Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
The downtrend in the crypto markets continued this week, with no signs of an imminent rebound as investors stay put. Ethereum’s underperformance comes as its Beacon Chain, which will introduce PoS to ETH, faced issues, and experienced a seven-block reorg. A reorg is a potentially high security risk and makes investors nervous that the merge might be delayed further.
Crypto and stock markets decouple
The broader crypto market and stocks slightly diverged this week. The S&P 500 is up 4% since last week’s close as the FED minutes show that they might not keep up the current pace of monetary tightening. Weak figures from the US housing markets, new homes sales MoM in April printed at 591k vs. the expected 750k, giving some indications that the US economy is cooling down. It also supports the view of a less hawkish FED for the rest of the year. The 10-year US yield is trading lower as well, and is currently at 2.74%
A more positive news is that Andreessen Horowitz recently announced a new fund for crypto and blockchain startups. The fund is set to dedicate $1.5 billion to seed investments, and $3 billion to venture investments. Despite the down of Bitcoin and Ethereum other layer 1 PoS cryptocurrencies suffered also really hard, with Solana trading more than 19% lower over the week, Avalanche 25%, and NEAR 17%. The relative weakness of all the altcoins pushed the BTC market cap dominance to 46.8%, the highest reading in 7 months.
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