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Bitcoin’s Contagion Immunity Boosts Crypto Markets to Outperform Equities

The Crypto Week in Summary

As a recession looms, gas prices soar, and wounded crypto markets heal from the outright elimination of two popular coins, the crypto industry managed to deliver some bright spots with Bitcoin leading the way.

At a glance:

  • “Contagion” effects from UST’s failure level off
  • TerraUSD (UST) investors are filing suit
  • El Salvador hosted 44 countries to talk Bitcoin inclusion
  • Nigeria SEC published clear crypto regs
  • Crypto’s first flag was hoisted on top of Mt. Everest

Top Market Trends:

  • UST contagion eased as crypto markets stabilized after last week’s death of 2 coins & a $693 billion selloff. Bloomberg strategist said BTC and ETH will outperform equities.
  • Fragile stock markets shook by a looming recession spiraled downward this week with retail giant Target (TGT) dropping 25% on Wednesday, and a viral fake tweet about Costco’s hotdogs sent its stock dumping 12.45% in 24 hours.
  • El Salvador President Nayib Bukele hosted leaders and central bankers from 44 countries to discuss financial inclusion and BTC-based trade.
  • In crypto regs: UK proposed stablecoins as legal form of payment, China’s bitcoin mining ban failed, Nigeria’s SEC gave crypto clarity, and US regulators blasted crypto market for UST chaos.

Movers and Shakers

Top 7-day Gainers:
Decentraland (MANA) +54.00%
KuCoin Token (KCS) +43.00
eCash (XEC) +41.30%
Chiliz (CHZ) +26.80%
Monero (XMR) +26.6

Top 7-day Losers:
TerraLuna (LUNA) -88.7%
TerraUSD (UST) -81.50%
Helium (HNT) -14.20%
Celo (CELO) -13.10%
Convex Finance (CVX) -10.90%

Technical Summary

Bitcoin Pulse
Coming after an historically grim week that saw two top 100 cryptos go to zero and BTC dump to 50% of its ATH, Bitcoin staged a comeback and helped lift altcoins along with it. BTC dominance rose to 44.38%, a 6-month high.

While regulators worldwide closed in on crypto regs following the stablecoin depegging, Bitcoin’s performance this week demonstrated that despite volatile markets and mass FUD, BTC is becoming a risk off asset of choice during economic uncertainty.

  • On the 1-hour chart, BTC regained $30k but failed to breakthrough the longer resistance line at $30.8k. It is now trading in a tight range for the last few hours ($30k-$30.8k). It reclaimed the 100 SMA earlier today, which is now acting as a local support line. However, both the RSI and MACD are bearish on this timeframe.
Bitcoin-Short-TermBitcoin 1-hour chart

  • Bitcoin is on its way to close its 8th weekly negative close after drifting another 3.5% since last Sunday. Looking at the weekly chart, RSI is closing in on 30, which some traders consider as a signal for a potential bottom. However, these bottoms saw less sell-pressure than Bitcoin is currently experiencing.
BITCOIN-Long-TermBTC weekly chart with RSI closing in on 30

Altcoins on the Move
Multiple stablecoins (some algorithmic, some not) destabilized slightly. USDT and DAI also saw a major drop in circulating supply, but overall they maintained their peg through a week of massive market uncertainty. GameFi, Play-to-Earn, and Metaverse tokens trended and most altcoins experienced high volatility.

  • Major DeFi coins made modest gains with a few outliers, including AAVE +8.35% and EnergySwap (ENS) +31.56%.
  • GameFi and Metaverse tokens including Decentraland (MANA) and Bloktopia (BLOK) were trending this week.
  • Cosmos (ATOM) is currently trading within in an ascending triangle pattern which lead to a 51% rebound in the last few days.
Altcoins-TA-Cosmos-ATOMCosmos (ATOM) in ascending triangle

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  • A Cardano flag was waved on top of Mt. Everest by an avid ADA fan/mountaineer.
  • The Celsius Network announced it will IPO its bitcoin mining subsidiary, Celsius Mining.
  • Terra’s community to vote on forking the Terra blockchain and creating LUNA Classic.
  • UST and LUNA investors are filing suit, Korean regulators and tax authorities are honing in on co-founder Do Kwon, and venture fund Hashed lost $3.5 billion to LUNA’s collapse.

Spotlight on: Chiliz

Chiliz (CHZ) is a top GameFi token used by blockchain-based sports and entertainment platform, Socios. Token holders can participate in governance, become a superfan, and help influence decision making for their favorite teams. Mid-week, CHZ trended during a high level of volatility before leveling off in a less chaotic Bollinger Bands range

Pro tip: Using Bollinger Bands

During times of high crypto volatility, it’s the perfect time to learn about Bollinger Bands. As a chart overlay indicator that measures volatility, Bollinger Bands help traders identify overbought and oversold conditions, and potential reversals.

Quadency’s Bollinger Bands Bot enables you to easily set up buy orders when price goes under the lower band, or sells when a pre-defined condition is met.

We Looked Into: Crypto in the Sports World

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Quadency is a cryptocurrency portfolio management platform that aggregates digital asset exchanges into one easy-to-use interface for traders and investors of all skill levels. Users access simplified automated bot strategies and a 360 portfolio view with a free account.

Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.