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On Thursday evening (Asian trading hours), the crypto market rally that kicked off at the start of the week began to show some signs of exhaustion as investors started to shy away from risky assets in the face of declining macroeconomic and geopolitical conditions. BTC, the largest crypto by market cap, started a fresh decline below the $43k level after failing to clear the $44.5k resistance, and has shed 6% of its value within the last 24 hours. It is currently trading below the $42k resistance level as of the time of writing. If BTC fails to clear the immediate resistance zone near the $42.5k level, its decline may very well be extended to the $40k level. In a similar vein, ETH experienced a 8% plunge from 24 hours ago, and is now trading below the $2,800 level. Most major altcoins are also still submerged in a sea of red, with previous top-performer AVAX now leading the downside correction. In order for the broader crypto market to reverse its losses over these past two days, investors' risk appetites must return.
Within the NFT space, the market has also cooled significantly, as the total trading volume within said space has, in the month of February, experienced a pretty huge plunge from January's record-breaking numbers. However, it's not all gloom and doom here, as several key on-chain metrics do reveal the fact that the supply of both BTC and USDT has actually been dwindling on most major exchanges over the past month. This sustained trend of BTC being moved off exchanges indicates strong conviction amongst long-term BTC holders, whilst the decline in the exchange supply of USDT also means that there is (for the time being), a much lower risk of a major market sell-off.
Finally, and on the decentralized finance (DeFi) front, DeFi savings protocol Anchor has seen its TVL surge to an all-time high value of $11.7 billion on the back of flesh capital inflows into its reserves. Do check out this blog post for a more in-depth analysis of Anchor Protocol.
As tensions mount in eastern Europe, a chorus of major news outlets have started to publish sensational reports labelling crypto as "the hidden tool to undermine sanctions". Within these reports, they condemn the crypto space for allegedly providing the means through which certain entities will be able to circumvent sanctions. Many public officials in the U.S. and Europe have also been very vocal about this issue over the past few days, with some even pushing for urgent (and tougher) laws to better govern the crypto space as a solution to this ostensible problem. However, as Coinbase CEO Brian Armstrong argues, there are very limited signs to suggest that crypto adoption is even on the rise in eastern Europe. Further, all public blockchain networks are open ledgers, and attempts to evade sanctions using cryptocurrencies will actually work against the parties doing so, as every transaction will be transparently and immutably recorded onto said ledgers for all to view.