Altcoin Aversion: Why Bitcoin And Stablecoin Dominance Is On The Rise
May 03 2022 - 6:00PM
NEWSBTC
Bitcoin and the crypto market are back in the red. The first crypto
by market cap records a 2% loss in the last 24-hours and could push
other digital assets into critical support zones. Related Reading
| Bitcoin Indicator Hits Historical Low Not Seen Since 2015 At
the time of writing, Bitcoin is one of the best-performing assets
in this ranking only surpassed by Binance Coin (BNB) and Ethereum
(ETH), according to data from Coingecko. BTC’s price trades at
$37,600 with a 7% loss over the past week. After a major outage to
its network, Solana (SOL) records a 16% loss and stands as the
worst-performing cryptocurrency by market cap. Terra’s native
cryptocurrency LUNA closely follows with a 15.5%. These losses seem
small when compared to other cryptocurrencies in the top 100 by
market cap. Tokens that were higher in the ranking, like Shiba Inu
(SHIB) and Avalanche (AVAX), now record as much as 20% losses in
one week alone. According to a recent report from Arcane Research,
smaller cryptocurrencies have been underperforming in the current
market conditions. Investors seem to be fleeting to “safety” as the
appetite for risk decreases pending a potential 50 basis point
increase from the U.S. Federal Reserve (FED). While Bitcoin and
larger cryptocurrencies have been showing a correlation with a 16%
loss for April, Arcane Research’s small-cap index and mid-cap index
are trending lower. The former record a 30% loss while the latter
records a 29% loss over the same period. Conversely, Bitcoin’s
dominance has been moving opposite to small coins. This metric
stands at 42% with a high probability of extending as
macro-conditions continue to prove unfavorable. Arcane Research
noted: Stablecoins also see growing dominance. UST has entered the
top 10, becoming the first algorithmic stablecoin to achieve this.
We now have three stablecoins among the top 10, and 4 among the top
11, illustrating the current flight to safety tendencies in the
market. What To Expect From Bitcoin In The Short Term? A separate
report from FTX Access claims the market is pricing 50 bps hikes
for the upcoming four FED meetings. This would place interest rates
at around 2 or 2.5 bps for the end of 2022. Related Reading
| Bitcoin Taker Buy-Sell Ratio Rebounds Back Into “Hold” Zone
In that sense, FTX Access claims that unless there is a surprise
from the financial institution, the market could see some relief:
Powell’s tone will be interesting but without raising +75bps or
increasing the pace of QT it’s a high bar for a hawkish surprise.
Some of this is cause for optimism, but unfortunately sentiment is
rock bottom.
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