Bitcoin price looks like it’s on a steady recovery from its precipitous fall at the start of the week
Many crypto market watchers think that Bitcoin and Ethereum have bottomed out after their bad start to the new year. Bitcoin price is up 6% from this point a week ago and Ethereum is up 10% since then. At the time of writing, BTC is changing hands at $43,042.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price, Ethereum, and altcoins begin a slow rebound
But as has been the case with 2022 so far, altcoins are doing better. Not so long ago, it was rare to see many other projects increase in price while Bitcoin and Ethereum remained stagnant. Now, weeks like these have become the new norm.
Bitcoin is up 6% from a week ago to $43,417. While this is still miles away from its previous ATH of $68,790, Bitcoin looks like it is on a steady recovery from its severe drop earlier in the week. In the early hours of Monday morning, Bitcoin was trading at around $42,178, then the price entered a spiral and bottomed out at $39,867. Ethereum also sank below the symbolic $3,000 threshold last Monday. It now trades at $3,335, almost 11% higher than it was this time last Saturday.
Over the past seven days, traditional market leaders have not been the slowest pushers, but they certainly haven’t gone as high as the likes of NEAR, the token of the next-generation dApp platform Near Protocol. NEAR rallied 43% over the past week to hit a new all-time high of $20.38 on Friday.
Terra (LUNA) blew up 37% this week. It trades for $86 at the time of writing. Terra has been steadily climbing over the last two months. It’s worth noting that at Christmas time, the total value locked in Terra-based projects exceeded $20 billion. Last week, as LUNA’s price was taking a beating, the TVL sank to about $15 billion, but higher prices mean higher value, and so the TVL in Terra projects is back to around $19 billion, according to DeFi Llama. And Polygon holders enjoyed a 24% rise this week for MATIC, now worth $2.38 each.
Finally, Dogecoin blew up 27% this week. It’s still only worth about 18 cents, a far cry from the vertiginous height of 74 cents, the meme coin’s ATH back in May of last year amid Elon Musk’s persistent pumping and “SNL” hosting gig. Yesterday, Dogecoin briefly crossed 20 cents when Tesla’s store started accepting it for merchandise payments.
“Spikes in interest for both inflation & Fed have been notable. Similarly, these words spiked around $BTC’s last major bottom in July 2021. The concept of hedging traditional markets with crypto seems to be more embraced by the week”, Santiment stated. “When it comes to #buyingthedip, it’s important to note just how enthusiastic the trading crowd is in doing so. Typically, when traders uniformly believe the price is about to bounce, this is NOT the time that prices actually bounce.”
On Monday, a new report from digital assets market data provider Kaiko concluded that the correlation between Bitcoin’s price and NASDAQ and the S&P 500 is at its highest since July 2020. Does that mean Bitcoin is being more assimilated into the traditional financial markets that it was designed to counter? Not necessarily.
Kaiko’s report concluded that investors in both Bitcoin and stock markets were responding to the Fed’s news last week that it is getting ready to hike interest rates in order to transition to a post-pandemic economy. So Bitcoin investors and equities investors are monitoring the same bearish news. But nobody can be sure if the current high correlation will hold.
The overall cryptocurrency market cap stands at $2.065 trillion, and Bitcoin Dominance is 39.5%.
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