Crypto’s flight to safer havens
There is a good observation to be made on USD Coin’s (USDC) recent de-pegging coinciding with the rally on bitcoin and ether.
Or more tellingly, bitcoin’s and ether’s trading volumes went sky high at the same time that investors were pulling out of USDC due to its exposure to Silicon Valley Bank’s collapse.
This could suggest that traders were fleeing USDC right into the arms of the two biggest, and arguably safest, cryptocurrencies.
It’s certainly what Binance is doing anyway.
Tether (USDT), the market-leading stablecoin, also saw a boost to its market capitalisation, implying a flight to … I want to say quality but that’s a loaded term when discussing Tether, given its chequered history.
Taking the USDC ➡️BTC-ETH observation to task, it’s only reasonable to suggest that crypto’s impressive, perhaps surprising rally over the weekend may start to run out of steam now that USDC is back to its dollar peg.
There does seem to be a cooling off on the one-hour chart after BTC/USDT hit a peak of US$24,820 in Tuesday’s early trades.
At the time of writing, the pair was changing hands at US$24,260, wedged between a US$25,000 selling wall and buying support at US$24,000/US$23,900, per the Binance order book.
Does this mean BTC has reverted back to the 24k to 25k channel favoured by the market in mid-to-late February? Perhaps, but with the markets on tenterhooks, persistent volatility shouldn’t be ruled out.
Bitcoin (BTC) back in channel mode? – Source: currency.com
While BTC remains in the green this Tuesday morning, ether (ETH) has actually chalked up a red candlestick.
ETH/USDT closed 6% higher at yesterday’s close but has so far cut back 0.3% today and the pair was changing hands at US$1,670 at the time of writing.
US$1,700 has been a sticking point for ether even before the November 2022 FTX collapse, so don’t expect the bulls to fly past this hard resistance wall with any degree of ease.
In the altcoin space
In times of (semi) crisis, attention tends to shift away from altcoins to the bitcoin and ether benchmarks. We can see this trend at the moment.
Whereas BTC’s and ETH’s week-on-week gains remain in the high single digits, the same cannot be said for the rest of the top-20 set of altcoins.
Dogecoin (DOGE), Solana (SOL), Tron (TRX) and Litecoin (LTC) and Uniswap (UNI) are all in the red week on week, while Cardano (ADA) and Polkadot (DOT) have managed to hold onto slight gains.
Binance’s BNB coin is the only large cap to have kept pace with the benchmarks, although news emerging that Binance is set to lose its British pound on-ramp could prove to be a headwind going forward.
Global cryptocurrency market cap added 4.5% overnight to US$1.08tn, while total value locked in the decentralised finance (DeFi) space added 2% to US$47.3bn.
