Weekly Crypto Analysis: Crypto Market Regains $1 Trillion Market Cap; BTC, ETH & DOGE in Highlights

2022/10/31 15:28:11

  • The crypto market’s total market cap hit the $1 trillion mark for the first time since September 13. The market ended at $1.025 trillion, a $100 billion gain from its previous week’s figure of ~$922 billion.
  • Bitcoin (BTC) investors saw a substantial gain in their holdings, as the cryptocurrency increased by ~8.6%, adding $42 billion to its market cap over the course of the week.
  • Ether (ETH) rallied this past week, gaining over ~23% since the week's beginning.
  • Dogecoin (DOGE) saw one of the greatest gains in the crypto market over the last week, with a 100% surge in value. The cryptocurrency rallied on news that Elon Musk completed the purchase of Twitter.
  • Ripple (XRP) saw a modest consolidation as the cryptocurrency gained only 2% of its value this past week.
  • The Altcoin market made notable gains for investors this past week, and some of the most prominent ones recorded their monthly highs.
  • The cryptocurrency market gained $100 billion this week, with 42% of the profits coming from Altcoins.
  • TVL of the DeFi sector dropped this week but is still around the $50 billion mark.

The crypto market had an eventful week, contrary to what we have experienced in the past few weeks. First, the market experienced the largest liquidation of short positions since July 2021, and market sentiments suggest a bottom has already been reached.

Moreso, receding inflation fears have caused many consolidating coins to form slightly bullish patterns on their price charts. The notable gains from cryptocurrencies like Klaytn, Dogecoin, and Ethereum caused Bitcoin’s dominance to be slightly reduced from 39.91% to 38.85%, and Ethereum‘s dominance increased by almost 2%.

Bitcoin (BTC) ended this week at around $22,800, which is over 8% above its previous week’s closing price of $19,400. The most valuable cryptocurrency has attempted to go beyond $21,000 this week as its price on Saturday went as high as $20,988. This is coincidentally the highest it has gone in the last 30 days. While it is difficult to say if the worst days are over, several analysts attribute this spike to the US Midterm elections.

Ether (ETH) holders would be pleased to see their cryptocurrency surge by over 20% this week, bringing the cryptocurrency to the $1,600 range. This is the second consecutive week that Ethereum ended in the green and the first time since September as it hits $1,600.

Looking at the altcoin market, Cardano (ADA) increased by18%, Ripple (XRP) by 0.5%, and Solana (SOL) by 16%. Many other tokens in the altcoin market (including DOT and SHIB) also saw a double-digit increase.

Cryptocurrency Market Heatmap | Source: Coin360

The upward run by all cryptocurrencies extends to Metaverse tokens as the notable tokens in this space, such as Axie Infinity, Decentraland, Theta, and The Sandbox, saw modest gains in their token values. Theta led the way with an over 20% increase in the last week.

Top Altcoin Gainers and Losers

Top Altcoin Gainers

Dogecoin (DOGE) ➠ +106.45%

Klaytn (KLAY) ➠ +52.35%

Chiliz (CHZ) ➠ +25.64%

Top Altcoin Losers

Chain (XCN) ➠ -15.89%

Aptos (APT) ➠ -11.17%

Quant (QNT) ➠ -8.55%

Fear & Greed Index at 31, Market Sentiment Bearish

The Crypto Fear and Greed Index is shifting to the neutral zone. Unlike last week’s value of Extreme fear - 20, the index is currently in the Fear zone - 31. As explained earlier, the sentiment on several cryptocurrencies indicates the bottom is over, but many cryptos are still far from their record highs. If things don’t go awry before the end of the month, this will be the first month since June that we ended above the “extreme fear” zone.

Fear & Greed Index | Source: Alternative

This Week’s Crypto News Highlights

Crypto Will be Subject to Capital Gain Tax- Australian Government

The recently-released budget paper that was made public on October 25 explained that the Australian government would tax cryptocurrencies for capital gain. The only exception to this rule is government-issued digital currencies or central bank digital currencies (CBDCs). This decision removes the cloud of uncertainty surrounding the Australian government’s role in cryptocurrency.

Despite this, Crypto Investors can get a 50% discount on their taxes when they hold the cryptocurrency for over twelve months. Businesses must report any crypto asset sold, the selling prices, and the value of the remaining crypto asset under management.

