Can the upcoming halving boost sentiment?
The crypto market has now stabilized, after regulatory action against two major crypto exchanges turned the market bearish last week.
Bitcoin showed resilience by managing to stay relatively flat on the news, along with XRP which held strong above $0.50. Other altcoins, however, including Polygon, Cardano and Solana, recorded heavy sell-offs before beginning to recover.
Read more after the jump.
This week’s focus
– Bitcoin buoyant amidst the storm — is the upcoming halving boosting sentiment?
– XRP holds above $0.50 as altcoins fall
– Polygon climbs 20% after falling on regulatory action
Bitcoin buoyant amidst the storm — is the upcoming halving boosting sentiment?
Despite the headwinds, BTC remains in the same trading range
Despite the altcoin downturn, Bitcoin remains relatively resilient with only 4% weekly losses.
As a result, Bitcoin dominance is soaring. This is the ratio between the market capitalization of Bitcoin, to the market capitalization of the entire crypto market, and has hit highs of nearly 50% for the first time since April 2021.
Bitcoin’s relative outperformance could stem from crypto investors fleeing altcoins towards Bitcoin. As crypto analyst Crypto Koryo tweeted: “It often happens in times of uncertainty and fear, Bitcoin dominance is pumping. People are rotating to Bitcoin, the safe haven.”
Another factor, as pointed out by JPMorgan (JPM) in a recent research report, could be Bitcoin’s upcoming halving event, which is expected to have a “positive psychological effect” on the market.
Demand for Bitcoin can partly be attributed to the advent of Bitcoin Ordinals and BRC-20 tokens, said the report, but more importantly “retail investor demand for Bitcoin is likely to strengthen as we approach the April 2024 halving event.”
XRP holds above $0.50 as altcoins hit turbulence
Holding above the critical $0.50 level, XRP is largely ignoring the market downturn
Amidst widespread turbulence in the altcoin market, XRP has stayed relatively flat over the last seven days.
One reason could be tailwinds from Hong Kong. Ripple, the company behind the token, is currently involved in a project in the city that aims to turn deed records into digital tokens on the blockchain.
Elsewhere, XRP is also being adopted in Canada, where The University of Toronto has revealed plans to start an independent XRP ledger validator in a new partnership with Ripple.
According to analyst Michaël van de Poppe, this adoption, along with a positive outlook for the ongoing lawsuit, could put XRP at the forefront of a market recovery. In a YouTube video posted on June 10, Poppe said: “If we break the resistance at $0.52, I think that we can start expanding to $0.75, but most likely start expanding towards a dollar or more.”
Polygon climbs 20% after falling on regulatory action
Despite falling 40% in the recent sell-off, MATIC has since climbed 20% from the bottom
Leading the crypto market recovery, Polygon has climbed 20% after regulatory action in the US triggered a deeper sell-off across the altcoin market.
In addition to Polygon, Cardano, Solana, and Cosmos recorded heavy losses, but have also started to bounce back as the development foundations behind the tokens release statements boosting investor confidence.
Solana and Polygon have both released statements asserting that their respective tokens are not securities, along with Input Output Global (IOG), the company behind Cardano. IOG responded to the regulatory action by asserting that the filings contain “numerous factual inaccuracies” and that ADA is not, and has never been, a security under US law.