In February, the cryptocurrency space witnessed a bullish performance, pushing it into the third consecutive month of gain. Despite the gains seen, the last two weeks of the month were clouded with negative news, from the U.S SEC, cracking down on cryptocurrency, to the delay in Silvergate’s financial statement and the rumors surrounding Binance’s reserves.
Flagship cryptocurrency asset, Bitcoin, posted a marginally bullish performance, as the rest of the market followed in its trend. It began trading from $23,139.28 at the beginning of the month and ultimately ended the month at $23,147.35, representing a 0.04% gain.
The cryptocurrency market capitalization in the month of February gained 2.86% for the month, from $1.05 trillion at the start of the month to the end of the month at $1.08 trillion. The cryptocurrency market capitalization traded as high as $1.13 trillion during the month.
The Altcoin market experienced similar bullishness, gaining 3.42% in February, from approximately $602.2 billion to currently standing at $622.8 billion at the end of the month. During the month, we saw the altcoin market capitalization trade as high as $653 billion.
Amid the current bullish trend seen in the market, here is a look at 5 cryptocurrencies investors should watch out for in March 2023.
Bitcoin’s BTC: The hopeful optimism of Bitcoin traders seems to dissipate as key on-chain metrics reveal heavy resistance, surrounding the token. Now Bitcoin is threatening a retest of the $22,000 level, and a wave of short sellers would stand to profit if that occurred. If the short sellers’ strike price hits, some analysts believe Bitcoin could drop as low as $19,000.
However, A handful of analysts still project BTC to hit $25,000 in the short term, but on-chain data highlights only a few reasons for price resistance at higher levels.
Market participants’ concern over the Federal Reserve’s interest rate hikes and high inflation are heavy macro headwinds facing Bitcoin and this has investors weighing the time value of money (TVM) of BTC investments. Investors that purchased BTC within the last six months benefited from the early bear market conditions and have an average realized price of $21,000, which places them in profit. The average market realized price across all BTC holders is $19,800, also currently in profit.
Conversely, BTC held for over six months has a higher realized price than the rest of the market groups at $23,500. When Bitcoin reaches above $23,500, the holders that have seen little TVM return for over six months potentially put pressure on a breakout as they get antsy to lock in profits.
Bitcoin price is highly reactive to interest rates and the U.S. Dollar Index (DXY), which puts a strain on risk assets. The negative impact of these factors is great for short sellers but bad for Bitcoin. The best way for Bitcoin to withstand short-seller pressure is for new long liquidity and spot buyers to enter the market.
Bitcoin ended the month’s trading at $23,147.35.
BNB Chain’s BNB: The Binance network includes the Binance Chain, Binance Smart Chain, Binance Academy, Trust Wallet, and Research projects, which all employ the powers of blockchain technology to bring new-age finance to the world. BNB is an integral part of the successful functioning of many of the Binance sub-projects.
Like the FTX debacle, BNB faces the possibility of regulatory risk as rumors are making the news surrounding Binance, the world’s largest cryptocurrency exchange, and its reserves. There are speculations that the firm, like FTX, does not have enough reserves to honor customers’ transactions. Recently, CZ and Binance.US CEO Brian Shroder were sent a letter on March 1 from three United States senators, Elizabeth Warren, Chris Van Hollen, and Roger Marshall, demanding more information regarding Binance financials.
The senators claimed that the “little information” available regarding Binance’s financials suggests that the exchange is a “hotbed of illegal financial activity.”
Also, Binance has been accused of “blatantly” copying the winner of the BNB Chain hackathon after launching Bicasso, an AI-based nonfungible token (NFT) creation tool. Binance allegedly ripped off a tool created by Chatcasso just two months after awarding them first prize in a BNB Chain hackathon held in Seoul from Dec. 17–19, 2022.
On March 1, Binance CEO Changpeng “CZ” Zhao announced the launch of Bicasso, an artificial intelligence (AI) product that can be used to “turn your creative visions into NFTs with AI.” However, community member “ggoma” believes Binance copied and promoted the Chatcasso project as its own.
