Crypto Market Daily Highlights – June 25 – BTC and ETH Make Ground

  • It was a mixed session for the crypto to ten, with bitcoin (BTC) extending its winning streak while Binance Coin (BNB) saw red.
  • There were no major news stories to provide direction on Saturday, allowing momentum from Friday to spill over to the weekend.
  • After adding $24 billion on Friday, the total crypto market cap rose by a modest $11.5 billion.

It was a mixed session for the crypto market on Saturday. Bitcoin (BTC) logged a second 3-day winning streak of the week, while Binance Coin (BNB) saw red to buck the top ten trend.

There was no major news to derail the latest uptrend, with the crypto market needing to make it four in a row to convince investors of a possible shift from the extended bearish sell-off.

The week ahead will likely be another choppy one with inflation back in focus.

The Total Crypto Market Cap Inches Nearer to $1,000bn

Following a $27 billion rise on Friday, the total crypto market cap increased by $11.5 billion on Saturday. A day high of $954 billion saw the market cap near $1,000 billion, last visited on June 13.

Crypto market cap rises.
Total Market Cap 260622 Daily Chart

Investors continued to put aside downside risks, including fears of a recession, with momentum from Thursday and Friday continuing into the weekend.

For the week, the total market cap is currently up by $58 billion, reducing the June deficit to $354 billion.

On Saturday, DOGE led the way, rising by 2.35%, with BTC (+1.15%) and ETH (+1.38%) close behind.

However, SOL (+0.76%) and XRP (+0.23%) saw modest gains, with ADA ending the day flat.

BNB bucked the trend, falling by 0.21%.

From the CoinMarketCap top 100, The Sandbox (SAND) led the broader market, rallying by 16.3%.

The market speculation of a possible investor buyout of The Sandbox delivered the breakout session on Saturday.

This week, tech companies, including Epic Games, Meta, Microsoft, and Sony, partnered to form the Metaverse Standards Forum.

Decentraland (MANA) also found strong support, gaining 9.0%.

Total Crypto Liquidations Eased, Reflective of Saturday’s Moves

The recent downward trend in total crypto liquidations resumed on Saturday, reflective of market movements.

Going into Sunday, total liquidations stood at $130 million, down from a Saturday morning of $192 million. 54,137 traders were liquidated over the past 24 hours.

One-hour liquidations were also steady. According to Coinglass, one-hour liquidations stood at $5.68 million.

Crypto liquidations ease
Total Crypto Liquidations 260622

Daily News Highlights

  • The Sandbox (SAND) and Decentraland (MANA) enjoyed breakout sessions supported by the formation of the Metaverse Standards Forum.
  • DeFi tokens continued their uptrend as investors began to dip back into the space following the collapse of TerraUSD (UST) and Terra LUNA.
  • Binance CEO CZ told Yahoo! Finance that the company is looking at 50 to 100 deals.
  • News hit the crypto wires of FTX planning to buy a stake in BlockFi.
  • The Wall Street Journal reported Goldman Sachs eying a possible acquisition of Celsius.

South Korea Bans Terra Employees’ Exit From Country Amid Investigation

Key Insights:

  • Seoul Southern District Prosecutor’s Office imposed a travel ban on crucial Terra developers.
  • As long as the investigation continues, the ban will be in effect.
  • The newly launched Terra LUNA has met a fate similar to LUNC to some extent.

Terraform Labs’ Terra will definitely go down in history as one of the biggest blunders in the crypto space. Not only did it bring terrible losses to its investors without being a rug pull, but the company behind it also fell into the crosshair of authorities. 

South Korea After Terra

The ongoing investigation against Terraform Labs and its employees pertaining to the collapse of Terra (Now Terra Classic, LUNC) has begun affecting the people that were, in a lot of ways, unaware of the workings of the company.

A former employee/developer recently revealed his plight to the world as the Seoul Southern District Prosecutor’s Office called for an absolute travel ban on certain employees that were centric on the development of Terra.

The same was also brought to light by a local media outlet, JBTC, which in a report highlighted that the travel ban was placed in order to avoid the possibility of either of the company’s employees running away from the country as well as destroying the evidence.

Not only this, the country’s authorities might even proceed to invalidate the CEO Do Kwon’s passport as they begin investigating him.

The Future of Terra

While the company deals with this situation, another situation is starting to develop in the crypto market as the newly launched Terra LUNA 2.0 is back to crashing. 

Right after the cryptocurrency came into existence, it dipped and fell from the high of $19.53 to $4.05. Today the altcoin is finding buyers and sellers at a meager $2.01. This marks an 89.7% drawdown in the span of just 20 days. 

However, the skepticism that came with the arrival of LUNA along with the broader market bearish crash is keeping it rangebound and might take a while to recover from these lows.

Binance Coin (BNB) Tumbles to Sub-$200, with the Bears Eyeing $190

Key Insights:

  • Binance Coin (BNB) rose by 2.59% on Friday, partially reversing a 9.97% slump on Thursday.
  • The upside was modest, with BNB and the broader crypto market in the deep red for the current week.
  • Technical indicators are bearish, with BNB sitting well below the 50-day EMA.

It is a tough week for Binance Coin (BNB) and the broader crypto market. On Friday, BNB rose by 2.59%. Partially reversing a 9.97% slide on Thursday, BNB ended the day at $215.46.

The upside on Friday was of little consolation for the bulls, with BNB down 15% Monday through Friday.

Investor sentiment toward Fed monetary policy and fears of a global recession weighed heavily on the appetite for riskier assets.

