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Market Wrap: Altcoins Underperform as Traders Reduce Risk

BTC and stocks traded lower after Federal Reserve minutes signaled aggressive monetary tightening could be coming.

Most cryptocurrencies traded lower on Wednesday, tracking losses in global equity markets.

Minutes published Wednesday from the U.S. Federal Reserve’s March meeting signaled that half-point interest rate increases could occur at coming meetings. That sent markets lower as investors continued to position themselves for aggressive monetary policy tightening, which typically leads to higher volatility.

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In Asia, China’s Shanghai Composite index outperformed regional peers over the past trading day, although sentiment among global investors has been negative. Still, some technical indicators show deeply oversold conditions in some emerging market equity indexes. That could attract short-term buyers who demand exposure to speculative assets, including stocks and cryptos.

Bitcoin (BTC) was down by 4% over the past 24 hours, although technicals indicate support around $40,000-$43,000 could stabilize the week-long pullback in price. Meanwhile, alternative cryptocurrencies (altcoins) declined such as ether (ETH) by 5%, a 14% drop in RUNE and an 11% fall in DOGE.

Despite the crypto pullback, the Luna Foundation Guard continues to stack up the bitcoin. The foundation has roughly 35,767 in BTC worth about $1.5 billion in its reserve, which is larger than the $1.2 billion worth of BTC held by the electric-car maker Tesla (TSLA).

Latest prices

Bitcoin (BTC): $43914, −4.48%

Ether (ETH): $3234, −6.68%

●S&P 500 daily close: $4481, −0.97%

●Gold: $1928 per troy ounce, +0.27%

●Ten-year Treasury yield daily close: 2.61%

Bitcoin, ether and gold prices are taken at approximately 4pm 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 about CoinDesk Indices can be found at coindesk.com/indices.

Bitcoin dominance uptick

The chart below shows a slight uptick in bitcoin’s dominance ratio, or its market cap relative to the total crypto market cap, over the past 24 hours. That suggests a lower appetite for risk among crypto traders.

Still, the recent uptick does not represent a changing trend. The dominance ratio has been capped below 47% since October of last year and remains in a year-long range. A decisive breakout above 50% (bearish) or a breakdown below 40% (bullish) would signal a shift from neutral to risk-on or risk-off. For now, it appears that some crypto buyers remain on the sidelines.

Bitcoin dominance ratio (Damanick Dantes/CoinDesk, TradingView)

Altcoin roundup

  • Metaverse tokens underperform: The metaverse, despite all the interest from venture capital and the world’s major brands, is struggling to attract users, and token prices have begun to reflect this. Tokens for the three major metaverse protocols, Decentraland’s MANA, Axie Infinity’s AXS and The Sandbox’s SAND are all down year to date, and significantly underperforming bitcoin (BTC). Read more here.
  • Circle enlists FIS, Crypto.com for merchant payments settled in USDC: Merchants who use fintech company FIS can now receive settlement directly in USDC after an arrangement with the stablecoin’s operator, Circle. The tie-up with FIS Worldpay, a card-to-crypto processor, lets businesses stay in the realm of crypto without having to cash out to fiat. Read more here.
  • XRP army drives bumper sales in Ripple stock despite SEC probe: Accredited investors are falling over themselves to grab pre-IPO equity in budding cryptocurrency unicorns like BlockFi, Dapper Labs and Kraken, according to Linqto, a firm that buys equity in young tech firms before they hit the public markets. But out of a crypto-heavy basket of unlisted company shares, Ripple Labs, creator of the XRP token, is the stock that Linqto users are buying the most.

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Largest winners:

There are no gainers in CoinDesk 20 today.

Largest losers:

Asset Ticker Returns Sector
Ethereum Classic ETC −12.0% Smart Contract Platform
Dogecoin DOGE −11.5% Currency
Internet Computer ICP −10.6% Computing

Sector classifications are provided via the Digital Asset Classification Standard (DACS), 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.

This article was originally published on Coindesk 

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