Bitcoin (BTC) Rallies After Nine-Week Red Streak
Bitcoin (BTC) closed with a net weekly loss, marking a record streak of nine red weekly candles. The unprecedented price action led to expectations of a breakout above $30,000. BTC only managed to recover to the $30,600 range, though still capable of more volatile and rapid price action on the upside.
BTC rapidly climbed above $30,700 on Monday, extending the day’s gains. BTC extended the rally to $31,741.05 during Asian trading hours. For now, BTC escaped the immediate scenario of dipping closer to $20,000, while setting the pace for regaining positions above $31,000.
BTC trading volumes returned above $28B in 24 hours, while dominance remained at 45.8%, signaling continued decoupling from altcoin projects. The trading sentiment remains extremely fearful, heading into the last stretch of May. After the rally above $30,000, BTC liquidations were just above $13M, attacking only a small range of short positions.
BTC will complete the month with a nearly 20% net loss, from a peak close to $40,000, extending the loss with a second monthly red candle. May also shifted the attitude, from a brief correction to an already deepening bear market.
This time, after the crash of LUNA, there are new expectations of weak projects getting shaken down again. Some coins are considered to be incapable of a new chance for an all-time high. The entire crypto market has erased $1.6 trillion since its peak valuation, with some of the sectors more affected than others.
The past year of growth was also unprecedented in the sheer number and type of new projects. The NFT trading boosted speculative value, along with play-to-earn games. Now, those models seem less viable as there are few willing buyers to recoup the losing assets.
Without a BTC rally, altcoins may not continue their climb. Additionally, Ethereum (ETH) is also deflating, due to the high and unpredictable fees. There is also the unsolved question of migrating all tokens and projects onto an eventual new proof-of-stake network.
ETH kept close to $2,000, but the token also saw its supply getting close to 121M in total, far outpacing the initial expectation of stopping new production at around 100M tokens. A shaky ETH market price affects the value of all related assets, including NFT, open finance tokens, and gaming tokens.
LUNA Crash Speeded Up BTC Adoption
Paradoxically, the crash of LUNA may have caused wider BTC adoption. The Terra LFG rapidly sold off an estimated 80K coins, which were rapidly acquired by retail or other buyers. Glassnode noted a growth of addresses building up to 100 BTC.
Holding behavior continues, with small-scale wallets and those holding above 10 BTC expanding.
Which Altcoins Can Hope for More Activity
Despite the fearful trades, not all coins and tokens were doomed to stay flat or slide. Cardano (ADA) broke out to $0.53, recouping some of the losses with a 12% daily gain. ADA was among the coins with the most rapid growth.
Cardano is starting to grow a decentralized ecosystem, while attempting to attract projects. New DEX are still trying to revive trading on the network.
Despite the bear market, DEX and algorithmic decentralized trading is a technology that is here to stay. Even for smaller projects, it is becoming viable to build small-scale local exchanges, ensuring liquidity for each project.
LUNA Regains Positions
After a day of rapid losses, LUNA actually started to regain some of its positions. The new asset was listed across exchanges, and gained more than 57% overnight to $9.25.
The asset is still considered highly risky, but also gained approval from investors. KuCoin, the leading Korean exchange, launched a new LUNA futures market.
Former Terra investors currently own only a fraction of their entire holdings. Not all lost LUNA from the old network was reimbursed, and the new asset has about 210M tokens in circulation. At this point, LUNA may be used for short-term speculation.
TRON Gains Ground After Token Burn
The TRON network may gain more importance as it took a risk with the USDD token. TRX rose gradually to $0.082, while sparking high-grade valuations of up to $5.
The big problem for TRX is its high supply, above 93B tokens. However, networks with a similar or higher supply have commanded higher prices. TRX can hope at least to repeat levels seen by Dogecoin (DOGE), which rose close to $0.70.
The TRON network also has different target users, carrying high-risk apps and tapping most of its transactions on the Chinese market. The TRON network claims to have more than 95M accounts, a stunning number of wallets given that networks like Avalanche carry about 5M active wallets.
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