The crypto market has started the week strong, regaining its $2 trillion market cap according to CoinMarketCap. The market surged over the weekend following strong Amazon earnings and better than expected US jobs data. This in spite of the fact that Meta (formerly Facebook) had a weaker than expected quarter and the belief that a tighter job market means a higher chance of Fed tightening. Remember, macro matters more now since the crypto markets have been moving in lock step with the equity markets recently.
Additionally, the Crypto Fear & Greed Index has finally left the “extreme fear” zone and is currently sitting in the “fear” zone at 45 (out of 100) whereas this time last week the index was at 20. The improved mood was aided by Bitcoin’s RSI breaking out of its downtrend - an important technical development.
Investors should also be aware that the first week of February was a national public holiday in China for the Chinese Lunar new year. Liquidity should be higher going forward as the festivities subside.
Where Bitcoin (BTC) goes, most of the market follows. After closing last week at $41.6K, it seems the downward trend may be over as BTC has already rallied to the $44K level as of this post. Turning the $44K level into support would be super bullish since this level also corresponds to the 50W EMA.
Cardano (ADA) is one to watch this week as well as ADA addresses with a balance between 10K and 1M ADA have grown by 15,000% since mid-December 2021. This group of investors have more than doubled its holdings according to Santiment. Moreover, addresses holding between 1M to 10M ADA have increased by over 40% since January. Even crypto exchange Kraken recently noted that Cardano’s price action relative to its growing daily transactions could indicate more room to run.
That being said, Cardano just hasn’t generated the same amount of retail excitement as its peers even with improving fundamentals. Notwithstanding the positive price action today, the Crowdsense Sentiment score for ADA has actually decreased 8.15% over the past 24 hours (as of this writing) to 6 out of 10 as seen below.
Polkadot (DOT) should also be on investors’ radar as the Crypto Carbon Ratings Institute (CCRI) just determined that the interoperable blockchain platform uses less power than popular peers such as Tezos, Avalanche, Algorand, Cardano, and Solana. Consuming the least power definitely broadens its appeal when corporations and institutional investors are deciding who to choose as a partner. The news is also helping DOT’s Crowdsense Sentiment and Social Mentions scores as seen below.
And as Polkadot gains in popularity, the PolkaFoundry token (PKF) should benefit. Traders shouldn’t sleep on this smaller token that describes itself as “a platform for building DeFi dapps for the Polkadot ecosystem.” Just yesterday, February 6th, it entered Crowdsense’s top 5 coins by social media sentiment positive change, gaining 26%.
On the macro front, the biggest event this week is the US CPI inflation numbers. They will be released Thursday, February 10 at 8:30am ET. The median forecast is for 7.2% YoY inflation. If there’s an upside surprise, the Fed might decide to tackle inflation in a quicker manner which would likely hurt risk-on assets such as crypto. Don’t be caught flat-footed.
Already, the market is pricing in a 71.2% chance of a 0.25% rate increase at the March meeting and a 28.8% chance of a 0.5% rate increase. This is a big jump from two weeks ago where the chance of 0.5% rate increase was sitting at 12.4% (according to CME Fed Futures).
Lastly, don’t forget about the Super Bowl on Sunday February 13th. America’s biggest sporting event that’s also famous for its commercials will feature ads (to be seen by 90+ million viewers) from Crypto.com (CRO) and FTX (FTT). Prepare accordingly.
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