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3 emerging crypto trends to keep an eye on while Bitcoin price consolidates

BTC’s price is range-bound, giving other assets room to gain a foothold in an otherwise down market.

This week, Bitcoin’s (BTC) price took a tumble as a hotter-than-expected consumer price index (CPI) report showed high inflation remains a persistent challenge despite a wave of interest rate hikes from the United States Federal Reserve. Interestingly, the market’s negative reaction to a high CPI print seemed priced in by investors, and BTC’s and Ether’s (ETH) prices reclaimed all of their intraday losses to close the day in the black. 

A quick look at Bitcoin’s market structure 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’s 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 moves is nearly impossible.

So, aside from multiple metrics hinting that a decisive price move is brewing, Bitcoin is still doing more of the same thing it’s done for the past 4.5 months. With that being the case, it is perhaps time to start looking elsewhere for emerging trends and possible opportunities.

Here are a few data points that I’ve continued to be intrigued by.

New rotations will emerge

ETH’s price has lost its luster in the now post-Merge era, and the asset now reflects the bearish trend that dominates the rest of the market. Since the Merge, ETH’s price is down 30% from its $2,000 high, and it’s likely that a good deal of the speculative capital that backed the bullish Merge narrative is now in stablecoins looking for the next investment opportunity.

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

ATOM emissions schedule (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 its staking. As shown in the chart above, when Cosmos 2.0 “kicks in” for the first 10 months, 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 top 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 transpires with ATOM’s 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 post Merge. Source: Delphi Digital

Since the Ethereum Merge, Ether emissions have dropped by 97%, and while the price has pulled back significantly, over the coming months, investors might keep an eye on Ethereum network activity, developments with ETH staking across decentralized finance (DeFi) and institutional products, along with any spikes in gas (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 begins to turn around if new trends trigger increased use of DeFi products, it’s possible that ETH’s price could react positively to those developments.

Post-Merge, BTC price action will likely remain king

While new trends across various altcoins may emerge, it’s important to remember the wider context in which crypto assets exist. Global economies are on the rocks, and persistently high inflation remains an issue in the United States and many other countries. Bond prices are whipsawing, and a looming debt crisis makes its presence known on a daily basis. Risk-on assets like cryptocurrencies are incredibly volatile, and even the strongest price trends in crypto (whether backed by fundamentals or not) are subject to the whimsy of macro factors such as equities markets, geopolitics and other market events that impact investors’ sentiment.

Keeping this in mind, Bitcoin remains the largest asset by market capitalization within the crypto sector, and any sharp moves from BTC’s price are bound to support or suppress the micro trends that might be gaining traction in the market. There is still the possibility of a sharp downside in Bitcoin’s price, so traders are encouraged to calculate investment size according to their own appetite for risk, and while multiple metrics might support opening long positions in various crypto assets, it still seems too early to fully ape in.

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

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

ETH Denver Top Builders Base by Supermoon, Cointelegraph, NDC, Horizen, and Conflux

Institutional investment flows out of ETH and into competing L1 altcoins

Analysis from CoinShares shows investors favored smaller altcoins last week as capital outflows for Ethereum hit $17 million.

Institutional investors have shifted their attention from Ethereum (ETH) to competing Layer 1 blockchains of late, with capital inflows for altcoin investment products increasing last week whilst Ether products posted outflows for the third week in a row.

Data from CoinShares’ latest Digital Asset Fund Flows report shows that investors last week (ending April 22) loaded up on $3.5 million worth of Avalanche (AVAX), Solana (SOL), Terra (LUNA) and Algorand (ALGO) funds whilst capital outflows from Ether products totaled $16.9 million.

It marks the third straight week that Ethereum products have seen outflows, bringing the total over that time to $59.3 million, equal to around 35% of the year-to-date outflows of $169 million from the second-largest blockchain.

Notably, investors also favored digital gold last week despite some recent hesitancy, with Bitcoin (BTC) products fetching $2.6 million worth of inflows.

Over the past 10 weeks, inflows to Ethereum products have reached only $68.5 million in what could signal a bearish trend by institutions towards the major blockchain.

Weekly flows showing $16.9m outflows from Ethereum. CoinShares.

Alternate layer 1 blockchains have been growing in popularity recently, decentralized application (dApp) usage on Solana in the last 7 days has increased according to metrics from DappRadar. Usage for the decentralized exchange Orca has grown nearly 43% over the week, and automated market maker Raydium has seen a 15.5% increase, with volume in its app reaching over $1.5 billion.

Whilst the metrics for Avalanche’s dApp usage haven’t increased over the week, the blockchains' investments in incentive programs and millions spent luring developers to the platform have traders bullish on the future of AVAX.

Related: Does the future of DeFi still belong to the Ethereum blockchain?

The Avalanche, Solana, Terra and Algorand inflows were $1.8 million, $800,000, $700,000 and $200,000 respectively, whilst Bitcoin saw inflows equating $2.6 million for the first time in two weeks with the analysts noting that month-to-date outflows for the largest crypto remain at $178 million.

Total outflows over the past three weeks have seen $219 million leave the market, with that number cooling last week winding down to just 7.2 million, a stark contrast to the $134 million which left the market in the first week of April.

Despite the recent run of outflows, the analysts note that year-to-date flows remain positive with $389 million coming into crypto assets since the start of the year.

ETH Denver Top Builders Base by Supermoon, Cointelegraph, NDC, Horizen, and Conflux