Market update

Although Bitcoin managed to break above AU$60K (US$43K) a few times, at the time of writing it had pulled back to around AU$58,700 (US$42.3K) for a -2% finish to the week. Ethereum gained 1.5% this week and is up around AU$4,400 (US$3.2K) while Cardano surged on positive network metrics and announcements and is up significantly by 38%. XRP was flat, Polkadot (4.5%) and Dogecoin (17%) both saw more significant gains. The Crypto Fear and Greed Index is at 22, or Extreme Fear which is pretty much where it’s been stuck so far in 2022.

It hasn’t been a great start to 2022, with Bitcoin essentially reversing an entire year of gains to be back in similar territory to January 2021. Bitcoin plunged on the weekend following an internet outage in Kazakhstan and signs the Federal Reserve was becoming hawkish. It dipped below the psychological US$40K (AU$55.7K) mark earlier today, with Ethereum falling below US$3K (AU$4.18K). Overall crypto markets have lost US$1 trillion (AU$1.4T) since the all-time high in November. At the time of writing Bitcoin was down 12% for the week just above AU$58,100 and Ethereum had lost 21% and was trading just under AU$4,300. Cardano lost 18%, Ripple (-14%), Polkadot (-24%) and Dogecoin (-18%). Bitcoin’s RSI fell below the May 2021 crash, making it the most oversold since the March 2020 pandemic crash. The supply in profit is around 66%, similar to July last year.  Some hope this means the bottom is in. After dipping to 10, the Crypto Fear and Greed Index is now at 23, or Extreme Fear.

Bitcoin may have pulled back one third from its all-time high of AU$95.7K (US$68.9K) in November, but it’s still up by almost 50% from a year ago, beating out the S&P 500 which was up 27% in 2021. Bitcoin’s performance was better than 2019’s 75% drop but didn’t hit the heights of other annual gains since 2016, which ranged between 81% to 1390%. Bitcoin dipped to around AU$63,000 (US$46.2K) on New Year’s Day and is currently trading around AU$64,300 (US$46.2K) for a loss of 11% this week. A survey of 110K CoinMarketCap traders tips we’ll hit AU$73K (US$52.6K) by the end of the month. Ethereum was down 10%, Cardano (-15%), XRP (-13%) and Dogecoin (-11%). Synthetix turned a corner, up 11% this week. The total crypto market cap is currently just over AU$3 trillion. The Crypto Fear and Greed Index is at 29 or ‘Fear’.

The Bitcoin price is around one third down from its all-time high price a little over a month ago. But while sentiment is bearish, on chain metrics remain strong and miners are holding on to their coins, with outflows halving in the last month and unspent supply about to hit a new ATH. Bitcoin spent most of the week trading between AU$64K and AU$69K (US$46K to $50K) and finished the week roughly where it began, around AU$66,000. Ethereum gained 1% and is trading around AU$5,550, Cardano was flat, XRP was up 9% and Dogecoin gained 3%. The Crypto Fear and Greed Index spent the week in the ‘Fear’ zone, but fell today down to 25 or Extreme Fear.

Crypto markets are seeing a price correction with many altcoins down by double digits this week. As usual, there are plenty of potential contributing factors, with inflation hitting a 40 year high in the US potentially forcing the Federal Reserve to accelerate its tapering plan and Chinese real estate giant Evergrande being declared in restricted default after failing to repay overseas bond holders. Bitcoin has also dipped below the 200-day moving average, which is never a good sign and finishes the week down 10% to trade around AU$65,500 (US$46,800). Ethereum lost 16% and is trading just above AU$5,300 (US$3,800). Cardano (-16%), XRP (-8%) and Dogecoin (-14%) all lost ground. The Crypto Fear and Greed Index is at 28, or ‘Fear’.

After its big weekend plunge, Bitcoin has been trundling along mostly below AU$70K/US$50K until today when it poked its head above. It’s still down 12.6% for the week and is trading at just above AU$72,100 (US$50.9K). Ethereum has performed considerably better and is now just 2.4% on this time last week to trade around AU$6,150. Everything else was down including Cardano (-10.7%), Ripple (-16.6%) and Dogecoin (-17.5%). The Crypto Fear and Greed Index is at 16, or Extreme Fear, the lowest reading since July.