DeFi Deep Dive: How Crypto Investors Can Generate Impressive Yields

Key Points

  • DeFi is an emergent financial technology that allows users to consume and provide financial services without a third party.
  • Some of the most popular yield generation strategies include Staking, Liquidity Provision and Lending.
  • Smart Contract, Impermanent Loss and Rug Pull risks are some of the main pitfalls investors will need to navigate.

What is DeFi?

Decentralized Finance (DeFi) is a new and emergent financial technology that allows users to consume and provide financial services without the need to rely on a third party, with transactions secured utilizing blockchain/distributed ledger technology, much like that used by cryptocurrencies.

In traditional centralized finance, when consumers transact, save and invest, they rely upon a centralized entity (such as a credit card company like Visa, a bank or an investment management company) whose goal is to turn a profit. Thus, they usually take a cut at the cost of the consumer.

While cryptocurrency solves the problem of having a middle-man at the center of each monetary transaction, the aim of DeFi is to cut out the middle-man from the saving/lending/investing process, thus also removing fees here.

Of course, it isn’t all just about reducing fees. Just like cryptocurrency, DeFi is decentralized and permissionless in its nature, thus removing the ability of any one centralized power (be that governments or banks) to manipulate an individual’s access to financial services.

At present, individuals are able to secure loans and other financial services without the need for credit checks or going through the Know Your Customer (KYC) process, so long as they have sufficient collateral (usually in the form of crypto) to put up.

DeFi developers have built a multitude of so-called Decentralised Applications (dApps) that run on one or multiple smart-contract enabled layer 1 blockchains (such as the ethereum, Tron, Solana or Cardano blockchains). dApps are the heart of DeFi and the health of a smart-contract enabled blockchain’s DeFi ecosystem can often be measured by how many/the variety of dApps it has running.

Those seeking to invest can go into the websites of these dApps, connect their wallets and deposit funds into various yield-producing strategies as they choose. Those seeking to borrow can utilize a variety of DeFi platforms to borrow against collateral (usually bitcoin or ethereum).

How Can You Utilise DeFi To Generate Yield?

The generation of yield in DeFi, often referred to as “yield farming”, can be done in a number of ways. A few of the most popular methods are summarised below:

1) Staking – Proof of Stake (PoS) cryptocurrencies require a certain number of holders to lock up their crypto for a certain period of time in order to secure the network. This is called “Staking”, and the holders of Staked cryptocurrencies are compensated via yield (almost always in the same cryptocurrency as that being staked).

According to staked.us, stakers of Ethereum (2.0), Cardano and Solana can expect a yield of between 4-6%. Most centralized cryptocurrency exchanges will allow users to stake their crypto on their website, but it is also possible to stake crypto via various dApps.

2) Liquidity Provision – When crypto investors provide liquidity, they are essentially pooling their crypto into a fund that facilitates trade on a Decentralised Exchange (a type of dApp, also referred to as a DEX) or other type of DeFi application. In contrast to centralized finance where there is a high barrier to outside entrants into the world of market-making, crypto Liquidity Providers (LPs) are able to participate through the use of automated market makers (AMMs), one of DeFi’s most promising emergent technologies.

In most cases, prospective LPs will need to provide liquidity in both of the cryptocurrencies of the trading pair they are providing liquidity for. Crypto holders can become LPs using a number of DEX platforms. Some of the most popular include Uniswap, PancakeSwap, Orca, Curve Finance and SunSwap. Yields can vary wildly based on the perceived riskiness of the cryptocurrencies involved.

3) Lending – Crypto holders can utilise a variety of centralized and decentralized applications to lend their tokens to borrowers by locking their crypto into so-called “vaults”. Rates on leading cryptocurrencies such as bitcoin and ethereum are typically quite low, but rates on stablecoins can be very attractive (anything up to 30%). Some examples of the most popular Lending DeFi platforms include AAVE, Compound and JustLend.

What Are The Risks?

Given the youth of the DeFi space and its lack of regulation, prospective investors face a litany of risks. Below are summarised a few of the main ones to take note of.

1) Smart Contract Risks – DeFi is powered by smart contracts, which are essentially just code. Poorly written code can expose potential DeFi investors to loss if it leaves room for hackers to exploit funds.

2) Impermanent Loss – Some investment tactics in DeFi, such as staking and liquidity provision, require that investors lock up funds for a certain period of time. During this time, the price of cryptocurrencies can move wildly, exposing investors to losses.

3) Rug Pulls – This is when a fraudulent developer creates a new DeFi token with the intention of pumping the price to draw in gullible investors, only to then pull out as much value as possible before abandoning the project and letting the value of the token crash to zero. Sometimes investors in scam tokens aren’t even able to sell them, as happened famously happened with the Squid token last year. Unfortunately, due to a lack of regulation to protect investors from bad actors, DeFi is rife with such pitfalls.

4) Regulation Risk – There is practically no regulation in the DeFi space at the moment. But this could quickly change in the coming years and the impact on investments across the space will be hard to gauge.

5) Market Risks – Stablecoins play a key role in the DeFi space, with investors keen to lend them out for high yields and borrowers keen to borrow them against collateral. But as seen earlier in the month with Terra’s algorithmic stablecoin UST, investors in stablecoins must factor in the risk of a de-pegging event that could see them lose much of or all of their capital.

Current State Of The DeFi Market

According to DeFi analytics website DeFi Llama, the total Trade Value Locked (i.e. the total sum of money committed in DeFi smart contracts) across the entire space stands at just below $100 billion as of 26 May. That compares to a TVL of more than $172 billion at the start of the month and a TVL of over $220 as recently as the end of December.

This month’s sharp decline came in wake of the collapse of the Terra ecosystem, which was triggered by the de-pegging of its US dollar stablecoin UST and a subsequent “bank-run” like rush of capital out of the stablecoin that triggered hyperinflation in LUNA. The Terra ecosystem was at one point the second largest in the DeFi space (only behind ethereum) with a TVL of nearly $22 billion as recently as 5 May. TVL is now only around $170 million, with the collapse sending a chill across the entire industry.

A further headwind to the growth of the DeFi space in recent months has been the broad downturn in cryptocurrency prices, with the likes of bitcoin and ethereum down in the region of 60% versus the record peaks they printed last November. DeFi investments are still viewed as highly speculative in nature, hence in risk-off cryptocurrency market conditions, it isn’t surprising to see investors avoid pouring more money into the space.

Still, despite recent de-risking that has seen capital leave DeFi in recent weeks, TVL in the space is still nearly 100x versus this time two years. DeFi remains very much at a nascent stage in its development. As developers and innovations build better and more trustworthy dApps, the long-term trajectory is almost certainly tilted towards greater adoption and further growth.

Regulation could also play a pivotal role in allowing DeFi to break into the mainstream. A strong, well-thought-out regulatory environment could protect prospective investors from many of the aforementioned risks (like rug pulls and centralization by stealth). Indeed, regulation is likely a pre-requisite if big money is ever to come anywhere near the space (i.e. major asset/pension fund managers, for example).

ETH Price Prediction: Bears Target Sub-$1,800 as Investors Cave

Key Insights:

  • It’s been a bearish morning, with Ethereum (ETH) tumbling by 6.75% to $1,810.
  • A broad-based crypto sell-off saw ETH slide through Major Support Levels to test support at $1,800.
  • Technical indicators are bearish, with ETH sitting below the 50-day.

On Wednesday, Ethereum (ETH) fell by 1.87%. Reversing a 0.36% decline from Tuesday, ETH ended the day at $1,941.

ETH tracked the broader market through the day to strike an early morning high of $2,020 before hitting reverse. The First Major Resistance Level at $2,009 pegged ETH back.

The reversal saw ETH slide to a day low of $1,933 before settling.

This morning, things were not much better, with ETH tumbling to a morning low of $1,804. The extended sell-off saw ETH fall through the First Major Support Level at $1,909 and the Second Major Support Level at $1,878.

Support at $1,800 limited the downside this morning.

Broad-Based Crypto Sell-Off Wipes Out Another $50 Billion

Bearish sentiment swept across the broader crypto market this morning, with the total crypto market cap falling to sub-$1,200 billion.

According to Coinglass, total liquidations came in at $294.55 million over the last 24 hours, with $195.49 million coming in the last 4-hours.

For Ethereum, total liquidations stood at $127.99 million over the last 24 hours and $103.65 million in the last 4-hours.

Joining ETH in the deep red this morning include ADA (-6.03%), BNB (-4.77%), DOGE (-6.35%), and XRP (-4.45%). SOL led the way down, however, tumbling by 9.81%.

BTC fared better than the broader market, falling by just 1.6%.

Ethereum Price Action

At the time of writing, ETH was down 6.75% to $1,810.

ETH faces a slump to sub-$1,800
ETHUSD 260522 Daily Chart

Technical Indicators

ETH will need to move through the Major Support Levels and the $1,965 pivot to target the First Major Resistance Level at $1,996.

Broader crypto market support would bring $1,900 levels back into play.

An extended rebound would test resistance at Wednesday’s high of $2,020 and the Second Major Resistance Level at $2,052. The Third Major Resistance Level sits at $2,139.

Failure to move through the Second Major Support Level at $1,878 would bring sub-$1,800 levels into play. Barring an extended sell-off, ETH should avoid sub-$1,750 and a current year low of $1,714. The Third Major Support Level at $1,791 should limit the downside.

ETH slides through support levels.
ETHUSD 260522 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. ETH sits below the 50-day EMA, currently at $1,994. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; price negative.

Failure to move through the 50-day EMA would bring sub-$1,800 into play.

