Market Wrap: Bitcoin Stalls Below $40K, Analysts Point to Risks in DeFi

Some observers are concerned about a "crypto winter."

AccessTimeIconJan 28, 2022 at 9:27 p.m. UTC
Updated May 11, 2023 at 6:25 p.m. UTC
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Bitcoin (BTC) held above $37,000 on Friday and was up about 3% over the past 24 hours. Meanwhile, some alternative cryptocurrencies began to stabilize after a volatile week.

Analysts were also looking for signs of a possible bounce in equity markets, which could encourage crypto buying. So far, some traders appear to be on the sidelines in both traditional and crypto markets. The S&P 500 is roughly flat over the past week, compared with a 1% gain in BTC and a 3% drop in ETH over the same period.

"Investors continue to withdraw from U.S. stocks amid the expected tightening of the US Federal Reserve's monetary policy," Alex Kuptsikevich, an analyst at FxPro, wrote in an email to CoinDesk.

If selling continues, more investors could start to reduce their positions on risky assets, and cryptocurrencies may be hit first, according to Kuptsikevich. That means a short-term price bounce could be limited.

Further, given macroeconomic headwinds, some analysts are concerned about a coming "crypto winter," similar to what occurred in 2017-2018. But it appears that winter is already here, especially given the nearly 40% drop in BTC from its all-time high of close to $69,000 in November.

Latest prices

Bitcoin (BTC): $37696, +5.55%

Ether (ETH): $2517, +7.51%

S&P 500 daily close: $4432, +2.43%

Gold: $1790 per troy ounce, −0.17%

Ten-year Treasury yield daily close: 1.78%

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at

Systemic risk in crypto markets?

The recent underperformance in some altcoins and decentralized finance (DeFi) tokens indicates heightened risk in crypto markets. And when uncertainty is high, some traders tend to rotate into bitcoin, which is deemed to be less risky in the crypto market.

CoinDesk DeFi Index is trending lower. (CoinDesk)
CoinDesk DeFi Index is trending lower. (CoinDesk)

The CoinDesk markets team has covered the sharp sell-offs across various tokens over the past two weeks, which could keep some crypto buyers on the sidelines. Here is a rundown of risks we identified.

Tokens related to Wonderland developer plunged:

In the past 24 hours, Popsicle Finance’s ICE fell as much as 22%, Wonderland’s TIME fell 15%, and Abracadabra’s SPELL dropped 15%. These are tokens created by Daniele Sestagalli, who gained a cult following in recent months thanks to his community-centric approach toward crypto projects. His protocols were worth billions of dollars at their peak, but those fortunes have since faded away, CoinDesk's Shaurya Malwa reported.

A falling out between two startup projects on Cardano:

On Wednesday, CoinDesk's Lyllah Ledesma wrote about the SundaeSwap debacle that left CardStarter users with steep losses. The conflict is between CardStarter, which describes itself as a "decentralized accelerator" for startup projects focused on Cardano, and SundaeSwap, a decentralized exchange built on the Cardano platform.

And then, there's potential contagion risk in Terra's UST stablecoin:

LUNA, Terra’s native token, was down as much as 10% during the past 24 hours due to yet another scandal. LUNA is on Abracadabra, a DeFi lending platform run by Sestagalli. LUNA was partly created for issuing stablecoins. The reserves of Terra-based lending and borrowing protocol Anchor, which offers a supposedly industry-beating benchmark deposit rate of around 20%, are also sliding fast as a result of the crypto market crash. Read more here.

Terra’s UST stablecoin was thrown into flux because the tokens used to leverage some stablecoins related to Sestagalli are in a mess. Some observers following the asset peg saga are worried UST and MIM could serve as a “contagion” that destabilizes other pools on Curve, CoinDesk's Andrew Thurman reported.

Altcoin roundup

  • Sandbox (SAND) Announces $50,000,000 accelerator fund: Popular gaming crypto The Sandbox (SAND) is partnering with a global venture company to open a fund for developing metaverse startups. According to a news release, SAND has committed $50 million to Hong Kong-based accelerator company Brinc for The Sandbox Metaverse Accelerator Program, which will invest $250,000 in 100 new metaverse altcoins. Read more here.
  • ChainLink Capital targets $100M in assets for two crypto funds: Crypto-focused venture capital fund ChainLink Capital Management has set a target to reach $100 million of assets under management each for its Luna and Ama funds this year, general partner Andrew Hoppin told CoinDesk in an interview. The funds had about $30 million and $13 million under management, respectively, at the end of last year. Read more here.
  • FriesDAO wants to start a crypto-crowdfunded fast-food franchise: The crypto group plans to buy a fast-food restaurant following ConstitutionDAO’s “let’s buy (and govern) a real-world asset with crowdfunded tokens” playbook. Read more here.

Relevant news

Other markets

Digital assets in the CoinDesk 20 ended the day higher.

Largest gainers:

Asset Ticker Returns Sector
Chainlink LINK +10.9% Computing
Polygon MATIC +10.0% Smart Contract Platform
Algorand ALGO +9.3% Smart Contract Platform

Largest losers:

There were no losers in the CoinDesk 20 on Friday.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.


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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Damanick Dantes

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

Angelique Chen

Angelique is a market contributor at CoinDesk.

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