Market Wrap: Bitcoin Stabilizes As Bearish Sentiment Pauses

Market Wrap: Bitcoin Stabilizes As Bearish Sentiment Pauses

Market Wrap: Bitcoin Stabilizes As Bearish Sentiment Pauses

By Damanick Dantes, Angelique Chen

The relief bounce in stocks and cryptos could be short-lived as recession risks linger.

Cryptocurrencies were mixed on Wednesday as bitcoin (BTC) stabilized around $39,000.

Sentiment among traders remains neutral to bearish, albeit less so compared with earlier this week. For example, despite the recent pullback in price, dogecoin (DOGE), a speculative dog-themed meme coin, is up 5% over the past week, compared with a 5% decline in BTC over the same period.

Analysts noticed signs of buyer demand around $38,000 in bitcoin, although it remains to be seen if the cryptocurrency can break above its short-term downtrend. For now, bitcoin appears to be “falling out of the window, but latching onto the windowsill,” Alex Kuptsikevich, an analyst at FxPro, wrote in an email to CoinDesk.

Overall, choppy trading across cryptos and stocks indicates uncertainty among traders, especially as macroeconomic and geopolitical risks linger.

On Wednesday, Deutsche Bank (DB) published its world economic forecast, which sees a U.S. recession by the end of 2023. The bank also mentioned that risks are skewed toward a much more significant recession, or a “hard landing,” driven by tighter monetary policy and rising inflation. Investors tend to reduce their exposure to speculative assets during times of slowing economic growth.

Latest prices

●Bitcoin (BTC): $39,047, +2.70%

●Ether (ETH): $2,864, +1.65%

●S&P 500 daily close: $4,184, +0.21%

●Gold: $1,887 per troy ounce, −0.78%

●Ten-year Treasury yield daily close: 2.82%


Bitcoin’s volume drift

The chart below shows bitcoin’s trading volume over the past two years. A surge in trading activity typically occurs around price peaks, similar to April and November of last year, which preceded significant sell-offs in price.

This time, however, trading volume has been relatively low, which means some buyers have remained on the sidelines.

Bitcoin’s choppy price range has also kept volatility anchored to its lowest level in a year. Further, option traders expect less turbulence going forward, which could point to a more gradual sell-off in BTC’s price until buyers return with conviction.

“Many investors traded on volatility in April, and most took long positions,” Deribit, a crypto derivatives exchange, wrote in a blog post. “However, volatility has not returned to its high level as expected, and investors are still waiting for volatility to rise.”

“For investors who bought volatility earlier, there seems to be a long way to go from making profits,” Deribit wrote.

Bitcoin trading volume (CoinDesk, CoinGecko)

Altcoin roundup

  • LUNA supply drops to all-time-low: The supply of LUNA, the native token of the Terra blockchain, fell to an all-time low level on Tuesday – a price-boosting dynamic that’s seen by crypto analysts as an indicator of how popular the project remains despite nagging concerns about its sustainability. LUNA’s circulating supply – the number of tokens on the market – slid to 346 million from 355 million a month earlier and a high of 482 million in November, according to Smart Stake, a data tracker platform focused on the Terra ecosystem.
  • Founders Fund, Pantera invest in DeFi investment bank Ondo Finance: Ondo Finance, a protocol aiming to accelerate the adoption of decentralized finance (DeFi) among mainstream investors by mitigating risk, has raised $20 million in a Series A round co-led by Peter Thiel’s Founders Fund and crypto firm Pantera Capital.
  • Ethereum Optimism rollup launches DAO, announces long-awaited airdrop: The popular Ethereum layer 2 Optimism rollup announced on Tuesday it will be forming a decentralized autonomous organization, or DAO, dubbed the Optimism Collective. Along with this news, Optimism set Crypto Twitter alight with the announcement of a long-awaited Optimism (OP) token and airdrop, according to CoinDesk’s Sam Kessler.


Other markets

Most digital assets in the CoinDesk 20 ended the day higher.

Top Gainers

Asset Ticker Returns Sector
Cosmos ATOM +4.8% Smart Contract Platform
Bitcoin BTC +2.7% Currency
Bitcoin Cash BCH +2.6% Currency

Top Losers

Asset Ticker Returns Sector
Dogecoin DOGE −0.4% Currency


Editor’s Note:

Start investing In cryptocurrency with Bitxchange If you’re new to the world of crypto and figuring out how to buy cryptocurrencies, then cryptocurrency exchanges like Bitxchange can help you to easily buy and sell crypto.

Original Source

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