EMAs send bearish signal.
ETHUSD 260522 4 Hourly Chart

Flowcarbon Raises $70m with VC Shop a16z the Lead Investor

Key Insights:

  • Crypto carbon credit platform Flowcarbon raised $70 million, with crypto venture shop a16z taking the lead.
  • Flowcarbon raised the remaining funds in a token sale of Goddess Nature Token (GNT).
  • Flowcarbon plans to put carbon trading on the crypto map and carbon credits on the blockchain.

Thanks to Proof-of-Work and bitcoin (BTC) mining, in particular, the crypto market has long been associated with environmental degradation.

In July 2021, China imposed a ban on bitcoin mining to support China’s goal of becoming carbon neutral by 2060. Before the ban, China was the largest bitcoin mining nation, with a hashrate hitting more than 75% at its peak, according to figures from Cambridge University. (75.53% in Sept-19). By contrast, the US had a hashrate of just 4.06% in Sept-19.

Since the ban, however, China has seen its hashrate climb from a Jul-21 0% to 21.1% in Jan-22. The US hashrate stood at 37.84% in Jan-22, making it the largest bitcoin mining nation.

US lawmakers have been unenamoured by its position as the world’s largest bitcoin mining nation. President Joe Biden and the US have a goal of reaching carbon zero emissions by 2050.

The continued use of fossil fuels to provide mining power has led to calls to ban bitcoin and Proof-of-Work mining altogether.

From a global perspective, the increased focus on crypto mining reflects a sense of urgency at the government level and below for more action to save the planet. This increases the need for a transparent carbon credit market.

Flowcarbon Draws Investor Interest with New Carbon Credit Platform

Flowcarbon is an open-source protocol, initially launched on Celo, aiming to bring carbon credits on-chain.

By tokenizing carbon credits, Flowcarbon provides a platform for project developers and carbon buyers to interact directly, resulting in a liquid carbon market with efficient pricing.

The goals to help achieve the Flowcarbon mission include,

  • Creating a more transparent, accessible carbon market.
  • Promoting sustainable practices.
  • Help organizations become net zero or net negative.

Key climate goals include:

  • Incentivize DAOs and other organizations to use on-chain carbon assets to become net zero or net negative.
  • Lead by example to show DAOs how to become net negative carbon contributors by burning a portion of all fee revenue as carbon tokens.

Investor interest has been impressive, with Flowcarbon raising $70 million in its first round of funding.

Among first-round investors was a16z. Announcing its investment in Flowcarbon on Tuesday, a16z said,

“The carbon neutral market could potentially grow to $50B by 2030, and on-chain carbon credits can help facilitate this reality. Bringing carbon credits on-chain adds major efficiencies to the market, enabling individuals and corporations to internalize the cost of emissions, reducing negative externalities that are currently socialized, and ultimately incentivizing more sustainable practices.”

The announcement went on to say.

“Unlike current voluntary carbon credit marketplaces, which are fractured, opaque, and gated, tokenized carbon credits allow anyone the ability to purchase credits and control when they are retired as offsets, with built in liquidity and price discovery.”

With crypto mining receiving government scorn, the launch of Flowcarbon hits home the benefits of blockchain technology and the need for governments to drive innovation.

Crypto Movement Goes Green with Carbon Credit Tokens

In April, FX Empire reported that Algorand (ALGO) is to launch its first carbon emission offsetting smart contract.

As a leader in the sustainability space, the new smart contract allocates a portion of every transaction fee to offset carbon emissions. ALGO is the first pure proof-of-stake blockchain and aims to minimally impact the environment.

Also environmentally friendly is Solana (SOL). In December, Solana achieved ‘carbon neutral’ for the calendar year 2021.

OCBC Bank is also targeting the carbon credit space. In April, the Singapore bank announced plans to launch tokenized carbon credit tokens before 2023.

Metaverse Green Exchange (MVGX) and OCBC will join forces to provide green financing solutions for companies in hard-to-abate industries, including steel, cement, and chemical production.

With other firms also targeting the tokenized carbon credit space, Flowcarbon could set the pace with names like a16z behind them.

Cardano, Polkadot Gain Institutions’ Attention As ETH, BTC Lose It

Key Insights:

  • Institutional investors seem to have shifted their focus from Bitcoin to altcoins.
  • This week noted the highest outflows from institutions in more than four months.
  • The most in-demand assets (ADA, DOT) are also the worst-performing assets.

In the wake of market-wide recovery, or more appropriately, the attempt at recovery, institutional investors’ move has finally come forward, and it is surprisingly not what was expected out of them.

Bitcoin Takes a Back Seat

As per the weekly net flows report from CoinShares, the week ending May 20 noted outflows totaling $141 million, the highest figure observed in more than four months.

Weekly netflows | Source: CoinShares

The week before, the same institutions registered inflows worth $247 million despite the entire market crashing and losing billions of dollars.

Interestingly, this week brought forward some previously unseen changes. For the most part of this year, Bitcoin was one of the most preferred assets witnessing mostly inflows, while Ethereum took the heat of bearishness.

This week Bitcoin slipped into the same category as Ethereum and marked outflows worth $153.5 million. At the same time, Ethereum only observed $300k in outflows.

While no other asset explicitly noted inflows high enough to take Bitcoin’s place, Polkadot and Cardano were certainly the more preferred cryptocurrencies for institutions to invest in.

Both the assets saw inflows worth $1 million, while their competitors Solana, Litecoin, Ripple, and Tron were in the sub $1 million categories.

Net flows by asset | Source: CoinShares

However so, Solana still holds the highest value in the altcoin category, even more than the altcoin king Ethereum itself year to date (since January 1, 2022) SOL’s flows have remained net positive at $102 million.

In contrast, Ethereum has observed outflows amounting to $239 million in the same duration.

Are Cardano and Polkdaot Brothers?

Apart from being the highlight of the week, both the assets have also been imitating each other’s price action as from their individual all-time highs to date, ADA and DOT have declined by 84%.

DOT, trading at $10.04 in the span of almost two weeks, has only managed to recover by 17.1% and is still 40% away from its next critical support of $14.04.

Polkadot has recovered by 17% over the last two weeks

On the other hand, ADA has not seen a recovery as high as DOT and has risen by only 9.75% from its lows of May 9.

Trading at $0.518, the altcoin did manage to save itself from the oversold zone but continues to linger in the bearish zone.

Cardano failed to mark a significant rise

Crypto Weekly Review May 22 – BTC Faces Another Weekly Loss

Key Insights:

  • After a week for the crypto markets to forget, this was a week Terra co-founder Do Kwon may not forget.
  • Regulatory chatter peaked, with the G7, UK, and US regulators targeting cryptos.
  • China became the second largest Bitcoin (BTC) mining nation despite a mining ban.
  • From the top ten, Binance Coin looks set to buck the broader crypto market trend, with a modest rise.

Following the previous week’s collapse of TerraUSD (UST) and Terra LUNA, regulatory chatter gathered momentum in the week to weigh on bitcoin (BTC) and the broader market.

The pickup in regulatory chatter didn’t take the spotlight from the increased scrutiny of stablecoins and Terraform Labs.

Do Kwon became the center of attention for a second consecutive week. It was a three-pronged attack for the CEO of Terraform Labs.

News hit the wires of a 100 billion won tax fine for tax evasion, an investor lawsuit for damages of 1.4 billion won, and South Korean prosecutors investigating Do Kwon for running a Ponzi.

January reports of South Korean prosecutors wanting to put crypto criminals away for life don’t bode well for Do Kwon.

The increased attention from lawmakers tends to test investor support for cryptos.

Bitcoin (BTC) Failed to Deliver a Broad-based Crypto Rebound

A bullish start to the week saw bitcoin (BTC) strike a Monday week high of $31,296 before hitting reverse.

The reversal saw bitcoin fall to a Wednesday week low of $28,610 before retesting resistance at $30,500.

For the week, bitcoin looks set for a 4% decline, which would mark an eighth consecutive weekly loss, its worst losing streak.

Bitcoin on target for an eighth consecutive weekly loss.
BTCUSD 220522 Weekly Chart

Market angst over Fed monetary policy and the economic outlook, with the renewed threat of more stringent regulatory oversight, tested support for bitcoin and the broader market.

The bearish sentiment was evident in the Bitcoin Fear & Greed Index, which fell to 8/100, its lowest level since March 2020.

While recovering to 14/100 on Sunday, the Index remained deep in the “Extreme Fear” zone.

BTC Fear & Greed Index in the Extreme Fear Zone
Fear & Greed 220522

Bitcoin’s decline was in line with the NASDAQ 100, which ended the week with a 3.82% slide.

Bitcoin - Nasdaq correlation remained strong in the week.
BTCNASDAQ 2205

Things were not much better for the rest of the crypto top ten.

Binance Coin Bucks the Broader Crypto Market Trend

In the week ending May 22, SOL and ADA are heading for losses of 12.5% and 9.0%, respectively, with DOGE (-7.2%), ETH (-5.4%), and XRP (-6.0%) also on the way to weekly losses.

BNB looks set to buck the trend, however, with a 2.7% gain.

The total crypto market cap fell from a start of the week $1,334 billion to a week low of $1,204 billion before partially recovering to $1,277 billion.

US Lawmakers and the G7 Look to Expedite More Stringent Regs

Without surprise, regulators remained front and center, with investors expecting a united response to the collapse of Terra LUNA and stablecoin TerraUSD.

G7: Officials resumed discussions on crypto regulations that ground to a halt in December 2020. Finance ministers called for crypto assets to fall under the same regulatory regimen as the rest of the financial system. Ministers called for tougher rules to combat money laundering and the disclosure of reserves.

