First Mover Americas: Bitcoin Holds $30K After Turbulent Week, Altcoins Trade Up

By May 13, 2022DeFi
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Bitcoin barely clings to $30,000 level. (Tyler Stableford/Getty images)

Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.

Bitcoin (BTC) is up 8% over the last 24 hours, climbing back above the $30,000 mark after dropping to lows of $25,000 on Thursday. The world’s largest cryptocurrency by market capitalization has still lost over 50% of its value from its all-time high reached in November 2021 around $69,000.

After one of the most turbulent weeks in history for the market, the total crypto market cap has decreased over $300 billion over the past seven days. Multiple assets crashed over 30% during the week, but have started to regain ground early Friday.

Solana's SOL token, which took a steep hit on Thursday as the wider market fell, trading as low as $35, is now up 15% on the day and trading at around $51. Cardano's ADA is trading up 20% on the day, and Avalanche’s AVAX is up 24%.

In traditional markets, the Dow Jones Industrial Average fell for a sixth straight day, and the S&P 500 took a 19.4% hit from its high of 4,800 in January. The S&P 500 is now at 3,868, and according to a popular rule of thumb used by investors, a dip of 20% or more signals the start of a bear market.

According to Florian Giovannacci, head of trading at Covario AG, the crypto market rebound over the last 24 hours for BTC and altcoins is “more a technical bounce following over the top bearishness/capitulation and leveraged short positioning being liquidated (especially for alts).”

He said that today’s increase in price for crypto assets will “definitely help sentiment but there’s no news out there to really mark a definitive change of mood.”

Looking forward, despite trading in the green for a number of assets on the day, Giovannacci said correlation to U.S. equity is a key factor for BTC’s price.

The top 10 coins by market capitalization show mostly gains over the last 24 hours. (Messari)

Binance, the world's largest crypto exchange, suspended spot trading for LUNA and UST against its own stablecoin BUSD on Friday after rival OKX said it planned to end spot listings of UST and delisted margin and borrowing services for Terra ecosystem tokens such as LUNA, anchor (ANC) and mirror (MIR).

"An exponential amount of new LUNA were minted due to flaws in the design of the Terra protocol," Binance founder Changpeng "CZ" Zhao said in an explanatory tweet. "Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading."

OKX planned to terminate exchange-traded UST trading for bitcoin (BTC), avalanche (AVAX), solana (SOL) and ether (ETH) as of 10:00 UTC, adding to earlier cancellations of the margin trading and borrowing function for LUNA, ANC and MIR. Perpetual swaps were suspended at 8:00 UTC.

“Seismic crypto market movements like we’ve seen this week tend to deliver some pretty brutal lessons,” explained Lennix Lai, an OKX director, in an email. “We’re seeing a flight away from direct investment in DeFi protocols in the wake of UST breakdown.”

“The reality is that centralized exchanges are set up to provide much greater levels of protection for users whatever the markets are doing,” Lai said.

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