BNB Under Intense Selling Pressure as Crypto Winter Bites Deeper

Selling pressure resumed today, with investors having little to celebrate following Friday’s modest gains.

Crypto exchanges and their native tokens remain at risk of significant losses, with the June sell-off coinciding with the Fed’s interest rate projections and the threat of an economic recession.

Some crypto exchanges are better off than others, however. While Binance continues to face intense regulatory scrutiny in several jurisdictions, Binance sits well placed to find opportunities amidst the market turmoil.

This week, Binance announced 2,000 open positions while other crypto platforms cut payrolls.

For BNB, however, much will depend on the outcome of a new SEC investigation into Binance.

Early this month, FX Empire reported news of the SEC investigating whether BNB was a security when sold in 2017.

With the SEC v Ripple case ongoing, the issue of cryptos and securities remains unresolved, which continues to impact the US crypto market.

Following news of the SEC investigation, Binance also got hit with an investor group class action suit on Monday, June 13.

The investor group alleges that Binance illegally sold unregistered securities UST and LUNA.

Investor group class action suits are on the rise as investors suffer heavy losses. The LUNA and UST collapse and stablecoin issues have exasperated the situation.

Binance Coin (BNB) Price Action

At the time of writing, BNB was down 8.47% to $199.54.

A mixed start to the day saw BNB rise to an early morning high of $218.72 before falling to a low of $196.14.

BNB fell through the First Major Support Level at $208 and the Second Major Support Level at $201 to a new current year low.

Steering clear of sub-$190 was the only consolation through the morning session as selling momentum gathered pace.

BNB selling pressure builds
BNBUSD 180622 Daily Chart

Technical Indicators

BNB will need to move through the Major Support Levels and the $215 pivot to target the First Major Resistance Level at $222.

BNB would need broader crypto market support to return to $210 levels.

Failure to move through the Major Support Levels and the pivot would test support at $190. Barring an extended sell-off throughout the afternoon session, BNB should avoid the Third Major Support Level sitting at $187.

BNB tests support early.
BNBUSD 180622 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. BNB sits below the 50-day EMA, currently at $235. 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.

A return to $220 would bring the 50-day EMA into play.

EMAs flash red.
BNBUSD 180622 4-Hourly Chart

Crypto Market Outlook: Risk-Off

Summary & Key Takeaways

  • Though we are seeing the makings of some favourable readings in many on-chain, derivatives, technical and sentiment indicators, the macro and liquidity environment moving forward remain a significant headwind for crypto assets. Rather than signaling at bottom, many of these metrics are perhaps confirming we are indeed in a bear market.
  • Investors should act accordingly; deploy capital in a conservative manner with a long-term timeframe, and understand that there may be significant downside ahead.
  • Any rallies from here will likely be sold as they will simply not be supported by the macro environment. Hedging further downside remains a wise strategy at present.

Risk-Off Grips the Crypto Landscape

When it comes to the world of cryptocurrency, the sparseness between risk-on versus risk-off is akin to making a small fortune versus total bankruptcy. It is the former that grabs the attention and lust of retail traders, whilst it is unfortunately the latter in which we are experiencing at present. Over the past few days we have seen approximately 265,770 cryptocurrency traders and investors be fully liquidated, with around $1.26b in capital destroyed. Unfortunately, with a speculative and high-beta asset, these are the ever present risks that come for the fore during a liquidity and growth cycle downturn.

The current drawdown in Bitcoin since its all-time high in November is now circa 70%. Again, this is to be expected of such asset class, and as we can see below, historically bear markets for BTC have seen prices fall anywhere from 70% to 90%. History would tell us there may be more pain ahead.

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We are witnessing true capitalism at work within the crypto space at present. Layoffs (as seen by BlockFi cutting staff by 20% and Coinbase reducing its workforce by 18%, among others), the demise of LUNA and deteriorating VC investment are some such examples of the pain underway within the market. Though these developments ought to lead to a brighter future, things are likely to get worse before they get better (looking at your MicroStrategy). Creative destruction is perhaps capitalism at its finest.

Looking at the technical picture, we can clearly see a chart that looks like it wants to go lower given the significance of what looks to have been a massive head and shoulders top. Though we will likely find support around the $20k level, an area which coincides with both the previous cycle all-time highs back in late 2017 and the 200-week moving average, given the macro backdrop and how previous crypto bear markets have seen drawdowns of far greater significant than present, $10k-$15k looks to be a possibility at some point this year.

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For BTC, the 200-week moving average has been an important area of support in recent years. Indeed, this moving average acted as support for the final lows during the previous bear market in late 2018/early 2019, as well as during the March 2022 crash. I suspect we could bounce hard of this level in the short-term, especially when we consider the context of this flush-out occurring in-line with a weekly DeMark 9 setup buy signal.

For Ethereum, the technical picture is much the same. The current price is too flirting with the 200-week moving average around $1,250, a level which also coincides with the previous cycle high in January 2018 and ETH’s own weekly DeMark 9 setup buy signal.

As such, I suspect this level will hold for the time being and form the basis of a short-term bounce. Should we break below this level in the coming months, sub-$1,000 ETH is likely with their being very little technical support until around $500-$750. I will note however the 200-week moving average has less historical significance for ETH given its limited lifespan.

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What leads me to be believe reaching low-teens BTC and sub-$1,000 ETH during this bear market to be a distinct possibility is their historical volume by price. By examining volume at different price levels, this helps us gauge where potential support and resistance levels may reside. Given there is comparatively little historical volume between $30k and $15k for BTC, it should not be surprising to see prices eek lower over the coming months until it can find support at these lower levels.

