Most assets have seen a correction over the past week. BTC fell from C$66,428 to C$54,900, a fall of close to 17.25%, before recovering , and currently trades at C$56,939 . ETH too witnessed something similar, as it fell from highs of C$5,049 to C$3,760 levels, before recovering and currently trades at C$4,146. The fall seems to have happened due to a mass sell off that was seen in the marketplace, worth about $3.5bn early last week, coupled with deflationary comments released by the IMF. This set off panic amongst holders, and bears took charge.
Surprisingly, the dip came right after El Salvador put BTC into practice, as a legal tender. However, since then we have seen volumes pump up, as at lower levels these assets seem to look attractive. This is a good sign, as it re-instills the fundamental belief in the ecosystem. Analysts still believe that this dip is not a cause of concern, and continue to hold a positive fundamental outlook towards market leaders like BTC and ETH, over a long term perspective. At the time of writing, Bitcoin’s market capitalization stands at $850bn. ETH, in terms of market capitalization, is currently at $390bn. Most altcoins have followed suit, and have also seen a dip over the past week. This is not a cause of concern, as historically we have seen altcoins follow the patterns and trends of leading assets like BTC and ETH, and this time seems to be no different.
As of Thursday last week, the latest date for which figures are available, roughly 2.399 million BTC were available across major exchanges globally. At the end of May, this figure stood at 2.390 million. The most plausible explanation for this is that Bitcoin traders have reversed the deposit trend that ensued during the mid-May price upheaval, and fundamentally this is a great sign of the industry. Essentially, this marks a significant change in the mentality of crypto investors, signalling that the asset is maturing, as it points to a clear return to an investment-focused, and not a speculation-focused mentality.
On the other hand, the ETH network continues to struggle with the issue of high gas fees. Ethereum competitors are taking advantage of this, and capitalizing on the network’s untenable gas fees, by launching mining and developer incentives that are also boosting token prices. The tenuous nature of Ethereum’s reign has come under increased pressure, more so since the mid May sell off, as several new layer-one- and layer-two-based protocols have launched incentive programs to attract liquidity and users to their ecosystems. However, fundamentally, ETH still remains the most scalable, and user-friendly protocol, with a complex yet robust smart contract network.
Altcoin action has been quite interesting too over the past week. Cardano (ADA) has seen a correction, falling from C$3.8760 to C$2.560, a fall of approximately 34%. However, as the new smart contract on the network goes live, investor interest seems to be rising, and volumes have increased, as after the correction the asset looks quite desirable. Similarly, we have seen good action in Dogecoin, after the asset witnessed a dip from C$0.44349 to C$0.271504 over the week. However, post this fall, we have started to see better inflows into the asset, as the bulls try to override the bears, and set a recovery trend in.
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Disclaimer: Information provided in the weekly market report is for information purposes only and should not be interpreted as investment, legal, or tax advice. Prior to investing, it is very important to evaluate your investment objectives and your risk tolerance carefully. This technical report is not meant to provide guarantees of future performance, and users should not rely on it, as the actual performance and financial results may differ significantly.