Most cryptocurrencies traded higher on Friday as bearish sentiment eased. It seems that short-term buyers have returned from the sidelines, although technical indicators show limited upside potential from here.
Bitcoin (BTC) returned towards the $30,000 price level, rising as much as 5% in the last 24 hours. However, momentum signals on the charts remain negative after BTC fell 17% last week.
At the moment, cryptocurrencies and stocks are experiencing a recovery phase that could last for a few more days. Alternative cryptocurrencies (altcoins) outperformed on Friday, due to greater risk appetite among traders. For example, ICP, MANA and DOGE gained more than 20% in the last 24 hours.
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Meanwhile, the Terra blockchain resumed operations on Friday after a nine-hour suspension. The LUNA token continued to trade below 1 cent at the time the network was halted.
Also on Friday, the Grayscale Bitcoin Trust (GBTC) discount fell to an all-time low of 30.79%. The recent sell-off in cryptocurrencies may also have contributed to a larger GBTC discount. (Grayscale is a sister company of CoinDesk.)
Current prices
.●Bitcoin (BTC): $29,980, +5.17%.
●Ether (ETH): $2,057, +6.60%
●S&P 500 daily close: $4,024, +2.39%
●Gold: $1,808 per troy ounce, -0.88%
●Ten-year Treasury yield daily close: 2.94%.
Bitcoin, ether, and gold prices are determined at approximately 4 p.m. New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information on CoinDesk indices can be found at coindesk.com/indices.
Crypto OutflowsFewerCrypto traders
sought refuge in stablecoins during the recent market sell-off. This suggests that investors are beginning to withdraw from crypto markets.
The chart provided by Glassnode shows the 30-day change in total stablecoin supply (blue) and the contribution of stablecoin USDC (red). Since last May, USDC has been a major contributor to the growth of the overall stablecoin supply. Recently, however, USDC has been the main stablecoin asset bought back.
The contraction in stablecoin supply signals some net capital outflow from the cryptocurrency industry as a whole, according to Glassnode. "Overall, there are a number of signals of net weakness in the space, many of which suggest that risk-off sentiment remains the key market position at this point," Glassnode wrote in a blog post.
Interestingly, Tether's USDT supply has continued to rise over the same period of USDC outflows. But since early April, the overall supply of stablecoins has plateaued.
It remains to be seen whether confidence in stablecoins will return after Terra's flawed algorithm experiment. Some stablecoin issuers have assured market participants that not all stablecoins are created equal (some are backed by cash-like instruments, while others seek to maintain their value based on an algorithm that balances the stablecoin with a partner token). However, recent events have exposed instability in the so-called stable corner of the crypto universe.
Limited uptrend foreseeableFor now
,cryptocurrencies could face additional volatility, which could keep some buyers on the sidelines (in stablecoins or cash)
.Despite the recent rise, Bitcoin's future returns are more likely to be flat or negative after a 55% or more decline between peak and trough in the following six months, according to Delphi Digital.
Altcoin Overview
- Issuance of LUNA exchange-traded products halted: VanEck, Valour and 21Shares, all of which offer LUNA-related exchange-traded products (ETPs) in Europe, have suspended issuance of shares, citing the network's recent problems, which include two complete shutdowns of the supposedly decentralized network. All three products have lost nearly 100% this week. Read more here.
- Do Kwon's Terra Revival Plan: The CEO of Terraform Labs unveiled a "revival plan" on Friday. It is essentially a reboot of the entire Terra blockchain, in which ownership of the network will be fully distributed to UST and LUNA holders through a billion new tokens. The plan comes at a time when Terra's TerraUSD (UST) stablecoin, which is supposed to be pegged to the $1 price, has fallen below 15 cents this week - losing over $30 billion in value. Read more here.
- ADA price jump: Cardano's ADA token jumped as much as 40% in the last 24 hours, leading gains among the largest cryptocurrencies. The cryptocurrency is still 82% below its all-time high of $3.10, which was reached last September. Some analysts have attributed the recent gains to a short-squeeze rally, which occurs when a large number of short sellers abandon their positions.
Relevant Insights
- Listen 🎧: As crypto markets trade back in the green after a deep plunge, the CoinDesk Markets Daily podcast team takes a look at how one of cryptocurrency's harshest critics is now building something like a blockchain.
- Coinbase, MicroStrategy and other crypto stocks are finally seeing some relief after recent losses: shares of many crypto stocks were hit hard last week.
- Grayscale Bitcoin Trust discount extends to all-time low of 30.79%: The fund is one of the few ways for stock traders in the U.S. to participate in Bitcoin's price movements.
- Nomura begins trading crypto derivatives, joining rivals Goldman and JPMorgan: Nomura has been trading bitcoin futures and options with futures exchange CME Group (CME) and crypto market maker Cumberland DRW.
- Elon Musk Holds On To Twitter Deal After Putting It On Hold: The landmark deal for Tesla (TSLA) chief Elon Musk to buy Twitter (TWTR) and take it private stalled after Musk said he wanted to review the number of fake accounts.
- Galaxy Digital sees quarterly loss of $300 million: The Mike Novogratz-led company said it has a liquidity position of about $1.6 billion, split 50 percent between cash and digital net assets.
Other MarketsMostdigital
assets in the CoinDesk 20 ended the day
higher.Biggest winners
| Assets | Ticker | Earnings | DACS Sector |
|---|---|---|---|
| Internet Computer | ICP | +23.0% | Data Processing |
| Polkadot | DOT | +21.6% | Platform for smart contracts |
| Solana | SOL | +14.3% | Smart contracts platform |
LosersThere
are no losers in CoinDesk 20 today.Sector classifications are provided through the Digital Asset Classification Standard (DACS), which was developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.