Bitcoin (BTC) stabilized around $36,000 and remained about the same on Friday. The cryptocurrency traded with lower volatility over the last 24 hours compared to yesterday's sharp price drop.
Alternative cryptocurrencies (altcoins) were also relatively stable on Friday, although GALA rose as much as 9%, outperforming other tokens on the CoinDesk 20 list. Algorand's ALGO token also rose 12% in the last 24 hours.
The choppy price action over the past week reflects uncertainty among traders, especially in light of ongoing macroeconomic risks.
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On Thursday, the Bank of England (BOE) raised interest rates and warned the public of an economic downturn. This sparked fears among investors of stagflation, meaning high inflation and slow economic growth. The BOE's gloomy outlook contrasted with optimistic tones from the Federal Reserve on Wednesday, which temporarily reassured investors that the U.S. economy could withstand higher interest rates.
Overall, the shift from accommodative monetary policy to more restrictive measures has led to a decline in speculative activity among global investors. This could be a headwind for equities and cryptocurrencies this year.
In the short term, prices remain neutral, and some altcoins have benefited from short price spikes.
Latest prices
●Bitcoin (BTC): $35.928, -0.71%.
Ether (ETH): $2,683, -1.28%
●S&P 500 daily close: $4,123, -0.57%
●Gold: $1,883 per troy ounce, +0.47%
●Ten-year Treasury yield daily close: 3.12%.
Bitcoin, ether, and gold prices are determined at approximately 4 p.m. New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information on the CoinDesk indices can be found at coindesk.com/indices.
The chart below shows the ratio of buying and selling volume in the bitcoin futures market. Values below one indicate declining sentiment among traders, similar to previous price declines.
BTC's recent price range between $35,000 and $46,000 was accompanied by a continued downward trend in the ratio between buy and sell volume. This suggests that some buyers have remained on the sidelines despite the short-term stabilization of the price.
Ether holds up well compared to bitcoin
Ether (ETH) is down 4% over the past week, while BTC is down 6%.
Normally, ETH underperforms BTC in down markets. This time, however, choppy trading conditions have kept the ETH/BTC ratio in a tight range over the past year. A decisive breakout or breakout from the current range could confirm a risk-on environment.
Bitcoin's dominance ratio, i.e., the market capitalization of BTC relative to the total crypto market capitalization, has declined in recent days. This suggests that altcoins have been under less selling pressure compared to bitcoin, which means that traders are still willing to take additional risks.
Altcoins fall less than Bitcoin in rising markets due to their higher risk profile. Nevertheless, similar to the BTC/ETH price ratio, a breakout or breakout of the dominance ratio would confirm the next phase for crypto markets.
Altcoin Review
- DeFi tokens underperform: April went relatively well for memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB), but brought big losses for decentralized financial tokens (DeFi), including Aave (AAVE) and Thorchain (RUNE), according to research from crypto exchange Kraken this week. Using Bitcoin's (BTC) 17% loss as a benchmark, the broader DeFi sector lost an average of 34%, followed closely by layer 1 tokens, or basic blockchains, at 33%. Read more here.
- $36 million in seized JUNO tokens were moved to the wrong wallet: Validators, developers and token holders are arguing over who is to blame for the copy-paste error that moved the tokens to an address no one can access. In a world where "code is the law," a simple community vote should have been enough to move the tokens from one specific blockchain address to another, according to CoinDesk's Sam Kessler. Read more here.
- Curve Finance integrates with Near's Aurora network: Aurora is an EVM based on the Near protocol that offers full Ethereum compatibility, low transaction costs and trustless bridging, according to its website. The integration allows users to connect to the Aurora network with their Ethereum wallets, such as MetaMask, when using Curve, and access the decentralized application's liquidity pools, according to the press release. Read more here.
Relevant Insights
- U.S. labor market report shows gain of 428,000, adding to price pressures: The U.S. Labor Department report released Friday showed job growth remained robust last month, at a level that should continue to worry the Federal Reserve about an overly tight labor market.
- Nvidia failed to disclose the impact of cryptomining revenue in 2018, the SEC said: without admitting or denying the allegations, the chipmaker agreed to pay a $5.5 million penalty to settle the matter.
- U.S. officials put North Korea-related bitcoin mixers and other BTC and ETH addresses on sanctions list: The U.S. Treasury Department is ramping up efforts to stop the flow of stolen cryptocurrencies from a historic $620 million hack.
- NY Mining Moratorium's Chances Deteriorated: The Senate Environment Committee will not consider the controversial bill, according to a schedule released Thursday.
- U.S. Court Orders BitMEX Founders to Pay $30 Million for Illegal Trading: The three co-founders, Arthur Hayes, Benjamin Delo and Samuel Reed, must each pay $10 million, the CFTC said.
- Argentina's central bank bans lenders from offering crypto services: The announcement Thursday afternoon came after the IMF approved a $45 billion credit facility for Argentina last month, which stipulated that the country would discourage the use of cryptocurrencies.
Other markets
Most digital assets in the CoinDesk 20 ended the day higher.
Biggest gains
| Asset | Ticker | Returns | DACS sector |
|---|---|---|---|
| Algorand | ALGO | +11.7% | Smart contracts platform |
| EOS | EOS | +1.1% | Platform for smart contracts |
| XRP | XRP | +0.7% | Currency |
Biggest losers
| Asset | Ticker | Earnings | DACS Sector |
|---|---|---|---|
| Dogecoin | DOGE | -2.0% | Currency |
| Solana | SOL | -1.9% | Smart contracts platform |
| Cardano | ADA | -1.3% | Smart contracts platform |
Sector classifications are provided through the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.