BNB ended the month’s trading at $301.47.
Ethereum’s Ether: In the digital assets space, Ethereum remains the largest smart contract platform, hosting a plethora of financial products, innovation, and automation, with varying degrees of decentralization (generally referred to as DeFi).
The price of Ethereum’s native token, Ether, has recovered 78% since June 2022. But this doesn’t guarantee further upside, particularly with declining trading volumes suggesting that the risk of a major correction is high. Ether price could see the real bottom if the supply in profit falls below 30%, which would reflect previous market cycles and the March 2020 bottom.
Another thing to consider is Ethereum’s long-awaited Shanghai upgrade going live sometime in March. Several analysts predict the upgrade, which will enable stakers to withdraw their vested tokens from Ethereum’s proof-of-stake (PoS) smart contract, will trigger a short-term sell-off event. The Ethereum PoS smart contract has attracted more than 17.4 million ETH (~$28.35 billion at the current exchange rate) since its introduction in December 2020, per Etherscan.
Ether ended the month trading at $1,605.90.
Binance USD’s BUSD: Binance USD (BUSD) is a 1:1 USD-backed stablecoin issued by Binance (in partnership with Paxos), Approved and regulated by the New York State Department of Financial Services (NYDFS).
The US Securities and Exchange Commission (SEC) cracked down on Paxos, the issuers of the Binance USD (BUSD) stablecoin in February over a possible violation of investor protection laws. Since then, $6.65 billion has been shaved off BUSD’s market capitalization as investors recall lessons from Terra Luna’s UST token, although, both tokens are set up differently.
Binance USD (BUSD) has suffered a steep decline in active addresses following the regulatory crackdown by U.S. authorities. This development continues a series of dips within the Binance ecosystem in recent weeks. According to data from Glassnode, the number of active BUSD addresses, based on its seven-day hourly moving average, has dropped to levels not seen since October 23, 2022.
Per sources close to the matter, Binance minted 180 million TrueUSD (TUSD) in February. It also added support for the decentralized stablecoin project Liquity (LQTY) in its innovation zone. All this indicates that the exchange may be distancing itself from what is popularly known as its native stablecoin.
BUSD ended the month trading at $1.00.
Cardano’s ADA: ADA is the native token of the Cardano Blockchain, which is a PoS blockchain that touts to be more efficient than Ethereum, in terms of scalability and transaction speed.
According to IntoTheBlock, more than 80% of all Cardano holders are suffering losses right now, a figure equal to 3.53 million addresses. At the same time, only 682,920 addresses are profitable, which is less than 16% of the total. Another 173,770 holder addresses, or 4% of the total, are breaking even at the current ADA price of $0.33 per token.
The three largest groups of unprofitable Cardano token buyers can be identified. The first group, with a total of 669,370 addresses, purchased ADA at prices between $1.71 and $2.97. The last time such prices were observed was in the second half of 2021, in the midst of the last bull rally on the crypto market.
The second large group of 560,940 addresses are those who purchased ADA below $1.71 but starting at $1.29. Finally, the third group is most likely recent buyers who purchased tokens between $0.4 and $0.5 — 551,610 addresses.
Also, another thing to consider is recent allegations that the blockchain’s governance is centralized. Vanessa Hariss, a Senator at Team Kujira (a decentralized ecosystem for protocols), on 5 March claimed that the Cardano governance was centralized. In a Twitter thread, she stated that IOG (Input Output Global), the company behind Cardano’s formation, has been dominating a large part of Cardano’s governance.
As per Vanessa, the CIP-1694 proposal will be giving away a lot of power to Cardano’s Constitutional Committee. The Constitutional Committee, which comprises insiders from IOG, would be able to veto any governance action, except motions of no confidence and calls for a new committee.
ADA ended the month’s trading at $0.3525.
Leave a Reply