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A similar volume analysis on ETH also suggests there may be little support between $1,000 and around $500-$600. Clearly, the $1,000 area looks to be an important level for ETH.

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One technical sign I have been looking for to help provide an indication of a bottom (or at least the beginnings of one) is a capitulation-like spike in downside volume. Whilst not a prerequisite for a market bottom, a significant spike in volume helps to provide comfort that selling pressure may be waning. We saw such spikes in BTC during the 2017, 2020 and 2021 lows.

Whilst this is yet to show up on the weekly charts for either BTC or ETH above, the recent move lower has indeed seen a notable pick-up in downside volume on the daily chart.

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From a macro perspective, crypto markets continue to trade as high-beta risk assets, and are doing so step-for-step with the high-beta/low-beta ratio. The latest move lower is largely in-line with what we should expect given the growth cycle and liquidity cycle outlook, one that does not portend favorably for risk assets.

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Indeed, with the macro backdrop indicating the high-beta/low-beta ratio continues to roll over in the coming months, crypto is not the place to be allocating significant portions of your capital at present.

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Indeed, on a relative basis we are seeing BTC itself breakdown compared to equities.

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And continue to breakdown versus commodities.

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All the while looking like it wants to go lower versus bonds.

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Despite the attractiveness of the future of digital assets as an asset class, it won’t be as a store of value but rather as a high-beta risk asset. As such, investors must adjust their expectations accordingly and understand how such assets behave during growth and liquidity cycle downturns. Again, both are suggesting investors remaining underweight such assets for the time being.

Seasonality is also confirming this message, with the June to September period tending to be the least favourable for crypto relative to most other months.

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Source: Coindesk

From a sentiment standpoint, crypto is almost as hated as it has ever been. Whilst this can be viewed as a contrarian buy signal, sentiment indicators within the crypto markets tend to display an inherent level of imbedded momentum, in that extreme sentiment readings to the upside tend to remain elevated for long-periods and precede higher prices, whilst extreme readings to the downside tend to precede lower prices in the short-term.

To me, the current levels in the Crypto Fear & Greed Index are confirming the downtrend rather than providing a contrarian buy signal.

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Looking now to the futures and derivatives markets, what is interesting is that whilst the latest flush out has seen a significant unwind in futures open interest for BTC, open interest continues to lag price and remains somewhat elevated compared to the lows seen during mid-2021. There is still more leverage in the crypto system now compared to the lows of last year.

However, as the futures market is generally used for traders of a short-term time frame due to the excessive roll costs associated with holdings futures contracts for long time periods, buyers of the Bitcoin futures ETFs who intend to hold for the long-term would cause the open interest data to be skewed to the upside. As a result, looking at Bitcoin open interest in isolation as means to asses speculative leverage within the system may be misleading.

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The fact that Ethereum’s open interest is now back down to its mid-2021 lows is somewhat confirmative of the idea that much of the leverage has now been washed out. This significant unwind in leverage within the crypto ecosystem should help to slowly set a floor in price going forward.

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We have also seen the largest level of Long Liquidations (in dollar terms) in BTC derivatives markets since the Q2 2021 sell-off, again confirming this washout of leveraged long positions.

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If we turn now to some of the on-chain metrics for Bitcoin and the crypto space, we continue to see many indicators slowly but surely reaching levels indicative of excellent long-term buying opportunities in the past. However, I should preface this section by reminding readers not only can many of these metrics continue to move lower, but they also can remain suppressed for long periods. Thus, investors willing to deploy capital would be best to do so in a conservative manner.

Beginning with several on-chain metrics measuring capitulation and profitability of crypto holders, specifically the Net Unrealised Profit/Loss (NUPL) ratio for BTC, we can see the latest drawdown has pushed this ratio down to its lowest level since March 2020.

Readings above zero tend to indicate investors are by-and-large in profit, with sub-zero readings (where we reside at present) indicative of the opposite. Clearly, many holders are in a world of pain at present as they are realizing losses on much of their crypto holdings.

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Another popular measure of profitability is the Market Value to Realised Value (MVRV) ratio, which again serves as a proxy for the average profit or loss position of investors. The MVRV ratio is too nearing levels not seen since the March 2020 lows. Again, as noted here by Glassnode, it is important to remember that past cycles have seen such measures remain at “undervalued” levels for many months. Just because such indicators have reached a perceived “undervalued” level does not mean they cannot go lower.

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In terms of network activity, what is encouraging for the long-term viability of Bitcoin and crypto as a functional asset class is how we continue to see the number of total network addresses rise even as price is in freefall. I do view this a favarouable fundamental outcome for the long-term.

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However, one of my favourite indicators I use as a proxy for retail participation within the crypto space in Active Addresses, continues to trend sideways. I view this metric as close to an on-chain macro indicator as there is. Whilst Total Addresses provides insight to the overall network adoption, Active Addresses provides insight into retail participation (which is largely a function of the macro environment). I will be looking for Active Address to begin to make higher highs as a confirmation of when the bear market may be nearing an end.

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Looking now at the buying and selling activity of long-term holders (those who have historically acted as the smart-money within the crypto space, by buying at the lows and selling at the tops), favourable long-term developments continue to play out. Indeed, as we can see below, long-term holders, or hodlers (categorized by those who have held BTC for over a year), continue to accumulate and increase their overall positions as prices fall. This is akin to what we saw during the 2018 and 2019 periods of price depreciation.

