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Gate.io Blog Market Trend|Assets Such as BTC Show Signs of Recovery, and The Market has Potentially Reinvigorated

Market Trend|Assets Such as BTC Show Signs of Recovery, and The Market has Potentially Reinvigorated

09 December 09:13

The past week for the cryptocurrency market has been one filled with horizontal price movements, discussions surrounding adoption and regulatory clarity, and the development of privacy and security solutions. With current valuation data suggesting that the market is beginning to recuperate following the devastating FTX collapse, this could signal a new phase for the cryptocurrency market, whereby stability is a staple.

The Latest News

Cardano Reveals ‘Confidential Smart Contracts’ Are On The Way

Despite the wider crypto market having been flooded with a sea of red, CEO of Cardano, Charles Hoskinson, has revealed that development within the project has far from slowed, with the project’s new privacy-focused blockchain, Midnight, being the focus for innovation. Acknowledging the dilemma of confidentiality and privacy within the blockchain space, Hoskinson stated that in TradFi user’s identifiable information is bound by privacy laws, thus protecting the party, yet when placed in a blockchain context this information can become alarmingly public.

To resolve this, Cardano’s Midnight blockchain is built upon a confidentiality framework featuring private smart contracts, as opposed to having a privacy token. Acting as a partner chain to Cardano, the latter provides ‘security, infrastructure, decentralisation, and ecosystem’, whereas Midnight contributes ‘a regulated value transfer protocol and framework for people to build confidential smart contracts’. While Hoskinson provided little information on when Cardano users can expect the reveal of the Midnight network, this information provides a sense of anticipation amongst investors and can perhaps introduce a bullish sentiment for the network.

Charles Hoskinson (Image Courtesy Of UToday)

XRP Market Cap Sheds Nearly $5 Billion Despite Positive Lawsuit News

Throughout 2022, XRP has been subject to immense price volatility as the Ripple vs SEC lawsuit has ensued and the community has closely monitored its progress. Despite the lawsuit beginning to look favourable for Ripple as the submission of final briefs has been made, XRP has experienced substantial selling pressure, which has led to a loss of $4.87 billion in market capitalisation across the past month alone. As of today, XRP’s market capitalisation hovers above $19.5 billion, representing a vast decline from the $23.91 billion recorded in early November.

Regarding the positive news in terms of the lawsuit, recently a presiding judge overruled the SEC’s attempt to withhold the documents relating to former Division Director William Hinman, which entailed a speech from Hinman whereby he claimed Ethereum was a security. Additionally, Ripple received backing following the court admitting supportive briefs from companies using XRP technology, cryptocurrency industry groups, and asset holders. Various legal analysts have projected that the case may be ruled in favour of Ripple as speculations that the two parties will settle the matter circulate.

Weekly Price Data For XRP (Data Courtesy of CoinMarketCap)

Goldman Sachs Moves To Buy Crypto Firms

With a substantial volume of cryptocurrency and blockchain firms taking a valuation hit in light of the FTX crash, Goldman Sachs executive, Matthew McDermott, has stated that the firm is ready to swoop in and invest millions to regenerate or purchase firms to help them recuperate in spite of the bear market. McDermott suggested that big banks and traditional finance firms are beginning to see burgeoning opportunities within blockchain as the FTX collapse emphasised a growing need for regulatory clarity.

It has been revealed that Goldman Sachs is witnessing opportunities that are ‘priced more sensibly’ and that they are undergoing due diligence on various blockchain firms. McDermott also acknowledged the FTX debacle and commented that FTX had established itself as a ‘poster child’ of the space, yet despite its collapse, the underlying technology ‘continues to perform’, hence why the firm is moving to invest in the space and foster development.

Goldman Sachs (Image Courtesy of Wikipedia)

The Top Five Standing

The past week for the top five has predominantly been one of horizontal price movements as the market began to regain its footing in light of the decimating FTX crash last month.
The current top five remain as:

Bitcoin (BTC)
Currently standing at $16,942.01.
Across the past 24 hours, there has been a positive 0.74% movement.
Across the past week, there has been a negative 0.13% movement.

(Data Courtesy of CoinMarketCap)

Ethereum (ETH)
Currently standing at $1,250.17.
Across the past 24 hours, there has been a positive 1.62% movement.
Across the past week, there has been a negative 1.63% movement.

(Data Courtesy of CoinMarketCap)

Tether (USDT)
Currently standing at $1.00.
Across the past 24 hours, there has been a 0% change.
Across the past week, there has been a 0% change.

(Data Courtesy of CoinMarketCap)

Currently standing at $287.70.
Across the past 24 hours, there has been a positive 1.56% movement.
Across the past week, there has been a negative 1.05% movement.

(Data Courtesy of CoinMarketCap)

Currently standing at $0.9999.
Across the past 24 hours, there has been a positive 0.01% movement.
Across the past week, there has been a 0% movement.