UK: The UK’s Financial Conduct Authority (FCA) announced expediting plans to implement a regulatory framework for stablecoins. The UK Treasury will hand the FCA new powers to regulate crypto assets later this year.

US:

SEC Chair Gary Gensler talked of other cryptos mirroring Terra’s demise to harm investors. The SEC Chair did not predict a few failures but many. Gensler also pitched for additional resources to monitor the crypto industry after recently beefing up its enforcement team.

Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), raised concerns over the possible effect of a crypto crash on traditional assets and markets. Behnam also talked of adding resources and ramping up efforts to target crypto fraud and manipulation cases.

Capitol Hill quizzed lobbyists in the wake of the TerraUSD collapse to ascertain whether the UST collapse was avoidable and whether other stablecoins are at risk.

Crypto News Highlights of the Week

  • Underground miners defied the Beijing mining ban, with China becoming the second largest Bitcoin mining nation based on new data.
  • SEC filed its reply to support its claim that attorney-client privilege protects documents related to William Hinman’s speech.
  • TAG Heuer partnered with BitPay to accept online crypto payments in the US.
  • SWIFT Network began the exploration of cross-border CBDC payments.
  • Ethereum Proof-of-Stake transition is slated for August 2022.
  • Crypto FTX announced plans to introduce stock trading.
  • Socios football Fan Tokens surged following listing news and Chiliz network updates.
  • Crypto venture capital investor Andreessen Horowitz debuted a $600m Web3 gaming fund.
  • UK Treasury to selectively legalize stablecoins as a means of payment.

Avalanche to Host ArtCrypted Marketplace as Interest in Ethereum Wanes

Key Insights:

  • Avalanche (AVAX) becomes the chosen blockchain host for the digital art platform ArtCrypted.
  • ArtCrypted plans to be the first 1/1NFT art marketplace on Avalanche, with a June launch.
  • ArtCrypted joins a growing list of NFT marketplaces choosing Avalanche over Ethereum (ETH).

Interest in NFTs has continued to grow following the eyewatering $69m sale of Beeple’s First 5000 Days. Avalanche (AVAX) has become a blockchain of choice for NFT marketplaces looking beyond Ethereum (ETH). ArtCrypted is the latest NFT marketplace to opt for Avalanche.

This year has seen a marked increase in interest in NFTs and a rise in the number of NFT marketplaces.

Once OpenSea dominated, Coinbase, Binance, LooksRare, and others launched marketplaces to compete for market share.

As the battle for dominance continues, marketplaces are also looking beyond the Ethereum blockchain to host their NFT marketplaces. While Ethereum remains the dominant host, a growing NFT space and interest in alternative blockchains could see Ethereum alternatives materially eat into Ethereum’s long-lasting dominance.

Other blockchains gaining traction in the NFT space include Avalanche, Cardano (ADA), Polygon (MATIC), and Solana (SOL).

Avalanche Becomes a Viable Ethereum Alternative for NFT Marketplaces

This week, ArtCrypted announced the launch of the ArtCrypted NFT marketplace on Avalanche (AVAX).

Taking to Twitter, ArtCrypted said,

“In the search of transforming our project, we decided to create our own Marketplace to build a community focused on unique 1/1 art on the @avalancheavax blockchain.”

ArtCrypted Marketplace went further to highlight the goals of the new NFT marketplace in a series of seven tweets.

ArtCrypted is looking to evolve the market by delivering on community needs. To achieve this, ArtCrypted aims to place artists and collectors at the center of the project to build a community driven by a passion for art.

As part of the goal to deliver unique art, ArtCrypted targets Latin American artists, believing in “the talent and potential of artists” in their region.

ArtCrypted selected Avalanche with belief in the future of the Avalanche project, saying,

“With their subnet technology, we’re guaranteed a superior performance and more stability, at a minimum fraction of the energy cost compared to the other PoW blockchains.”

ArtCrypted also pointed out that Avalanche,

“Allows us to have very low fees compared with other blockchains, this way, artists only need to worry about creating.”

Other NFT marketplaces on the Avalanche blockchain include YetiSwap, Kalao, and NFTrade.

NFT activity on the various marketplaces on the Avalanche blockchain will need to ramp up for AVAX positive price action. The launch of ArtCrypted is a step in the right direction.

AVAX Price Action

At the time of writing, AVAX was down by 1.14% to $29.49.

AVAX struggles at sub-$30 despite ArtCrypted news.
AVAX 220522 Daily Chart

Technical Indicators

AVAX will need to move through the day’s $29.52 pivot to make a run on the First Major Resistance Level at $30.87. AVAX would need the broader crypto market to support a breakthrough Saturday’s high of $30.56.

An extended rally would test the Second Major Resistance Level at $31.92 and resistance at $32. The Third Major Resistance Level sits at $34.32.

Failure to move through the pivot would test the First Major Support Level at $28.47. Barring an extended sell-off, AVAX should avoid a return to sub-$28. The Second Major Support Level sits at $27.12.

A move through the pivot would give AVAX a look at $32
AVAX 220522 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. AVAX sits below the 50-day EMA, currently at $32.64. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also fell back from the 200-day EMA, AVAX negative.

An AVAX move through the 50-day EMA to $35, however, would bring the 100-day EMA and $40 into play.

A break out from the 50-day EMA would bring $35 into play.
AVAX 220522 4-Hourly Chart

Bitcoin Entrenched at $30K

Bitcoin and ALTs Latest Price Action

Bitcoin fluctuates around $30K and has crossed that line daily in one way or another over the past 12 days. A 3.5% increase in the day’s results on Thursday turned into another pullback on Friday morning. Ethereum has strengthened by 3.5% in the past 24 hours, finding itself pegged at $2000.

Other altcoins in the top 10 gained between 0.4% (Solana) and 5.5% (XRP). Total cryptocurrency market capitalisation, according to CoinGecko, rose 3.1% overnight to $1.28 trillion. The Bitcoin Dominance Index rose 0.1% to 44.8%. By Friday, the cryptocurrency fear and greed index is unchanged at 13 points (“extreme fear”).

BTC Forecast

Bitcoin and the entire cryptocurrency market’s protracted tug-of-war promises to resolve with a strong move in one direction. However, there is hope for both bulls and bears. The latter has a minor advantage, as we saw this area touch down from above in January and June-July 2021. But now, all the fighting is concentrated below.

Crypto News

Among the crypto news that caught our eye: MicroStrategy CEO Michael Saylor said his company would buy bitcoin at any price until it reached a million dollars.

Chart, line chart Description automatically generated

Bitcoin’s drop below $30,000 last week came after a large volume of the cryptocurrency entered exchanges. According to IntoTheBlock, traders have sent around 40,000 BTC to exchanges since May 11. According to an audit report by accounting firm MHA Cayman, USDT stable coin issuer Tether Holdings Limited reduced its reserves in the commercial papers by 17%, improving the quality of its funds.

The Ethereum development team said it would migrate the Ropsten test network to the Proof-of-Stake (PoS) consensus algorithm on June 8 2022. According to the legislation, SEC chief Gary Gensler has warned that the regulator is ready to take new measures against unregistered cryptocurrency companies.

The US Commodity Futures Trading Commission (CFTC) believes that amid a rise in cryptocurrency crime, the watchdog must strengthen regulation of digital assets to crack down on fraud and manipulation.

by FxPro’s Senior Market Analyst Alex Kuptsikevich

Here’s what Solana (SOL) Needs to Rise to Fame Again

Key Insights:

  • Solana was one of the top-performing altcoins of Q3 2021.
  • The network has seen sustained growth in the number of daily unique addresses.
  • SOL price, however, continues to be in a more prolonged downtrend.

The year 2021 was the time to shine for alternative scaling-focused Layer 1 (L1) blockchains. As several chains emerged in order to outdo Ethereum and its functionality, Solana was at the vanguard of this group.

Throughout 2021, Solana’s native token SOL was up by a staggering 17595%, rising from $1.5 to its all-time high price of $258.93 on 7 November. Many reports even believe that Solana was the chain that ushered in the alternative-L1 wave that came to dominate 2021.

So, with SOL down to $52.20, can the altcoin rise to fame again?

Did Solana Fall from Grace?

After hitting $15 billion in total value locked (TVL) for its DeFi projects and rising to the token price of $240 last year, Solana made its way into the top five cryptocurrencies by market cap. Around the same time, the term ‘‘Solana Summer” was coined and quickly took the community by storm.

FXempire, Solana, Crypto, SOL
SOL’s ATH on a daily chart | Source: FXEmpire

In comparison to its competitors, Solana offered lower fees, lower transaction time, and higher scalability.

Notably, Solana’s 30-day rolling mean in daily active unique addresses was experiencing an upward trend. Data also highlighted a healthy, active unique address growth despite bearish sentiment and larger market downturn in the recent quarter.

FXempire, SOL, Crypto, Solana
Daily active unique addresses | Source: Bybit Blog

In fact, data from SolFM presented a robust growth in daily unique addresses in March 2022. Despite SOL’s metrics looking healthy and network vibrant, the altcoin’s price action remained largely stagnant.

Since last year there have already been several cases where the Solana chain encountered full network outages because of an untenable TPS rate. The same affected SOL’s social media narrative, in turn affecting the coin’s retail growth.

Nonetheless, with technicals for SOL looking decent, this definitely wasn’t a fall from grace for the altcoin.

So, What’s up With SOL’s Price?

Despite Solana’s relatively healthy trajectory, SOL’s price was still in a long drawn downtrend due to the larger market fall. Much like the rest of the altcoins, SOL’s price too was highly correlated to BTC’s, which has weighed down upon the coin’s uptrend of late.

