The crypto market has been remarkably challenging for investors this year, with BTC and ETH prices currently around 65% below their highs. June was the worst month since 2011 for both assets. Nevertheless, there are reasons for optimism in Julysince both assets record profits.
Even so, this year’s reduction has actually been the least severe registered.
While this crypto winter has seen less drawdown than previous bear markets, it has seen numerous large capitulations and the restructuring of a market.
Bitcoin and Ethereum have been trading below their respective realized prices since mid-June. The average period to fall below realized price for Bitcoin’s historical bears has been 180 days, except for March 2020, when it took just seven days.
We examine the MVRV ratio, which measures changes in market value (MV, spot price) for three types of Bitcoin cohorts, including general market, short-term holders, who typically react to market volatility by spending their coins. , and long-term holders. We can see that term holders, who are statistically less likely to spend their coins, currently have coins below their cost basis.
It is common for all three cohorts to be under cost basis at the time of bear market lows. So Bitcoin may be approaching a potential market bottom.
In the meantime, the macroeconomic environment and concerns about cryptocurrencies led venture capital investors to reduce their investments in cryptocurrencies in Q2 2022. A 29% decline in blockchain project funding to $6.5 billion in Q2 from $9.2 billion in Q1 2022 marks the first fall in two years.
There was also a staggering 54% drop in mega-round blockchain funding (over $100 million) in the second quarter, from $5.6 billion in the first quarter to $2.6 billion in the second quarter.
Source: CB Insights
Start-ups developing the Web3 technology received 57% of that fundingcompared to 68% the previous quarter.
It is fair to conclude that the year 2022 has been a major reset of market expectations, a major deleveraging and hopefully the beginning of new foundations which will allow even larger structures to be built on top of them.
Summary of weekly winners
Ethereum Classic added another 50.7% in the last seven days. In the past week Lido DAO (LDO) added another 51.65% gain.
Among the less popular tokens, ROSE, the native token of the Oasis Network, gained 50.85% in the last 7 days, outperforming BTC by more than 43.10%.
Quantity (QTUM) also performed well over the past week and month, recording gains of 48.29% and 64.3%, respectively.
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