Market update

Normal service has resumed, with Bitcoin now up by 35% since Russia’s invasion of Ukraine tanked markets in February. Analyst Will Clemente observed: “Bitcoin has closed above short term holder cost basis for the first time since Dec. 3. Hard to be bearish as long as BTC is above.” Tether just printed 1 billion USDT in four days, Ethereum gas fees for DeFi transactions are back around US$20 (AU$27) and memecoin insanity has returned because of course there’s already a Will Smith slap token and a DAO. The BTC price is up a whopping 11% since this time last week and currently sits at around AU$63,000 (US$47,100). Analysts who were bearish recently, are now talking about a new all time high. Ethereum gained 11% and is trading around AU$4,500 (US$3.3K), XRP was flat, Cardano added 24% and Polkadot was up 13%. The Crypto Fear and Greed Index is at 60, or Greed, for the first time in March.

With the market growing more accustomed to the Ukraine war, and inflation and interest rate rises, the Crypto Fear and Greed Index has recovered slightly to 30, or simply ‘Fear’. Bitcoin has spent most of the week in the mid AU$50Ks, and it’s currently 1% up on seven days ago to trade around AU$55,500 (US$41K). With signs the years-in-the-making Merge is finally coming closer to reality Ethereum jumped 8% to trade at AU$3,900 (US$2.8K). Separately, XRP increased 5% and Cardano and LINK are up 10%.

With inflation at a 40 year high in the US, and the Federal Reserve expected to start raising interest rates this week, Bitcoin’s ‘inflation hedge’ narrative is being put to the test. After a short-lived sugar rush from President Biden’s Executive Order, Bitcoin spent most of the week trundling along under US$40K (AU$55.6K), and it is currently flat on the last seven days, trading just around AU$55,200. Ethereum was up 1% to around AU$3,600 (US$2.5K), XRP gained 3%, Cardano is down 3% and Polkadot is up 3%. The Crypto Fear and Greed Index is at 23, or Extreme Fear, the same as last week.

With the possibility of a nuclear exchange (relatively) high, a financial war ramping up, and increased regulatory pressure in the US and Europe, crypto markets are again under pressure. Bitcoin is down 15% for the week to trade just under AU$52K (US$38.3K)  while Ethereum’s slide continues, losing another 17% to around AU$3,400 (US$2.5K). XRP lost 11%, Cardano (-20%) and Polkadot (-16%). The Crypto Fear and Greed Index moved above 50 earlier in the week but is now back around 23 or Extreme Fear.

Bitcoin went on a rollercoaster ride this week, plunging more than 10% on the news that Russia had invaded Ukraine. It bottomed out below AU$48,000 (US$34K), recovered a little bit as markets digested the implications, and then suddenly jumped almost 15% in the past 24 hours to AU$59,300 (US$43K). As usual, the reasons aren’t exactly clear but there are reports Russians are buying up crypto as the country’s financial system gets hit hard by sanctions. Markets also seem to prefer certainty to uncertainty and news emerged today that eBay is looking at adding crypto payments. Bitcoin is up 12% for the week at the time of writing, with everything else up too including Ethereum (9%), XRP (6%), Cardano (6%), and Polkadot (13%). The Crypto Fear and Greed Index is at 20, or Extreme Fear. Bitcoin dominance is edging back towards 44%, the highest it’s been since November, and there are now 800K wallets with at least one whole Bitcoin, and non-zero addresses are at an all-time high above 40 million.

The year started with a US$2.21 trillion (AU$3.1T) crypto market cap but it’s declined 25% since and hit US$1.69 trillion (AU$2.35T) as of today. The threat of regulatory clampdowns and the possibility of war with Ukraine is weighing heavily on markets. Bitcoin fell below the US$37K (AU$51.5K) mark earlier today and the Fear and Greed Index is at 25 or Extreme Fear. At the time of writing, Bitcoin is at AU$51.7K for a 16% loss this week. Ethereum lost 15% to trade just below AU$3,600, XRP fell 15% and Polkadot lost 16%. Activity on the Bitcoin network has fallen back to mid-2019 levels, from 400K daily entities transacting in November down to around 275K today “indicative of tepid demand from new users,” Glassnode commented. In more positive news, El Salvador’s GDP soared by 10.3% in 2021 for the first time, showing that at the very least the Bitcoin Law didn’t tank its economy.