EnglishDigital Assets ended the week +20%, up now for the 8thweek of the past 10 to finish at a total market cap of US$174B. Trading volume continued to build with overall turnover for the week ending at a daily average of US$53B, +64% from the previous week, for the best week on record.
Sentiment indicators were strong across the board with 90% of the top 40 Coins / Tokens ending the week higher, 100% of the top 40 Coins / Tokens above their 50 day moving averages, Bitcoin newssentimentgaining to a new YtD high, ‘Bitcoin’ Google searches tripling from the previous week, ‘BTC’ leading keyword searches on Baidu (Chinese Google), and Digital Assets up above the 200-day Moving Average for the first time since May of last year.
The top headlines this week were focused on improving regulatory clarity and overall investor access to the space with: 1. Taiwan’s FSC outlining upcoming STO regulations, 2. The SEC issuing new Digital Asset guidance, 3. The Jamaica Stock Exchange listing BTC/ETH and eying STOs, 4. Binance preparing to launch its first fiat onramp in Singapore this month, and 5. Japan’s largest railway operator planning to both accept Digital Assets and launch its own exchange. Negatives this week — hacks at Coinbene and Bithumb — were largely ignored; pointing to how the industry has become immunized to this kind of news as platform specific and having little impact on the overall ecosystem.
Analysts and market commentators struggled to come up with a reason for this week’s rally and corresponding surge in trading. The main driver for this week’s rally, though, appears to be largely technical and is likely just the cumulation of several weeks of improving volumes, tightening volatility, and lack of significant BTC price resistance between $4,000 and $6,000. With Digital Assets having now broken above the 200-day moving average — for the first time in almost a year — and given the lack of price resistance immediately above the current level, we would expect a few days of consolidation before another push to the US$200B market cap level (US$6,000 for BTC). The most likely scenario after that would be a period of consolidation between the 200-day moving average and the US$200B market cap level.