Cryptocurrencies had a volatile week after Bitcoin’s (BTC<\/a>) sudden crash to $33,000 on Jan. 24. However, the sharp 9% drop fully recovered within 8 hours after BTC price regained the $36,000 support.<\/p>\n On Jan. 26, Bitcoin rallied to $38,960 but it could not sustain the level and corrected by 8.8% in the following 8 hours. When factoring in the recent ups and downs, Bitcoin managed to only gain a meager 1.6% over the past seven days.<\/p>\n Even with the considerable price swings, the aggregate futures contracts liquidations were relatively low. Longs (buyers) had $570 million futures terminated, while shorts (sellers) faced $690 million. Data shows that Bitcoin futures represented 41% of the total $1.25 billion liquidations.<\/p>\n The total crypto market capitalization presented a modest 1.6% weekly increase, in line with Bitcoin’s performance.<\/p>\n Notice how the Jan. 24 price is forming higher lows and currently shows support at $1.75 trillion. Even with the price being 22% down in 2022, the total crypto market capitalization showed a healthy 12.5% bounce since the Jan. 24 low.<\/p>\n Investors seem to be digesting this week’s regulatory news where United States Congressman Ted Budd submitted an amendment to scrub a bill provision allowing the U.S. Treasury to unilaterally prohibit certain financial transactions<\/a> without public input.<\/p>\n If passed in its current form, the America COMPETES Act of 2022 would result in a significant blow to the cryptocurrency industry, as Coin Center’s executive director Jerry Brito stated.<\/p>\n Investors were negatively impacted by news that the U.S. White House is reportedly preparing an executive order on crypto<\/a> to make government agencies conduct risk analysis on cryptocurrency as a national security threat. <\/p>\n Steady bearish newsflow might have been the cause for cryptocurrencies\u2019 recent price action but there were some stellar performances from Metaverse tokens. <\/p>\n Apple (AAPL) CEO, Tim Cook, said in an investors’ call on Jan. 27 that metaverse applications have a lot of potential and that his company is investing in augmented reality developments on its devices.<\/p>\n The news was enough to catapult metaverse-related tokens by up to 36%, including Flow, The Sandbox (SAND), Decentraland (MANA), Enjin Coin (ENJ), and Arweare (AR).<\/p>\n On the other hand, Terra (LUNA<\/a>) was impacted after the Avalanche-based reserve currency Wonderland Money (TIME) announced that a pending proposal would determine whether the project closes up shop or not. As a result, the MIM stablecoin dipped below 1.00 and some speculate that this may have had a knock-on effect on Terra’s LUNA and UST token.<\/p>\n Scalability and interoperability blockchain solutions Cosmos (ATOM), Fantom (FTM), and Harmony (ONE) presented negative performances after the Ethereum hash rate surpassed 1.11 PH\/s, its highest level ever registered. A higher hash rate indicates that more miners are joining the network, which helps to cement blockchain security.<\/p>\n The OKEx Tether (USDT<\/a>) premium measures the difference between China-based peer-to-peer (P2P) trades and the official U.S. dollar. Figures above 100% indicate excessive demand for cryptocurrency investing. On the other hand, a 5% discount usually indicates heavy selling activity.<\/p>\n The Tether indicator continued to display strength as it stood above 99% over the past seven days. That is in stark contrast to three weeks ago when panic selling from China-based traders drove the indicator to a 4% discount.<\/p>\n To confirm that the crypto market structure has improved, traders should analyze the CME’s Bitcoin futures contracts premium. This metric analyzes the difference between longer-term futures contracts to the current spot price in regular markets.<\/p>\n Whenever this indicator fades or turns negative (backwardation), it suggests that there is bearish sentiment.<\/p>\n These fixed-month contracts usually trade at a slight premium, indicating that sellers request more money to withhold settlements for longer. As a result, futures should trade at a 0.5% to 2% premium in healthy markets, a situation known as contango.<\/p>\n Notice how the indicator flirted with the backwardation from Jan. 18 to 24 as Bitcoin dipped below $42,000. However, as BTC showed signals that $33,000 could have been a local bottom, the futures markets recovered a healthy 0.5% premium.<\/p>\n Considering that the aggregate cryptocurrency market capitalization is down 22% in 2022, the market structure looks primed for a recovery. <\/p>\n Barring a significant change in these fundamentals, Bitcoin bulls are probably beginning to feel comfortable adding positions below $40,000.<\/p>\n The views and opinions expressed here are solely those of the <\/em>author<\/em><\/a> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<\/div>\nRegulatory winds could be limiting BTC\u2019s price recovery<\/h2>\n
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Metaverse tokens decoupled after last week\u2019s Apple news<\/h2>\n
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Tether premium and CME futures showed improvement<\/h2>\n
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