Crypto Market on Defensive Ahead of US Inflation Data

The cryptocurrency market went on the defensive with an eye on the US inflation data to be released by the Federal Reserve on Wednesday as pandemic sensitive investors scrambled for less volatile assets. The global cryptocurrency market cap declined by 3.7 per cent today to $1.37T as of 9 am IST.

Bitcoin (BTC) started the day at $34,600 but succumbed to the bearish sentiments of the investors, losing most of the previous four-day gains. However, as expected, the bulls fought back to close at $33,160 at end of the day, steering clear of the crucial support level at $32,400. The BTC trade volumes went up by 12 per cent in the last 24 hours.

Ethereum (ETH), the second-largest cryptocurrency by market cap, is back at the major support level of $2,000, with a considerable 6 per cent drop today. A daily close above $2,000 is critical in the upcoming days to prevent it from dropping further to the $1,700 levels. Despite the bearish outlook, the total number of unique ETH addresses used in various Defi (Decentralised Finance) protocols crossed a significant milestone of 3 million for the first time, according to an on-chain data platform, Dune Analytics. 

All other major cryptocurrencies, excluding the dollar-pegged stablecoins, registered losses ranging between 2 and 8 per cent in the last 24 hours. Trade volumes of dollar-pegged Tether (USDT), USD coin (USDC), and Binance USD (BUSD) saw significant spikes of over 20 per cent from the previous day, signaling that investors are choosing to hold stablecoins to negate some volatility.

With BTC mining hash rates growing back steadily and the upcoming unlocking of 16,000 Grayscale Bitcoin Trust (GBTC) shares, strategists forecast a BTC price rally up to $38,000 going forward this week.

Top Gainers today:

1. Revain (REV): 13.0%

2. OKB (OKB): 10.0%

3. Axie Infinity (AXS): 1.1%

Top Losers today:

1. Stacks (STX): -12.6%

2. Flow (FLOW): -11.3%

3. Synthetix (SNX): -10.9%

The analysis includes the top 100 coins only as of 9 am IST

Source: CoinMarketCap

Crypto News at a Glance:

1. Fidelity Digital, the crypto arm of the global asset management giant Fidelity Investments Inc., plans on hiring 100 employees for its expanding cryptocurrency business as institutional demand for crypto soars.  

2. The UAE (United Arab Emirates) plans to launch its digital currency as a part of its 2023-2026 strategy. 

3. JP Morgan, a leading American investment bank, released a report suggesting that the adoption of Bitcoin by the smallest country in Central America, El Salvador, could put a strain on the Bitcoin network. 

4. The Bank of Ghana (BoG) is looking to pilot its central bank digital currency (CBDC) in a couple of months according to BoG’s First Deputy Gov. Maxwell Opoku-Afari.

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