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And finally, another healthy measure for the long-term viability of the crypto space is the Bitcoin Hashrate. Despite the ~70% drawdown in Bitcoin over recent months, BTC’s hashrate (which can be considered as a proxy for the security of the Bitcoin network) continues to remain strong despite weakness in price, again confirming the long-term network adoption in a similar manner to Total Addresses.

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Indeed, though we are seeing the making of some favourable readings in many on-chain, derivatives, technical and sentiment indicators, the macro and liquidity environment moving forward remain a significant headwind for crypto assets. Rather than signaling at bottom, many of these metrics are perhaps confirming we are indeed in a bear market.

As such, investors should act accordingly; deploy capital in a conservative manner with a long-term timeframe, and understand that there may be significant downside ahead. Likewise, any rallies from here will likely be sold as they will simply not be supported by the macro environment.

Do not try and time the bottom. The time to be overweight high-beta risk assets will come when the growth and liquidity cycles are a tailwind, not a headwind. Patience is key.

Bitcoin’s Continued Collapse and Furnace of Fire for the Crypto Periphery

Bitcoin was down 5.7% on Tuesday, ending the day at around $22K. The decline picked up on Wednesday morning, taking another 3.3% off the price to $21K, declining for the eighth consecutive day and losing 30% in seven days.

Ethereum lost 8.1% in 24 hours and 38% in a week. Leading altcoins in the top ten are losing between 2% (Polkadot) and 9.6% (Dogecoin).

Total cryptocurrency market capitalisation, according to CoinMarketCap, sank 6.4% overnight to $898bn. The Cryptocurrency Fear and Greed Index was down 1 point by Wednesday, to 7, which last was in March 2020.

Concerns around a sharp tightening

Financial markets and are trickling down into cryptocurrencies through their influence on large institutional investors. It is not surprising that Bitcoin and Ether are dragging the entire cryptocurrency market down in such an environment.

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According to CoinShares, institutional investors withdrew $102 million from cryptocurrencies last week amid expectations of a tightening of monetary policy by the US Federal Reserve. The US regulator’s two-day meeting results will be announced todays.

Fears that the market has not yet hit rock bottom

We could see a massive sell-off in cryptocurrencies if bitcoin falls below $20,000. Galaxy Digital head Mike Novogratz is convinced that bitcoin is close to the “bottom” and will hold above $20,000.

We believe Bitcoin may be close to its bottom, but it could take months until the next rally. During those months, the entire crypto industry will probably go through a furnace of fire, as we saw with Terra (Luna), and is now happening with Celsius. Stablecoins continue to be tested, and USDD being below parity with USD for the third day tells us that history with USDT (stable tied to Luna) could repeat itself several times.

by FxPro’s Senior Market Analyst Alex Kuptsikevich

SEC Chair Gary Gensler Reacts to the Lummis Bill and Oversight Plans

Key Insights:

  • The Responsible Financial Innovation Act aims to give digital asset oversight powers to the Commodity Futures Trading Commission (CFTC).
  • While the crypto market views such an outcome as crypto market-friendly, SEC Chair Gary Gensler has other ideas.
  • On Tuesday, the Wall Street Journal reported that Gensler is dissatisfied with lawmaker plans.

Regulatory chatter continues to grab the crypto headlines in what has become a busy year for lawmakers and regulators. SEC Chairman Gary Gensler has not been far from the headlines, with the SEC eyeing the task of regulating the digital asset space.

Last week, we reported on a likely battle between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over the appointment to regulate digital currencies.

The report was in response to a bipartisan bill beginning its passage on Capitol Hill, which looks to give the CFTC the coveted job of overseeing the digital asset space.

SEC Chair Gary Gensler Voices Dissatisfaction Over the Lummis Bill

On Tuesday, the Wall Street Journal reported SEC Chair Gary Gensler raised concern over lawmaker legislation that “could compromise regulations that govern the broader capital markets.”

Gensler held back from commenting directly on the bipartisan Lummis and Gillibrand bill.

The SEC Chair did say,

“We don’t want to undermine the protections we have in a $100 trillion capital market.”

Adding,

“Like behaviors should have like treatment.”

Last week, US senators Cynthia Lummis and Republican Kirsten Gillibrand filed the Responsible Financial Innovation Act.

The bill aims to tackle the classification of digital currencies as securities and non-securities. This is a subject on which US lawmakers, the SEC, and the CFTC have yet to agree.

Gensler’s comments come at a tumultuous time for the digital asset space.

The collapse of TerraUSD (USTC) and investor jitters over Fed monetary policy have weighed on investor sentiment.

A Balance Between Oversight and Innovation Is Needed for Cryptos

US regulatory uncertainty also remains a crypto market impediment.

Earlier this year, lawmakers sent a letter to the SEC Chair questioning the SEC’s approach toward crypto firms. Lawmakers raised concerns that the SEC could stymy innovation. The letter was bipartisan, with both sides of the aisle co-signing the letter.

With the SEC and the CFTC failing to find common ground, lawmakers may solve the issue.

Neither are likely to give up without a fight. Lawmakers and regulators anticipate continued growth in the digital asset space.

Until the US crypto market has clarity on the regulatory front, the SEC will continue to target crypto firms. A resolution could be around the corner, however.

This week could prove pivotal, with a court ruling on an SEC motion to protect William Hinman speech-related documents under the attorney-client privilege expected.

In 2018, the former SEC Director of the Division of Corporation Finance stated that Bitcoin (BTC) and Ethereum (ETH) are not securities.

