Bitcoin (BTC) failed to move decisively above or below $30,000 on Tuesday. The cryptocurrency appears to be stabilizing, although sentiment among traders remains bearish.
Some alternative cryptocurrencies (altcoins) underperformed Bitcoin on Tuesday, indicating a lower risk appetite among short-term traders. Decentraland's MANA token, for example, fell 3% over the past 24 hours, while BTC was flat over the same period. Still, some alts gained on Tuesday, such as Litecoin's LTC, which rose 4%.
Just launched! Please sign up for our daily Market Wrap newsletter, which explains what's happening in the crypto markets - and why.
Equity markets were also mixed on Tuesday, while the Chicago Board Options Exchange's CBOE Volatility Index (VIX), a popular measure of stock market volatility expectations based on S&P 500 index options, has fallen for four consecutive trading sessions.
In addition, global equity markets appear to be oversold from a technical perspective, with early signs of exhaustion to the downside, which could keep short-term buyers active over the next week. A similar picture can be seen on bitcoin's daily chart as long as the $30,000 price level is held.
Last prices
●Bitcoin (BTC): $30,077, +1.81%.
●Ether (ETH): $2,045, +1.99%.
●S&P 500 daily close: $4,089, +2.02%.
●Gold: $1,814 per troy ounce, +0.04%
●Ten-year Treasury yield daily close: 2.97%.
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.
Realized Losses Add UpThe
selloff of the last week
has led to a surge in realized losses for Bitcoin holders
.The chart below shows realized losses relative to realized market cap, which is at its highest level since the crypto selloff last May. Typically, a loss spike occurs at the beginning or late stages of a bear market, similar to 2018 and 2019.
A loss occurs when the market price of BTC falls below the average cost basis of bitcoin holders, which is recorded in the blockchain. The realized price (aggregate cost basis) is calculated by dividing the sum of all coin values at the time they last moved by the circulating supply, according to Glassnode.
Currently, the realized price is between $23,000 and $24,000, which could be an important support level for BTC. However, in previous bear market cycles, BTC could trade below the realized price for about 100 days before buyers started to build long positions.
Blockchain data also shows strong buying activity around the $30,000 price level in BTC.
Still, the longer-term metrics suggest that new buying may be short-lived until the down cycle reaches a bottom. For example, the chart below shows a Z-score of the market value of BTC relative to its realized value, or the value paid for all existing BTC (MVRV). It is essentially a measure of Bitcoin's "fair value" and is not at an extreme low that usually coincides with the end of a bear market.
Altcoin Overview
- ApeCoin is looking for a new home: Bored Ape Yacht Club-affiliated decentralized autonomous organization (DAO) ApeCoin is in talks with blockchain providers to migrate its ApeCoin (APE) token from Ethereum. Yuga Labs' disastrous minting of non-fungible tokens (NFTs) to sell land in the metaverse "Otherside" cost investors more than $100 million in transaction fees on the Ethereum blockchain. ApeCoin DAO board members are listening to offers, and Avalanche and Flow are in the front row. Read more here.
- A16z's State of Crypto: Famed venture capital firm Andreessen Horowitz (a16z) has released its first "State of Crypto" report. A16z has become one of the most active and prominent investors in the crypto space, raising $2.2 billion for its third and final fund last summer. The report looks at the current downturn in crypto markets, the benefits of Web 3, and Ethereum's continued blockchain dominance. Read more here.
- Robinhood's upcoming crypto wallet for professionals: brokerage platform Robinhood (HOOD) is planning a Web 3 crypto wallet for decentralized financial traders (DeFi) and buyers of non-fungible tokens (NFT). Robinhood's Johann Thompson said the new depository wallet is intended for "advanced" crypto users and will operate separately from the existing wallet. The company plans to launch it by the end of 2022. Read more here.
Relevant Insights
- Nayib Bukele of El Salvador is promoting bitcoin adoption in emerging markets: The president is hosting financial representatives from 44 developing countries as part of the Alliance for Financial Inclusion's annual meetings.
- Dutch financial official wants to ban retail investors from trading crypto derivatives: However, the Dutch Authority for Financial Markets (AFM) does not yet have the authority to issue a UK-style ban.
- Bitcoin mining seems to have survived the ban in China: From September 2021 to January this year, China's contribution to the Bitcoin mining network was second only to that of the United States.
- EY Introduces Supply Chain Manager on Polygon Network: EY OpsChain Supply Chain Manager, now available in beta, is the first joint project between EY and Ethereum scaler Polygon.
- Jump-Backed Wormhole Bridge Expands on Algorand Blockchain: The cross-chain bridge hopes to tap a portion of Algorand's $136 million DeFi Total Value Locked (TVL).
Other MarketsMostdigital
assets in the CoinDesk 20 ended the day
higher.Biggest winners
| Asset | Ticker | Earnings | DACS Sector |
|---|---|---|---|
| Litecoin | LTC | +6.9% | Currency |
| Bitcoin Cash | BCH | +4.8% | Currency |
| Polygon | MATIC | +3.9% | Smart Contract Platform |
LosersThere
are no losers in CoinDesk 20 today.Sector classifications are provided through the Digital Asset Classification Standard (DACS), which was 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.