5 Most Popular Cryptos of the Week: XTZ, SOL, ADA, DOGE, SHIB

Key Points

• Hotter than expected US CPI on Friday saw markets up Fed tightening bets and cryptocurrencies end the week under pressure.
• Bitcoin fell back to the low-$29,000s and ethereum to fresh more than one-year lows in the $1,600s.
• Five of the most popular non-bitcoin/ethereum altcoins were XTZ, SOL, ADA, DOGE and SHIB.

Cryptocurrency markets fell back to two-week lows on Friday in wake of US inflation data that surprised to the upside and was interpreted by market participants as raising the likelihood that the Fed continues with aggressive rate hikes all the way through September. Total cryptocurrency market capitalization was last around $1.175 on Saturday, having fallen over 4.0% from closer to $1.23 trillion on Friday, and eyeing a test of late May lows just under $1.15 trillion.

The headline pace of annual inflation in the US according to the Consumer Price Index (CPI) unexpectedly rose to a fresh four-decade high at 8.6% in May, data revealed on Friday, versus expectations for it to remain unchanged 8.3%. Meanwhile, the YoY measure of core price pressures fell, but not as much as market participants had expected. Traders reacted to the data by upping their bets that the Fed will hike rates by a further 50 bps in September, after two widely expected 50 bps rate hikes in June (at next week’s meeting) and July.

When markets up their Fed tightening bets, this tends to put upwards pressure on US government bond yields, which was the case on Friday, with the US 10-year yield jumping over 11 bps to close to multi-year peaks around 3.20%. Cryptocurrencies tend to have a negative correlation to US bond yields, given that a rise in yields represents a rise in the “risk-free” interest rate or “opportunity cost” of holding non-yielding assets (such as crypto or commodities like gold).

Meanwhile, the US dollar rallied hard on Friday against most of its major G10 peers, another side effect of markets expecting a more hawkish Fed. This makes USD-denominated cryptocurrencies more expensive for international buyers, thus reducing demand slightly. As a result, cryptocurrencies also tend to have a negative relationship to the buck.

Finally, expectations for more aggressive Fed tightening put US equities, with which cryptocurrencies have had a close positive correlation in recent months, under pressure as 1) a hawkish Fed increases downside risks to US economic growth (as tighter monetary conditions slow growth), increasing downside risks to company earnings and 2) the associated rise in interest rates increases the opportunity cost of holding companies (like big tech/many other so-called growth stocks) who have a low or non-existent dividend yield. The big tech/growth stock heavy Nasdaq 100 fell over 3.5% on Friday, to end the week around 5.7% lower.

The world’s largest cryptocurrency by market cap bitcoin was subsequently last trading in the low-$29,000s on Saturday, having slipped back below its 21-Day Moving Average on Friday near the $30,000 level, and is now eyeing a test of late May lows in the $28,000 region. At current levels around $29,300, bitcoin’s market cap is around $560 billion.

The world’s second-largest cryptocurrency by market cap ethereum was last trading in the mid-$1,600s, having on Friday fallen to fresh lows for the year and, indeed, going all the way back to March 2021. From a technical perspective, the latest break lower is crucial. Support in the form of a May/June/July 2021 triple bottom in the $1,700s, which had been offering support over the last few weeks, is now gone, opening the door to significant further downside. Many ethereum bears might now be targetting a test of the 2018 highs around $1,400. At current levels just above $1,650, ethereum has a market cap of close to $200 billion.

Outside of the big two, five of the most popular altcoins of the week were…

Tezos (XTZ)

According to cryptocurrency social intelligence analytics website Lunarcrush, Tezos’ social dominance score jumped to 3.7% as of Saturday from closer to 2.0% earlier in the week. The jump in interest came after Tether announced that it had launched its USD-pegged, fully backed stablecoin USDT on the Tezos blockchain, a move that crypto market commentators said would unlock new Decentralised Finance (DeFi) opportunities within the Tezos ecosystem.

While XTZ/USD saw a more than 10% slump on Friday in tandem with the broader crypto sell-off, the cryptocurrency remains on course to close out the week in the green and with gains of close to 5.0%. XTZ/USD is currently changing hands around $2.04.

Solana (SOL)

Having started the week with a social dominance score of around 1.7% on Lunarcrush, Solana looks set to end the week with a score closer to 7.5%. Solana’s developers announced a $100 million fund this week to support South Korean crypto projects.

In terms of price action, SOL/USD was last trading around $37.50 on Saturday, having fallen on Friday in tandem with broader markets, though having for now avoided testing last week’s lows in the $35s. SOL/USD nonetheless looks on course to post a WoW loss of just over 2.0%.

Cardano (ADA)

Cardano looks set to end the week with a social dominance score on Lunarcrush of around 2.7%, up from around 1.6% this time last week. Despite difficult broader macro/crypto market conditions, ADA/USD’s price has pumped for a second successive week as of Saturday. The cryptocurrency was last trading around the $0.60 mark, up around 6.5% on the week following last week’s near 18% gain.

Crypto traders have attributed the recent upside as down to Fear Of Missing Out (FOMO) ahead of the Cardano blockchain’s much anticipated Vasil hardfork later this month that should deliver some significant upgrades.

Dogecoin (DOGE)

The ever-beloved dog-inspired memecoin had a social dominance score of around 2.5% on Saturday, little changed from this time last week. But that wasn’t enough to shield DOGE/USD from further downside, with the cryptocurrency dropping a further 5.8% on the week as of Saturday, putting it on course for a sixth successive weekly loss. Dogecoin bears are eyeing a test of earlier annual lows in the 0.065 area, with the cryptocurrency currently changing hands around $0.076.

Shiba Inu (SHIB)

Not to be outdone by its “older brother” (Dogecoin), fellow dog-inspired memecoin Shiba Inu, which describes itself as the “Dogecoin killer”, saw its social dominance score on Lunarcrush rise to around 2.0% as of Saturday from around 1.3% this time last week. But like its older brother, SHIB/USD had a tough week, dropping more than 5.0% to just above $0.000010 per token, putting it on course for an eigth successive week in the red. Shiba Inu bears will be eyeing a test of annual lows in the $0.0000087 area should broader cryptocurrency market conditions fail to improve.