The SEC case against Ripple Lab has been ongoing since December 2020. For lawmakers, the outcome could be decisive on who oversees the digital asset space.

The SEC alleges that Ripple raised over $1.3bn through an unregistered, ongoing digital asset securities offering.

On Tuesday, Stuart Alderoty, General Counsel for Ripple, talked about the failures to come to a consensus on how to classify cryptos.

Taking aim at the SEC, Alderoty said,

“4 years since the (in)famous Hinman speech, and we’re nowhere closer to knowing how to classify digital assets in the US – keeping every crypto, including ETH, in regulatory limbo.”

With the SEC v Ripple case hanging in the balance, a former SEC employee speech could ultimately decide who regulates the digital asset space.

BoE Director Stands Firm in His Anti-Crypto Stance Amid Market Chaos

Key Insights:

  • The head of the Bank of England said that cryptos have “no intrinsic value.”
  • He warned users that those who invest in these digital assets would “lose all their money.”
  • The crypto market had one of its worst days yesterday, falling below $1 trillion.

The crypto market witnessed a brutal blow on Monday, alarming global authorities and raising pressure on central banks. Crypto investors and users voiced out their cries about the ongoing market downturn. One crypto investor and a YouTuber went to the extent of announcing that many people would quit crypto.

This has even instigated fear in the minds of central bank authorities, who have shown their ‘pro-crypto’ stance. For instance, U.S. Treasury secretary Janet Yellen publicly acknowledged the potential of digital currencies and blockchain technology. In a recent CBDC interview, she said crypto has “grown by leaps and bounds.”

However, the unexpected market crash driven by the collapse of the Terra network and massive selloff amid heightened inflation fears has made Yellen shift sides. Last week during an event organized by the New York Times, she warned that cryptos like bitcoin (BTC) and ether (ETH) are “very risky investments.”

Days after her warnings, the chief of the central bank of England, Andrew Bailey, said Monday that unbanked digital assets have “no intrinsic value.”

“People may still want to buy them because they have extrinsic value … people value things for personal reasons. But they don’t have intrinsic value. This morning we have seen another blow-up in a crypto exchange.”

Be prepared to lose all money

Again, the central banker emphasized that crypto assets are highly risky and speculative. In particular, people need to be alert to the risks or be prepared to lose their entire investments. 

Speaking to MPs during a Parliament session, Bailey noted,

“If you want to invest in these assets, okay, but be prepared to lose all your money.”

This isn’t the first time Bailey has voiced his anti-crypto stance. Last month, the Bank of England (BoE) Governor said that cryptos are not suitable as a practical means of payment.

Bailey has never been a fan of bitcoin or crypto. He said in April during a “Stop Scams” conference that crypto creates an “opportunity for the downright criminal.” Known for his reluctant stance on decentralized money, he has been highly skeptical since last year. He tagged cryptos as “dangerous” before expressing that these assets wouldn’t last long. 

Was he right? What exactly happened to the crypto industry?

On Monday, major trading platforms such as Celsius halted crypto withdrawals, citing “extreme market conditions.” Binance (BNB) quickly followed, pausing bitcoin withdrawals due to “stuck on-chain transaction,” but resumed it hours later.

The Celsius native token CEL dropped drastically from over $7 to about 33 cents last year. The token was down further by 50% in the previous week. The news of Celsius looked similar to what happened in May when the algorithmic stablecoin pegged to USD – TerraUSD (UST) – lost $60 billion in value.

Additionally, Peter Thiel-backed crypto lending start-up BlockFi and Crypto.com announced Monday that they would cut more than 400 jobs. They joined the growing list of digital asset firms such as Gemini and Rain Financial that are looking to layoff.

Following these, panicked investors dumped their crypto holdings, causing the market cap of overall crypto to slump below $1 trillion, which is down from $3 trillion in November 2021.

The crash dragged BTC to trade below $23,000, tumbling 15% in the last 24 hours. The largest cryptocurrency is trading at $22,419 at press time. Ethereum, too fell by 17% and now trading at $1,187.

Adding more to the Monday swirl, shares of the crypto trading behemoth Coinbase (COIN) fell 11%, which marks the lowest since the company’s public debut in April 2021.

Bailey’s repeated warning comes in response to a question during Parliament about the duty of regulators to protect investors amid the government’s wish to promote financial innovation.

Stablecoin USDD Loses Its Peg, Delivering Tron TRX Price Instability

Key Insights:

  • Algorithmic stablecoin USDD is the latest to lose its Dollar peg, raising more red flags over the use of algo stablecoins.
  • On Monday, USDD fell by 1.12% against Tether (USDT) to end the day at $0.9890.
  • Tron (TRX) price action reflected the unpegging, with TRX continuing to fall this morning despite a broader crypto market rally.

On Monday, Tron (TRX) joined the broader crypto market in the deep red, with a 16.1% loss. Following a modest 0.13% gain on Sunday, TRX ended the day at $0.0639. Stablecoin USDD has pressured TRX this week.

Several factors contributed to the extended sell-off, including investor sentiment towards Fed monetary policy and news of DeFi lender Celsius freezing withdrawals, swaps, and transfers.

For TRX, the USDD unpegging from the dollar added further selling pressure.

Algo Stablecoin USDD Loses Dollar Peg to Pressure TRX

This week, the crypto market faced the unpegging of another algorithmic stablecoin from the dollar.

Stablecoin newcomer USDD fell to a current week low of $0.9795. On Monday, USDD had briefly fallen to $0.98 levels before reestablishing the peg. Today’s unpegging is more sustained, raising concerns that another algorithmic stablecoin could fail and deliver another crypto market blow.

