Short term relief rallied in the market in the second half of the week. Although cryptocurrencies across the board continues to slide into the red on a long-term scale, this week rally saw some investors finish the week better than they started.

Projecting forward, the macro environment may not sustain this rally; increased regulatory scrutiny is looming and the possibility of rising interest rates could further generate greater volatility in the crypto market. Which turns us to the question: has the bubble finally burst?

The Usual Suspects No Longer a Hedge Against Inflation

Bitcoin and Ethereum rallied this week after a shaky start. Bitcoin which was once heralded as a hedge against inflation' rallied, dropped and then rallied again. With inflation being announced this week and corresponding volatility since the announcement, it begs the question of whether Bitcoin is still a hedge against inflation.

Bitcoin started the week at just over $49,320 AUD per coin, and rallied to a high of ~$54,000 before dropping to $52,700 by Friday. Long-term Bitcoin holders saw opportunities in the sell-off while other investors continue to sell out, driving market volatility. It not all sell-off for everyone however “ Tesla, have been very public about their Bitcoin holdings, and have held its position in Bitcoin with the asset on its balance sheet remaining at $1.26 billion in USD. Whether Tesla has diamond hands' isn't yet clear, but the company is holding steady.

Ethereum started the week at just under $3500 per coin and enjoyed a midweek rally to $3700 before dropping down to $3450. Trading volumes of Ethereum are still strong with the cryptocurrency remaining highly liquid which indicates the duality of investors looking to continue investing in the space and investors who are selling off.

The market rally may be driven by strong signals from investors like Tesla and Cathie Woods of Ark Invest. They recently published their Big Ideas Report and speculated that Bitcoin could reach prices of over $1m by 2030, and Ethereum could reach a price of $180k. While this is highly speculative, if Cathie Woods proves to be right, this recent bear run would be negligible in the overall growth trajectory of both coins.

The Best of the Rest Mixed Results as Some Coins Rally

The second tier of popular cryptocurrency Solana, Cardano, Polygon and Avalanche had mixed performance this week as the bear run affecting some coins more than others. Solana fell by 1.5% down to $130 a coin, shielded from the bear run due to its lower volatility while Polygon, Avalanche and Cardano all benefited from the midweek rally. Polygon is positioned to finish the week up 11% from its Monday price, Avalanche is positioned to finish 8.5% up and Cardano is looking to finish 1% above its starting price for the week.

If your portfolio consists of multiple currencies, they may have played off each other to offset the bearish sentiment across the market.

The Weekly Loser Has Axie Lost its Appeal?

After a stellar year in 2021, Axie Infinity (AXS) pushes further and further to the red. For those unfamiliar, Axie Infinity is an online play-to-earn game where users can earn and trade Axie Infinity tokens by playing the game, which involves PokƩmon-esque creatures. AXS made gamers incredibly happy in 2021 with over a 10,000% return over the course of the year.

However, investors may not be happy with Axie performance this year. Since the start of the year, the gaming token has lost more than 50%, declining faster than both Bitcoin and Ethereum. This week alone, Axie has declined by more than 5% from ~$71 to $67. In a week with mixed performances from other coins, a 5% decline is a significant outlier for a popular coin.

Metaverse and gaming tokens like Axie Infinity are positioned to capture the tailwinds coming from the gaming industry. Keep a lookout for gaming tokens like Axie, Decentraland and The Sandbox because if crypto gaming picks up, these coins may turn around.

Weekly Winner Elon Tweets Dogecoin to Short Term Gain

In a sea of red, Elon Musk once again provided short term financial (and comic) relief on Twitter, this time tweeting at the officials McDonald Twitter account stating that he would eat a Happy Meal on national TV if they accepted Dogecoin.

This tweet not only prompted a reply from McDonalds, jokingly offering GrimaceCoin' a coin based off one of the McDonald characters but also a short-lived rally of ~7% for Dogecoin. This quickly declined along with the market, but this once again illustrates the volatility and at times, randomness of cryptocurrency.

If you're still holding onto your assets, it might be another red week coming up to follow this one given the short term rally. Look out for our Monday Look Ahead' to get informed about potential market movements and upcoming Initial Coin Offerings.

Sources: BTC Markets, CoinMarketCap

This post was written by Fresh Capital Media.