Crypto: Calm Before the Storm?

Market Overview

The crypto market has been hovering at the same market capitalisation level for some time now, remaining close to $2.86T for the eighth day in a row. However, it is worth noting that since the start of this trading week, price action has been more concentrated at the lower end of the range. We do not yet see this as a sign of a bearish reversal, but rather as growing caution amid uncertainty, which is driving demand for the dollar. Among the most liquid coins over the past 24 hours, the top gainers were IOTA (+7.8%), NEAR (+4.6%) and AAVE (+3.4%). The biggest fallers were Internet Computer (−4.3%), Filecoin (−3.5%) and Ethereum Classic (−1.9%).

Bitcoin has once again failed to hold above $85K, as the upward momentum triggered by weaker-than-expected inflation figures quickly fizzled amid an ongoing sell-off in global government bonds. The leading cryptocurrency is caught between pressure from a strengthening dollar and the desire among some investors to temporarily steer clear of falling assets. The persistence of the bond sell-off is a very worrying sign, capable of triggering a sell-off across all markets almost overnight. It is easy to find periods in history when turmoil in traditional finance has benefited crypto. Still, it is impossible to predict when the market will shift from caution to panic.