Weekly Market Wrap: Bitcoin Drops to US$26,166 as Memecoin Floods the Blockchain

Photo of author

Bitcoin Hong Kong was trading at US$26,365, down 9.42% from May 5 to May 12, as of 7:30 p.m. . The world's largest cryptocurrency by market capitalization has been trading below US$30,000 since April 19. ether Losing the key US$1,800 support level, it fell 7.3% to US$1,765 during the week.

image 3

image 3

The US consumer price index (CPI) released this week showed slowing headline inflation in April, raising hopes of the Federal Reserve holding off on a rate hike next month. US annual inflation slowed to 4.9% last month from 5% in March, but rose 0.4% on the month.

Bitcoin briefly peaked at US$28,300 following the release of US inflation data, but has since been trading lower.

“Bitcoin drops to US$26,900 after rejection from ~US$28,200 area. Reaction from ~US$26,900 area was intense,” Tweeted Pseudonym crypto analyst Rekt Capital. “The $28,200 resistance is the resistance to beat if the price is to enjoy an uptrend,” he added.

The global crypto market capitalization stood at US$1.1 trillion at 07:30 PM in Hong Kong on Friday, down 8.33% from US$1.2 trillion a week ago. coinmarket cap Figures. Bitcoin's US$510 billion market cap accounts for 46.3% of the market, while Ether's US$214 billion accounts for 19.4%.

Stuck in bitcoin traffic

In another milestone for the world's first blockchain, the number of non-zero balance bitcoin addresses hit an all-time high of 46.6 million on Thursday, fueled by growing interest in ordinals, a protocol that stores data in the smallest possible way. Allows to denominate in monetary terms. Bitcoin unit according to on-chain data analytics firm glassnode,

As a result, bitcoin congestion issues Was spoilt. The network faced a growing backlog of transactions, exacerbated by the network surpassing 5 million ordinal writes, memecoins An alternative token standard built on the Ordinals protocol, in the form of BRC-20 tokens. The BRC-20 token surpassed US$1 billion in market capitalization on Tuesday.

See also  Dubai's Emaar Says It is Conscious Of Report CEO Detained In India: Report

Adding to the negative market sentiment, Binance temporarily halted bitcoin withdrawals twice in 12 hours on Monday due to a “large volume of pending transactions.” World's Largest Crypto Exchange Relaunches Bitcoin Withdrawals on the same day, while bitcoin fell as low as US$27,419 on Monday.

,[The correction] The reason for this was excessive because Binance had seen historically high BTC outflows,” said Lena Eldeb, a research associate. 21.coParent company of 21Shares, issuer of crypto exchange-traded products.

Bitcoin supply on exchanges fell to a five-year low of 5.84% on Tuesday, according to crypto analytics firm EmotionThis shows that long-term holders are increasingly opting for self-custody solutions.

“The downtrend was also influenced by misinformation on Twitter, attributing congestion to a denial of service attack, when in fact, it was increased demand that caused that congestion and skyrocketing transactions that meant people were paying more for faster settlement.” were ready to pay money,” Eldib added.

Nilesh Verma, crypto market analyst and founder of crypto texts Consultancy in India points to a separate thread of misinformation dissemination around the US and its bitcoin holdings as a key factor in bitcoin's falling value this week.

Misinformation surfaced on Wednesday, claiming that the US government has begun selling off its bitcoin holdings. According to the court of 31 March Admission, the US government seized 51,351.89 bitcoins (worth US$1.4 billion) from Ross Ulbricht, the creator of the darknet marketplace Silk Road. The government sold 9,861 bitcoins (US$279 million) on March 14 and plans to sell the remaining 41,490 bitcoins (US$1.1 billion) in four batches this year.

See also  Giant Pensions sells Caterpillar and Microsoft stock, buys Comcast and Visa

Verma said, “Somebody shared fake news that the US government will sell bitcoin on Arkham Platform showing mislabeling… Same we saw on April 27, when bitcoin fell from US$29,000 to US$27,000 due to glitch in Arkham Platform “

market analysis

CryptoGrant's Verma said that bitcoin has a strong support near $26,111. “Bitcoin needs to maintain this support for continued bullish momentum. As of now, we may see a retest of this area. We believe we will see strong buying around $25,000-26,000. Below $26,000 The weekly close will make bitcoin bearish,” Verma wrote.

But Dr. Jeff Ross, founder and CEO of investment firm WellShares Capital Management, said bitcoin needs to bottom out before starting a new rally.

“Short-term momentum indicators need another flush low, ideally to $24,000 to complete a healthy reset and initiate the next leg toward late May,” Ross wrote on his Verified. Twitter Account.

Biggest Beneficiary:

Kava, the governance token of a layer-1 blockchain of the same name, was the biggest gainer among the top 100 coins by market capitalization listed on CoinMarketCap this week. Kava surges 17% to US$0.9204 after protocol announced That its mainnet launch is a week away.

Bitcoin SV (BSV) – a fork of Bitcoin Cash focused on scalability – was the second biggest gainer this week, rising 8.47% to $35.88. The token saw an increase in interest after transaction fees increased due to congestion on the bitcoin network.

See related articles: Central Bank Actions Drive Crypto; Standard Chartered eyes $100K bitcoin

Next week: All eyes on US ceiling

Talks on raising the US debt ceiling to US$31.4 trillion continued on Wednesday, with congressional Republicans seeking further cuts to the budget. President 's meeting with top congressional leaders scheduled for Friday has been postponed to next week, three sources familiar with the matter said. NBC news.

See also  LIC Web Revenue Jumps To Rs 683 Crore On Document Coverage Gross sales

Investors are also anticipating Europe's Harmonized Index of Consumer Price report, scheduled for next Wednesday. Euro area annual inflation is expected to come in at 7% for April from 6.9% in March, according to flash estimates eurostatStatistical Office of the European Union.

In the crypto space, Liquid Ether staking protocol Lido Finance is preparing its V2 upgrade, allowing Ether and Staked Ether (stETH) withdrawals directly on the protocol. The Lido DAO is set to vote for the V2 upgrade tonight at 10PM Hong Kong time. With community approval, the upgrade is expected to go next Monday.

Web 3.0 gaming protocol Gala Games is also preparing a contract upgrade on Monday. The protocol will issue its new GALA V2 tokens in a 1:1 ratio to all GALA token holders, while support and utility for the initial token will expire simultaneously. While most exchanges indicated their support for the new coin Coinbase where did it go That it will not support Gala V2.

See related articles: Crypto and NFT Market Update – May 11