USDD loses Dollar peg, pressuring TRX.
USDD/USD 140622 7-Day Chart

Launched in May, USDD was to take on Terra, with the algorithm set to work in a similar manner to TerraUSD and Terra Luna. In this case, USDD is backed by the native token TRX and follows the pegging mechanism of Terra Lab’s failed TerraUSD (USTC).

As explained by Tron founder Justin Sun,

“When USDD’s price is lower than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX. When USDD’s price is higher than 1 USD, users and arbitrageurs can send 1 USD worth of TRX to the decentralized system and receive 1 USDD.”

According to Defi Llama, Tron’s total value locked (TVL) is down 18.2% to $4.68 billion.

Despite the unpegging, Tron remains the third largest DeFi blockchain, behind Binance Chain ($6.53bn) and Ethereum ($52.11bn).

Tron TVL tumbles.
TRON TVL 140622

A USDD failure to reestablish the dollar peg could adversely affect TRX and investor sentiment towards the broader crypto market.

For now, TRX looks to have borne the brunt of the market reaction to the unpegging, though containment could become an issue should USDD fall further back from current levels.

According to Tron DAO Reserve, the collateral ratio for USDD currently sits at 248.33%, providing a degree of comfort.

USDD overcollateralization limits the TRX damage.
USDD Collateral 140622

TerraUSD, Tether (USDT), and USDD have shown the adverse effects of stablecoins on the crypto market.

TRX Price Action Hinged on USDD

At the time of writing, TRX was down 4.07% to $0.0613. A mixed start to the day saw TRX rise to an early morning high of $0.0648 before hitting reverse.

The reversal saw TRX fall to a low of $0.0559 before steadying.

TRX fell through the First Major Support Level at $0.0575 before returning to $0.061 levels.

USDD fall weighs.
TRXUSD 140622 Daily Chart

Technical Indicators

TRX will need to move through the day’s $0.0671 pivot to target the First Major Resistance Level at $0.0735. The market will need to see the USDD begin to reestablish the $1 peg to find support.

In the event of an extended rally, TRX could test resistance at $0.080. The Second Major Resistance Level sits at $0.0831.

Failure to move through the pivot would bring the First Major Support Level at $0.0575 back into play. Barring an extended sell-off, TRX should avoid sub-$0.050. The Second Major Support Level at $0.0511 should limit the downside.

Support levels tested early.
TRXUSD 140622 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), the signal was bearish. TRX sits below the 50-day EMA, currently at $0.0747. This morning, the 50-day EMA pulled away from the 100-day EMA. The 100-day EMA converged on the 200-day EMA; TRX price negative.

A bearish cross of the 100-day EMA through the 200-day EMA would bring sub-$0.060 back into play.

A repeg would support a TRX rebound.
TRXUSD 140622 4-Hourly Chart

Crypto Market Daily Highlights – June 13 – DOGE, ETH, and BTC Slump

Key Insights:

  • Cryptocurrency market conditions deteriorated further at the start of the week, with the broader market seeing red for a seventh consecutive day.
  • While market apprehension toward Fed monetary policy continued to weigh, news of DeFi lender Celsius suspending withdrawals added to the bearish mood.
  • The total crypto market cap tumbled by $121 billion to sub-$1,000 billion for the first time since February 2021.

It was a bearish start to the week for the crypto market, with the broader market seeing red for a seventh consecutive day. According to CoinMarketCap, Theta Network (THETA) was the only altcoin in the top one hundred to avoid a loss, with a 6.41% gain.

Investor apprehension ahead of Wednesday’s Fed monetary policy decision and forward guidance continued to weigh on the crypto market.

Adding to the market angst, however, was news of DeFi lender Celsius suspending all withdrawals, swaps, and transfers. With the dust yet to settle from the collapse of Terra LUNA and TerraUSD, the prospect of another market event came at the wrong time.

The extended sell-off led bitcoin (BTC) to sub-$22,000 for the first time since December 2020.

Crypto Market Cap Slides to sub-$1,000 Billion Amidst Panic Selling

A particularly bearish Monday saw the total crypto market cap slide by $130.6 billion to end the day at sub-$1,000 billion.

The total crypto market cap last stood at sub-$1,000 billion in February 2021. By contrast, however, the crypto market was in a bull run in February 2021, culminating in a bitcoin November all-time high of $68,979.

Year-to-date, the total crypto market cap has fallen by $1,268 billion.

Crypto market cap slides to sub-$1,000 bn.

With regulators looking to expedite efforts to roll out more stringent policy measures, the news of Celsius suspending withdrawals will likely draw more government ire.

The latest news raises the risk of more collapses in the wake of TerraUSD Classic (USTC) and Terra LUNA.

From the top ten cryptos, ETH and BTC led the way down, with losses of 15.7% and 15.5%, respectively.

BNB (-12.6%), DOGE (-14.8%), and XRP (-9.1%) also saw heavy losses.

ADA and SOL fared better than most, falling by 5.3% and 6.6%, respectively.

From the CoinMarketCap top 100, Aave (AAVA), CurveDAO Token (CRV), NEO (NEO), NEXO (NEXO), THORChain (RUNE), and Zcash (ZEC) saw the heaviest losses.

Tracking gold spot (XAUUSD) into the red, PAX Gold (PAXG) failed to provide comfort, declining by 3.01%. On Monday, gold spot slid by 2.80% to end the day at $1,819.

