3 Emerging Crypto Trends to Watch as Bitcoin Price Consolidates

This week, the price of Bitcoin (BTC) fell as a higher-than-expected Consumer Price Index (CPI) report showed that high inflation remains a persistent challenge despite a wave of interest rate hikes. interest from the United States Federal Reserve. Interestingly, the negative market reaction to a high CPI print seemed priced in by investors, with BTC and Ether (ETH) prices recovering all of their intraday losses to close the day in the black.

A quick look at the structure of the Bitcoin market shows that even with the post-CPI print 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 on a unique situation where Bitcoin futures open interest is at a record high, while its 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 movements is nearly impossible.

So, in addition to multiple metrics suggesting a decisive price move is brewing, Bitcoin is still doing more of the same as it has for the last 4.5 months. That being the case, perhaps it’s time to start looking elsewhere for emerging trends and potential opportunities.

Here are some data points that continue to intrigue me.

New rotations will emerge

ETH price has lost its shine in the post-merger era, with the asset now reflecting the bearish trend dominating the rest of the market. Since the Merger, the ETH price is down 30% from its $2,000 high, and a good chunk of the hot money that backed the bullish Merger narrative is likely now in stablecoins looking for the next investment opportunity. .

In addition to ETH having a lopsided performance over the past four months, Cosmos (ATOM) also bucked the market’s downtrend by posting a monster rally from $5.40 to $16.85. As thoroughly covered by Cointelegraph, oversold conditions coupled with Cosmos 2.0 hype supported the bullish price action seen in the altcoin, but this chart continues to capture my imagination.

ATOM release schedule (old vs. new). Source: CosmosHub

According to the revised Cosmos white paper, ATOM’s current offering will be dynamically adjusted based on supply and demand for its stake. As shown in the chart above, when Cosmos 2.0 “goes live” 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 a technical analysis standpoint, ATOM price appears to have hit a local high as the months leading up to Cosmos 2.0 were a “buy the rumour, sell the news” type of event, but it will be interesting to see what happens with ATOM price as the market approaches month 20 in the diagram above.

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

Keep an eye on Ethereum network activity

Ether emissions plummet after melting. Source: Delphi Digital

Since the Ethereum merger, Ether issuances have decreased by 97%, and while the price has retraced significantly, in the coming months, investors may want to keep an eye on Ethereum network activity, developments involving ETH in decentralized finance (DeFi) and institutional products. , along with any gas spikes (connected to network activity).

Ether supply dynamics. Source: Delphi Digital

While the price could succumb to bearish pressure in the short term, if the market starts to turn if new trends trigger increased use of DeFi products, it is possible that the price of ETH will react positively to those developments.

Post Merger, BTC Price Action Will Likely Remain King

While new trends may emerge in various altcoins, it is important to remember the larger context in which crypto assets exist. Global economies are in crisis, and persistently high inflation remains a problem in the United States and many other countries. Bond prices are swinging, and a looming debt crisis is being noted daily. Risk assets such as cryptocurrencies are incredibly volatile, and even the strongest cryptocurrency price trends (whether supported by fundamentals or not) are subject to the fantasy of macro factors such as equity markets, the geopolitics and other market events that affect investor sentiment.

With this in mind, Bitcoin remains the largest asset by market cap within the crypto sector, and any sharp BTC price movement is bound to support or suppress micro-trends that could be gaining traction in the market. There is still the possibility of a sharp drop in the price of Bitcoin, so traders are encouraged to size the investment according to their own risk appetite, and although several metrics could support opening long positions in various crypto assets, it still seems too early to do it all. monkey inside

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident author of the newsletter at Cointelegraph. Every Friday, Big Smokey will write market insights, trend instructions, analysis, and early research on potential emerging trends within the crypto market.