Details

Weekly Crypto Analysis: Fear Hits the Crypto Market Amid FTX Crash; BTC & ETH Lose 20% In One Week

2022/11/14 23:24:29

Overview

  1. Crypto market tumbles as fear and distrust enter the crypto industry yet again.

The uncertainties of high inflation, economic downturn, and unexpected interest rate hikes have been weighing on the stock and crypto market this year. However, we would not expect the backlash of FTX's collapse until last week. The sudden moves triggered an extremely risk-off mood among crypto investors, shaking the faith of many in the market. 

News of FTX’s possible collapse pushed the crypto market over the edge, driving steep losses in Bitcoin, Ethereum, and other altcoins. Several investors rushed to withdraw their funds and exit the market over the fresh wave of uncertainty plaguing the outlook for digital assets.

In response to the news and to cement trust in the industry, several leading cryptocurrency exchanges - KuCoin included, have committed to publishing their Proof of Reserves (PoR). The move will usher in a new wave of transparency into the industry and aim to allay investors’ concerns about how to hold their digital assets.

At the end of the week, Bitcoin (BTC) dropped to $16,932, Ether (ETH) to $1,274, and XRP to $0.37. Over $3 billion worth of Bitcoin also left exchanges as the FTT contagion continued.

Cryptocurrency Market Heatmap | Source: Coin360

At the end of the week, Bitcoin (BTC) dropped to $16,932, Ether (ETH) to $1,274, and XRP to $0.37. Over $3 billion worth of Bitcoin also left exchanges as the FTT contagion continued.

Crypto Market Overview

  • The crypto market experienced a strange downturn this last week as the FTX ecosystem collapsed. Bitcoin (BTC) lost 22% of its value, but the loss pales compared to bigger losers like Solana and Cronos with 58% and 48% lost, respectively.
  • The total market cap dropped to $824 billion, but Bitcoin maintains its dominance of 38%.
  • FTX filed for bankruptcy on Thursday, but the saga continued as over $600 million was hacked from the exchange a few hours after its bankruptcy filing.
  • Elon Musk joined Twitter spaces to discuss his views on the FTT collapse and his views on the rumors of SBF being interested in partnering in the Twitter purchase.
  • Ether (ETH) did not derail from the crypto market direction this past week and lost over ~23% – the second time in three weeks.
  • Trustwallet Token saw the highest gain this past week, rallying by over 70%. This dwarfs the next top gainer, which made only a 4% gain.

Top Altcoin Gainers and Losers

Top Altcoin Gainers

Trustwalet Token (TWT) ➠ +70%

Pax Gold (PAXG) ➠ +4.35%

GMX (GMX) ➠ +2.37%

Top Altcoin Losers

FTX Token (FTT) ➠ -90.89%

Solana (SOL) ➠ -58.17%

Cronos Chain (CRO) ➠ -48.55%

Fear & Greed Index at 31, Market Sentiment Bearish

The Crypto Fear and Greed Index is back to its extreme fear zone, all thanks to the drama around the FTX and its CEO. The Whitehouse also suggested an urgent need to look into cryptocurrencies amid the FTX crash.

Fear & Greed Index | Source: Alternative

A glaring sign of dwindling investors' confidence comes as both Vitaik Buterin and Elon Musk lent their voices to the crash and explained it was always coming. The market is undecided about where the prices of cryptocurrencies will head next. Some believe Bitcoin will lead the next rally as it did during the Mt Gox crash, while the overwhelming majority believe there is still more downside ahead.

This Week’s Crypto News Highlights

Ethereum Turns Deflationary for the First Time Since the Merge

For the first time since Ethereum's switch to proof-of-stake via the Merge in September, the annual supply rate of Ether fell under zero. The cause? Massive on-chain activities fueled by the FTX crash.

The first deflationary trend was observed on the 30-day chart on November 9, when the blockchain burned 773,000 tokens, 170,000 more than it produced in the same timeframe.

Solana TVL Drops by 32%, Price Dips by Over 50%

On Monday, the Solana chain's total value locked (TVL) fell 32.4% due to news of FTX's demise resonating throughout the cryptocurrency community.

Solana's TVL, according to DefiLlama, is currently $423.68 million, down 32.4% off its all-time high (ATH) of $10.17 billion on November 9, 2021– just a year ago.

The largest decrease in TVL on the chain was seen by the Solana-based liquid staking protocol Marinade Finance, which fell 35.1% to $115.79 million the previous day.

Similar declines have been observed on several significant Solana protocols, including the liquid staking protocol Lido down 43.13%, the lending protocol Solend down 63.07%; and the automated market maker Raydium down 34.25%.

Over the same time period, TVL on other top blockchains also fell, with Tron falling 8.84%, BNB Chain falling 9.68%, and Ethereum falling 9.68% to 10.59%.

OpenSea to Enforce Creator Royalties on All Collections After Community Outcry

After many creators made public displeasure with the new Opensea rule, the NFT marketplace has decided it will continue to allow creators’ royalties. The first announcement was made on November 7, but a week later, nothing was done to that effect. The announcement in question was that it was launching an on-chain tool allowing creators to enforce royalties for any new collections on the platform.

This was after the marketplace announced it considered different fee options, but a pushback from the community saw the platform recheck its stance.

Bobby Kim, co-founder of The Hundreds, and other NFT creators announced on November 9 that they had decided to postpone the launch of their upcoming nonfungible token (NFT) collection on OpenSea while they "waited to see if OpenSea would take a stand to preserve creator royalties for existing collections."

Metaverse Community with 3M Users Adds Utility with FIFA World Cup 2022™ Collaboration

Upland is a game that takes gamers into the Metaverse and teaches them how they can participate in its real-world community, with interactive property gameplay for those who love buying up land or building houses. With events like FIFA Connected, Upland creates an environment where people are connected not only as competitors but also friends - bringing communities together from around this virtual planet Earth!

To help fans get ready for the World Cup, Upland is building an immersive experience that allows them to explore Qatar's stadiums in virtual reality. They'll be able to visit branded villages and stores throughout these digital spaces using collectible NFTs from FIFA, like passes or items necessary before attending matches live!

Upland is excited to announce its partnership with the FIFA World Cup 2022™! As part of the partnership, Upland will offer special properties labeled FSA for The Fair Start Act. These properties will be available at a reduced price point, making them accessible to newer players. In addition, Upland will be offering support for the FIFA World Cup 2022™ with national flags and other collectible decors. This is a great opportunity for fans to begin their metaverse journey by purchasing and exchanging digital homes. These homes are based on real-world addresses that exist in one of 22 available cities. Just like in the real world, these properties will increase in value as users build structures and customize them to their liking.

Crypto Calendar: Events to Watch This Week

➺ 14/11/2022 - PlanetWatch Emirex listing

➺ 14/11/2022 - Worldcup Inu

➺15/11/2022 - Care Bears Avatar Launch

➺ 16/11/2022 - Decentraland GooGle Meet AMA

➺ 16/11/2022 - Bridge and life wallet AMA

Bitcoin (BTC/USDT) Technical Analysis

Bitcoin corrected this week with a 20%+ dip. This is a result of the perceived crypto civil war that saw FTX lose most of its value and file for bankruptcy. This week will be interesting to watch as we might either see the full effect of the FTX crash and go further downward or Bitcoin shrug off the industry-wide crash and make a sustained recovery.

The support is currently around $15,000; the two primary resistances are $16,900 and $17,700. The market also seems skewed towards bears as they control the volume.

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

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