It’s perhaps too soon to call today’s rebound in the crypto world sustainable. Indeed, this weekend brought yet another plunge to major cryptocurrencies, with Bitcoin (BTC 4.30%) and Ethereum (ETH 5.00%) For Bitcoin, this was its lowest level since 2020, and for Ethereum, this was the token’s lowest level since early 2021.
However, the story has changed as of 9:30 am ET on Monday. Bitcoin and Ethereum have rebounded 5.5% and 8.7%, respectively, in the past 24 hours. These gains built on the upticks seen yesterday. At the time of writing, these tokens trade for around $ 20,500 and $ 1,130 apiece.
Proof-of-stake blockchain Solana (SOL 5.50%) Also experienced similar price action. Solana dropped as low as $ 26.06 this weekend. However, today’s 11.4% 24-hour move (at 9:30 am ET) along with some strong price action yesterday has this token trading above $ 35, matching its highest level in over two weeks earlier this morning.
The ongoing fallout from the implosion of Terra (LUNA 1.58%) and the more recent collapse of Celsius (CEL 34.33%) Whether algorithmic stablecoins are likely to be a thing of the past is up for debate. However, seeing a centralized exchange such as Celsius fall under the pressure of declining crypto prices is concerning for many investors.
One beacon of light which appears to be buoying top tokens such as Bitcoin, Ethereum, and Solana today is news that Celsius has put forward a recovery plan, and its community is rallying behind this project. This morning, CEL tokens reached their highest levels in More than a month, as investors bank on this recovery plan resulting in a resolution of claims in short order. Experts suggest that claims could be resolved within nine months, saving this exchange from liquidation.
Bitcoin, Ethereum, and Solana are among the most-traded and most-utilized tokens in the market. The significant declines these top tokens have seen in recent weeks have provided long-term investors with the ability to accumulate at much more attractive prices. We ‘ve seen some indication of mass retail buying of Bitcoin, for example, with a reported 13,000 new holders of a whole Bitcoin (“whole Bitcoiners”) materializing over the past week.
That said, it’s also true that the downside pressure on the crypto sector from macro forces appears unrelenting. This has been the worst quarter ever for the crypto sector, which really says something, given the gravity of previous declines. of the woods yet.
Indeed, concerns around the potential for a recession are pertinent. The Federal Reserve is hiking rates at its fastest rate in nearly two decades, and as more outsized rate hikes materialize, liquidity will continue to be drained from the system. For most cryptos, which have been the beneficiaries of the incredibly cheap liquidity that’s been pumped into the market, this is a tough time to suggest the next bull run is right around the corner.
That said, 2022 will likely shape up to be a year where fortunes are made or lost. Depending on one’s view on the sector (and time horizon), I think both are possible, given the volatility we’ve seen of late.