Solana was trading in the same price range from where it recovered in August last year. At the time of writing, Solana’s price stood at $52.28 and was up by 15.50% on the weekly chart.

FXempire, SOL, Crypto, Solana
Solana Price Action | Source: Trading View

While price action looked decent on a weekly window on a daily chart, SOL’s relative strength index still flashed oversold. Additionally, Bollinger bands presented that SOL traders could be in for a volatile week.

Going forward, flipping the $82 resistance to support would be crucial for Solana bulls. A move above the $100 psychological barrier could further add bullish momentum.

However, since selling pressure was still high amid larger market sell-offs a swift price recovery in the near term seems unlikely.

Additionally, Solana’s DeFi ecosystem has witnessed a substantial amount of TVL leave the network over the past few months since its peak in December 2021.

Currently, Solana network’s TVL sits at $4.23 billion, almost 70% down from its all-time high of $15.08 billion. Recent reports highlighted that despite providing highly efficient products and services, lackluster token price performance could be attributed to outdated token value accrual designs and misaligned incentives.

Seemingly, a better TVL infrastructure and additional push from buyers could aid some positive momentum for SOL.

21Shares Enters the US with new Crypto Product Launches

Key Insights:

  • 21Shares entered the US market this week, with the launch of two cryptocurrency exchange-traded products (ETPs).
  • Last week, the firm launched the first Bitcoin (BTC) and Ethereum (ETH) ETFs in Australia.
  • 21Shares built the first crypto ETP on the Six Swiss Exchange in 2018.

21Shares has enjoyed a strong European presence in recent years as the acceptance and adoption of digital assets gather momentum. ETP and ETF products have drawn plenty of investor interest.

In 2018, 21Shares rolled out the first crypto exchange-traded product on the Six Swiss Exchange.

Since then, 21Shares has evolved and currently offers 35 exchange-traded products available in CHF, EUR, GBP, and USD.

33 crypto exchange products are on offer to European investors, including The Sandbox ETP, Decentraland ETP, Crypto Basket Index ETP, and DeFi 10 Infrastructure ETP.

Among the 33 ETPs is also the Terra ETP, down 92% over the past 24-hours.

Despite the market angst from the TerraUSD (UST) de-pegging and the collapse of Terra LUNA, 21Shares continues to expand its product suite.

21Shares Launches Two US Crypto Index Funds Amidst Choppy Conditions

On Wednesday, 21Shares announced its entry into the US with the launch of two Crypto Index Funds.

The first fund offerings in the US will give accredited investors easy access to crypto. Accredited investors can invest into the Crypto Basket 10 Index Fund and the Crypto Mid-Cap Index Fund.

The Crypto Basket 10 Index Fund provides accredited investors with,

“An easy and efficient way to gain diversified exposure to bitcoin and other leading cryptocurrencies in a traditional private placement vehicle, which allows subscriptions and redemptions weekly and monthly, respectively.

The Fund seeks to track an index comprised of the top 10 largest cryptocurrencies based on market capitalization and available on US exchanges.”

At the time of writing, underlying assets included Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), Polkadot (DOT), Avalanche (AVAX), Polygon (MATIC), Litecoin (LTC), Bitcoin Cash (BCH), and Cosmos (ATOM).

The Crypto Mid-Cap Index Fund,

“seeks to track an index comprised of the mid-cap portion of the cryptocurrency market based on market capitalization.”

At the time of writing, the underlying assets included Cardano (ADA), Solana (SOL), Polkadot (DOT), Avalanche (AVAX), Polygon (MATIC), Litecoin (LTC), Bitcoin Cash (BCH), and Cosmos (ATOM).

Both of the Funds have an expense ratio of 2.5%.

The latest product launch offering follows last week’s launch of two crypto exchange-traded funds in Australia and heightened volatility across the crypto market.

The Bearish Crypto Market Gives 21Shares and Investors an Entry Point

21Shares launched its Australian and US crypto products at a difficult time for the crypto market.

For May, bitcoin has tumbled 23.9% and by 38% year-to-date. From May 9 to May 18, bitcoin was down 15.8%, reflecting the impact of the TerraUSD (UST) de-peg and the Terra LUNA collapse.

21Shares CEO and co-founder Hany Rashwan said in an interview,

“We’ve been working on products in the US since we started, so we couldn’t be more excited to finally bring them.”

On the US debut, Hany has also said,

“Bear markets are wonderful times to consolidate, to build and to innovate, and we see this as a long-term investment.”

 

At the time of writing, bitcoin was up 1.04% to $28,965. A move through to $29,500 would support a breakout day ahead.

BTC finds support after early pullback.
BTCUSD 190522 Daily Chart

Can Bitcoin and top Altcoins Have a Bullish Week Ahead?

Key Insights:

  • Bitcoin’s price has presented signs of extending the recovery to the $35,000 mark.
  • Ethereum still presents a high BTC correlation.
  • With volatility still high, altcoins could face hurdles going forward.

After the recent flash crash, the top crypto asset found a solid support at the $29,100 price level. Bitcoin price has been coiling up around the range of $29,000 – $30,000 for quite some time.

On Monday, BTC price started on a high note, rising to as high as $31,350. While technicals point towards range formation, indicating that an up move is likely in the coming days, the larger sentiment around cryptos remains ‘Extreme Fear.’

Nonetheless, with BTC establishing a solid footing at the $30,500 mark for the short-term, investors can expect altcoins like Ethereum, Ripple, Solana, Algorand, and others to do the same.

Bitcoin price presenting bullish signs?

BTC bulls are making attempts at recovery from the under $30,000 zone. This time, a strong comeback (if at all it happens) would be a testament to the bulls’ power and could determine bitcoin’s price path going forward.

Last week saw one of the most significant price losses in the history of the cryptocurrency market as BTC almost tested the $25,000 mark. BTC’s price was up by nearly 15% from last week’s price lows.

The top coin’s price still moved in the tight price channel of $29,050 – $31,250.A strong push from bulls would be needed to fuel buying pressure in the market over the coming days.

FXempire, BTC, Crypto
BTC 1-day price chart | Source: FXEmpire

Notably, bitcoin’s RSI on a daily chart was still in the oversold zone, a recovery above the oversold mark could indicate some sustained positive momentum for the top coin.

Additionally, with Bollinger bands on BTC’s 24-hour chart looking wide open, the market participants should expect high volatility going forward.

While BTC’s recent price lows have been swept at the moment, a significant price uptick seems unlikely in the short term due to the coincidence of Monday’s high and weekly open at the $31,268 price level.

Investors and traders could be cautious of a pullback towards Monday’s low at $29,027 and contemplate going long BTC. However, if bulls can push BTC price higher and flip Monday’s high at $31,250, the same would reveal a stronger conviction amongst buyers suggesting the likelihood of a short-term rally.

In case of a near-term uptrend, Bitcoin price could first retest the range high at $32,650. Once that is cleared, the next major resistance would fall at the $34,750 level.

After the $34,750 level is breached and BTC’s price is above the psychological support at the $35,000, more volatility and pressure from bears could be expected.

Institutions running the show?

Just last week, bitcoin and the larger cryptocurrency market fell as the Terra ecosystem collapsed. Bitcoin plummeted to under $30,000; however, institutional players took advantage of the circumstance, buying into BTC at a discounted price.

According to a CoinShares report, institutions invested $300 million into exchange-traded bitcoin funds last week. The previous week recorded record weekly crypto inflows for the year 2022, while the net weekly inflows were $274 million during the last week.

Additionally, it was noted that North American investors pumped $312 million into cryptocurrency while European investors saw a $38 million net outflow last week.

FXempire, BTC, Crypto
Source: CoinShares

The head of research at CoinShares, James Butterfill, spoke about the unprecedented volume of bullish investments in bitcoin funds despite increased market volatility. He said,

“It’s the highest weekly total since October 2021, and the 19th highest since records began in 2015.”

Can altcoins gain strength?

On BTC’s renewed short-term momentum, ether’s price saw a minor 2.5% price rise over the last day. ETH’s price had finally stabilized above the $1,980 support level, and while it can retest the $2,200 resistance, the same wouldn’t be possible without BTC’s bullish moves.

FXempire, ETH, Crypto
ETH 1-day price chart | Source: FXEmpire

On the other hand, bearish momentum in BTC’s price trajectory could pull ETH back to the $1945 support.

That said, some of the top market gainers in terms of price were – KAVA, Aave, Elrond, Kusama, Litecoin, and IOTA, among a few others.

Kava (KAVA) traded at $2.58 and was up by 11.06% in the last 24-hours while Elrond (EGLD) was up by 9.68% and oscillated at $100.03. That said, Litecoin (LTC) was up by 7.11% and traded at $71.28, at the time of writing.

Alogrand’s ALGO, Ripple XRP, and Solana’s token SOL were up by 6.84%, 3%, and 4%, respectively, over the last 24-hours but still traded below key resistance marks.

Some altcoins seemed to make notable gains, but sustained gains don’t seem to be on altcoins’ cards due to high volatility.

Bitcoin’s Short-term Upward Channel

Bitcoin and Major Cryptos Last Price Changes

On Monday, Bitcoin was down 3.6%, ending the day around $29.9, but is trading back above $30K on Tuesday morning. Ethereum has little changed over the past 24 hours (-0.4%), remaining near $2000. Other altcoins from the top 10 changed in price from -2.7% (Polkadot) to 1.2% (Solana). Total crypto market capitalisation, according to CoinMarketCap, rose 0.1% overnight to $1.30 trillion. Bitcoin’s dominance index fell 0.1 points to 44.3%.

