Even after Bitcoin faced a third straight rejection from the European Union, investors remained confident in strengthening their altcoin positions. However, as Cointelegraph reported, BTC's run to a price of $50,000 is now seemingly arduous.
The EU Parliament Committee on Monday threw out a policy proposal that would have mandated cryptos to transition to more environmentally friendly methods, thus prohibiting energy-intensive proof-of-work (PoW) mining. This proposal was adjoined to the Markets in Crypto Assets (MiCA) framework last week, a move slammed by crypto advocates globally.
Cryptocurrencies Market Not Affected; Capitalizations Stay Flat, Altcoins Surge
In response to this, the market appeared unperturbed, with market caps staying relatively flat in the past week, posting a slight 0.4% gain to $1.77 trillion, Coindesk reported. However this behavior was not seen in a number of altcoins, which had rose 17% or more in the last seven days.
Bitcoin prices still managed to increase in value by 2.5% over the past week, as Ethereum took a 3.6% gain, Cointelegraph added. Altcoins, on the other hand, had surged in the last seven days, with THORChain leading the pack with a monstrous 65.73% rise to $7.0505, with a rally that followed its enabling of synthetic tokens last March 10.
Such derivatives are tied to the worth of the underlying collateralized assets. THORChain chose to support its synthetic tokens with 50% of the underlying asset and 50% in its RUNE token.
Other tokens, such as ZCash (ZEC) and Monero (XMR) surged after U.S. President Joe Biden signed his landmark executive order that zeroed in on creating a cryptocurrency regulatory framework to avoid evasion of sanctions.
Terra (LUNA) value, meanwhile, rose after its parent firm Terraform Labs donated $1.1 billion to its Luna Foundation Guard (LFG) reserves last March 11.
Bitcoin Trading Volume Declines Ahead of Fed Meeting
Over the past weekend, however, Bitcoin's trading volume sunk to its lowest level since February 19, indicating restraint among investors ahead of the U.S. Federal Reserve meeting this week. Uncertainty due to geopolitical concerns also led to the slowdown in the top cryptocurrency's trading activity, as seen in the blockchain data.
In 2022, demand among Bitcoin holders flattened, showing what the crypto data firm Glassnote revealed as the "impact of global macro uncertainty on investor sentiment." This has led to "weaker BTC accumulation," Glassnote added in its blog post.
Coindesk emphasized that such a narrow trading range from $35,000 to $40,000 would lead to higher volatility in the next two weeks, citing technical indicators.
The put-call ratio, or the measurement investors use to assess market sentiment, has remained on a declining trend in the last few days, thus indicating a lesser bearish outlook among traders of Bitcoin and other cryptocurrencies.
Analysts from Fundstrat Global Advisors said that even with the expected Fed rate increase, the "BTC put-call ratio continues to decline" from a high in February. This continuing decline, they said, indicated that "investors are starting to position for a longer-term risk."