Do Kwon Hit With $57 Million Lawsuit in Singapore

Do Kwon, the co-founder of Terraform Labs, who may be facing legal actions in South Korea and the United States, is the target of a lawsuit in Singapore along with the Luna Foundation Guard (LFG) and Terra founding member Nicholas Platias. 359 individuals have filed a lawsuit against these individuals and organizations, claiming that they made fraudulent representations about Terra's stablecoin, TerraUSD (UST).

The plaintiffs allege that UST is not actually "stable by design" and that it is unable to maintain its peg to the US dollar. If these allegations are proven true, it could have serious repercussions for Kwon, Platias, LFG, and Terra.

The claimants in the class action lawsuit against United Statestoken (UST) allege that they have suffered financial losses due to the platform's fraudulent and misleading practices. They are seeking compensation for roughly $57 million worth of "loss and damage" combined based on the value of UST tokens they purchased and held or sold amid the market downturn in May. In addition, they request an order to pay for "aggravated damages." The suit alleges that UST and its team members made false and/or misleading statements about the company's business prospects, financial condition, and token price.

Reddit NFT Trading Volume Hits an All-Time High

The recent surge in trading activity for Reddit NFT avatars represents a significant milestone for the social media platform's cryptocurrency experiment. In just 24 hours, over $1.5 million worth of digital collectibles changed hands, representing a significant portion of the total volume traded since the avatar NFTs were first launched.

The increase in trading activity is even more impressive, considering that it comes at a time when most traditional markets are experiencing a period of relative calm. For Reddit, the success of its NFT avatar experiment could pave the way for more widespread adoption of blockchain technology and cryptocurrency on the platform in the future. With users already showing a willingness to pay for digital collectibles, it will be interesting to see how Reddit harnesses this demand to drive further innovation on its platform.

Andreessen Horowitz Lost 40% in H1 2022

Despite the recent crypto market crash, Andreessen Horowitz remains committed to its "crypto-centric vision of the internet called Web3." In an interview with the Wall Street Journal, Chris Dixon, a general partner of the firm, stated that they will continue to invest in cryptocurrencies despite the losses. This is a bold move considering the current state of the market, but it is a good indication that Andreessen Horowitz still believes in the long-term potential of the crypto industry. While it remains to be seen how well they will weather this storm, their commitment to the industry is admirable.

In an interview with Business Insider, a16z co-founder and general partner Chris Dixon said that he believes there is still a lot of potential for growth in the crypto sector. He noted that the market is still in the early stages of acquiring users and that the current market downturn presents an opportunity for companies like a16z to continue backing crypto entrepreneurs.

Dixon also said that a16z had adjusted its strategy on crypto assets after its main crypto fund lost around 40% of its value in the first half of 2022. In Q3 2022, it announced only nine deals with crypto startups, compared with 26 announcements in Q4 2021. Despite this adjustment, Dixon said that a16z still remains a large beneficiary of the crypto market's positive leaps in recent years. For example, it saw almost 10x gains after backing the exchange Coinbase in 2013.

Crypto Calendar: Events to Watch This Week

➺ 31/10/2022 - Hong Kong Fintech Week

➺ 31/10/2022 - IXIRSWAP Roadmap Update

➺ 3/11/2022 - CFX - Conflux AMA with Kucoin

➺ 1/11/2022 - Ricnatum Private NFT Sale

➺ 3/11/2022 - ETH San Francisco Summit

Bitcoin (BTC/USDT) Technical Analysis

Bitcoin made a short statement move in this week, breaking the sinusoidal move of the past few weeks. The cryptocurrency market leader gained over 8% as it made one of its most decisive moves in the past few months.

On the daily timeframe, the $20k resistance level was finally broken, and Bitcoin’s support is holding strong around the $18,800 mark. The primary resistance is $20,600, and these significant S&R levels are determined by combining 100-MA & 200-MAs, which proved to be valid in most of the scenarios.

BTC/USDT Chart on the Daily Timeframe | Source: KuCoin

There is little resistance from bears in volume. For the foreseeable future, the market seems to predict a sustained rally. The major reason for this rally could be traced to the upcoming US Midterms election. The major test for this Bitcoin rally will be seen next week, as the Fed is expected to raise the federal funds rate by 0.75 points. This will not primarily be the test, but the Federal Reserve's outlook for December will prove pivotal.

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