Indicators and BTC Technical Analysis

The Cryptocurrency Fear and Greed Index was down 6 points to 8 by Tuesday, hitting its lowest level since August 2019. Technically, the crypto market on Monday followed the cautious sentiment of the stock market. We note that after hitting lows on May 12th, a short-term upward channel is forming in BTCUSD with increasingly higher local lows and local highs. Such dynamics of the flagship crypto resemble the work of traders of institutional managers, who moderately “buy the fear” or fix the profit from the short positions.

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Fundamentals and BTC Price Forecast

So far, there is little reason to argue that a prolonged rise will follow the current buying, as the fundamentals (tightening markets, slowing economy) remain in place. According to CryptoQuant, institutional investors continue to buy BTC through market makers despite the decline in the crypto market.

Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, believes bitcoin has no future as a payment network because of its low scalability and negative impact on the environment. There is a need for an alternative blockchain-based Proof-of-Stake (PoS) protocol for payments. IMF managing director Kristalina Georgieva called for a new public infrastructure for payment systems, including digital currencies.

Do Kwon, founder of the Terra ecosystem, presented a new plan to rehabilitate the project. On May 18th, the developer intends to present Terraform Labs team with a new management system for the Terra fork, decoupling it from the TerraUSD (UST) stable coin.

by FxPro’s Senior Market Analyst Alex Kuptsikevich

Your Crypto Brew: Bitcoin Dips Back Under $30,000 Amid China Growth Fears

Key Takeaways

  • After a positive weekend, cryptocurrency markets are giving back some gains on Monday, with BTC/USD back under $30,000. 
  • Weak Chinese data over the weekend have put fears about slowing global growth in the limelight.
  • US Retail Sales data and Fed Chair Powell’s speech, both Tuesday, will be key events for crypto markets this week.

State Of The Market

Cryptocurrency markets are seeing broad weakness at the start of the week following a weekend of stabilization. The total market capitalization of cryptocurrencies rallied to as much as $1.344 trillion on Sunday, up nearly 25% at the time from last Thursday’s multi-month lows under $1.1 trillion.

After closing out Sunday trade in the green for a third successive session, the longest positive run since March, the total market capitalization of cryptocurrencies has fallen a little more than 5.0% on Monday to around $1.26 trillion.

Data released out of China over the weekend showed steep declines in the YoY growth rates of both the nation’s Industrial Output and Retail Sales in April. Recent economic weakness in China comes as the country implements harsh lockdowns across major cities including financial hub Shanghai and the capital Beijing in order to contain the spread of Covid-19.

The latest data out of China, the world’s second-largest economy, highlights increased concerns investors have been having about slowing global growth as of late. These concerns, alongside concerns about central bank tightening, have weighed heavily on risk-sensitive assets such as equities and crypto in recent weeks.

Growth worries and central bank tightening fears will remain in focus this week with the release of April US Retail Sales figures followed by remarks from US Federal Reserve Chair Jerome Powell on Tuesday.

Markets expect the Fed to implement further 50 bps rate hikes at its next few meetings as it seeks to bring rates to a more neutral level amid persistently elevated US inflation. Against the backdrop of concerns about growth and tighter monetary policy, rallies in cryptocurrency markets may remain subject to being sold.

Bitcoin, Ethereum, Altcoins

In tandem with the recent swing in cryptocurrency market sentiment, bitcoin is back to trading just below $30,000 on Monday, down nearly 5.0% on the day, having rallied as high as $31,400 on Sunday. At current levels of around $29,000 per token, bitcoin’s market cap is around $570 billion, and its crypto market dominance is around 44.5%.

Similarly, ethereum is back to trading near the $2,000 per token level having gone as high as the upper $2,100s over the weekend. At current levels, its market cap is around $245 billion, and its crypto market dominance is around 19.3%.

Price action across most of the rest of the other non-stable coin cryptocurrencies in the top ten has been similar to that of bitcoin and ethereum over the past few days. On Monday, Ripple’s XRP was last trading lower by about 6.0% around $0.40 per token, and Binance’s BNB was last down around 5% and back to just below $300 per token.

Cardano’s ADA was last down about 4.5% to around $0.57 per token and Solana’s SOL was down just under 8.0% to around $54 per token. Popular meme coin DOGE was last down about 6.0% to just under $0.09 per token.

DeFi, NFTs

After last week’s LUNA-led rout that saw the market of major DeFi tokens collapse from near $100 billion to lows around $50 billion, sentiment has stabilized since the weekend. The market cap of major DeFi tokens is currently around $56 billion, little changed since Sunday.

In terms of the latest news regarding Terra’s LUNA, the market cap of the token native to Terra’s blockchain went as high as $3.0 billion over the weekend but has since dropped back to around $1.4 billion.

Ethereum founder Vitalik Buterin said he strongly supports a plan that would deliver “coordinated sympathy and relief for the average UST smallholder who got told something dumb about “20% interest rates on the US dollar” by an influencer, personal responsibility and SFYL for the wealthy”.

Meanwhile, questions have been rising about what happened to the Luna Foundation Guard’s (LFG) bitcoin reserves, with $1.2 billion reportedly still unaccounted for. The LFG is a non-profit set up to support the development of the Terra ecosystem and had been building a large bitcoin reserve to help back UST.

Separately, over the weekend a Bored Ape Yacht Club non-fungible token (NFT) worth over $200,000 was mistakenly sold for $200. Some speculated the sale could actually have been for tax evasion/avoidance.

Exchange Flows

According to Glassnode data, last week saw $19.4 billion worth of bitcoin flow into cryptocurrency exchange wallets versus $17.9 billion flow out. The net inflow to exchanges was thus around $1.5 billion worth of bitcoin, which isn’t too surprising given last week’s volatile/bearish conditions.

In times of crypto market stress, it’s not unusual to see investors moving their crypto into their exchange wallets so they can sell.

Last week also saw a net inflow of around $979.5 million ethereum and $3.8 billion USDT (Tether USD) into exchange wallets.

In terms of exchange flows on Sunday, bitcoin saw a net outflow of just under $70 million, ethereum saw a net inflow of just under $50 million and USDT saw a net inflow of just over $70 million.

Crypto Adoption

Major global investment banks Goldman Sachs and Barclays invested in a $70 million funding round for Elwood Technologies, a crypto trading/portfolio management software company, marking a new bet on the longevity of the crypto space.

Meanwhile, reports over the weekend suggest that Japanese bank SIB Holdings will buy a 51% stake in crypto trading platform BITpoint Japan.

Grayscale Investments just listed its first exchange-traded fund (ETF) in Europe. The Future of Finance UCITS ETF will list on the London Stock Exchange, German Börse, and Italian Borsa Italiana and will offer investors exposure to companies including PayPal, Coinbase Global, Block, Robinhood Markets, and Argo Blockchain.

Finally, the CEO of major crypto exchange FTX Sam Bankman-Fried said that he doesn’t think bitcoin has a future as a payments system, but that it does have potential as a store of value.

Regulatory Landscape

The UK government on Monday confirmed that they will regulate stablecoins following the LUNA and UST collapse. They reportedly do not have any problem with stablecoins, so long as they aren’t algorithmic (like UST was).

Reports over the weekend suggest that South Korea is to launch an emergency review of cryptocurrencies in wake of the LUNA and UST crashes.

“32 central banks and 12 financial authorities (44 countries) will meet in El Salvador to discuss financial inclusion, digital economy, banking the unbanked, the #Bitcoin rollout and its benefits in our country”, El Salvador President Nayib Bukele tweeted on Monday. The meeting will take place on Tuesday.

Officials at India’s central bank warned a key parliamentary finance panel that the adoption of crypto in the country could result in the “dollarization” of the Indian economy and reiterated their recommendation for a complete ban. India may also soon ban crypto celebrity endorsements.

Finally, the Securities and Exchange Commission of Nigeria said in a new rulebook published over the weekend that all digital assets represent either an asset such as a debt or equity claim on the issuer, thus by default fall under their regulatory purview.

Has Bitcoin Reached the Bottom?

Bitcoin Price Action and Trading Strategy

Bitcoin is down 9.4% over the past week, ending at around $31,000. Ethereum lost 16.1%, while other leading altcoins in the top 10 fell from 13.9% (Binance Coin) to 25.4% (Solana). The total capitalisation of the crypto market, according to CoinMarketCap, sank 15% over the week to $1.30 trillion.

The bitcoin dominance index jumped 2.9 points to 44.4% over the same period due to a sharp weakening of altcoins. The cryptocurrency fear and greed index fell 8 points in the week to 10 and continues to be in “extreme fear”. By Monday, the index had climbed to 14 points, thanks to the cryptocurrency market’s retreat from local lows at the end of last week. Bitcoin has declined for six weeks in a row, along with stock indices.

A prolonged one-way move in Bitcoin was last seen in late 2018 when the first cryptocurrency hit a cyclical bottom. That was followed by many more months of sluggish momentum, so investors have an essential question: choose a low point to buy or join the move when it is certain. Prudence suggests that it is less risky to follow the second strategy.

Chart, histogram

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Luna Crash and Raul Pal Crypto Market Forecast

Last week’s decline intensified after breaking through last year’s lows near $30,000, becoming the most significant weekly drop since January. The story of the Terra (LUNA) crash and the TerraUSD stablecoin project added to the negativity on the crypto market, hitting all altcoins hard. According to Global Macro Investor CEO Raul Pal, May and June will be the most worrying months, so a new wave of sell-offs in the crypto market is inevitable.

Bill Miller and Robert Kiyosaki Points of View

Legendary investor Bill Miller said he sold some of his BTC holdings. Although bitcoin may continue to decline in the short term and even drop by half from current levels, Miller looks at bitcoin positively and expects it to grow over a long time. Robert Kiyosaki, the world-famous author of the bestselling book Rich Daddy, Poor Daddy, is looking to buy bitcoin once it tests the ‘bottom’ at $17,000. The businessman has once again expressed distrust of the US government.

by FxPro’s Senior Market Analyst Alex Kuptsikevich.

