First Mover Asia: The Hunt for Quality Web3 Games Continues as Bitcoin Dips Below $29K

Good morning. Here’s what’s happening:

Prices: Bitcoin lost the mojo it regained on Tuesday, dropping below $29K; ether fell toward $1.9K.

What happened to bitcoin's Tuesday mojo?

On early Wednesday, the leading cryptocurrency in terms of market capitalization experienced a stumble as it fell below $30,000 for the second time in three days. Subsequently, hours later, it dropped below $29,000 for the first time in over a week. At present, BTC is trading at around $28,930, indicating a 4.6% decline from the previous day at the same time. This drop is a significant distance away from its recent peak last week, when renewed investor optimism and a moderately positive Consumer Price Index drove up market prices.

Investors' mood soured on Wednesday after a sobering U.K. inflation report and massive sell order on Binance. "One way or another, the hot U.K. CPI report that we got in today's European session made the market more vulnerable and may have been the piece of macroeconomic data that pushed that large seller to pull the trigger, which led to a cascade of sell orders as we dropped below $30,000," Matt Weller, global head of research at online broker Forex.com, told CoinDesk TV's "First Mover" program.

This week, Ether followed a similar pattern to BTC and experienced a decline of approximately 7.1%, currently trading at around $1,945. On Tuesday, the second largest cryptocurrency by market value briefly exceeded $2,100, but had fallen earlier in the week alongside other major altcoins. However, prior to this dip, Ether had been on an upward trajectory following the highly-anticipated Ethereum Shanghai upgrade, which marked the platform's transition from a proof-of-work to a more environmentally-friendly proof-of-stake protocol.

The APT token, which belongs to the first layer blockchain Aptos, and the ARB token, the native cryptocurrency of the second layer blockchain Arbitrum, have both experienced a recent decline of around 10% and 13%, respectively. Additionally, the CoinDesk Market Index, which serves as an indicator for the overall performance of the cryptocurrency market, has dropped by 6.2%.

For the second day in a row, equity markets remained relatively unchanged, with the Nasdaq Composite, which heavily features technology stocks, rising by 0.03%. Meanwhile, the S&P 500, which also has a significant technology component, experienced a slight drop of 0.01%. Despite this, investors are still processing the surprisingly robust earnings of the financial services sector in the first quarter, although a few regional banks are yet to report. These upcoming results will provide further insight into the state of the banking sector.

Markus Levin, who is one of the co-founders of XYO Network, a cryptography-based oracle network that collects and certifies data with a geographic component while ensuring anonymity, wrote an email to CoinDesk, noted "a tremendous amount of anxiety in the market right now, particularly when it comes to macroeconomic conditions."

"The U.K.’s higher-than-expected inflation numbers seem to be hitting a bit too close to home, both in the U.S. and in other countries where monetary policy is tightening and fears of a recession are growing," Levin wrote. "It seems as though all these macroeconomic concerns may finally be catching up with Bitcoin.

He added that after bitcoin's strong gains in recent weeks, "it's not surprising to see consolidation. Crypto markets have always been particularly susceptible to price fluctuations, so none of this should be cause for panic.”

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