Cryptocurrency Market Review: US Default Risks and Ethereum Withdrawal from Exchanges

Article reading time:
6 min.

The rise in prices for cryptocurrencies in the first four months of 2023 gave way to a decline in May, which turned into a side trend amid some events.

Bitcoin

In seven days, from May 12 to May 19, Bitcoin rose by0.35%. The largest increase was observed on Wednesday, May 17 - 1.36%, and the largest drop - on Thursday, May 18 - 2.14%. Overall, BTC was in the $25,800-$27,666 range last week.

Source: tradingview.com

The main reason for any jumps inThe cryptocurrency market is a situation of uncertainty with the ceiling of public debt in the United States. So far, US congressmen continue negotiations, but no visible progress has been made. This increases the anxiety of crypto-investors, as a very specific prospect looms - a default.

At the same time, large players (those who havefrom 1,000 to 10,000 BTC) this development is clearly not embarrassing. They have been building up their positions for the past five weeks. This can only speak in favor of the fact that institutional investors expect the price to rise. Will they not buy in order to be at a loss?

Source: app.santiment.net

According to technical analysis, bitcoin is insideways. At the same time, it is important that during the week it broke through the $26,500 support level several times, but closed higher. Thus, the bears were unable to reign in the market. In case of growth, the nearest resistance level should be the high of the current week at $27,666.

Source: tradingview.com

The index of fear and greed for the week has not changed much, falling from 49 to 48. It is still in the neutral zone.

Ethereum

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Ethereum price has changed slightly over the week— From $1,808.5 at the close on Friday, May 12 to $1,810.3 as of May 19. Thus, the growth was less than 0.1%. The peculiarity of this week was the absence of ETH volatility: on all days the price changed by less than 1.5%.

Source: tradingview.com

According to the analytical platform Santiment,the decrease in activity is due to the fact that the number of cryptocurrencies listed on exchanges is only 10.1%. This is a historic low for broadcast since 2015.

“While Ether dropped to $1,780 today,we see how the supply on the exchanges continues to decline. The percentage of ether on exchanges is at its lowest since the beginning of public trading in 2015 and is 10.1%. In fact, this is an all-time high for assets held in over-the-counter wallets.”

Source: app.santiment.net

It is likely that crypto enthusiaststhey prefer now not to try to earn on cryptocurrency courses, but participate in staking. The amount of Ethereum staked still far exceeds the withdrawal volumes, with a difference of more than 650,000 ETH over the past seven days.

Source: dune.com

From the point of view of technical analysis, the second cryptocurrency by capitalization is in the flat. The levels from last week remained unchanged: support - $1,750, resistance - $2,000.

Source: tradingview.com

Polygon

Over the past week, the cost of Polygon (MATIC)changed slightly - the growth was only 0.6%. Cryptocurrency has been falling globally since February 18. Since then, the decline has been over 40%. The most interesting moment over the past seven days was the price drop on May 16 by more than 30%. However, this was only a fleeting occurrence.

Source: tradingview.com

While the price of MATIC is falling, the platform itselfthings are going well. Polygon is the most popular blockchain for brands by May 2023, according to the NFT Tech platform, which promotes Web3 technologies. It accounts for 41%. It recently overtook Ethereum in this metric, Polygon CEO Ryan Wyatt said.

In addition, the platform is going to develop andenvironmental agenda. This week it became known about the agreement of Polygon with a startup Solid World, which provides financial and technical tools to combat climate change. Stenver Jerkku, CEO of Solid World, said a forward pool of carbon credits would be created to sell emissions permits at prices determined by an automated market maker. Carbon credits are emissions permits.

But from the point of view of technical analysis, the picturerelatively unhappy. MATIC price is below both the 50-day (green) and 200-day (orange) moving averages. In addition, the first one recently crossed the second one from top to bottom, which means that a so-called dead cross has formed, which indicates with a high probability a further decline. The support levels are $0.7 and $0.6, the low of the current week. The resistance level is $1.05.

Source: tradingview.com

Thus, while in the cryptocurrency marketthere was a calm. The price of Bitcoin, Ethereum and Polygon has changed by less than 1% over the week. The main reason for this is the general macroeconomic uncertainty.

This material and the information in it does not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.