Total Crypto Liquidations Remain Elevated

Following a rise over the weekend, total crypto liquidation spiked going into today’s session.

According to Coinglass, 24-hour liquidations stood at $1,070 million, well above any levels in recent weeks. Early in the Monday session, 24-hour liquidations had stood at $359.7 million,

One-hour liquidations pointed to a steadying in market cap conditions, with one-hour liquidations at $15.53 million.

Crypto liquidations sky rocket.
Total Crypto Liquidations 140622

Crypto Daily News Highlights

  • DeFi lender Celsius suspended withdrawals, swaps, and, transfers to add to the crypto market ire.
  • JPMorgan announced plans to tokenize US Treasuries to embed them into its crypto strategy.
  • US investors filed a lawsuit against Binance US for illegally selling TerraUSD and Terra LUNA.
  • Former Twitter CEO Jack Dorsey challenged Elon Musk to develop a DOGE-based Web69.
  • XRP investors await a court ruling that could decide the direction of the SEC case against Ripple Labs.
  • MicroStrategy (MSTR) share price tumbled by 25.18% on Monday, with Coinbase (COIN) sliding by 11.41%.

Binance US Faces Court Action for the Sale of LUNA and TerraUSD

Key Insights:

  • Binance was back in hot water today, with news of US investors filing a class action suit against Binance US for the sale of Terra LUNA and TerraUSD.
  • The fallout from the collapse of Terra LUNA and TerraUSD is likely to impact several US crypto exchanges.
  • The class-action suit coincided with a broad-based crypto market sell-off that saw Binance Coin (BNB) fall back to sub-$220.

Investors and crypto exchanges are in the midst of the crypto winter. Since hitting a November 8 all-time high of $694, Binance Coin (BNB) has tumbled by more than 68%.

While investor sentiment towards inflation, the economic outlook, and Fed monetary policy has contributed to the meltdown, regulatory uncertainty has added fuel to the fire.

In May, the collapse of TerraUSD (USTC) and Terra LUNA added further downward pressure. The dust has yet to settle from the collapse, with regulators and investors looking for answers.

This week, the world’s leading exchange Binance was back in hot water.

Investors File Class Action Suit Against Binance US

Today, an investor group filed a class action suit in the US District Court of Northern District of California claiming that Binance illegally sold unregistered securities UST and LUNA.

Roche Freedman and Dontzin Nagy & Fleissig filed the lawsuit on behalf of the investor group. The lawsuit also claims Binance US mislead investors into purchasing UST and LUNA.

Kyle Roche took to Twitter today, looking for other investors wishing to file claims against exchanges. Kyle Roche tweeted,

“If you purchased $LUNA or $UST on either @coinbase @krakenfx @binance or @Gemini, please reach out to TerraRecovery@rochefreedman.com . My firm is coordinating an effort to help those who lost funds from the recent collapse of #terra and #luna.”

The latest class action filing follows news of the SEC investigating whether BNB was a security when sold in 2017.

Things are not much better for Coinbase and Gemini, who also face the prospect of class action suits.

Last week, news hit the wires of retirement investment company IRA Financial filing a lawsuit against Gemini Trust Company. This year, Coinbase has also faced class action suits, with investors claiming the exchange sold securities illegally.

Binance Coin (BNB) Price Action

At the time of writing, BNB was down 13.2% to $221.

A mixed start to the day saw BNB rise to an early morning high of $258 before falling to a low of $217.

BNB fell through the First Major Support Level at $246 and the Second Major Support Level at $238.

Finding support at the Third Major Support Level at $217, BNB partially recovered to $221 levels.

BNB sees deep red
BNBUSD 130622 Daily Chart

Technical Indicators

BNB will need to move through the Major Support Levels and the $259 pivot to target the First Major Resistance Level at $267.

BNB would need broader crypto market support to return to $250 levels.

Failure to move through the Major Support Levels and the pivot would bring the Third Major Support Level at $217 back into play. Barring another extended sell-off, BNB should avoid sub-$210 and the current year low of $207.

BNB under pressure support levels in play.
BNBUSD 130622 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. BNB sits below the 50-day EMA, currently at $276. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA fell back from the 200-day EMA; BNB price negative.

A move back to $250 would bring the 50-day EMA into play.

Binance US faces lawsuit pressuring BNB.
BNBUSD 130622 4-Hourly Chart

DeFi Lender Celsius Halts Withdrawals, Sends 104,000 ETH to FTX

Key Insights:

  • Due to “extreme market conditions,” crypto lender Celsius paused all withdrawals, swaps, and transfers.
  • Celsius did not mention when it would call off the withdrawal freeze.
  • Celsius has transferred around 104,000 ETH to FTX in the past three days.

Crypto lending platform Celsius Network has been under pressure from all sides, including US state regulators. The embattled startup has drawn the ire of securities commissions from the states of Kentucky, Alabama, New Jersey, and Texas. The regulators believe the company violated security laws through its crypto “Earn Rewards” program.

Adding to it, Celsius’s native token CEL slumped after being affected by the broader crypto crash last month. The major sell-off was driven by the collapse of TerraUSD (UST) and its sister token Luna.

Now, Celsius users are facing another blow after the company paused withdrawals, swaps, and transfers, but there are conflicting reports about what actually happened.

Celsius halts withdrawals, leaving investors in shock

The crypto staking network Celsius experienced a chaotic weekend after announcing the hold on withdrawals, citing “extreme market conditions.” In the elaborate blog post, the firm said,

“We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”

Immediately following the announcement, the price of CEL fell sharply by 45% to $0.19 at press time. This triggered market stress in the sector bringing down the price of ether (ETH) to $1,237 as of press time.

