This Week in Crypto: Market Dips Sharply

Cryptocurrency market sentiment is revisiting “fear” territory after the Federal Reserve telegraphed its intentions to raise interest rates and reduce the balance sheet faster.

The revelations sent major crypto and altcoin prices tumbling below critical support levels, reversing recent bullish momentum.

BTC Bear Run

With a significant Federal Reserve rate hike just around the corner, according to the minutes from the Federal Reserve’s last Federal Open Market Committee (FOMC) meeting, investors have turned risk-averse, leading to more than a 7% dip in the value of Bitcoin (BTC).

Since March 24, 2022, BTC has been able to sit atop the $43,000 mark. However, earlier this week, it dipped to lows of $42,700 before recovering marginally. Now, Bitcoin is attempting to retake the $43,700 mark.

At the same time, BTC trading volume continues to ebb near low levels, further weakening the recent rally despite optimism that the Luna Foundation Guard’s plan to accumulate upwards of $10 billion of BTC will help bid the crypto higher. According to Arcane Research, BTC spot volume has remained relatively flat over the past week.

In other news, MicroStrategy has announced its acquisition of more BTC. According to the company’s latest regulatory filing, MicroStrategy used the $205-million Bitcoin-collateralized loan from Silvergate Bank, bringing its total holdings to over 129,218 BTC.

Terra (LUNA) Becomes 6th-Largest Cryptocurrency

The upcoming Fed rate hike has impacted the market value of several altcoins as well. While Ethereum (ETH) has managed to find support at the $3,200 level, several altcoins among the coveted top 10 crypto by market capitalization suffered significant losses this week.

Meanwhile, Terra (LUNA) has moved past prominent tokens like Cardano (ADA), Solana (SOL), Polkadot (DOT), and Stellar (XRP) to position itself as the sixth-largest cryptocurrency by market capitalization.

Although many altcoins experienced significant declines in value over the week, LUNA continues to notch gains. The Luna Foundation bought the dip, adding $230 million of BTC and pushing its total BTC reserve to $1.6 billion (more than 35,000 BTC).

Broader Altcoin Market Bleeding Out

Unlike LUNA, most altcoins were unable to sidestep the broader market downturn. Alongside BTC, the prices of major altcoins slumped.

Cardano (ADA) fell more than 11%, even after the network registered a new milestone of over five million active addresses, with year-to-date growth of 48%.

Ripple’s XRP, too, slipped by almost 11%, primarily owing to renewed risk aversion amongst investors and its ongoing feud with the SEC.

Polkadot (DOT), Avalanche (AVAX), Cosmos (ATOM), Algorand (ALGO), Stellar (XLM), and several other metaverse tokens also registered double-digit losses over the last seven sessions.

During this period, Waves (WAVES) and ThorChain (RUNE) drastically underperformed the broader market, giving back nearly half of their value over the last week.

RUNE’s parabolic rally over the past couple of weeks came to a sudden halt as its price formed a top reversal pattern, hinting towards a deeper correction. 

WAVES is down by nearly 42% as the network finds itself plagued by accusations of price manipulation, a broken stablecoin peg, and substantial price volatility.

The ongoing “drama” between crypto analytics firm Alameda Research and Sasha Ivanov, the founder of the Waves blockchain, seems to have taken its toll on investor sentiment, leading to a sharp drop in the value of WAVES.

Another Day, Another Network Attack

Cosmos-based blockchain Juno (JUNO) has become the latest victim of the ongoing hacks across blockchain ecosystems.

The Juno chain went offline for more than 24 hours earlier this week due to a “suspected network attack.”

However, the good news is that no user funds were compromised, and the Juno team has confirmed that a fix is in the works.

In other news, ESPN and Tom Brady’s NFT company Autograph have joined hands to collaborate on a multi-year deal to mint the sports network’s first NFT collection.

Finally, Miami was the scene of one of the fiercest crackdowns on crypto-frauds after Federal prosecutors seized roughly $34 million from a Parkland resident suspected of exploiting the dark web to sell OTT account details and other information.

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