Good morning. Here's what happened:
Prices: Bitcoin rises, but remains below $30,000.
Insights: bitcoin dominance is at a yearly high, but traders are preparing for another alt season.
Technician assessment: technical indicators are neutral and the uptrend seems limited from here.
PricesBitcoin
(BTC): $29,672 +2%.
Ether (ETH): $1,978 +0.4%
Biggest Winners
| Asset | Ticker | Income | DACS Sector |
|---|---|---|---|
| Ethereum Classic | ETC | +12.8% | Smart contracts platform |
| Filecoin | FIL | +5.2% | Data processing |
| EOS | EOS | +4.7% | Platform for smart contracts |
Biggest Losers
There are no losers today in the CoinDesk 20.Bitcoin is performing better than other major cryptocurrencies
Bitcoin did not perform quickly late Tuesday.
The largest cryptocurrency rose slightly, but still traded below $30,000 and was roughly in the middle of the $2,000 range it has been in since the UST stablecoin crashed nearly two weeks ago. Other major cryptocurrencies also rallied late to move into the green, though not by much as investors held on to their risk-averse bearishness.
At the time of publication, Bitcoin was trading at around $29,700, up 2%. Ether, the second largest cryptocurrency by market cap, recently rose less than a percentage point, while XRP, SOL, and the meme coin SHIB each rose over 1%. Bitcoin's price has fallen for eight straight weeks.
"Bitcoin is in the danger zone as risky asset sentiment has fallen off a cliff," wrote Edward Moya, senior market analyst The Americas at Oanda.
Macroeconomic news offered little encouragement for investors.
Stocks gave back their strong gains from Monday after social media platform Snap Inc (SNAP) issued a profit and earnings warning that dragged down the tech sector, and the U.S. Commerce Department reported that new home sales slumped 17% in April, hitting a two-year low. The tech sector-focused Nasdaq fell 2.3%. The S&P 500 also slipped, though to a lesser extent.
Shares of Snap fell more than 40% from Monday's close after the company said its revenue and earnings would miss earlier forecasts for the second quarter, a victim of inflationary pressures and macroeconomic turmoil. According to the Wall Street Journal, the company's CEO Evan Spiegel said in a presentation before the warning that he had asked managers to look for cost savings. Tech giants Meta (FB) and Google (GOOG) fell 7% and 5%, respectively.
The housing report reflected the impact of rising mortgage rates on potential homebuyers, who now can't afford loans they could have earlier in the year when borrowing costs were lower. Meanwhile, the purchasing managers' index for the manufacturing and services sectors fell to three- and four-month lows, respectively, primarily due to rising prices.
The smallest bit of good news is that bitcoin's Fear & Greed Index, which has remained in the "fear" zone for the past several months and reached its second-lowest level in the index's history last week, has improved slightly in recent days, suggesting that bearish sentiment may be waning, especially if bitcoin crosses $30,000.
However, Oanda's Moya noted that even falling government bond yields, which make cryptocurrencies attractive, have not moved investors. "Right now, no one wants to buy this dip," he wrote, adding that bitcoin could test support just above $25,000 and that $20,000 remains a possibility.
"Bitcoin can't stabilize until Wall Street calms down, and that could take a while. "
MarketsS&P500
: 3.941 -0.8%
DJIA: 31.928 +0.1%
Nasdaq: 11,264 -2.3%
Gold: 1,866 +0.
6%InsightsBitcoin dominance is at yearly highs, but traders are preparing for another alt season
While Bitcoin continues to trade comfortably in the $30,000 range, data shows that the cryptocurrency's dominance of the digital asset market has shot upward and now accounts for nearly 45% of total market capitalization, a one-year high.
Bitcoin's dominance in the broader crypto market cap reflects traders' risk tolerance and market sentiment. When conditions turn positive, traders shift their capital into Ethereum and other Layer 1 or basic blockchains to benefit from the decentralized financial market (DeFi). Likewise, a declining market is bringing traders back to the safe haven of Bitcoin, the "digital gold" of cryptocurrencies.
