Market Trend 30/5 - 5/6 ｜Market shows brief surge, BTC reaches for 32k

For almost a full month, we have continued to describe the global crypto market and its verticals as highly volatile and without a clear trend ahead - advising investors to tread carefully as Bitcoin continued to side between 28 - 30k while Ethereum had fully lost its 2k support down towards the 1.700 - 1.900 levels.

This week was a clear example of the importance of respecting market uncertainty and choosing to observe for signs rather than executing any sudden decision. While the market was highly optimistic from Monday to last Wednesday - given moves and parallel optimism from the stock market and signs of tapering inflation - it dropped significantly back to previous support levels in just a few hours.

While sentiment and trading volume continues to be positive compared to previous weeks, the volatility warning is now much higher for the upcoming week. False break-outs are based on two equivalent scenarios; the will of the market to push higher but also its inability to do so. Proceed with caution and avoid any large moves.


Market shows brief surge


With positive news coming from stock-market activity, a reduction in US inflation and price settlement of most crypto projects along the same lines over the past month - similar to BTC at 28k and ETH around the 2k area - investors reacted with a breakout attempt with the global crypto capitalization going from 1.26 (almost a yearly low) to 1.37 trillion dollars. However, it quickly retraced back to 1.27 in a matter of a few hours on Wednesday.

Although it's obvious that both Bitcoin and Ethreum would take the lead as largest movers, the spike spread across the entire ecosystem - showing that investors, mostly retail, have great support at the moment for an upside trend. The problem was, and has remained for quite some time, of capital strength to hold higher levels. Given how uncertain the market has been from both a financial and regulatory standpoint, especially after the LUNA/UST fiasco, large movers are being extremely careful while retail investors are eager for a bounce-back.


BTC reaches for 32k

As the all-leader with almost 50% of market dominance, Bitcoin pulled the crypto pack towards the breakout - failing to do so much quicker than it rose towards the previous 32k support of the last months. The run towards new upside levels was similar to stock markets over the past week - which used positive news from the economy and the Federal Reserve’s projection of a potential high. It did not pan out, unfortunately, with Bitcoin returning to 28k as quickly as it went up.

The crypto still shows immense activity, with trading volume of around $11 billion dollars daily and a recent tick back to the $30k level. For this upcoming week, however, the best-case scenario is for Bitcoin to return to its sideways moves of 28-30k instead of suffering even deeper drops from its false breakout.


Waves to the moon


Waves investors, rejoice: this has certainly been the week for the crypto project. It’s been a remarkable week for Waves, to say the least, with the crypto recently reaching a 91% weekly gain. To make matters more interesting, the chart above shows that we didn’t have a sudden spike at all but rather a gradual and certain rise throughout the week.

So what is happening here? Basically, Waves just unveiled their “DeFi Revival Master Plan” to make investors’ whole again after protocols related to the project - Neutrino and Vires Finance - took massive hits from exploits and bank runs that left investors stranded. Hopefully the project, which aims to make the ecosystem more secure while also reimbursing investors, works out. The past week does show that people are excited about it, but there’s still a long road ahead.

After all, while a 91% weekly run is impressive for such a large market cap project, zooming out does put things into perspective. Right before Neutrino and Vires exploits, Waves had reached $54 per crypto - just three months ago, now standing at around $8 dollars. That does not mean that Waves should just be left aside, however, as it is still an incredibly original and useful project with a strong history and community support within the past six years. Definitely keep an eye on how things are going with their revival plan and the market’s reaction, as it could lead up to a truly massive rally back to stronger levels.



Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
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