Tax fears trigger correction for crypto market
The crypto rollercoaster has taken another sharp turn, with Ethereum hitting all-time highs last Thursday just before Biden’s plans to hike capital gains tax triggered a sell-off across global markets.
Bitcoin plunged below $50K on the news, falling for five consecutive days before bouncing to $52K. Ethereum, on the other hand, managed to weather the storm and emerge with 13% weekly gains. It was joined by a few other resilient altcoins including Uniswap which rose 12%.
This sudden downturn rattled the crypto market, swinging the Fear and Greed Index right round to the lowest level since March 2020 when pandemic fears caused Bitcoin to halve in price.
This Week’s Highlights
- eToro lists Uniswap and Chainlink
- Venmo embraces crypto
eToro lists Uniswap and Chainlink
In light of the dizzying rise of decentralized finance (DeFi), eToro is now listing Uniswap and Chainlink.
UNI (Uniswap) is the token of the decentralized exchange protocol that is based on liquidity pools rather than an order book. Uniswap defied this week’s downturn with over 10% gains, and recently broke its record weekly trading volume crossing $10 billion for the first time.
LINK (Chainlink) is the token powering the decentralized oracle network that bridges smart contracts with real-world data. The token has dropped 5% over the last week, but has made a meteoric rise over the past twelve months, and hit headlines last week for the release of its new whitepaper on Chainlink 2.0.
Venmo embraces crypto
As one of the most popular digital payment services with 70 million users, Venmo’s adoption represents another big step for crypto towards the mainstream. This follows similar moves by rival payment apps Square and Cash App, and the launch of multiple crypto services by parent company PayPal.
The week ahead
With an almost 30% drop from the all-time high, Bitcoin’s retracement is similar to the pullbacks seen in the last bull market of 2017.
If analyst Raoul Pal Is correct, this downswing sets the stage for further gains in coming months. He tweeted early on Monday that “these are the pauses that refresh a bull market.”
As Ethereum showed resilience during the market downturn, all eyes are now likely to be on this cryptoasset in expectation of a strong recovery back towards all-time highs.