This is a difficult week to analyze from the point of view of financial markets trading. The focus of the market is on geopolitical events, mainly due to the correlation between all assets.
This has conditioned the evolution of the entire weekly session. Regarding crypto-asset trading, we have seen relatively significant declines that have been added to the previous falls in the crypto-asset market.
Despite this, we can see how the market capitalization shows the generation of a reversal figure with a double bottom. We should be watching for the perforation of this bearish guideline in this case.
We must remember that the total market capitalization is one of the macro reference indicators that can give us an insight into the evolution of the entire crypto-asset ecosystem
Recovery in dominance
Another noteworthy fact that we can examine at the macro level is that of dominance. The concept of Bitcoin dominance expresses the specific weight that this asset has with respect to the rest of the market.
Successive peaks and troughs of Bitcoin dominance coincide with inflection points in the market, so it can help us to detect these changes in sentiment.
Right now we have this metric at the highest since November 2021. Recall that on those dates the market reached its current ATH. Previously, dominance had reached a remarkable maximum.
When assessing this indicator, we must take into account the effect that occurs in the market when a downtrend begins to act. At that moment, simultaneous sales of all the assets in the market begin to occur, and in the case of Bitcoin, it is quite likely that liquidations will occur leaving the crypto ecosystem.
DeFI. We continue with the downtrend accompanied by declines in LTV.
Regarding the Decentralized Financials market we have two highlights:
First, we can appreciate how the market has taken on this bearish trend.
We can mark a clear guideline that would mark this marked tendency towards sales. Even so, we can appreciate two different bearish impulses in which there have been significant upward bounces with increasing volatility.
The cryptoasset market shows two clear upward reactions indicating the presence of potential buyers at low levels.
Blockchain capital remains in a downtrend. A trend we see continuously since the beginning of 2022, with a single attempt to break that trend. Therefore, we are moving at levels close to those we had at the time of the ATH.
Whales have not increased activity
Another way to gauge the impact of this whole situation is to look at the movement of large trades. Examining the outflows of exchanges in this case of large traders, we can see how in the last 90 days the greatest concentration of activity is not seen in the last few days.
Conclusions: building a new trend
The conclusion we can draw from the market is that we have undoubtedly discounted the events that have occurred so far. The possibility of a major impact on the market of a war of these characteristics was evident and has not yet materialized. We have probably seen a progressive discounting of this possibility in prices so that, by the time the event occurred, prices had already absorbed the full impact of the conflict.
We must keep an eye on the reference levels in the two main assets, BTC and ETH, which are the ones that will set the pace of recovery or the possibility of further declines in the event of the loss of strategic support levels. These levels are currently marked by the lows reached in recent market declines, both in the last quarter of 2021 and the beginning of 2022.