(Data Courtesy of CoinMarketCap)

Current Project Trends

Based on data provided by CoinMarketCap, a majority of the top-gaining projects across the past week have been based on analytics, blockchain information, and similar complex technical studies into blockchain. This is likely a result of the FTX collapse exacerbating concerns related to blockchain knowledge and security, hence why many may be investing in protocols committed to providing security, transparency, and accessible information.

However, there has also been a surge of interest in metaverse-based and P2E gaming projects on the Binance Smartchain, signalling that this facet of blockchain may be making a resurgence, despite the loss of interest and market capitalisation caused by the rapid onset of the bear market.

The Current BTC Trend

Across the past week, Bitcoin has predominantly remained above its 7-day SMA, with the exception of a two-day slump between midday on the 7th and the early hours of the 8th, however, Bitcoin has since surged above the 7-day SMA and is trading at an average of $17,231.

However, despite this seemingly bullish price recovery as Bitcoin has finally cleared the new resistance of $17,000, it has been reported that Bitcoin derivatives have begun to unwind in light of the FTX fallout, with over 160,000 BTC having been unwound since the start of October. This data indicates that an estimated $3 billion worth of futures contracts has been dissolved in two months, suggesting that the future price points of Bitcoin may be relatively bearish, considering futures contracts serve as an indicator of market health and market leverage. Currently, the sharp decline in fund allocation to Bitcoin futures contracts is at parity with levels recorded in July 2022, demonstrating a regression as a result of external market factors.

As a result, this bearish indication may signal a progressive decline in Bitcoin’s valuation over the coming weeks, provided the futures market is unable to recuperate its losses.

On the flip side, Bitcoin’s MVRV (market value to realised value) has remained relatively horizontal across the past week, bottoming at a 0.84 ratio and reaching a high of 0.85. Considering the value remains below one, this signals that the Bitcoin market may be at a ‘possible market bottom’, indicating that taking a gradual long position may be a beneficial tactic in the current market climate, as Bitcoin is reportedly trading below its realised value. This demonstrates a more bullish prospect for the Bitcoin market and suggests that the current bearishness may remain for the time being, yet that recovery could be viable in the long term.

Monthly MVRV Data For BTC (Data Courtesy of Blockchain.com)

The State Of ETH Gas Fees

As of the 7th of December, there has been a sharp decline in the total gas used across the past week, with the lowest figure attained on the aforementioned, totalling 107,539,500,950. The highest figure attained this week was 108,964,070,646, demonstrating the continuation of last week’s gas usage in the former portion of the past week.

As a result, Ethereum gas fee boundaries this week have remained relatively consistent. The low gas boundaries remained between 8-58 gwei, the average boundaries were between 8-148 gwei, and the high boundaries were between 9-256 gwei – demonstrating a vast disparity in gas fees across the past week.

Across the past 24 hours, the top ‘Gas Guzzlers’ according to Etherscan were Uniswap V3: Router 2 (with fees totalling $187,886.45 or 147.63 ETH), Seaport 1.1 (with fees totalling $145,854.25 or 114.6 ETH), and Uniswap V2: Router 2 (with fees totalling $108,370.02 or 85.15 ETH).

The estimated cost of transactions across the likes of OpenSea: Sale, Uniswap V3: Swap, and USDT: Transfer, has been suggested to be between $1.58 and $5.87, according to Etherscan.

The Current Macro Situation

CPI Data

Data related to the CPI of November in the USA is set to be released in the coming week on December 13th.

Unemployment Rate

According to the U.S Bureau Of Labor Statistics the current rate of unemployment in the USA sits at 3.7%. However, 45 surveyed economists have predicted that the unemployment rate will soar to a figure between 5.5% and 6.5%, with some suggesting that an increase to 7% could be possible, despite the Federal Reserve’s aims to stifle historic levels of inflation.

Additionally, 85% of the surveyed economists have predicted that the National Bureau of Economic Research will declare a recession by next year.

Federal Reserve Conferences

The Federal Reserve is expected to partake in a meeting across December 13th-14th with a summary of economic projections in light of their ongoing initiatives to curb historic levels of inflation.

What Could Be Coming In The Week Ahead?

Based on the previous data and the current market climate, it remains possible that the overarching bearish sentiment may remain throughout the market as the FTX collapse continues to reverberate throughout each sector of blockchain. However, with assets such as Bitcoin demonstrating signs of recovery and the likes of Cardano bolstering development initiatives, it is possible that a bullish momentum may begin for some assets within the top ten, thus improving investor sentiment and potentially reinvigorating the market.

Author: Gate.io Researcher: Matthew Webster-Dowsing
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.
BTC/USDT -3.29%
ETH/USDT -2.38%
SHIB/USDT -3.60%
The Latest News
The Top Five Standing
Current Project Trends
The Current BTC Trend
The State Of ETH Gas Fees
The Current Macro Situation
What Could Be Coming In The Week Ahead?
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