This week, the cryptocurrency market had ambiguous dynamics: quotes attempted a new decline but have regained most of the lost positions. BTC is currently trading around 17200.00 (+0.4%), ETH is at 1290.00 (+1.0%), USDT is around 1.0006 (+0.01%), BNB is at 290.00 (–0.8%), and USDC – at 0.9999 (+0.01%). The total market capitalization was 0.859B dollars, and the share of BTC increased to 38.52%.
The digital sector is under the influence of several opposing factors that complicate the choice of direction: pressure on it is the impact of the bankruptcy of the FTX exchange, but monetary factors prevent a deeper price decline. Investors are still assessing losses from the closure of the second major cryptocurrency company in six months and continue to gradually exit the market, as evidenced by the reduction in the number of "whales" to a two-year low of 1.662K. According to the CNBC survey of American citizens, by the end of the year, the number of respondents who were positive about digital assets adjusted to 8.0% from 19.0%, and after the failures of Terraform and FTX, the number of respondents who were strongly negative about cryptocurrencies rose from 25.0% to 43.0%. A protracted downward price correction has led to another negative moment illustrating the weakness of the cryptocurrency sector: according to The Block news portal, developers' activity in most blockchains is falling. Experts point out that the less investment comes into the market, the slower the process of technical improvement.
Nevertheless, despite the serious negative factors, there was no significant drop in quotes during the week, as they were supported by investors' hopes for a correction in the US Federal Reserve's monetary policy. Market participants expect the "hawkish" rhetoric officials to soften amid signs of a slowdown in prices, as the head of the regulator Jerome Powell announced earlier. However, the Fed's decision may be influenced by the release of national inflation data for November next week: a new decrease in the consumer price index will increase market confidence in a less aggressive tightening of the US Federal Reserve's monetary policy and further weaken the position of the US currency against its main competitors. Moreover, experts hope that the positive signals of the American regulator can become a catalyst for the traditional pre-Christmas Santa rally, during which the leaders of the cryptocurrency market will significantly restore their positions.
From the news of the week, it is worth noting that American investigating authorities suspected Sam Bankman-Fried of being involved in the fall of TerraUSD and Luna: the Manhattan federal prosecutor's office is investigating whether the businessman could manipulate token prices in the interests of his companies. Previously, the US Securities and Exchange Commission (SEC) has already reported on the investigation into the legality of the transfer of part of customer funds from the FTX exchange to its related company Alameda. In general, there are more and more suspicions about the former head of the cryptocurrency platform, but no official accusations against him have yet been voiced.
Brian Armstrong, CEO of the Coinbase cryptocurrency exchange, said in an interview with Bloomberg that last year the site made a profit of 7.0B dollars, but this year, due to falling market prices, such results will not be achieved, and profits may be halved. European Central Bank (ECB) board member Fabio Panetta again criticized digital assets, saying that they do not bring benefits because they are not used for payments, do not stimulate consumption, and do not contribute to environmental protection. According to the official, even the introduction of regulation will not make the cryptocurrency market safe for investors and advised them to turn only to state-owned digital assets.
Next week, quotes of most cryptocurrencies may continue to consolidate or resume growth.