Stronger Dollar, Weaker Markets
Yesterday’s Market Moves
BTC
S&P
WTI
21,047.60 |
+ 1.56%
3,900.11 |
- 0.30%
111.29 |
+ 1.57%
ICYMI: Our new Crypto Rebel website is live. Be sure to check it out and subscribe to read the complete issues of our newsletters for free. New week, new macroeconomic headwinds! On this issue, there’s renewed context into the performance of Bitcoin, Ether, and some fascinating alts. Let’s have a look, shall we?
Read the full issue to find out
Ethereum

On-chain data shows that the amount of Ether being issued daily has drastically been cut since the Merge. Ethereum’s issuance rate has fallen by 98% since the Merge, suggesting that the asset is on its way to becoming deflationary.

Since its transition, the network’s supply has grown by 7,385.47 ETH, whereas if it were still running on the Proof-of-Work (PoW) consensus model, it would have added 128,422.13 ETH.


The price of Ether has continued to decline since the Merge, tinkering with the $1,300 price point at the time of writing. According to a JP Morgan research note, "Reasons for the recent decline likely include a combination of buy-the-rumor, sell-the-news flows specific to Ethereum’s Merge event along with broader weakness in risk assets due to more hawkish central banks."

In Other News,
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MARKET’S RESPONSE

The crypto market entered a new downward spiral yesterday. The total crypto market cap has fallen back to $924 billion and continues to drop. Bitcoin fell below the $19K mark Ethereum fell  below the $1.3K mark again.

Unsurprisingly, the S&P 500 slid by 1.72% and NASDAQ fell by 1.66%. This performance shows the continued correlation between the crypto market and the general broader market, especially the tech-oriented NASDAQ 100 index.

What you need to know

One of the biggest reasons the market is crashing is the strengthening of the US Dollar. The U.S. Dollar Index (DXY) increased by another 0.64% to reach 113.92. This strength is destroying other global currencies such as the British pound and inflicting damage to riskier assets such as cryptocurrencies.

Meanwhile, the US Fed continues its aggressive approach to tame inflation at the cost of economic growth. The Fed has hiked interest rates by another 75 basis points - a move that’s strengthened the dollar. Other global economies are also bracing for a recession as the Fed continues to underestimate the slowdown in the economy.

Fed chair Jerome Powell is set to speak on Tuesday, while Susan Collins of the Boston Fed, and Loretta Mester of the Cleveland Fed are due to speak today. As the Fed officials will speak on further monetary policy, it’s certain to impact crypto price movements.

In Other News,
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BITCOIN

The world’s largest cryptocurrency Bitcoin (BTC), continues to face strong selling pressure amid uncertainties in the global markets. The BTC price has momentarily made a recovery above the $19,000 mark, despite several analysts expecting further downside.

Source: Messari

Source: Messari

According to on-chain data provider Santiment, addresses holding 100 to 10k BTC have lowered their percentage of supply held of crypto‘s top asset to 29-month lows. This clearly shows that Bitcoin whales remain extremely cautious, considering the current macro environment.

Data also suggests that the number of short positions in Bitcoin derivatives has been increasing. It appears that whales have intentionally opened short positions on derivatives exchanges and helped to lower BTC prices - a move showing bearish sentiment.

In Other News,
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Altcoins

XRP’s growth is the biggest of the top 10 tokens in the past week, as it is up 32.47% to $0.4975. The XRP community has remained ever optimistic about the potential of its affiliated firm, Ripple Labs Inc, to win the long-protracted lawsuit with the US Securities and Exchange Commission (SEC).

Algorand (ALGO) is one of the best performers over the past week, up 34.32% to $0.3815, and is worth watching for short term price gains. DeFi stalwart Compound (COMP) also did well and is currently changing hands at $61.84, up 25.65% over the past 7 days

Interpol has officially issued a Red Notice against Terra’s founder Do Kwon after he fled Singapore. As a result, Terra Classic (LUNC) and Terra (LUNA) plummeted nearly 20% and 15% in the last 24 hours, respectively.

In Other News,
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