Bearish sentiment gripped the cryptocurrency market last week — even amongst positive, optimistic conversations about the future of crypto coming out of the United States and the United Kingdom. Many coins are down double figures on their positions from last week, with only a small handful of the top ranked tokens managing to buck that trend. It has been a week that will no doubt alarm traders across the market, with many feeling like a corner had been turned as Q2 began.
It hasn’t been the start to Quarter Two that the market anticipated. There has been a considerable drop amongst many tokens in the past week, even after a steady beginning. While Q1 started in a similar vein, the market will be desperate to avoid a repetition of what was seen the previous quarter.
After a relatively positive start to the week, Bitcoin endured a climbdown from Tuesday onwards that saw more than one dramatic price drop. Trading at just over $47k on Tuesday afternoon, 24 hours later the world’s most popular crypto had lost $3k of its value, ending the week around the $43k mark. Short term traders would have struggled to make any considerable returns going long, barring some short opportunistic spikes around Thursday afternoon. It was certainly more of a selling market for BTC.
The story was again similar for Ethereum, down over 9% week on week. Tuesday was again a day for dramatic value drops, as the coin went from $3,430 to $3,319 in the space of two hours. There were signs of a very steady climb at the start of the weekend, however the damage had mostly been done and by the beginning of a new week, there was a further drop in value.
It was a disastrous week for Waves fans, with just over half of its value wiped out in the space of a week. Beginning the week pushing towards the $46 mark, Waves is now sitting at $22.70 — an alarming fall from grace for a token that peaked at $54 just a couple of weeks ago. Conversations on social media amongst Waves fans do not sound positive.
Terra is also down by over 20%, falling from 119% to 95% by the end of the week. This fall has continued into this week, with LUNA currently trading around 88%. The token is close to undoing a lot of the work it did in actually recovering from the general Q1 market slump from mid-February.
Amongst the positive conversations being had about crypto last week was the Bitcoin 2022 Conference in Miami. The Florida city has become something of a haven for cryptocurrency enthusiasts, and this was highlighted by the 25,000 strong convention that took place over the week. However, such an event did little to improve market sentiment and drive the falling tokens upwards, with critics claiming that conversations at the conference lacked depth and didn’t create any specific general direction for the future of the industry.
On the other hand, the UK’s Chancellor of the Exchequer Rishi Sunak announced plans for the United Kingdom to become a ‘cryptoasset technology hub’. Stablecoins will be recognized as a form of payment - under regulation - and room will be given for firms to operate as part of innovation hubs as a means to ensure that the industry continues to grow in the country. The UK government will also work with the Royal Mint to create a UK NFT, the very first of its kind. It is a sensible and positive step forward from the country, recognizing that there is room for collaboration between governments and the ever-growing crypto industry, whilst also noting there is a requirement for the rules of the game to be established. The move is similar to what we have recently from Dubai.
Looking ahead, traders this week will simply be hoping for a more positive week than the one just passed. The fall has been market wide, and will require some kind of shift in sentiment to reverse the trend we have seen over the last 7 days. However, it must always be remembered that crypto does have a history of bouncing back from such weeks, and often coming back stronger. Nonetheless, this is a crucial week coming up for the market to see how it responds.
