Crypto market consolidation
Based on last week’s results, we can conclude that the total cryptocurrency market capitalization index has moved from a phase of local growth to a phase of local consolidation.
After starting at $2.1 trillion at the beginning of the week, the indicator was in a sideways motion, dropping sharply to $2 trillion mid-week, before quickly recovering to $2.11 trillion.
Having started the week with a local peak at 48 200, the bitcoin price chart had a smooth downward movement (except for a sharp dip to 44,400 mid-week and a similarly rapid recovery). By the end of the period under review, the first cryptocurrency was at 46 150 (down 4.2%).
During the past week, the Ethereum chart had exactly the opposite direction of movement from bitcoin, but with exactly the same intensity. Having started from 3380, by the end of the week the second cryptocurrency reached 3480 (cumulative growth of 2.95%). At the same time, in the middle of the week, there was also a brief dip to the level of 3225, followed by a rapid recovery. At the end of the week, the dominance of ETH in the cryptocurrency market structure increased, while the same indicator for BTC decreased.
Another major investment round has come to light. This time, Blockchain.com has raised an undisclosed amount of funding at a total valuation of $14 billion. Moreover, last week it was revealed that they had acquired the over-the-counter platform Autonomy. In addition, some of the money raised will be used to build their own NFT marketplace, which the company has been working on for over a year. This news could further lead to a reassessment of the entire cryptocurrency wallet sector.
On 31 March, two European Parliament committees voted in favor of measures requiring crypto companies to collect and transmit data on certain transactions. The Economic and Monetary Affairs Committee (ECOM) and the Committee for Civil Liberties, Justice, and Home Affairs (LIBE) voted in favor of expanding anti-money laundering requirements for crypto. The proposal aims to require crypto-service providers, such as exchanges, to collect and transmit information about the sender and recipient of these asset transfers — similar to what payment service providers do for wire transfers. In this way, lawmakers hope to ensure traceability of transfers between crypto-service providers and so-called ‘unregistered wallets’ to be able to better identify and potentially block possible suspicious transactions.
Another notable piece of news was the release of an algorithmic USDB stablecoin on the Fantom network. Balance Company is the issuer of the new decentralized assets. USDB can be issued by burning FHM tokens. The stablecoin will be pegged to $1 by users who will use arbitrage opportunities.
A Turkish prosecutor has requested prison terms totaling 40 564 years for twenty-one officials of the Istanbul-based cryptocurrency exchange Thodex. This comes about a year after it was shut down and its CEO disappeared. CEO Fatih Ozer was spotted in the footage at Istanbul airport in April last year. Turkish police have been unable to locate him. Thodex was part of a Turkish cryptocurrency boom that attracted investors seeking to protect their savings from inflation and a weakening currency.
In his latest blog post, Coinbase CEO Brian Armstrong said that the platform intends to attract web3 talent that can help accelerate India’s economic and financial goals. Armstrong announced a cryptocurrency community event in Bangalore on 7 April to discuss the future of cryptocurrencies and web3 in India. He also said that the exchange plans to hire 1000 people at its India hub this year alone. Coinbase Ventures has already invested a total of $150 million in Indian crypto and Web3 technology companies.
According to data from Glassnode, an analytics service, the amount of Bitcoin on exchange addresses continues to decline. More than 96000 BTC were withdrawn during March, one of the largest outflows in the history of observation.
The number of addresses that accumulate rather than reduce their balances also increased. A more detailed cluster analysis shows that micro (up to 1 BTC) and super large (more than 1000 BTC) wallet holders were the most active. Major confirmed buyers include Microstrategy, the Luna Foundation (the developer of the Korean cryptocurrency Terra), and Canadian spot ETFs (PURPOUSE and 3iQ CoinShares Bitcoin (BTCQ.U)).
In the options market, the main trading interest within the next month was in the 52 000 and 60 000 levels, with traders buying call options on upside expectations. In terms of hedging the current price, the highest volume was recorded at the 47 000 and 42 000 levels for put options, which can serve as the nearest price support levels.
The recent Bitcoin price movement to above 47 000 has motivated traders to trade monthly call options more actively hoping for a continuation of the trend.
The market is currently in a consolidation phase, according to analysts. After the BTC price jumped and broke out of the 38 000–45 000 channel, momentum in the spot market has weakened a bit, but options traders expect a continued rise towards the psychological 50 000 mark over the next month.