Crypto whales are nowhere to be found – The Average Joe

    Crypto whales are nowhere to be found

    Victor Lei — Head of Research

    January 25, 2022


    January 25, 2022

    If you thought the stock market is looking bad, just wait until you see crypto prices. Or better yet, don’t — and sleep better.

    What’s the big deal? Both the stock and crypto markets are falling nearly in sync — impacted by the fear of rising interest rates.

    From their November peaks, Ethereum is down by 54% and Bitcoin by 47%  — with smaller crypto assets generally down by even more.

    The crypto market is now oversold based on several technical indicators:

    • The relative strength index (RSI) on the crypto index fell below 30 — a lifetime low according to CoinDesk.
    • Between 0-100: Under 30 is oversold and above 70 is overbought.

    At these levels, crypto is seeing low demand from big investors (per CoinDesk) and if they’re not buying — investors can say goodbye to a big rebound.

    • At the start of 2021, 2,500 accounts held 40% of all Bitcoin.
    • This makes the market more susceptible to large price swings from the buying/selling by these whales.

    Is this a 2017 repeat? When crypto prices fell 90% over 15 months? It’s difficult to predict but there are many signs that it’s different this time:

    • 2017: Crypto prices were driven primarily by speculation — with most tokens having little fundamentals or real projects backing them.
    • 2022: Crypto projects are still driven by speculation but several projects are generating revenue with real use cases — with slow adoption by institutions.

    But crypto is still highly unpredictable — and prices could fall even further before they recover. Until market sentiment changes and investors are willing to take risks again — both the stock and crypto market are unlikely to see a major recovery.

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