Crypto Proving Its ‘Down, But Not Out’ | Daily News 16/6/22
The crypto market seemed to have had a well sought after rally 🐂 yesterday on the news of the Fed Reserve interest rate hikes. Everything from Bitcoin to smaller and even lesser-known altcoins pushed prices higher breaking an albeit uncomfortable drop at the start of the week!
For the first time in almost 2 weeks, Bitcoin and Ether gained over 6% in price at one stage where the general consensus was that the opposite effect would happen (and still could). A popular explanation for this could be that the interest rate hike forecast and speculation had already been priced into the market. In any case, the positive price action was certainly welcomed by all and could be another indication of the crypto market finally finding a bottom level 🚀🤔
Let's take a look at the markets in further detail 👀
We saw Bitcoin lead the crypto market charge on a nice relief rally yesterday after the news of interest rate hikes was released by the Fed. After 8 days of price decline due to selling pressures, we saw Bitcoin close yesterday in the green 🟢 having pumped to almost $23,000!
This was a very welcome bit of price action for the crypto market as a whole, as everybody's eyes were on the markets, most expecting volatility across the board. Especially as we’ve seen some not-so-great developments; such as several crypto firms announcing layoffs and the Terra/UST collapse. But with all this having happened, we do see Bitcoin (and crypto in general) in the process of evolving to a more mature state as an asset class!
This image below is the Bitcoin Dormancy Flow which for us, gives us another indication as to why Bitcoin is at a discount right now! 🛒
The Bitcoin Dormancy Flow Chart indicates we could potentially see more positive upside soon!
The dormancy flow chart is used as a tool to time market lows and assess whether we could potentially see a big push up in price by the bulls. As you can see here with the 🟡 yellow highlighted circles, every single time the dormancy flow (orange line) hits the green shaded area, Bitcoin makes a new push up in price (black line)! And as you can see, we are currently sitting comfortably well in the green area. Could history repeat itself once again and this be just another nugget of proof that bullish sentiment is returning? One thing we can be certain about is that $20k is certainly a hard support level to break! 💪
What Can We Expect For BTC?
- Well if BTC can maintain above the $20k support level and the bulls take control, we could potentially be seeing price having found its bottom!
- If this is the case, this could be an opportunity to dollar cost average in (DCA) or use the ‘buying the dip’ strategy certainly play out well!
- But we do need to still keep our eyes on that psychological support of $20k, as if it breaks then we could see continuous bearish momentum (or what we like to call ‘buying more at discount prices!’)
Altcoins have certainly done well 🎉 alongside Bitcoin in the last 24 hours here with many alts having moved to double-digit positive figures in price action! Ethereum, being the 2nd largest cryptocurrency and leader of the alts, did well reaching almost $1250, regaining many investors' confidence in the markets.
The clear winner (well, best performed anyway) in the altcoin space 🥇 is Tron (TRX) having moved up in price by 25% in the last 24 hours! This was primarily due to breaking through an important resistance point in price and as its stable coin USDD regained closer to peg, easing investors' fears of another stablecoin collapse! This, with the addition of the market-wide bullish reaction to the Fed’s policy decision that we’ve seen across all crypto - has helped it become the top gainer in the alt market! Find out more about Tron (TRX) at NAGAX here.
Tron (TRX) broke a major resistance level yesterday - the top performing altcoin in the last 24hrs!
🌪️ Well as we’ve mentioned, it's been a whirlwind 24 hours with one of the most important and awaited announcements of the year yesterday as the Federal Reserve unleashed its biggest rate hike in 28 years upon its battle of super-high inflation!
🏦 The Fed raised interest rates by 0.75 percentage base points which has been the largest jump since 1994 😲 and it's very likely not going to be the last increase we see this year either. But what does this all mean? Well, raising the rates helps to reduce inflation by increasing the cost to borrow money = slows down spending!
🤷♂️ What does this mean for crypto? Well due to the slowing down of spending and other loans tied to the ‘prime rate’ increasing such as mortgages and credit cards, people will be more focused on trying to clear and pay off their debts and start saving! This means some people for the time may be less likely to invest into other assets.
However, if Bitcoin and the alts have really found their bottom price 🍑 (or at least near it), then we could see sentiment change to be more positive as big institutional investors buy and accumulate their positions! This could be just ‘what the doctor ordered’ for the market to tip the scales and drive more interest for the average investor.
🔎 What are some strategies that our analysts are currently using? (Not financial advice)
- 📊 DCA (dollar cost average) into the market. ie: buying smaller amounts at certain intervals like every Monday as an example, as opposed to buying all at once! This is a good and less risky way to increase position size whilst still protecting from extreme volatility when there is still uncertainty of the direction in the market.
- 🔐 Staking! Instead of just holding your crypto coins, put them to work! Staking allows you to earn interest, similar to how a bank account works. Your deposited coins in a staking pool are used to verify transactions, and for doing so you get rewarded! Why not check out our explanation video here on how staking works and see how you can earn up to 20% interest in rewards with NAGAX safely, with no fees!
So with all that being said, let us know what your thoughts are on the recent events with the crypto rally. Are you 🐂 bullish or 🐻 bearish? What are your strategies? Later today, we will also have an article on how to survive a ‘bear market’ so keep your eyes peeled! 🧅
- The crypto markets had a brief rally yesterday upon the Fed results
- Bitcoin still showing that the psychological level of $20,000 is holding strong
- The US dollar is back to climbing to the upside and could be the tipping point for BTC to drop under $20k
- Many are DCA’ing and ‘buying the dip’ with data backing up the idea of bulls might be regaining control
Important Notice: Any news, opinions, research, analyses, prices, or other information contained on this feed are provided as general market commentary and do not constitute investment advice or solicitation for a transaction in any financial instrument or unsolicited financial promotions. All material published on the website is intended for informational purposes only. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. We do not make any warranties about the completeness, reliability, and accuracy of this market commentary. Past performance is not an indication of possible future performance. Any action you take upon the information on this feed is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this feed.
Risk Warning: Cryptocurrencies are highly volatile and trading can result in the loss of your invested funds. Before investing you should be aware that cryptocurrencies may not be suitable for all investors. You should therefore carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition and not invest money that you can not afford to lose.