Cryptocurrency markets focused on 12 April
Current information about the first quarter of 2023 has started to be shared in the cryptocurrency markets. Cryptocurrencies, which started the year with rapid declines, revived with the banking crisis that broke out in the US as the end of the first quarter approached.
In the cryptocurrency ecosystem, which started 2023 with declines, the first quarter made investors smile. Supported by bank bankruptcies in March, Bitcoin approached the $ 30,000 level and completed the first quarter with a 72% increase. On the April agenda of cryptocurrency investors is the Shanghai Update.
What will change on Cryptocurrency markets?
While Bitcoin completed the first quarter of the year by approaching the $ 30,000 level, the rise in cryptocurrency was 72% compared to the previous quarter. Sevcan Dedeoğlu, Research Manager of the crypto asset trading platform Gate.io, shared her evaluations of the first three months of 2023 and her forecasts for the second quarter starting with April.
Noting that the appetite for risk-taking in investors increased in the last weeks of the quarter, Sevcan Dedeoğlu said, “We saw this not only in cryptocurrencies, but also in technology stocks that experienced 2022 with large value losses. The Nasdaq stock exchange, where mainly technology companies are listed, rose 17% in the first quarter.”
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Market capitalisation of two major assets exceeded $750 billion
According to the table seen at the end of the first quarter, Bitcoin increased by 20.66% and Ethereum by 9.62% in March. The total market capitalisation of BTC and ETH, which are considered the two largest assets of the cryptocurrency ecosystem, has exceeded $750 billion with current increases. Looking at the correlation used to determine the relationship between investor trends in different asset types and investment instruments, it was noted that the correlation between the S&P 500 and Nasdaq indices and Bitcoin was drawn to the 30% band, while the correlation between gold and Bitcoin reached 50%, reaching the highest peak in 2 years.
Pointing out that the fact that cryptocurrencies act independently of established cryptocurrency markets and stocks, and that the differentiation of their behaviour with these investment instruments bodes well for the nature and value promise of cryptocurrencies, Gate.io Research Manager Sevcan Dedeoğlu said, “Gold is considered among relatively less risky assets and is seen as a ‘safe haven’ by investors. We can explain the increase in correlation between gold and Bitcoin by saying that Bitcoin has become a ‘safe harbour’ for crypto investors.”
Bitcoin suppresses other cryptocurrencies
Bitcoin’s dominance in the market also increased to 47%, showing that the largest crypto asset suppressed other cryptocurrencies called altcoins. While altcoins such as Metis and Maker completed the quarter with a loss of more than 20%, the number of active addresses in Bitcoin and Ethereum networks increased by 10% and 5%, respectively. In this process, the crypto ecosystem, especially Ethereum investors, was locked on 12 April.
12 April is critical due to the Shanghai Update
The long-awaited Ethereum update, dubbed Shanghai on the mainnet and Chapella or Shapella on the consensus network, will take place on 12 April. This update means unlocking 17.6 million ETH worth $32 billion locked for ETH 2.0. Pointing out that Ethereum is negatively priced against Bitcoin due to the expectation for this date, Sevcan Dedeoğlu concluded his evaluations with the following statements:
“Basically two scenarios stand out. Ethereum is expected to try to test the $ 2,000 level, as the price of Ethereum temporarily decreases in the period after 12 April or the validators continue the locking process. JP Morgan’s expectation for the ETH stake rate after the Shapella update is that the rate will increase to 60% and Messari’s expectation is that it will increase to 30%. We anticipate that these expectations will have a positive impact on the Ethereum price in the medium and long term. We think that ‘liquid staking’ protocols such as Loto Finance, Rocket Pool, Frax Finance should be followed in the coming period. As Gate.io, which operates with the motto ‘the gateway to crypto’, we offer our users the opportunity to trade more than 1,400 cryptocurrency assets, while making it possible for them to follow the latest developments in the cryptocurrency markets with our periodic investor summaries.”
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