Market Wrap: Bitcoin Fades From $42K, Alts Still Ahead as ApeCoin Pumps

Bitcoin (BTC) reached a high at $42,199 earlier in the New York trading day, although the buying eventually waned. The cryptocurrency is roughly flat over the past week, which could indicate some uncertainty among market participants.

Meanwhile, some alternative cryptos (altcoins) are starting to outperform bitcoin. For example, AAVE, EOS and CAKE all rose by more than 3% over the past 24 hours. Also, on Wednesday, a pair of tweets from the pseudonymous profiles ignited a 24% rally in the price of ApeCoin (APE), a token linked to the non-fungible token (NFT) project Bored Ape Yacht Club (BAYC).

Trading volumes in the NFT market ticked higher last week, albeit at a far lower level than last year’s peak. The uptick could reflect an increase in speculative behavior among crypto traders, which typically occurs when market sentiment is bullish.

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Stocks were also mixed on Wednesday, while gold, a traditional safe haven asset, ticked higher.

Decentralized finance (DeFi) tokens have continue to underperform bitcoin and other large-cap cryptocurrencies.

The chart below shows the CoinDesk DeFi Index (DFX) compared with the CoinDesk Large Cap Index (DLCX). Typically, during market rallies, DeFi and other altcoins outperform BTC because of their higher risk profile.

The current downtrend in the DeFi index appears to be slowing, which could point to a brief rise in bullish sentiment among crypto traders.

A deeper look, however, shows mixed performance for some DeFi tokens such as AAVE, AMP and COMP. For example, over the past month, AMP has dropped 15%, compared with a 28% gain in COMP and roughly flat performance in BTC.

And the chart below shows net inflows to the 21Shares exchange-traded products over the past week. Positive figures could indicate a preference for alternative crypto products among investors.

For now, uncertainty remains, according to 21Shares. Bitcoin is a “risk-on asset class, entirely at the mercy of the global macro outlook – as denoted via BTC’s continued correlation with the stock market,” the firm wrote in a research report.

Most digital assets in the CoinDesk 20 ended the day lower.

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.