Crypto Wrapped: May 23rd-29th
The bear was still sniffing around the crypto market last week, as tokens continued to fall with considerable volatility. Though a quiet week in context, major players such as Bitcoin, Ethereum, XRP and Avalanche all suffered from dips that the industry hasn’t quite managed to shake out of its system just yet. It’s been a rough month for crypto, and the week that has just passed is symbolic of that.
We’re a couple of weeks down the line from the major news of TerraUSD’s unpegging from the Dollar, and the subsequent consequence of this on the Terra market — and crypto as a whole. Still, the waters continue to be choppy, and markets haven’t yet leveled out. Even by the volatile standards of the industry itself these continue to be unstable times, and nothing represents this better than the introduction of Luna 2.0 — the resurrected version of Terra — and its pretty swift price dump.
Luna 2.0 was introduced to the market on May 28th. The new token is a direct spin-off of the metaphorically deceased Terra, the infamous crypto that dumped from above $80 to less than the price of a Dogecoin in a matter of a few devastating days. Part of the Luna 2.0 recovery plan was to directly provide previous holders of TerraUSD with an airdrop of new tokens, getting the new token back up and running and picking up where it left off. Peaking at just under $20 on its first day of trading, Luna 2.0 leveled out at around the $5 mark, with a pretty dramatic fall from $16 to $6 in two short hours. The market remains volatile, and we’re yet to have an indication of what the new token’s ‘true’ price will be. However, initial market sentiment was bearish, and whether traders will learn to put their faith back into the fallen crypto remains to be seen.
Bitcoin spent most of the week sitting below its $30k benchmark, with a brief period trading above it on Monday, and for a couple of hours on Wednesday. From that point, the world’s most popular cryptocurrency experienced a gradual climb down to approximately $28.5k late on Friday. The climb down itself was relatively volatile, with opportunities for short term traders if they were able to gauge the direction of the market. Heading into the coming week, Bitcoin managed to begin trading steadily within the parameters of $29k, and a flurry of trading has started to push BTC above $30k and towards $32k. Early signs show the market picking back up, but one swallow doesn’t make a spring as we’ve come to learn.
Ethereum experienced a volatile week also, befitting of overall market sentiment. Trading as low as $1,700 and as high as $2,080, ETH spent the vast majority of the week descending towards its low point. There was very little opportunity available to short term traders looking to take advantage of a falling market, as any slight price rises were modest in their nature — a notable $64 value boost on Thursday being the most obvious of these. Much like its Bitcoin counterpart however, Ethereum has picked up heading into the new week and is charging towards the $2k benchmark currently. Again, time will tell whether this will last, but it’s heading in a better direction than this time last week.
The general mood of the market continued to be bearish overall, with notable tokens such as XRP and Avalanche experiencing the climb downs felt by the biggest players. With that said, markets have been on the rise in the new week so far and previous 24hr trading activities have been positive. One would not be taking on the lessons of the past however if they were to hang their hat on this being a symbol of the bear market ending. Considering the fact that there are many markets that are down over 50% across the previous 90 days, there is still a long way to go before crypto can consider itself in recovery.
May 2022 has been a time that the crypto market will not look back at fondly. The crashing of TerraUSD along with Terra were unprecedented events, and there is no doubt that market confidence has taken a hit. Looking ahead, traders will be expecting an upturn in some capacity in June, as many tokens may currently be considered to be below their ‘actual’ value. While early signs show a glimmer of optimism heading into the new month, we await the medium-term prospects of the industry to play out.