Do WAX (WAXP) gains indicate a V-Shaped Recovery for Bitcoin (BTC)

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Bitcoin (CRYPTO: BTC) traded above the $50,000 mark at press time as the global cryptocurrency market capitalization rose 2.31% to $2.40 trillion.

What Happened: The apex cryptocurrency traded flat Wednesday evening. BTC was down 0.39% over 24 hours at $50,533.69. It has fallen 11.14% over a seven-day trailing period.

Ethereum (CRYPTO: ETH) rose 2.58% over 24 hours at $4,450.18. Over a seven-day time frame, it has fallen 2.37%.

Meme cryptocurrency Dogecoin (CRYPTO: DOGE) was up 1.35% at $0.18. Over the week, it has declined 13.13%.

Shiba Inu traded 2.05% higher over 24 hours at $0.00003718. In the last seven days it has lost 12.72% of its value.

The three top gainers over 24 hours, according to CoinMarketCap data were WAX, Immutable X, and NEAR Protocol.

WAX soared 35.1% to $0.6499, Immutable X appreciated 22.96% to $6.42, and NEAR Protocol gained 17.73% to $9.15 in the period.

Why It Matters: Researchers in South Africa have found that people who have received three shots of the Pfizer Inc (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX) vaccine could fend off the Omicron variant of the COVID-19 virus, as per an earlier report.

Marcus Sotiriou, an analyst at the United Kingdom-based digital asset broker GlobalBlock, noted that in the short term cryptocurrency markets are still correlated to equity markets, particularly tech, with Omicron fears in the background.

“This does not mean we’ll see a V-shaped recovery in the price of Bitcoin or that the largest digital asset by market cap it is out of the woods just yet. With the rate at which Omicron is spreading, I think this may still cause fear in the short term and choppy price action.”

Meanwhile, CEOs of six cryptocurrency firms that included Coinbase Global Inc (NASDAQ:COIN) urged Congress for clarity on regulations for the industry, but warned against onerous regulation, reported Reuters.

“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations,” said Alesia Haas, CEO of Coinbase.

Ethereum’s gains remained intact despite the action on Capitol Hill which targeted stablecoins, noted Edward Moya, a senior market analyst with OANDA.

“The House doesn’t want to get in the way of Web 3.0 as blockchain could have a vast impact on American lives. As long as everything is still mostly being built on Ethereum, the bull case remains intact,” Moya wrote in a note seen by Benzinga.

Binary Coin Days Destroyed (Binary CDD), a metric that indicates whether spending behavior of large volumes and/or old coins is significant relative to historical data, may indicate that BTC has finished the accumulation phase, noted CryptoQuant. Notably, as per the Wyckoff method, the accumulation phase is followed by a bullish phase.

Chart Depicting Binary CDD — Courtesy CryptoQuant

“The accumulation cycle has passed, and it has broken through,” said CryptoQuant’s Mignolet in a note. As per the analyst, the data is not significant for short-term prices but is noteworthy from a “cycle point of view.”

Tether and USD Coins have been the key two coins that have led to a prolific rise in stablecoins in the past month. The top 5 Stablecoin Marketcap has risen from $129 billion to just under $150 billion, as per Delphi Digital, an independent research boutique.

Chart Indicating Stablecoin Flow — Courtesy Delphi Digital

“The USDC/USDT ratio has grown from 0.19 at the start of the year to 0.53 today, a sign of market preference for USDC which is considered to have less risk compared to USDT,” Delphi Digital said in an emailed note.

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