A turbulent start to the year for cryptocurrency…

Article by Alejandro Zalla, Country Director of Bitpanda Spain.

Bitcoin and most of the top 10 altcoins started 2022 in the red, with bearish pressure dominating and with the Crypto Fear and Greed Index at 15, indicating “extreme fear.” The largest cryptocurrency by market capitalization was hovering around its support level of €41,000 in the first five days of the year, before dropping around €4,000 on Wednesday.

A closer look at price action on the daily charts shows that Bitcoin has been trading within a falling wedge since December 21. A wedge is usually considered a bullish movement signal – a breakout from here is the most likely scenario, but the market has to find a bottom first.

The lower trend line has been tested several times so far, but BTC failed to break through it, neither up nor down. Macro factors are effectively bearish, with the Fed cutting and fighting inflation, higher than expected.

Moreover, the Kazakh authorities declared a state of emergency across the country and shut down internet access, causing many bitcoin miners to stop working. Altcoins also fell, following the trend of bitcoin. Kazakhstan is the second country in the world in terms of bitcoin mining hash rate, which makes it a major player. During the internet outage, the hash rate dropped from 194 EH/s – reached on January 4 – to a minimum of 168 EH/s.

Bitcoin dominance continues to decline Bitcoin has a total market capitalization of €774 billion, with an overall market dominance of 39.3%. The dominance of the BTC market has continued to decline and is currently at its lowest level since May 2018. Early in 2018, a record low was set during the massive crash of the cryptocurrency market in January of that year. At the time, BTC’s dominance was only 33%.

LINK shows strength – With the cryptocurrency market facing huge volatility in the wake of the New Year celebrations, some players like Chainlink are showing great strength. LINK is one of the best performing tokens so far in 2022, with an increase of 30%. It is currently trading at around €21. At the beginning of the year, the price was 16 euros. The Relative Strength Index (RSI) is moving in a clear bullish direction and above 50 on the daily chart, indicating that the uptrend may extend.

Cardano is among the most developed projects on Github in 2021 – ADA price has seen a dip recently. Despite the poor price performance, the development of the Cardano project has not slowed down. In fact, Cardano was one of the most developed projects on GitHub in 2021, with over 140,000 events. Charles Hoskinson, founder of Cardano, revealed that 127 projects are being developed on the Cardano blockchain and expects the number of ADA users to multiply by 10 due to the NFT projects planned on the network.

Since Alonso’s hard fork, Cardano has begun updating the Hydra’s second-tier. Another Cardano project, and a unique feature offered by the network, is the Initial Staking Pool Offering (ISPO). ISPO will allow users to fund by delegating their tokens and, as a bonus, receiving tokens for the project it funds.

Ethereum under 3000 euros – It’s been a slow start to the year for Ethereum. The second largest cryptocurrency Bitcoin is currently fighting for market dominance. The past year has been centered on Ethereum, with ETH outperforming BTC by a large margin.

However, Ethereum price lost steam in the recent sell-off and broke the falling wedge it had been in since mid-November last year. The price fell below 3000 euros for the first time in nearly 3 months.

Despite having a bad time in these early days of the year, BTC and ETH are likely to once again be critical players in the cryptocurrency market in 2022.

BEST / BTC is moving higher – The best outperformed other altcoins in the last year’s decline and were higher compared to BTC. The BEST/BTC pair is trading at 0.00002423, the highest value in the past three weeks.

BEST 2.0 will be released soon and the loyalty program will be updated: new VIP levels, new best weekly rewards and a new best incentive program.

*This material is intended to be a commentary on economic or market conditions and does not constitute a financial analysis or recommendation.

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