With the implosion of the Terra ecosystem, many Layer 1s have been hit hard, with Solana down 50% in the last month, Avalanche down 60% in the same period, and Polygon losing just over 53% of its value.
While the collapse of Terra leaves many with existential questions about the future of cryptocurrencies and DeFi as an investment vehicle, traders seem to be preparing to return to altcoins, with data suggesting that Bitcoin's dominance may be short-lived.
According to CoinGlass, funding rates for Ether and the major altcoins are working in favor of long traders. Funding ratios are turning negative, meaning that short sellers are liquidating in favor of those with long positions.
The ratio of long positions to short positions has also shifted in favor of long positions for Ether, DOT, and SOL, according to CoinGlass data.
We still have a long way to go before we can declare another season of alts, despite some green shoots. The total value tied in DeFi logs, the vehicle in which many alts are used, shows no sign of improvement.
DeFiLlama puts the total value at $111 billion, down from $205 billion earlier this month, before Terra's planetary collapse, and well below the $250 billion in DeFi last December.
The fact that so much wealth has disappeared in the last two weeks will give many traders pause, especially since institutional investors have lost billions of dollars. But we see that conviction in the asset class remains, even as it is tested time and again.
Technician OpinionBitcoin
moves in a range; support at $27K, resistance at $33K
.Bitcoin (BTC) continues to trade in a narrow range, struggling to make a decisive break above or below $30,000. The cryptocurrency has found support at $27,500, which has stabilized the price action over the past week.
The Relative Strength Index (RSI) on the daily chart is rising from oversold levels, but remains capped below the neutral level of 50. A movement of the daily chart's RSI above 50 would confirm a short price recovery. For now, upside potential appears limited, initially towards the resistance zone between $33,000 and $35,000.
Momentum signals are improving on the daily chart, but remain negative on the weekly and monthly charts. This could increase the risk of a price collapse as seen earlier this month.
ImportantEventsWorld Economic Forum
Conference on blockchain and sustainable economic growth.
Nvidia second quarter resultsCoinDeskTVIn
case you missed it, here is the latest episode of "First Mover" on CoinDesk TV
:Sending decentralized data storage into space, buying land in the metaverse
Marta Belcher of the Filecoin Foundation explains how her organization is working with Lockheed Martin (LMT) to explore the transfer of blockchain data to space. Also, Josh Olszewicz of Valkyrie shared insights on crypto markets and Sam Hamilton of Decentraland Foundation talked about virtual land.
HeadlinesInDavos
,crypto is no longer a fringe topic: cryptocurrencies took a prominent role at the World Economic Forum's annual meeting in Davos, despite mainstream finance's apparent disdain for the sector
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Longer ReadingMartinShkreli
is back. He Loves Crypto: The failed former hedge fund manager is trying to reinvent himself as a crypto entrepreneur. Buyer beware.
Today's crypto explainer: what is a Satoshi? On understanding bitcoin's smallest unit.
Other Voices: Welcome to the Zombie Cryptocalypse (Wired)
Said and Heard
"They got Ukraine wrong, they got the West wrong, they basically got everything wrong. We diplomats at the Foreign Ministry are also to blame because we didn't pass on the information we should have - because we smoothed things over and made it look like everything was great." (Russian diplomat Boris Bondarev on his country's invasion of Ukraine in the New York Times) ... "Still, Bitcoin and the entire crypto industry could largely be described as an experiment with liberalism. It's the "lowercase L" variety, or the political philosophy that adopts an expansive view of individual rights and equality." (CoinDesk columnist Daniel Kuhn) ... "In a sense, the hyperreal is not only a goal, but possibly a necessary end state of the metaverse. Scaling immersive digital experiences for billions of people will only be possible if content creation is automated by artificial intelligence (AI)." (CoinDesk contributor and Metaphysic co-founder and CEO Tom Graham)