Public interest in the metaverse continues to grow, but not so much in metaverse ETFs. Does encryption belong to everything?
good morning. Here’s what happens:
Price: Bitcoin and most other cryptocurrencies are back in the red.
Insights: Metaverse ETFs are struggling to keep up with gaming ETFs.
Technical opinion: BTC’s upside appears to be limited despite short-term support.
Bitcoin (BTC): $29,982 – 3.4%
Ether (ETH): 2030 USD – 4.7%
There are no CoinDesk 20 winners today.
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Bitcoin and other cryptocurrencies falter
It didn’t last long.
A day after Bitcoin broke off a week-long losing streak, the largest cryptocurrency by market cap and other major cryptocurrencies were in the red again on Monday.
Bitcoin has recently fallen more than 3% in the past 24 hours and has fallen for seven consecutive weeks. However, he spent most of the day near or above the psychologically important $30,000 level. “Over the past 24 hours, we’ve seen a six to eight week sell consolidation,” Mark Connors, head of research at 3iQ Digital Asset, told CoinDesk.
The performance of Bitcoin and other cryptocurrencies was in line with stock markets, which fell slightly on Monday and declined since last fall as inflation and supply chain issues continued to rise and investors became more risk-averse. The tech-heavy Nasdaq lost more than a percentage point on Monday.
This heightened caution, fueled last week by the collapse of the terraUSD stablecoin (UST) and the Luna token that supports it, has rocked cryptocurrencies in particular over the past week. On Monday, AXS and AVAX were recently down 12% and 8%, respectively. SOL decreased more than 6%.
Ether, the second largest cryptocurrency by market capitalization, is down more than 4.6%, despite holding above $2000.
“In stocks, I lost almost a year of returns, so [there was] Fast Reset With Fed Increase [interest rates] Connors said in the first week of May. “I’ve seen digital assets, bitcoin, ether, and the rest of the altcoins. What has happened is that there has been stability. What people are evaluating is whether the rate hike has been suppressed. In our opinion, that is not the case.
Trade volume has risen from the lows of the early months of the year, signaling a possible, and at least temporary, recovery. But few analysts anticipate a more permanent exit from the current bear market. The coming weeks could be particularly tough for stablecoins, although Terraform Labs CEO Do Kwon has issued a “recovery plan” to bail out Terra Network. Kwon offered Terra branching into a new chain without the floor tanks.
Connors said investors will likely see three to nine months of “volatile markets” and prices are likely to fall, with support between $20,000 and $24,000. In this environment, he sees investors focusing more on Bitcoin and Ethereum. “Bitcoin dominance has to happen and it will happen when the markets sell off,” Connors said. “People are looking for quality, but now it seems that Ethereium is developing as the second quality asset in the ecosystem.”
Standard & Poor’s 500: 4,008 -0.3%
DJIA: 32223 + 0.08%
Nasdaq: 11,662 -1.2%
Gold: 1824 USD + 0.6%
Metaverse ETFs struggle to keep up with gaming ETFs
Sometimes a great new investment tool, the latest from Metaverse, doesn’t work in the market like last year’s model.
Metaverse exchange-traded funds (ETFs) arrived last year shortly after the term entered our lexicon and became a favorite with venture capitalists. Since the metaverse is a mixture of gaming and cryptocurrency, these metaverse ETFs are very similar to gaming ETFs or eSports (the two terms are synonymous), which were launched a few years ago.
They resemble them because metaverse is an ambiguous term; The shared online experience envisioned in Neil Stephenson’s science fiction novel “Snow Crash” is already on many multiplayer gaming platforms. Metaverse tokens do not have agents listed yet, so metaverse ETFs compensate for this by setting up publicly traded cryptocurrency companies like Galaxy (GLX.TO) or Block (SQ), the previous box. Here the problem begins.
Roundhill Ball Metaverse ETF (TradingView)
This association with cryptocurrency means that METV, a metaverse ETF from Roundhill, is not significantly performing as well as ESPO, VanEck’s gaming/esports ETF.
Heavyweight games like Nvidia GPU Designer (NVDS) or game engine developer Unity are in both baskets and haven’t performed well over the year, but Galaxy Digital’s inclusion – down 60% year-to-date and planning for a stock buyback https://www. netcost-security.fr/cryptocurrencies/news/first-mover-asia-metaverse-etfs-are -underperforming-gaming-etfs-cryptos-return-to-the-red-202205170033 – is already sinking the metaverse ETF.
Of course, this metaverse ETF outperforms the metaverse tokens themselves: The Sandbox (SAND) token is down around 77% and Decentraland’s MANA at 68% primarily because both struggled to attract a player base that reflects their ratings.
There is a paradox here. The metaverse, a way of selling crypto-plus-gaming as a branded product, works better in the market than the vanilla games themselves.
Perhaps cryptocurrency does not belong to everything?
Bitcoin daily chart showing support/resistance. (Damanic Dantes/CoinDesk, TradingView)
Bitcoin (BTC) is stabilizing around the $30,000 price level after last week’s sell-off. The cryptocurrency needs to stay above the $27,000-$30,000 support area this week in order to generate a positive momentum signal in the short term.
BTC is down 3% in the last 24 hours.
The Relative Strength Index (RSI) on the daily chart is rising from oversold levels, which may keep buyers active at support. The RSI is also in the oversold territory on the weekly chart, although negative momentum may limit upward price moves.
The immediate resistance is seen at $33,000 and $35,000, where the price crash occurred earlier this month. This indicates that a large number of sell orders may limit the rally over the next two weeks.
In addition, the recent weak performance of altcoins against bitcoin indicates a lower risk appetite among cryptocurrency traders. Altcoins usually fall more than bitcoin during bear markets due to the higher level of risk involved. The broader risk environment could keep BTC’s short-term bearish trend intact.
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