Bitcoin traded largely flat on Thursday evening while altcoins dipped as the global cryptocurrency market cap rose by 0.6% to $1.8 trillion.
| Coin | 24-hour | 7-day | Price |
|---|---|---|---|
| Bitcoin (CRYPTO: BTC) | 0.5% | -0.1% | $37,172.77 |
| Ethereum (CRYPTO: ETH) | -1.4% | 10.8% | $2,668.77 |
| Dogecoin (CRYPTO: DOGE) | -0.5% | -3.2% | $0.14 |
| Cryptocurrency | 24-Hour % Change (+/-) | Price |
|---|---|---|
| Quant (QNT) | +22% | $137.68 |
| JUNO (JUNO) | +19.6% | $23.65 |
| Cosmos (ATOM) | +13.4% | $29.81 |
See Also: How To Buy Bitcoin (BTC)
Why It’s Moving? Fears of rising inflation that have sent bond yields spiraling globally have led to the consolidation of the apex coin below the $40,000 level, according to OANDA Senior Market Analyst Edward Moya.
Yields of short-term U.S. government bonds are rising rapidly in 2022 on the back of expectations of incoming rate hikes by the Federal Reserve. On the other hand, the longer-maturity papers have seen yields move at a slower pace on fears that such rate hikes could hurt the economy. Essentially, what this implies is that the yield curve is flattening.
At the end of December, two-year treasury yields rose from 0.73% to the current 1.16% levels, which is a 60% increase. Ten-year benchmark bond yields rose 1.8% from 1.5% in the same period, which is a 20% rise, according to a report from Reuters.
“Bitcoin is also not faring well in the monetary tightening environment although it’s the impact it’s having on broader risk appetite that’s probably the most damaging aspect of that,” said Craig Erlam, Moya’s colleague at OANDA.
Erlam said Bitcoin could consolidate at current levels in the near term but a significant break of the $30,000 mark could trigger another aggressive lower move.
It is not all doom and gloom. “Bitcoin is forming a base and considering the selloff in tech stocks, crypto investors should be feeling a bit more optimistic that the bottom is in place,” said Moya.
Meanwhile, Bitcoin’s NVT Ratio, which is derived by dividing the market cap of the coin by the daily dollar volume being transacted on the network, has touched 10-year lows (30-day exponential moving average).
Bitcoin NVT Ratio (30-day EMA) — Courtesy CryptoQuant
“This tells us Bitcoin is highly undervalued, in accumulation, and a coming bull phase is very likely,” said CryptoQuant analyst DivXMan.
Another boost to Bitcoin could come from good news on the tax front; a group of Bipartisan lawmakers has introduced a bill titled The “Virtual Currency Tax Fairness Act,” which seeks to amend the Internal Revenue Service’s tax code and would exempt users from paying taxes on cryptocurrency payments of less than $200.
Earlier on Thursday, it was reported that the IRS will not tax unsold tokens, which could offer potential relief to both cryptocurrency miners and stakers.
On the Ethereum side, the total value in the ETH 2.0 deposit contract touched an all-time high of 2,292,258 ETH, according to Glassnode data.
Amount Of ETH Deposited In The ETH 2.0 Deposit Contract — Courtesy Glassnode
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Photo: Courtesy of Jose Rodrigo Safdiye/Benzinga