Crypto Weekly: 8 – 14 May 2023
JP Morgan has released a research report stating that the lack of clear legislation regarding cryptocurrencies in the United States, particularly over the classification of which tokens could be considered securities, is impacting liquidity in the cryptocurrency market and pressuring crypto companies to move their operations abroad. Additionally, due to the uncertainty in regulations and strict oversight in many countries, some institutional investors are increasingly turning to gold, as some may perceive it to be a safer option in the face of regulatory crackdowns on cryptocurrencies.
A report by Kaiko reveals that the trading volume on centralized exchanges in April decreased for the first time in the past three months, dropping over 50% from March, a value of approximately $50 billion.
Regardless, Binance continues to lead the crypto market with a market share of over 71.6% and approximately $10 billion in 24-hour trading volume.
Glassnode disclosed that the amount of stablecoins held on centralized exchanges has reached its lowest level since May 2021, at $22.06 billion, a decline of more than 50% since its peak at $44 billion in mid-December 2022. Additionally, activity in DeFi, NFT, and GameFi sectors also continues to fall.
DefiLlama reveals that liquid staking protocols have a higher total value locked (TVL) than decentralized exchanges, with Lido leading the way with a TVL of $11.54 billion, followed by Coinbase Wrapped Staked Ether at $2.19 billion, and Rocket Pool ranking third with a value of $1.46 billion.
The market value of BRC20 tokens, which operate on the Bitcoin network, has skyrocketed over the past three days, growing by 192% to reach a market value of $279 million, with approximately 13,530 tokens in circulation. As a result, Binance suspended BTC withdrawals for one hour due to congestion on the Bitcoin network.
Weekly Technical Analysis: 8 – 6 May 2023
BTC is undergoing a directionless trend at the moment, with trading volumes significantly decreasing and no novel positive factors to fuel significant/lasting upward price movement. However, no major selling pressure has occurred, allowing BTC’s price to remain stable. The key support to watch is at the 930,000 level, while the resistance level remains at 1,020,000 baht this week.
ETH has outperformed BTC in terms of returns over the past week, potentially due to the buzz surrounding meme tokens. However, ETH’s trend remains sideways for now, with the support level remaining at 61,000 baht while the resistance level is at 67,000 baht. Traders may potentially engage in short-term trading within this range until new positive factors emerge.
VELO has adjusted upwards by +3.4% in the past week, but the price has retraced to test the critical support level at 0.08 baht. If it falls below this level, the price trend may continue downward, as it would establish a new low. If the price can recover, the resistance level is at 0.13 baht.
Fuse Network (FUSE)
FUSE has adjusted upwards by +0.8% in the past week, but the primary trend remains downward, with the previous low at 2.45 baht. If this level is maintained, there is an opportunity to test the first resistance level at 2.54 baht. If the price surpasses this level, it may continue to recover.
Trading and Investment Considerations For The Week
The outcome of the US Federal Reserve meeting was in line with market expectations, as the FED increased interest rates by 0.25%. The FED Chairman stated that there is a possibility this could be the last rate hike for a while whilst maintaining the 2% inflation target. As a result, the crypto market remained stable due to the FED’s monetary policy action largely falling in line with expectations.
However, the US Non-Farm Payroll data released two days later came in significantly higher than expected at 253,000 positions, compared to the forecast of 180,000 positions. The unemployment rate was also lower at 3.4% instead of the predicted 3.5%. Despite this, the US dollar did not appreciate significantly in value.
The better-than-expected Q1 earnings report from technology giant Apple positively impacted the NASDAQ index, indirectly supporting Bitcoin. A key highlight of this week is the announcement of the Consumer Price Index (CPI) on Wednesday, May 10th. The market is expecting CPI to remain at 5% from the previous month. If it decreases, the market may anticipate that the FED will reduce interest rates this year instead of next year, as previously suggested. However, if CPI figures are higher than anticipated, it could add more pressure to the crypto market as an inflation rate that exceeds expectations would reduce the chances of an interest rate cut later this year.
More funds are flowing toward meme tokens, indicating a lack of new supportive factors to drive the market or fuel a rally. Coupled with pressure from the US SEC, the market could potentially resemble bearish conditions, resulting in many fundamentally strong altcoins experiencing weak prices at the moment.
In the current market conditions, investors may focus on large market cap coins such as BTC and ETH until new positive factors emerge to potentially trigger a rally that could push other altcoins.
-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.
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