5 Coins to Watch Closely This Week: BTC, XRP, SOL, XMR, MKR

Key Insights:

  • BTC’s price has established the $30,000 mark as support again.
  • The global cryptocurrency market cap is back above the $1.3 trillion mark.
  • Altcoins like XRP, SOL, XMR, and MKR could be some tokens to watch out for this week.

The last week brought bearish waves for the larger crypto market, as the king coin’s price slid by almost 30% in the previous ten days to visit the near $25,000 zone for the first time since late 2020.

The BTC-induced losses and the fall of Terra’s LUNA and UST pulled the global crypto market cap down to $1.29 trillion at the time of writing.

However, towards the end of last week, bitcoin’s price started to recover from the $26,000 mark making its way above the $30,000 zone. As BTC trades just under the $30,000 psychological barrier, the current market sentiment remains in ‘extreme fear.’

That said, traditional assets were down too, S&P 500 was down 17% this year, and the Nasdaq was off 27% since January. These losses present the pain for the many investors who took bigger gambles on risky assets.

FXempire, BTC, Crypto
Source: Alternative

Notably, more than $500 billion evaporated from the cryptocurrency market over the last week as the market cap slipped to a low of $1.2 trillion. Data from the Bloomberg Galaxy Crypto Index (BGCI) suggested that cryptocurrencies delivered negative returns of about 33.9% over the last month.

Nonetheless, at press time, with bitcoin price’s short-term recovery above the $28,500 resistance, most altcoins traded in green, as highlighted in FXEmpire Weekend Wrap. So, as a short-term recovery takes off, let us look at some of the top coins to watch closely over the coming week.

Bitcoin (BTC)

On May 12, the Bitcoin market sold off to $25,400 and within 6% of the realized price ($23,960), as highlighted by Glassnode data. The realized price represents the average cost basis of all BTC and was last visited, only briefly, in March 2020.

FXempire, BTC, Crypto
Source: Glassnode

The realized price has historically been strong support for bitcoin, and a rebound from the same could lead to short-term gains. However, analysts believe that the price isn’t expected to see parabolic gains soon.

Bitcoin’s price fell to as low as $25,800 over the last week, but pressure from bulls ensured a short-term recovery back to the sub-$29,000 zone. At the time of writing, the top cryptocurrency traded at $30,910, noting a 4.77% price rise over the last day.

FXempire, BTC, Crypto
BTC Price | Source: FXEmpire

BTC’s recovery above the $28,200 support on May 13 pushed the top asset towards higher highs in the following couple of days. If bulls can ride out the sell-side pressure in the coming days and BTC’s price can settle above the $32,500 mark, the same can provide positive market momentum.

XRP

XRP rallied by close to 9% on Friday, recovering from a 7.44% loss the altcoin recorded on Thursday. After crossing the $0.380 mark, the altcoin saw considerable upside, which came amidst Friday’s SEC v Ripple court date, as reported by FXEmpire earlier.

While long-term key technical indicators for XRP continued to remain bearish, at the time of writing, XRP’s price rallied on the back of BTC’s freshly gained momentum. Additionally, the progress in the SEC vs Ripple case has fueled a bullish sentiment among XRP investors.

At press time, XRP traded at $0.4409, noting 4.20% daily gains, however, the altcoin was still down by 23.27% on the weekly charts.

FXempire, XRP, Crypto
XRP Price | Source: FXEmpire

XRP’s recovery above the $0.45 mark can further aid bullish momentum. In the short term, if bulls can push prices above the $0.48 mark, prices can see upside. However, volatility would continue to rule the market.

Solana (SOL)

Amid the larger market bounce, Solana gained over 18% in market value in the last 24 hours and traded at $58.68. SOL experienced a brutal crash as its price hit a low of $37 on May 12.

Over the last four days, SOL’s price has made higher lows presenting a bullish trajectory; however, trade volumes maintained low as investors remained cautious. The altcoin’s recovery above the $44 mark aided the positive price momentum.

Going forward, a recovery above the $62 mark would be key to SOL’s price recovery.

FXempire, SOL, Crypto
SOL Price | Source: FXEmpire

The sudden in buying pressure helped SOL regain the psychological $50 level as support. Buying pressure from bulls as the market embarks on a short-term recovery could push the token higher as technical indicators turn bullish.

Monero (XMR)

Privacy tokens have often turned bullish in response to larger market sell-offs. Monero, at press time, traded at $171.28 noting 11.25% daily gains, however, it was still down by 21.33% on the weekly chart.

XMR has held the psychological support at $145, which aided the coin’s rise over the last couple of days. While RSI for XMR had recovered from the oversold zone and highlighted that buyers were gaining momentum.

FXempire, XMR, Crypto
XMR Price | Source: FXEmpire

Even though RSI’s uptrend reinforced positive market momentum, sellers still dominated buyers. In the short term, a recovery above the $200 resistance would be crucial for XMR. If the market turns bearish again, XMR could fall back to the $145 zone.

Maker (MKR)

Defi token MKR was one of the top performing altcoins last week, as highlighted in a FXEmpire article. Amid high sell pressure in the larger market Maker Protocol’s MKR token recovered from the last week’s losses as the price pushed above the $1500 mark.

At press time, MKR traded at $1,550.23, noting 0.65% daily losses. MKR had reversed the losses made in the first week of May. With MKR’s recovery above the $1500 mark, sell-side pressure could ease in, giving way to short-term losses.

FXempire, MKR, Crypto, Maker
MKR Price | Source: FXEmpire

In the short term, if bulls can push MKR’s price above the $1650 level, the same could aid MKR’s positive price momentum. However, a bearish downturn could push the price back to the lower $1400 support.

Weekend Market Wrap: Top Updates From the Cryptocurrency Market

Key Insights:

  • With BTC’s price above the $30,000 mark, market confidence seemed to return.
  • Most of the top altcoins were trading in the green on a renewed market momentum.
  • The recent short-term gains seem to be temporary as the market could see further downside.

Most cryptocurrencies traded higher as Sunday approached with a wind of fresh air for crypto investors. While it wasn’t a full-blown recovery, markets headed towards gains, as bearish sentiment waned.

Over the last six months, the cryptocurrency market reached as high as $3 trillion and dropped to as low as $1.2 trillion. In the last half a year, the cryptocurrency market cap has lost $1.9 trillion; these losses are bigger than those witnessed during the 2007’s subprime mortgage market crisis.

The high losses and higher trading volumes have propelled fears of crypto market risk spilling over across traditional markets hurting stocks and bonds. The same also indicates the increased correlation in the high-risk and traditional finance markets.

A return of short-term buyers, as the cryptocurrency market cap inches close to the $1.5 trillion mark, shows optimism in the market. However, the return of traders isn’t indicative of larger market recovery as technicals present limited upside in the short term.

Nonetheless, with the global crypto market cap returning to the $1.30 trillion mark at press time, noting a 4.73% increase over the last day, the same pointed towards a short-term recovery.

So, let us take a quick look at how the market reacted over the last week and where it could go, moving forward.

Bitcoin staging a recovery?

The bitcoin (BTC) price dropped to the lows last seen in late 2020, amid the COVID-19 crisis. Recently, after a storm of Federal Reserve interest rate hikes, the scaling back of its massive $9 trillion balance sheet, and a huge $18 billion stablecoin meltdown, the same brought down the larger crypto market cap and the top crypto asset.

Bitcoin’s price fell to as low as $25,800, but pressure from bulls ensured a short-term recovery back to the sub-$29,000 zone. At the time of writing, the top cryptocurrency, traded at $30,284, noting a 4.11% price rise, over the last day.

FXempire, BTC, Crypto, bitcoin
BTC Price Action | Source: FXEmpire

While the BTC gains instilled some confidence in the market participants, analysts believed that market gains wouldn’t sustain for long with volatility still high. Data analytics site, Glassnode, tweeted that Bitcoin dropped below $30,000, as inflation fears and the Fed’s readiness for “short-term pain” rattled markets.

Notably, BTC was down by 58% from its all-time high price, while SPX was down by 18%, NDX was down by 30%, and US bonds have fallen by 15% from their ATH.

Top market movers

Despite the larger bearish blues, some altcoins took advantage of BTC’s short-term gains as their prices took a bullish turn. At the time of writing, with BTC back above the psychological $30,000 mark, most of the top altcoins like ETH, BNB, XRP, ADA, SOL, and AVAX were trading in the green on their daily charts.

Ethereum traded at $2,079.78, noting 5.61% daily gains, while BNB was up by almost 9%, in the last 24-hours. Fantom’s price performance has also been decent in the last week. FTM traded at $0.3654, noting 19.87% gains, over the last day.

Privacy tokens like ZEC and XMR were up by 21.32% and 17% in the last 24-hours. Of late, privacy tokens have often charted bullish price trajectories when the larger crypto market is down.

That said, DeFi token MKR was one of the top gainers of the last week. At the time of writing, MKR traded at $1,575.27, noting 10.28% daily and 30.90% weekly gains. MKR had reversed the losses made in the first week of May.

FXempire, MKR, Crypto, maker
MKR Price Action | Source: FXEmpire

Top news from the crypto verse

A positive development in the crypto space came from Nigeria, where the nation’s Securities and Exchange Commission has released new rules to guide the issuance, custody, and exchange of digital assets and classify them as securities.

In other news, Chile was still considering whether to move forward with a central bank digital currency (CBDC), despite the earlier disclosed plans to have a proposal ready by early this year.

