3 New Crypto Trends to Watch as Bitcoin Price Consolidates

3 New Crypto Trends to Watch as Bitcoin Price Consolidates

This week, Bitcoin (BTC) prices fell as a warmer-than-expected Consumer Price Index (CPI) report showed that high inflation remains a persistent challenge despite a wave of rate hikes by the US Federal Reserve. Interestingly, the market’s negative reaction to high CPI pressure seemed to be priced in by investors, and BTC and Ether (ETH) prices retook all their intraday losses to end the day in the black.

A quick look at Bitcoin’s market structure shows that even with the post-CPI pressure drop, the price continues to trade in the same price range it has been in for the past 122 days. Adding to this dynamic, Cointelegraph market analyst Ray Salmond reported a unique situation where Bitcoin futures interest is at an all-time high, while volatility is also near record lows.

These factors, along with other indicators, have historically preceded explosive price movements, but history will also show that predicting the direction of these moves is nearly impossible.

So apart from several metrics that suggest a decisive price move is in the offing, Bitcoin is still doing more of the same as it has been doing for the past 4.5 months. When that’s the case, it might be time to start looking elsewhere for new trends and possible opportunities.

Here are a few data points that continue to intrigue me.

New rotations will appear

ETH’s price has lost its luster in the post-merger era, and the asset now reflects the bearish trend dominating the rest of the market. Since the merger, ETH’s price is down 30% from its high of $2000, and it is likely that a good portion of the speculative capital that supported the bullish merger story is now in stablecoins looking for the next investment opportunity.

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Aside from ETH being an asymmetric performer over the past four months, Cosmos (ATOM) also defied the market decline by posting a monster rally from $5.40 to $16.85. As covered extensively by Cointelegraph, oversold conditions, along with the hype of Cosmos 2.0, supported the bullish price action seen in the altcoin, but this chart continues to capture my imagination.

ATOM emissions plan (old vs. new). Source: Cosmos Hub

According to the revised Cosmos white paper, the current supply of ATOM will dynamically adjust based on the supply and demand of the stake. As shown in the chart above, when Cosmos 2.0 “takes off” for the first 10 months, the issuance of new ATOM tokens is high, but after the 36th month, the asset becomes deflationary.

ATOM/USDT 3-day chart. Source: TradingView

From the vantage point of technical analysis, ATOM’s price appears to have hit a local peak as the months leading up to Cosmos 2.0 were a “buy the rumor, sell the news” type of event, but it will be interesting to see what happens to ATOM’s price when the market is approaching month 20 in the chart above.

Related: Price Analysis 10/14: SPX, DXY, BTC, ETH, BNB, XRP, ADA, SOL, DOGE, MATIC

Keep an eye on activity in the Ethereum Network

Ether emissions plummet after merging. Source: Delphi Digital

Since the Ethereum merger, Ether emissions have fallen by 97%, and although the price has pulled back significantly, over the coming months, investors can keep an eye on Ethereum network activity, developments with ETH staking across decentralized finance ( DeFi) and institutional products, along with any gas spikes (linked to network activity).

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Ether supply dynamics. Source: Delphi Digital

Although the price may succumb to bearish pressure in the short term, if the market begins to turn if new trends trigger increased adoption of DeFi products, it is possible that ETH’s price may respond positively to these developments.

After the merger, BTC price action will likely remain king

While new trends across different altcoins may emerge, it is important to remember the broader context in which cryptoassets exist. Global economies are on the rocks, and persistently high inflation remains a problem in the US and many other countries. Bond prices are soaring, and a looming debt crisis is making its presence known on a daily basis. Risk-based assets such as cryptocurrencies are incredibly volatile, and even the strongest price trends in crypto (whether supported by fundamentals or not) are subject to the vagaries of macro factors such as stock markets, geopolitics and other market events that affect investor sentiment.

With this in mind, Bitcoin remains the largest asset by market capitalization in the crypto sector, and any sharp movements from BTC’s price are bound to support or suppress the microtrends that can make an impact in the market. There is still the possibility of a sharp downside in Bitcoin’s price, so traders are encouraged to calculate the investment size according to their own risk appetite, and although several calculations may support opening long positions in various cryptoassets, it still seems too early to fully. monkey in.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter writer at Cointelegraph. Every Friday, Big Smokey will write market insights, trending how-tos, analysis and early research on potential new trends within the crypto market.

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