Within the last seven days, the crypto market recorded decent gains for Bitcoin and other major alts, while the stablecoin market benefited from this development.
Bitcoin and other major cryptocurrencies recently printed some of the most impressive candle sticks since the FTX saga. According to Arcane’s report, BTC and ETH saw over 19% gains in price while other alts recorded remarkable double-digit gains. The market dominance of the pioneer digital asset grew by 2.2% points over the last week as it led the recovery. This development positively reacted to Thursday’s CPI print of -0.1%, which was a catalyst. Although before the release, BTC had already begun its rally, as it had seen 13 green trading days out of 16 this month. Its correlations to US equities had also started to fall.
BTC’s rally had rubbed off on the entire crypto scene over the last week as it showed significant strength. Even FTX and DCG-affiliated coins MANA, SOL and Aptos were not left behind as they also made impressive gains. They topped the charts, recording YTD gains, which extended by 100%.
For the first time since March 2022, the market recorded seven days of green profit non-stop last week. The report stated that this current momentum is over-extended from a technical analysis perspective. The relative strength index momentum indicator has already tilted towards the extreme highs before returning to a more neutral position today.
The current rally carries the features of a “hated rally”, as a short squeeze triggered the surge caused by aggressive shorting. In the short term, BTC’s rally above $21,000 has led to a stabilizing open interest, indicating that short sellers have become wary. This ripple effect may cause prices to stabilize in the short term, allowing BTC to reinforce its gains.
Stablecoin Volume Share In the Spoils
Meanwhile, stablecoins were not left out as volume dominance surged to a new all-time high. Statistics from market analysis of Kaiko reveal that almost 90% of stablecoin supply was used in BTC trades over the past week. This occurrence is second to the 81% global dominance recorded in 2019.
According to data, the recent surge in stablecoin usage spiked after Binance launched zero-fee trading for BTC/BUSD and BTC/USDT trading pairs. Overall, stablecoin adoption received a significant impact from falling institutional activity and stricter regulations over the past year.
Do you think Bitcoin will continue to record more green profits in 2023, or is this just another bull trap? Let us know your thoughts in the comment section below.
