Bitcoin Stalls Under $100K While Stablecoins and NFTs Experience Growth
Heading into a US holiday weekend, the crypto markets are experiencing notable trends. Bitcoin is facing challenges in sustaining its rise toward $100,000, while an alt season appears on the horizon, alongside renewed interest in NFTs and record growth in the stablecoin sector.
Bitcoin’s $100K Rejection and Market Volatility
The crypto market is expected to cool off, as Thanksgiving typically results in reduced volatility within a 3-4% range.
Bitcoin reached approximately $99,500 last week but retreated to about $91,000, reflecting its historical pattern of sharp rallies followed by corrections. A $9,000 drop represents a minor percentage decline.
James Toledano, COO at Unity Wallet, attributes this pullback to profit-taking and put options at critical resistance levels. He noted that significant volatility often occurs due to a lack of fundamental valuation bases, leading to oversized corrections following rapid gains.
Despite the dip, optimism persists due to favorable political developments and increasing institutional interest. Bitcoin-related Google searches surged post-election, indicating heightened retail curiosity.
NFTs, Stablecoins, and Crypto’s Long Tail
The NFT market has seen a revival, with floor prices for the top 100 collections rising by an average of 28% in November, and some collections experiencing increases of up to 146%. This resurgence is fueled by a shift toward NFTs with real-world utility, correlating with increased Bitcoin interest.
Stablecoins have solidified their position in the market, achieving an all-time high market capitalization of $190 billion in November, surpassing pre-TerraUSD collapse levels. Trading volumes for stablecoin pairs on centralized exchanges rose by 77.5% to $1.81 trillion, marking the highest month-on-month growth since 2021.
Key Highlights:
- Tether (USDT): Market cap increased to $135 billion, maintaining a nearly 70% market share.
- USD Coin (USDC): Rose by 11% to approximately $38 billion, its highest since February 2023.
- Ethena Labs’ USDe: Increased nearly 40%, driven by competitive APY and ecosystem expansion.
Regulatory changes are influencing the stablecoin landscape, with MiCA-compliant Euro stablecoins gaining traction.
As Bitcoin enters a corrective phase, focus has shifted to other major cryptocurrencies like Solana (SOL) and smaller assets. Bitcoin Dominance has decreased by about 5% over the past week.
Solana reached a record high of $264 last week, reflecting a 160% year-to-date increase. Anmol Singh of Zeta Markets highlighted Solana's user engagement, with 6.2 million daily active addresses compared to Ethereum's 500K. Solana-based applications are reportedly generating more revenue than those on Ethereum, with substantial stablecoin inflows noted.
Ether also showed signs of recovery, halting declines in the ETH/BTC ratio, which increased by 15% over the week. Emerging layer-1 networks like Sui are gaining attention for features like liquid BTC staking.
The focus remains on Bitcoin's next moves, evolving regulatory landscapes, and signs of mainstream adoption. The crypto market is characterized by cycles of growth, correction, and reinvention, suggesting that the current bull run may continue.