A breakout materializes after weeks of consolidation
Bitcoin regains $20,000
After weeks of consolidation and range-bound movement, the value of Bitcoin (BTC-USD) has finally jumped past the $20,000 psychological resistance level. Over the past seven sessions, BTC recorded around 8.5% in gains.
The current rise in the price of BTC is attributed to several factors, including a short squeeze that has helped drive its value higher. BTC’s recent gains sparked a wave of short liquidations. On top of that, the sudden rise in US stocks and a falling US dollar also played a major role in pushing BTC’s value past the critical resistance point.
Investor confidence in cryptocurrencies is also increasing based on expectations that the Federal Reserve will scale back expected rate hikes in the coming months. Per investor consensus estimator MacroMicroinvestors increasingly believe that future interest rates will be lower than previously assumed.
Small-Cap Coins Lead Crypto Market Higher
Helped in part by the market-wide rally sparked by Ethereum’s (ETH-USD) recent gains, low- and mid-cap altcoins experienced a spectacular run over the past seven sessions, with many tokens recording impressive double-digit gains. For example, lesser-known altcoin Klaytn (KLAY) is up ~78%, meme coin DOGE is up ~27%, and Toncoin (TON) jumped almost 46.7%.
A key driver behind KLAY’s rise includes Klaytn’s recent partnership with cross-chain smart contract platform Zetachain (ZETA). However, much of KLAY’s recent success is tied to a proposal to reduce the block rewards of the Klaytn network. The Klaytn Governance Council (KGC) approved the measures, and introduced a new reward scheme where block rewards will shrink from 9.6 KLAY to 6.4 KLAY per block.
Meanwhile, Dogecoin (DOGE) rallied as “Dogefather” Elon Musk prepares to complete Twitter (NYSE: TWTR) transaction. The billionaire’s recent tweets and changes to his Twitter profile touched off another rally that saw DOGE break past the upper limit of its recent range.
Among other better results, the value of TON rose nearly 50% over the past seven sessions when messaging platform Telegram announced a TON-based username auction marketplace to buy and sell unique usernames. In addition, the news that Toncoin (TON) secured a listing on KuCoin’s crypto exchange helped TON reach its highest level since early September.
Not everyone was at the rally
While many tokens recouped previous weeks’ losses, a few altcoins missed the bullish momentum that captured most of the market. Among the biggest decliners were Chain (XCN), Maker (MKR) and Axie Infinity (AXS). The value of Chain’s XCN token fell by approximately 21.6% this week, Maker DAO’s MKR fell by 12.20%, and Axie’s AXS fell by almost 7.8%.
New AXS tokens released into circulation earlier this week were the main driver behind the latest price decline. Like other crypto projects, Axie Infinity has an earning plan where native tokens are unlocked at specific intervals. The last unlock event saw more than 21.5 million AXS tokens in circulation, which is about 8% of the entire circulating supply.
Other low-to-mid-cap tokens, such as TerraClassic (LUNC) and TerraClassicUSD (USTC), fell around 3.5% and 4.9% respectively, primarily due to the ongoing legal pressure on Terra Co founder Do Kwon. The value of Elrond (EGLD) also fell by 1.2% over the past seven sessions, while Helium (HNT) and Ethereum Name Service (ENS) fell by about 0.9% and 2.8% apiece.
New crypto debit cards, Kazakhstan pursues CBDC and more
Crypto’s acceptance as payment continues to expand, with crypto exchange Blockchain.com entering into a strategic partnership with Visa (NYSE: V). The duo will soon launch a crypto-backed credit card set for initial rollout in the US. This new credit card will allow users to pay everyday expenses using crypto or cash balance across all outlets and stores where Visa cards are accepted.
Meanwhile, as regulatory activity picks up and governments around the world explore the use of crypto, oil-rich Kazakhstan has become the latest country to embrace blockchain technology. The National Bank of Kazakhstan has chosen to integrate its central bank digital currency (CBDC), called the digital Tenge, with the Binance Chain (BNB). The move follows Kazakhstan’s efforts to regulate and promote crypto within its borders following a pilot test of the digital Tenge.
Last but not least, the Norwegian authorities, Bronnoysundregistrene, have entered into a partnership with the accounting firm Ernst & Young to launch their first ever virtual office space in Metaverse. The virtual office, designed to appeal to younger generations through its approach, will handle a number of registries on behalf of the agency and convey important information related to crypto regulation, taxation and company formation.
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