April 14, 2023
"The global crypto market cap is $1.28T, a 2.75% increase over the last day. The total crypto market volume over the last 24 hours is $55.40B, which makes a 12.59% increase. The total volume in DeFi is currently $4.79B, 8.65% of the total crypto market 24-hour volume. The volume of all stable coins is now $49.08B, which is 88.60% of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 46.40%, a decrease of 0.38% over the day." - Courtesy of Coinmarketcap.com as of 09:48AM EST, 14APR2023
There was a lot of uncertainty prior to the Shanghai update with many investors concerned that the update would result in a lot of Ethereum being unlocked and subsequently sent to the market potentially driving the price downward during an already bearish sentiment.
Investors and speculators have been happily reassured over the last couple days as much of the Eth that was assumed to was washout has been re-staked. With the uncertainty priced out of the market, a rally has followed with major cryptos up over the last week. According to coingecko.com as of 09:48AM, EST, Bitcoin is up 9.6% on the seven day and Ethereum is up 12.5% on the seven day, and Crypto Twitter is calling for Alt-season.
Altcoin Season Coming?
Historically, big pumps to major cryptos have fueled the fire for "Altcoin Season." This generally happens after a big push upward on major cryptos like Bitcoin and Ethereum, where holders take profit toward the top and roll them into smaller cap coins. The increase in liquidity flowing from larger cap into smaller cap coins tends to cause a more significant pump where faster and more substantial gains can be made.
It's worth noting that altcoins also pumped a bit following the Shanghai update, and it's anyone's guess as to whether we will see a continued pump or a correction following a short-term bullish sentiment. Binance BNB is up 6.7% on the week, Cardana ADA is up 13.7%, and Solana is up 20.1%.
Crypto Confidence Restored! Bull Market Imminent!
If major cryptos keep momentum and continue showing steady and consistent price action upward, altcoins will follow suit and stay fairly consistent on the way up as well, depending on how much inflow to crypto comes from retail and institutions in the coming weeks. With the Ethereum Shanghai update, institutional interest in staking and network validation will likely increase as Ethereum has been both steady and reliable, and the prospect of earning Eth rewards without a massive investment in hardware and energy consumption coupled with the removal of the indefinite lock-up period for staked Eth might attract new players, and this interest could drive price action upward and eventually decouple Eth price action from BTC.
However, if momentum does not remain consistent, this pump could likely test resistance before seeing a correction, after which we'll start to see similar happening in smaller cap alts shortly thereafter. While either scenario is entirely possible in the short term, smart money are anxiously awaiting the CPI data to make a better determination of how to invest once they have some assurance that the larger retail market has some discretionary income to throw at more speculative assets as lower consumer price index generally correlates with market confidence and inflow. April 12th, BLS announced a 5% CPI which is considerably lower than the last several months in which the United States has a seen months of unprecedented inflation. More on CPI at US Bureau of Labor Statistics.
What Happens Next... Probably
Crypto will likely see a short term pump over the next month or so before correcting and setting higher lows and trading sideways for a while. It's a year before the next anticipated Bitcoin halvening, and US consumers have still not fully recovered from the impacts of inflation. During this time, we will likely see more institutional investors stocking up on ETH and BTC while consistent crypto players swing trade for a bit before dollar cost averaging when the signals indicate a reversal/correction.
It's especially hard to tell what will happen with altcoins in short-term bull situation like this one, especially with many new small and micro-cap projects hitting the market on a regular basis. Some of the current narratives include, crypto gambling, perp Dex, crypto gaming, crypto AI, Zero-knowledge infrastructure, and Layer 2. Based on sentiments from Crypto Twitter and the larger crypto community, these will likely be the narratives that pump the most during the short-term bull as well as following into the halvening.
We are not financial advisors, and this is not financial advice, but there are opportunities to make some short term gains, but it will be difficult to call the local top as sentiment can change very quickly, and this price action is the affect of only the most recent news. If dollar-cost-averaging is your strategy, stick with it as the new all-time-highs for our favorite coins will surely come back around. This type of short-term bullish situation is where a lot of people will get left holding the bag, so be careful. Always do your own research, and never invest more than you could afford to lose. Stay safe, keep your assets protected, keep your finger on the pulse of the narratives, keep a cool head, remember to drink water and touch grass, and most importantly: have fun. WAGMI.
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