Crypto market wrap: Bitcoin defies gloomy outlook
Updated
Bitcoin defied pundits’ gloomy outlook on its fortunes Tuesday, sparking an altcoin price surge, while one leading market commentator predicted the end of the algorithmic stablecoin concept.
The world’s largest cryptocurrency and most altcoins spent the day in the green during conventional trading hours in North America, according to Capital.com data.
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BTC to USD
Eth posts gains
Both bitcoin (BTC) and ether (ETH), the world’s second-largest cryptocurrency based on market cap, which is backed by the Ethereum blockchain, were up more than 3% in the morning and about 5% in the afternoon, according to Coinmarket.com data.
Bitcoin surpassed $21,000, viewed by investors as a pivotal benchmark, after falling below $20,000 – its lowest price since 2020 – on the weekend. As the market leader and trendsetter battles uncertainty and volatility since the beginning of 2022. However, the bellweather crypto is still way short of its November 2022 high.
SHIB to USD
Shiba Inu price skyrockets
Popular meme coin Shiba Inu (SHIB), named after the breed of Tesla founder Elon Musk’s dog, was among the biggest gainers, skryrocketing more than 40%. Relative unknown WAVES mushroomed about 44%, before falling back, and Uniswap (UNI) jumped about 18%, during trading in East Coast markets around the traditional close of business.
Pundits have predicted that a prolonged bitcoin stay below $21,000 could lead to a much deeper plunge as rapidly rising inflation and a US interest-rate increase hamper the crypto sector and conventional investment markets.
“I would summarize that the feeling of [traders on our company’s] trading desk, including myself, is that if bitcoin stays in this $20,000 range, $18,000 to $20,000, it's going to be a long drawn out [period], and we could be in this trading range now for weeks,” said Chris Terry, vice-president of enterprise solutions at US-based crypto trading and lending platform operator SmartFi, in comments provided to Capital.com.
BTC at $12,00 would cause a ‘market shake-out’
Bitcoin is down about 70% from its November 21 high. Terry noted that the price has retreated severely three or four times, if not more, in bitcoin’s history, if not more, and an 80% retracement, which the coin “likes,” is “typical.”
Bitcoin, he added does not have a clear high or a clear low. He does not expect a considerable rally to occur until the coin reaches a further low.
“If Bitcoin hit $12,000 to $13,000, then I’d say that's what it took to shake the markets out,” said Terry. “So, most investors are waiting for the other guy to make a move.”
O’Leary covets crypto
But Canadian billionaire Kevin O’Leary, who stars in the US business television program Shark Tank, could be an exception. O’Leary revealed to Markets Insider on the weekend that he’s buying the dip on bitcoin and other crypto assets.
“I'm not selling anything,” he told Market Insider. “Long term, you just have to stomach it. You have to understand you'll get volatility, and that some projects aren't going to work.”
O’Leary told the publication that he holds 32 positions in the digital-asset space, including polygon (MATIC) and solana (SOL), which were both up about 11% on Tuesday.
End of the algorithmic stablecoin?
He said the collapses of stablecoin terra and its sister token luna, which has seen been replaced by LUNA2, provide important lessons, teaching investors caution, and can benefit technology the underpins digital assets.
“Luna raised $30bn-plus,” he said. “No one's going to use their idea of an algorithmic stablecoin again. [The collapse] educated everybody that this isn't the way to build a stablecoin. It's important for the education and the maturation of the market.”
Cardano postpones hard fork
Meanwhile, Input Output, the company behind cardano (ADA), wants to learn more about its highly anticipated upcoming Vasil hard fork before implementing it. Input Output announced Tuesday that it is postponing the hard fork, a blockchain network upgrade that is designed to accelerate the coin’s production, for a month.
Vasil was originally slated to occur June 29, and buzz about it prompted cardano to rise a number of times before the crypto market nosedived last week on the Celsius Network’s decision to freeze deposits and transfers of its CEL coin.
The market was also stymied by speculation surrounding the financial woes of the Three Arrows crypto hedge fund before its co-founders finally shed light on them.
But investors showed little concern for the hard fork postponement on Tuesday as cardano rose about 2.5% before falling back moderately.
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