Synopsis
- The CPI data published on Wednesday hinted at a drop in inflation (from 6% YoY to 5% YoY for March). It is likely to have a strong consideration in keeping the interest rates stable during the next FOMC meeting.
- The Shapella Upgrade to Ethereum (ETH) went live on April 12, and ETH ended the week at an 11-month high price point, crossing the $2100 mark.
- The total crypto market cap added around $85 Billion over the past week, around 7% higher than the previous week.
- Bitcoin wallets with less than 1 BTC have accumulated over 35,000 Bitcoin in just the last 30 days. It is an indicator of the bullish sentiments returning back to the market.
Key observations
The total crypto market cap is hovering around a strong accumulation zone similar to the one observed during June last year. This is a range where investors are believed to be accumulating assets in anticipation of an eventual price increase. The only difference between the accumulation phase of last year and the current one is the sentiment of the market preceding the phase. Last year, the total crypto market was over $2 Trillion in March, and then it dropped massively.
This time, the market is gradually rising from its March 2023 lows of $900 Billion.
Analysis
In March, the consumer price index (CPI) decreased to 5% year-on-year from 6% in February, primarily driven by lower energy and food prices. This drop in CPI is a positive sign for the cryptocurrency market, as it indicates that the Federal Reserve may soon ease its monetary tightening measures.
The highly-anticipated Ethereum ‘Shapella’ upgrade was successfully implemented last week, bringing several key upgrades to the network. One of the most significant improvements is the ability for holders of staked ETH to withdraw their staked coins. Now, ETH holders have the liberty to opt for flexible staking and not locking. It is expected to encourage more participation in staking, which is crucial for the security and decentralization of the Ethereum network.
The successful implementation of the hard fork and the positive response from the market led to a boost in the price of Ethereum’s token, which breached a psychological resistance level of $2K.
Despite concerns among some cryptocurrency professionals about a potential sell-off among staked ETH holders, the price of ETH remained stable. It suggests that the market has confidence in the long-term prospects of the network. Overall, the successful implementation of the hard fork and the positive response from the market are encouraging signs for the future of Ethereum and the wider cryptocurrency market.
Although there hasn’t been a major shift in the dominance of Bitcoin, there has been a significant increase in the case of Ether. On a week-on-week basis, ETH’s market dominance has increased by more than 1% and currently stands at 20.4%.
Deep dive into the top gainer and loser
We closely analyze the performance of the top 50 coins by market capitalization and take a closer look at the best and the worst performers of the week.
Arbitrum (ARB) up by 38.18% ⬆️
The $ARB token is one of the latest entrants to the crypto market. And the team at Offchain Labs (the parent company of Arbitrum) has been forging strong partnerships to develop more efficient blockchain infrastructure.
Arbitrum announced a new development allowing users to track NFTs in real time on its network, which might have been attributed to its native token surging. With this new feature, users can get real-time updates whenever an NFT is transferred between addresses on Arbitrum.
Arbitrum’s following can also be observed from the steady rise in the Total Value Locked (TVL).
Opinion: Although the fundamentals look solid, $ARB is already in the overbought zone. We have time and again observed that investors chase these new tokens in hopes of massive returns. And that could be a major contributor to $ARB’s current rally. It is likely that there will be a price correction in the short term.
Quant (QNT) down by 3.11% ⬇️
An altcoin exchange, Bitrue had recently been exploited, and around $23 million worth of cryptocurrency assets were withdrawn. A proactive action saved QNT from being heavily sold off. To ensure complete security, Bitrue suspended all withdrawals until April 18th and confirmed that affected users would be fully compensated.
Opinion: There hasn’t been any major selloff in the case of Quant Network. The token is demonstrating a good setup, and the price action is following a decreasing channel. We will keep our eyes on QNT for the coming couple of weeks. Once it breaks either of the trend lines, we can expect a solid move in either direction.
Conclusion
The current accumulation phase of the crypto market, coupled with the drop in the CPI, bodes well for the industry’s future. The successful implementation of the Ethereum ‘Shapella’ upgrade, its positive response from the market, and the increase in ETH’s market dominance are encouraging signs for the network’s long-term prospects. However, caution should be exercised with new entrants, such as Arbitrum, already in the overbought zone, and a price correction may be imminent. On the other hand, Quant Network is demonstrating a good setup, and we will closely monitor its price action.
Disclaimer: Please note that the content contained in this crypto market research report is for informational purposes only and should not be considered financial advice. We recommend seeking professional financial advice before making any investment or trading decisions. This report should be considered a research report, not financial advice.
