Contagion Risks

Chart of the Day

In a similar vein to the stock markets, the crypto market saw some upside recovery momentum on the back of U.S. Federal Reserve chair Jerome Powell's reiteration that the Fed is committed to combating the current levels of inflation. BTC rallied as high as $43k before falling back slightly to the upper $42k bound that it is currently trading at. A key bullish trend line has been formed on the BTC hourly chart, hinting at the possibility of further upside action in the near-term. On the on-chain front, there are some positive signs too. BTC's dormancy inflow, for one, suggests that a strong rebound could be in order. The ratio of the current market capitalization and the annualized dormancy value offers a rough gauge of market lows and assesses the current market condition by determining whether the broader trend is leaning in favor toward the bulls or the bears. As can be seen from the chart above, BTC has entered the buy zone — a bottom signal that has only appeared five times since BTC's inception. One thing to note though, would be the fact that the Puell multiple, a metric that tracks BTC's supply-side, has been consistently seeing higher lows in recent times, and has yet to hit levels that would indicate a bottom formation. So how this all plays out for BTC remains to be seen. On the major altcoins front, most have largely flipped green ahead of the CPI release, with leading tokens such as LUNA and MATIC posting more than 7% gains in the past 24 hours.