Crypto Market Review, December 16

image of the article

Arman Shirinyan

The SBF-approved coin is once again in an upward trend, but you definitely shouldn’t celebrate it too much

Content

  • Solana’s upward trend is in danger
  • Shiba Inu number of transactions drops sharply

The cryptocurrency market re-entered the downtrend following a cold shower by SEC Chairman Jerome Powell, who made it clear that the regulator will continue with a series of rate hikes until the desired inflation target is reached. After that, Bitcoin fell to $17,000, ETH returned to $1,200, and alt-currencies lost the gains they made during the week.

Solana’s upward trend is in danger

Despite the big drop we witnessed in November, Solana is gradually moving up and even entering a local uptrend, despite dangerously high selling pressure. Still, it’s too early to celebrate the turnaround; SOL’s entry into an uptrend could be part of an upward wedge, which is part of a continuation of the downtrend.

Solana's chart
Source: TradingView

The most common reason for Solan’s successful turnaround that analysts highlight is the degree to which SOL is now oversold. The SBF-approved cryptocurrency and go-to network for NFT projects in 2021 was the most actively traded asset on the market during the exchange implosion.

Unfortunately, up to 100 million SOL could be held in the wallets of stakers who panicked and withdrew their assets from staking contracts after it became clear that SOL was the main, if not the only, source of liquidity for FTX.

The future of what was once an Ethereum killer remains hazy as it is unclear how much SOL stakers will unleash the market once the crypto industry’s volatility and liquidity return to normal levels.

Shiba Inu number of transactions drops sharply

The number of transactions on the meme token network has hit a multi-week low after the price per SHIB token fell to $0.000008 for the first time since November. The recovery in the Shiba Inu burn rate did not help the price rebound from local price levels.

The reason for the fall has nothing to do with Shiba Inu itself, because there were no major events surrounding the project or its token. The aforementioned 50bp rate hike triggered another market correction that affected altcoins like Shiba Inu.

SHIB has always depended on the performance of the market in general. Meme tokens and coins are practically the most volatile assets in the market, and their growth usually acts as a signal for the recovery of risk demand.

In the case of today’s market, the lack of action on meme assets is further confirmation of the virtually non-existent demand for risk. Investors are not willing to be exposed to an asset that bounces back and forth and loses its value faster than more stable assets like Bitcoin or even Ethereum.

Overall, the cryptocurrency market is still going through a massive migration of funds from exchanges to self-trust. By the end of this cycle, we could see the beginning of a real accumulation that would become the basis of the future recovery that we are waiting for from mid-2022.

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