A troubled start to the year for cryptocurrencies

Alejandro Zala, Country Manager of Bitpanda Spain, shared with Cointelegraph en Español his first analysis of the year on the cryptocurrency market.

According to Zala, he comments in this first analysis seeing Bitcoin and most of the main altcoins of the top 10 starting the year 2022 in red, is a sign of a dominant downward pressure that takes the Crypto Index of Fear and Greed to 15, marking the ” extreme fear “. Which in turn caused the largest cryptocurrency by market capitalization to be close to its support level of 41,000 euros in the first five days of the year, before falling about 4,000 euros on Wednesday.

“A closer look at the price movement on the daily charts shows that BTC has been trading within a declining wedge since December 21. The wedge is normally considered a bullish movement signal – a breakout from here is the most likely scenario, but the market has to find a bottom first, ”Zala commented.

Zala described in his analysis that the lower trend line has been tested multiple times thus far, but BTC has failed to break through it, neither above nor below. However, he made it clear that the macro factors are indeed bearish, with the reduction of the FED and the fight against inflation, which is higher than expected.

“In addition, the Kazakh authorities declared a state of emergency throughout the country and closed access to the Internet, causing many Bitcoin miners to go offline. Altcoins also fell, following the trend of Bitcoin. Kazakhstan is the second country in the world in terms of Bitcoin mining hash rate, making it a major player. During the Internet outage, the hash rate fell from a high of 194 EH / s – reached on January 4 – to a low of 168 EH / s ”, he added in his analysis.

Bitcoin’s dominance keeps falling

Zala noted in his analysis that Bitcoin’s total market capitalization of € 774 billion, with a total market dominance of 39.3%, indicates that BTC’s market dominance has continued to decline, and is currently at its lowest point. low since May 2018. “As early as 2018, a record low was recorded during the great cryptocurrency market crash in January of that year. At that time, BTC’s dominance was only 33%, ”he added.

LINK shows strength

With the crypto market-facing high volatility following the New Years’ celebrations, some players like Chainlink, Zala said, are showing great strength. “LINK is one of the best performing tokens so far in 2022, up 30%. It is currently trading at around 21 euros. At the beginning of the year, the price stood at 16 euros. The Relative Strength Index (RSI) is in a clear uptrend and above 50 on the daily chart, indicating that the uptrend could continue, ”said Zala.

Cardano among the most developed projects on GitHub in 2021

Regarding ADA, a currency that the price experienced a decline recently leading to underperforming, its development of the Cardano project did not slow down, and Zala stressed that the following: “In fact, Cardano was one of the most developed on GitHub in 2021, with over 140,000 events. Cardano founder Charles Hoskinson has revealed that 127 projects are under development on the Cardano blockchain and anticipates that the number of ADA users will multiply by 10 due to the planned NFT projects on the network. ”

“Since the Alonzo hard fork, Cardano has started the Hydra layer two upgrades. Another Cardano project, and a unique feature offered by the network, is the initial staking pool offering (ISPO). ISPO will allow users to finance by delegating their tokens and, as a reward, receiving tokens for the project they finance, ”he added.

Ethereum below 3,000 euros

Regarding Ethereum, Zala describes a slow start to the year, noting that the second largest cryptocurrency is currently battling Bitcoin for market dominance. “Last year was very Ethereum-centric, with ETH outperforming BTC by a considerable margin,” Zala said.

“However, the price of Ethereum has lost ground in the recent sale and has broken out of the falling wedge it was in since mid-November last year. The price fell below 3,000 euros for the first time in almost 3 months, ”he commented.

“Despite having a bad time in these first days of the year, it is likely that BTC and ETH will once again be decisive players in the cryptocurrency market in 2022.”

BEST / BTC moves higher

On Bitpanda’s native token BEST, Zala commented: “It outperformed other altcoins in the recent overall dip and was even higher compared to BTC. The BEST / BTC pair is trading at 0.00002423, its highest value in the last three weeks, and the BEST 2.0 will be released soon. ”

(Clarification: This material is intended to be a comment on economic or market conditions and does not constitute a financial analysis or recommendation. The analysis presented here corresponds to Bitpanda’s Country Manager in Spain and under no circumstances is it an investment recommendation from Cointelegraph. Anyone, before investing, should do their research and be responsible for their own decisions).

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