That said, the Terra ecosystem fall still stood as one of the top stories, in the last week. Earlier today, an FXEmpire article highlighted how Binance’s Changpeng “CZ” Zhao cleared the exchange’s name as rumors about Binance investing in Terra surfaced on crypto Twitter. CZ also questioned the idea of hard forking the Terra blockchain to revive the LUNA and UST ecosystems.

Crypto Weekly Review May 15 – TerraUSD Sinks LUNA

Key Insights:

  • It is a week for the crypto market to forget, with TerraUSD (UST) sinking Terra LUNA and the broader market.
  • The UST de-pegging from the dollar led LUNA out of the top ten to #206 on CoinMarketCap.
  • LUNA’s meltdown wiped out $700 billion from the market, causing regulatory ire.

Stablecoins and Terraform Labs became the center of a crypto market storm in the week. TerraUSD (UST) saw the dollar peg algorithm fail epically, leaving TerraUSD at a week low of $0.0437 before partially recovering.

TerraUSD depegs to leave bitcoin and the broader market in the deep red.
UST 1505 Daily Chart

The UST meltdown had far-reaching implications. Terra LUNA imploded, tumbling to close to zero and out of the crypto top 200 by market cap.

The TerraUSD depeg left Terra LUNA at close to zero.
LUNA 1505 Daily Chart

After the UST catastrophe on Monday, Tether (USDT) added to the market angst on Thursday, with a fall from parity. USDT fell to a week low of $0.9511. Fears of another stablecoin collapse sent the markets into another tailspin before a recovery to $0.99 levels restored market order.

Tether tested market nerves after UST meltdown.
USDT 1505 Daily Chart

The events of the week saw the correlation between the bitcoin (BTC) and the NASDAQ 100 weaken for all the wrong reasons.

Bitcoin correlation with the NASDAQ weakens amidst market turmoil
BTCNASDAQ correlation – Daily Chart 1505

Bitcoin (BTC) Shows Resilience Amidst Market Bedlam

A chaotic week saw bitcoin slide to a week low of $25,836 before finding support to bounce back to $30,000 levels.

News of Bitcoin Whales jumping ship, however, raises concerns over the near-term outlook for BTC and the broader market.

On Friday, FX Empire reported the news of Bitcoin whales jumping ship, with a slide across the US equity markets adding pressure on whales to reduce risk and cash out to meet possible margin calls.

Notably, the current bearish trend started back in November, with BTC sliding from an ATH of $68,979 to this week’s current week low of $25,836.

Market angst over Fed monetary policy and the economic outlook had hit the crypto market head of this week’s capitulation.

Near-term, a move through the 50-day EMA ($31,460) and the 100-day EMA ($33,857) would restore some confidence.

A renewed threat of a regulatory overhaul of the crypto market could test investor appetite, however.

Terra Lab Returns the Risk of a Crypto Market Regulatory Overhaul

In response to the UST stablecoin and the demise of LUNA, lawmakers stepped forward, calling for action.

On Wednesday, the UST and LUNA collapse drew the attention of US Treasury Secretary Janet Yellen. Treasury Secretary Yellen highlighted the risks of stablecoins to financial stability and the need for a framework.

Yellen followed Wednesday’s comments on Capitol Hill with further calls for crypto regulations while noting that dollar-pegged stablecoins have yet to reach a scale “where they’re financial stability concerns.”

The ex-Fed Chair was not alone, with SEC Chair Gary Gensler taking the opportunity to target digital assets. Gensler staked claim on digital assets, saying that,

“Most crypto tokens involve a group of entrepreneurs raising money from the public in anticipation of profits – the hallmark of an investment contract or a security under our jurisdiction. Most crypto tokens are investment contracts under the Supreme Court’s Howey Test.”

Bitcoin Fear & Greed Index Sees Lowest Level Since 2020

In the week ending May 15, BTC looks set to finish with a 14% loss, following on from last week’s 11.5% decline. BTC is on target for a seventh consecutive weekly loss, its longest losing streak since 2018. In May 2018, BTC saw red for six weeks out of seven.

Bitcoin set for a seventh consecutive week in the red.
BTCUSD 7-day chart 1505

The Fear & Greed Index continued to reflect investor sentiment, with the Index falling from 18/100 to a Saturday week low of 9/100. It was the lowest level since March 14, 2020, when the Index stood at 8/100.

A fall deeper into the “Extreme Fear” zone suggests more trouble ahead.

On Sunday, the Index climbed to 10/100, though this may provide little comfort to investors looking for an entry price.

The index sits deep in the extreme fear zone.
Fear & Greed Index May 15.

Things were no better for the rest of the crypto top ten.

The Broader Market Tracks Bitcoin into the Red

In the week ending May 15, Terra (LUNA) is heading for a 99% slump to $0.00032 levels.

At the time of writing, ADA (-29.9%), AVAX (-37.6%), SOL (-33.6%), and XRP (-26.1%) are heading for heavy losses.

BNB (-18.4%) and ETH (-20.2%) look set for relatively modest losses, however.

The total crypto market cap slumped from a start of the week $1,554 billion to a week low of $1,082 billion before partially recovering to $1,262 billion.

While TerraUSD and Terra LUNA grabbed the crypto headlines, there were other news worth events.

News Highlights of the Week

  • Nomura Bank announced its first bitcoin derivatives offering.
  • Aussie ETFs went live amidst crypto market turmoil.
  • Germany issues crypto tax guide.
  • NFT creator Dapper Labs raised $725 million for Web3 developer growth.
  • Bank of Israel found public support for a digital Shekel.
  • Binance was among exchanges to delist TerraUSD and Terra LUNA.
  • MicroStrategy stock plunged amidst crypto market sell-off.

Cardano (ADA) Leads the Top 10 as the Market Moves on from TerraUSD

Key Insights:

  • It’s a bullish Friday, with Cardano (ADA) leading the top ten out of a hole.
  • Following Thursday’s jitters, Tether (USDT) approaches parity to the dollar, while TerraUSD and Terra (LUNA) fall into the abyss.
  • Cardano (ADA) technical indicators remain bearish but suggest a possible shift in sentiment.

Cardano (ADA) leads the morning change. While Tether (USDT) delivered stablecoin comfort, a bearish start to the week went from bad to worse for TerraUSD (UST) and Terra (LUNA).

The LUNA and UST implosion left the total crypto market cap at a Thursday low of $1,082 billion before support kicked in.

Binance delisted LUNA after a fall through 0.005UST to ‘almost zero,’ with UST floundering at sub-$0.14 levels, up modestly from a current-day low of $0.0437.

Crypto Market Moves on from Terra and Do Kwon Silence

A the time of writing, LUNA was down 99.7% to $0.000028. Any hopes of a rebound faded on news of Binance delisting LUNA and UST this morning.

Adding to the negative sentiment was a silent Do Kwon Twitter account.

On May 11, Do Kwon tweeted,

“Getting close… stay strong, lunatics.”

 

The Co-Founder and CEO of Terra Labs then tweeted a series of announcements on May 11 before going silent.

For investors, Do Kwon’s absence and lack of accountability will be a concern.

Stablecoins Provide Market Comfort Following a Thursday Termor

This morning, Tether (USDT) provided crypto market support, with a move back towards parity with the dollar.

After falling to a Thursday low of $0.9511, USDT currently sits at $0.9978.

Stablecoin Tether provides crypto comfort.
USDTUSD 130522 Daily Chart

By contrast, UST has fallen deeper into the abyss. At the time of writing, UST was down 63.8% to $0.1369. Through the early hours, UST slumped to a day low of $0.0437 before finding support.

Stablecoin TerraUSD continues to slide.
USTUSD 130522 Daily Chart

Despite the ongoing woes of LUNA and UST, the broader crypto market is in rally mode.

ADA and Crypto Top-Ten Support a Broad-Based Crypto Rally

According to CoinMarketCap, Cardano (ADA) leads the charge from the crypto top ten. Over 24-hours, ADA is up 37.7%, with Binance Coin (BNB) up 28.9%.

Dogecoin (DOGE) and Solana (SOL) rallied by 23.6% and by 23.4%, respectively.

Ethereum (ETH) and XRP trailed the front runners, with gains of 14.3% and 18.7%, respectively.

While the crypto market is in rebound mode, regulatory chatter spiked in response to this week’s events.

There are growing calls for the rollout of stablecoin regulations to ensure the UST collapse is not repeated.

For the crypto market, a more rigid stablecoin regulatory environment may be well received. It may boil down to which agency takes responsibility to oversee stablecoins and the crypto market.

As the market licks its wounds from this week’s meltdown, investors will be hoping the current recovery is a sustainable one.

Cardano (ADA) Price Action

At the time of writing, ADA was up 25.0% to $0.5902. A mixed start to the day saw ADA fall to a low of $0.4681 before striking a high of $0.6061.

ADA broke through the First Major Resistance Level at $0.5496.

Cardano (ADA) on a breakout session.
ADAUSD 130522 Daily Chart

Technical Indicators

ADA will need to avoid the First Major Resistance Level and the $0.4711 pivot to target the Second Major Resistance Level at $0.6274.

ADA would need the broader crypto market to support a return to $0.60.

An extended rally would test resistance at $0.70 before any pullback. The Third Major Resistance Level sits at $0.7845.

A fall through the First Major Resistance Level and the pivot would test the First Major Support Level at $0.3932. Barring another extended sell-off, ADA should steer clear of sub-$0.39 levels. The Second Major Support Level sits at $0.3140.

ADA bulls eye a return to $0.70 as mood shifts.
ADAUSD 130522 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. ADA sits below the 50-day EMA, currently at $0.6460. This morning, the 50-day pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; ADA negative.

