Metrics point towards market confidence
Big crypto investors, also known as whales, seemingly hold on to their crypto fortunes amidst the crypto crash that happened in the past 24 hours. Bitcoin made a drop and took the entire market with it, as the entire crypto market cap lost 10% of its value measured in US dollars.
Crypto markets saw red in the last 24 hours, in part due to macroeconomic fears about rising interest rates as early as March, coupled with rising inflation fears. Ironically, crypto markets should remain robust, but the crash points towards cryptocurrencies starting to fall in line with broader economic trends. However, crypto whales are holding firm showing confidence amidst falling prices.
Many have been waiting for BTC to make its move down to the $42,000 resistance level to see which way it heads after that. In the last 24 hours, BTC dropped over 8.4%, down to $42,866 at its lowest point.
Macroeconomic fears appear to be infiltrating crypto markets as US stock markets closed on Wednesday. The Federal Reserve indicated increasing interest rates sooner than previously expected. At the same time, the FED pointed towards a balance sheet reduction amidst such interest rate moves. Leading BTC to hit its lowest value since December 4, 2021, when it fell to $42,333.
However, the DappRadar Industry Overview data points towards whale investors holding on to their crypto wealth amidst these uncertain times. When writing, 24-hour unique users across all blockchains are down just 0.5%, transactions fell slightly by just over 1%, and volume is down 65%. Volume is the total amount of incoming or outgoing value (tokens included, where available) to all smart contracts across all protocols tracked.
A rising volume figure would indicate investors moving funds, whereas a falling volume figure indicates value stayed put. Investors seem content with hodling, the word used for holding on to your crypto assets. This shows, to some extent, the confidence the whale investor community has in cryptocurrencies right now. Interestingly, when looking at the number of wallets connecting to dapps in the three key categories of DeFi, Gaming, and Exchanges, we see slight increases in activity across the board.
Just six days into 2022, we already have a narrative of user activity emerging in the blockchain space. Play-to-earn gaming looks set to continue its march toward encouraging mass adoption. DeFi on chains outside Ethereum is thriving as users start to explore the full scale of options across multiple blockchains. Moreover, whales are showing strong confidence indicators in the markets as we enter 2022.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds ETH, BTC, AGIX, HEX, LINK, GRT, CRO, OMI, IMMUTABLE X, ENS, GALA, AVASTR, GMEE, CUBE, RADAR, FLOW, FTM, BNB, SPS, WRLD, and ADA.