now operating under the assumption that the FED will not be able to tighten its monetary policy further. These factors reflect a weakening dollar and a declining DXY index.

Prior to the next FOMC meeting scheduled for September 20-21, the market will be keeping a close eye on inflation figures. Unless there is unexpected negative news, volatility is expected to slow. Despite this, there is currently no positive news/factors that are expected to support a true Bitcoin recovery, so BTC may be trending sideways-up for the time being.

Trading strategies should focus on altcoins that have been able to outperform the market and generate good returns or are sending signals of a short-term upwards reversal. Buying on dip for tokens that have been performing strongly like OP, APE, UNI, and YFI could prove profitable for the time being.

*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.

Post Views: 1,141