A move through the 50-day EMA would support a run at $0.70. A flattening of the 50-day EMA on the 100-day EMA suggests a shift in sentiment.

ADA 50-day EMA starts to flatten supporting further upside.
ADAUSD 130522 4-Hourly Chart

Has the Crypto Market Hit Bottom?

Bitcoin Moves in the las 24 Hours

Bitcoin added 0.6% on Thursday, ending the day around $28,600, a modest gain but a significant intraday win. Bitcoin managed to find support near $25K on Thursday morning, reversing a multi-day decline. Since the start of the day on Friday, the rate has moved back above $30.5K (+6.9%).

This could be both the start of an extended buying wave and a trap for the bulls. After serious oversold previous days, altcoins rose at a double-digit pace in the last 24 hours. Ethereum is adding 16%, once again above $2K. The top 10 other leading altcoins are soaring from 25% (Solana) to 41.4% (Cardano). Total crypto market capitalisation, according to CoinMarketCap, jumped 14% overnight to $1.32 trillion.

The bitcoin dominance index lost 0.3 percentage points to 44.4% due to weaker altcoins. The cryptocurrency fear and greed index was down 2 points to 10 by Friday and remains in “extreme fear”, but it largely ignores the optimism of recent hours. Thus, the indicator’s current low levels might also attract “buy when you are scared” buyers.

Graphical user interface, chart Description automatically generated

Crypto News

Do Kwon, head of Terraform Labs, presented a recovery plan for the UST stablecoin. Against this backdrop, the cryptocurrency LUNA lost nearly 100% of its value. The Terra blockchain has halted. According to media reports, Do Kwon was previously behind Basis Cash – another failed stablecoin blockchain project.

The USDT stablecoin price tested the $0.94 level on Thursday amid market turbulence. Paolo Ardoino, technical director of issuer Tether, said the company has enough reserves to buy back all assets at a 1:1 ratio to the US dollar. Tron founder Justin Sun saw signs of an imminent attack on the USDD algorithmic stack coin launched on the Tron network in May. Sun announced a $2 billion allocation from the TRON DAP Reserve organisation to prevent such a scenario.

by FxPro’s Senior Market Analyst Alex Kuptsikevich

Crypto Market Gets Crushed With Tether (USDT) Giving Up Dollar Parity

Key Insights:

  • Bitcoin (BTC) is the best of the worst today, falling by 10% to sub-$28,000 levels.
  • The rest of the crypto top ten are down by more than 20% over the last 24-hours.
  • Market angst over stablecoin pegs to the dollar weighed, with Tether (USDT) the latest to lose its peg.

There is no respite for the crypto market as stablecoin woes continue to hit investor sentiment. On the news front, there was little to provide investors with a shift in focus, with the crypto top ten hitting new 2022 lows. Tether (USDT) becomes the latest stablecoin to give up its peg against the dollar.

The crypto market has been so seismic that stablecoins are now a feature of the crypto top ten by market cap.

Bitcoin (BTC) is down 10% to $27,731, at the time of writing. Bitcoin last sat at sub-$28,000 in December 2020.

Stablecoins send the crypto market into a tailspin

This week, the TerraUSD (UST) peg with the US dollar imploded, with UST touching a Wednesday all-time low of $0.1977 before a partial recovery.

The knock-on effects of the de-peg are far-reaching, with Terra LUNA tumbling to a Wednesday low of $0.58. It is possibly the first time a top-ten crypto faces the prospect of “almost zero.”

Crypto market conditions have not improved this morning, with stablecoins still the area of market attention.

Today, USDT grabbed the headlines. Tether gave up parity with the dollar, falling to $0.986 levels.

In the wake of UST’s visit to sub-$0.20, market fear of a Tether plummet has investors scrambling.

Over the last 24 hours, the total crypto market cap fell by $268 billion to $1,116 billion before support kicked in.

With stablecoins drawing market attention, the de-pegging of TerraUSD has also drawn the attention of lawmakers.

The threat of a regulatory overhaul has added to the market angst.

Crypto top-ten are among the biggest losers over 24 hours

While bitcoin is down by 10% over 24 hours, losses are far more significant elsewhere.

Solana (SOL) and Cardano (ADA) are down 31% and 27%, respectively, at the time of writing.

Dogecoin (DOGE) and XRP were not far behind, with losses of 26% and 26%, respectively.

Ethereum (ETH) and Binance Coin (BNB) saw relatively modest losses. At the time of writing, ether was down 19%, with Binance Coin also down 19%.

Bitcoin sees sub-$28,000, with stablecoin Tether weighing.
Top10 Cryptos by market cap.

For those hopeful of a Terra LUNA revival, LUNA was down 97.1% over 24 hours. Once sitting in the top ten by market cap, LUNA ranked at #79 this morning, with a market cap of $556 million.

For the remainder of today, there remains very little for investors to consider. A re-pegging of the market’s major stablecoins will be a must to restore confidence.

This isn’t the first time stablecoins have lost their pegs against the dollar. UST’s demise and the issues behind restoring the peg remain a concern.

The fact that Tether has given up parity this morning adds fuel to the fire. On Wednesday, the markets were considering the end of algo stablecoins. A Tether collapse would have altogether different connotations for crypto market stability.

Bitcoin (BTC) Avoids Heavy Losses Amidst USDTerra Driven Meltdown

Key Insights:

  • Bitcoin (BTC) fell by a relatively modest 6.44% on Wednesday as the broader market took a hit.
  • TerraUSD (UST) and Terra (LUNA) dragged the majors into the deep red, with UST’s de-pegging raising the prospects of a regulatory overhaul.
  • Bitcoin (BTC) technical indicators flash red. This morning, bitcoin sits well below the 50-day EMA.

Bitcoin (BTC) fell by 6.44% on Wednesday as TerraUSD and the NASDAQ 100 influenced. Reversing a 3.11% gain from Tuesday, bitcoin ended the day at $29,017.

A choppy session saw bitcoin find early support before succumbing to market forces. Bitcoin hit a late morning intraday high of $32,136 before sliding to a late day low of $28,087.

Market sentiment toward TerraUSD (UST) and Terra (LUNA), coupled with a NASDAQ 100 sell-off, left bitcoin deep in the red.

Bitcoin’s loss was modest relative to the broader crypto market that struggled throughout the day.

Investors Turn to Stablecoins Amidst USDTerra Fueled Meltdown

On CoinMarketCap, stablecoins became a feature of the top 10 cryptos, with Tether (USDT) and USD Coin (USDC) sitting behind bitcoin and Ethereum (ETH). Binance USD (BUSD) moved into the number 8 spot, leaving little room for the altcoins.

Binance (BNB), Ripple (XRP), Cardano (ADA), Solana (SOL), and Dogecoin (DOGE) formed the remainder of the top ten, with Terra LUNA tumbling to the number 37 spot.

UST faired better, recovering to $0.78 levels to rank at #11.

Crypto Market Sell-off Sees $300 Billion Market Cap Wipeout

Performance-wise, the losses were unprecedented. LUNA ended the day with a 94% loss.

Terra LUNA slumps by 94%.
LUNAUSD 120522 Daily Chart.

Anchor Protocol (ANC) slumped by 33%, with Avalanche (AVAX) down 32%. Things were no better for SOL (-24%) and XRP (-19%), with ADA (-15%), BNB (-16%), and ETH (-11%) also seeing heavily losses.

The total crypto market cap ended the day at $1,264 billion, down $149 billion and $290 billion for the current week.

Bitcoin Correlation with NASDAQ 100 Adds to Crypto Woes

On Wednesday, the NASDAQ tumbled by 3.18% as investors responded to April inflation figures from the US. While softer than in March, the numbers were strong enough to support a more aggressive Fed rate path trajectory.

In April, the annual rate of inflation softened from 8.3% to 8.0% versus a forecasted 7.7%.

Both bitcoin and the NASDAQ succumbed to the numbers after an initial move northward.

BTC-NASDAQ Correlation.
BTC-NASDAQ Daily Chart.

Bitcoin Fear & Greed Index Slides to

Today, the Fear and Greed Index held steady at 12/100. The lack of movement came despite the bitcoin and broad-based crypto sell-off.

This morning’s value remained above the most recent low of 8/100 on March 14, 2020. On Wednesday, the Index had also avoided a decline despite the market angst over TerraUSD and LUNA.

For bitcoin investors, the “Extreme Fear” zone relays investor anxiety over the threat of another sell-off. Further fallout from the TerraUSD and LUNA events could bring sub-10/100 into play.

Bitcoin (BTC) Price Action

At the time of writing, BTC was up 0.39% to $29,130.

The NASDAQ 100 and TerraUSD leave BTC in the red.
BTCUSD 120522 Daily Chart.

Technical Indicators

BTC will need to move through the $29,749 pivot to target the First Major Resistance Level at $31,401 and resistance at $31,500.

BTC would need the broader crypto market to support a return to $31,000.

An extended rally would test the Second Major Resistance Level at $33,794 and resistance at $34,500. The Third Major Resistance Level sits at $37,845.

Failure to move through the pivot would test the First Major Support Level at $27,358. Barring another extended sell-off, BTC should steer clear of sub-$25,000 levels. The Second Major Support Level at $25,701 should limit the downside.

A Bitcoin return to $30,000 to shift sentiment.
BTCUSD 120522 Hourly Chart.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. BTC sits below the 50-day EMA, currently at $33,777. This morning, the 50-day pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; BTC negative.

A move through the 50-day EMA would support a run at $35,500.

Signals are bearish, with BTC below the 50-day EMA.
BTCUSD 120522 4 Hourly Chart.