The company noted that the act would “stabilize liquidity and operations” while taking steps to protect assets and benefit the Celsius community.

“We are working with a singular focus: to protect and preserve assets to meet our obligations to customers. Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible.”

The company did not specify an exact timeframe when it would resume withdrawal services.

What does it mean for users?

The news follows increased tension among Celsius users who vented on social media. One user spread the rumor that there is a possibility for locked Celsius accounts, “similar to Luna.”

The CEO of Celsius, Alex Mashinsky, hit back at the user denying such allegations and terming such rumors as FUD.

A sudden announcement of the temporary suspension of withdrawals has put users in a fix. Celsius community will not be able to withdraw until the company resumes its withdrawal services. However, Celsius promises customers that their accounts would meanwhile accrue interests.

Celsius Network platform, which has 1.7 million customers, offers an interest-bearing savings account, borrowing, and payments with digital assets and fiat money. This regulated lender lets users receive interest on deposited cryptocurrencies or take out crypto collateralized loans.

The mass exodus of assets

The digital assets lender has supposedly transferred around 104,000 ETH in total for the past three days to the FTX exchange today for unspecified reasons.

Moving massive amounts of ETH, wrapped bitcoin (WBTC), and freezing withdrawal services has stirred speculators. The crypto firm sent about 9,500 WBTC worth around $247 million.

One user noted that the possible reason could be to earn yields, while there are risks that it would create delta exposure. However, the exact reason for the mass exodus of assets between Celsius and FTX and the sudden suspension of withdrawals remains unknown.

The liquidity problem

Put simply, when a business does not have the liquid assets necessary to meet its short-term obligations, such as repaying loans, it faces a liquidity problem.

In this case, Celsius has been facing a liquidity crisis since last month, when CEL’s price dropped to $1 after customers complained about being unable to withdraw funds.

The firm would be trying to stabilize liquidity by replacing several volatile digital assets like WBTC and ETH, which the company withdrew from Aave.

Per the Cointelegraph report, since Sunday, Celsius has staked 204 million USD Coin (USDC) stablecoins on Aave. Additionally, the lender has deposited 10 million USDC and around 8.2 million Dai (DAI) stablecoins to Compound. 

The stablecoins re-staked by Celsius (222 million in total) is close to the value of removed WBTC assets.

Additionally, Mashinsky has been highly vocal in the recent past, blaming short-sellers on Wall Street as responsible for the overall crypto crash, including the fall of CEL and Terra network. He also recently told Kito News that the crypto markets would recover, and inflation is not a long-term concern.

Bitcoin (BTC) Falls to sub-$27,500 with the Bears Eyeing $25,000

Key Insights:

  • On Saturday, bitcoin (BTC) fell by 2.33% to end the day at sub-$28,500.
  • Investors failed to move on from the US inflation figures on Friday, with the focus now moving on to the Fed monetary policy decision on Wednesday.
  • The Bitcoin Fear & Greed Index saw a modest rise this morning, despite bitcoin falling for a fifth consecutive day.

On Saturday, bitcoin (BTC) fell by 2.3%. Following a 3.4% slide on Friday, bitcoin ended the day at $28,389.

A bullish morning saw bitcoin hit a high of $29,414 before hitting reverse.

Falling short of the First Major Resistance Level at $29,989, bitcoin slid to a day low of $28,105.

Bitcoin fell through the First Major Support Level at $28,492 to end the day in the deep red.

Market sentiment failed to improve this morning, with bitcoin facing the prospect of ending the week at the lowest level since the week ending December 21, 2020.

Market jitters over Fed monetary policy and the likely interest rate path trajectory to curb inflation continue to weigh.

The Bitcoin Fear & Greed Index Rises Amidst Sell-Off

Today, the Fear & Greed Index rose from 12/100 to 14/100. The modest increase came despite the ongoing bitcoin sell-off that led bitcoin down to sub-$27,500 for the first time since the May 12 sell-off fueled by the collapse of TerraUSD (USTC) and Terra LUNA.

BTC deep in the Extreme Fear zone.
Fear & Greed 120622

While the Index increased, despite Saturday’s sell-off, the Index remains deep within the “Extreme Fear” zone, reflecting investor fear of further downside.

With bitcoin closely correlated with the NASDAQ 100, investors may need to wait until Monday for any shift in sentiment.

The threat of a more aggressive Fed interest rate path, however, could test appetite for riskier assets through to Wednesday’s decision.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 3.29% to $27,457.

A mixed start to the day saw BTC rise to an early morning high of $28,519 before sliding to a morning low of $27,183.

The extended sell-off saw BTC fall through the First Major Support Level at $27,860 and the Second Major Support Level at $27,330.

BTC under pressure this morning.
BTCUSD 120622 Daily Chart

Technical Indicators

BTC will need to move through the First Major Support Level and the $28,636 pivot to target the First Major Resistance Level at $29,165.

BTC would need the broader crypto market to support a return to $29,000.

An extended rally would test the Second Major Resistance Level at $29,942 and resistance at $30,000.

Failure to move through the First Major Support Level and the pivot would leave the Second Major Support Level at $27,330 in play. In the event of an extended sell-off, bitcoin could test the Third Major Support Level at $26,015 before any recovery.

Support levels in play.
BTCUSD 120622 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. Bitcoin sits below the 50-day EMA, currently at $29,549. The 50-day EMA fell back from the 100-day EMA. The 100-day EMA eased back from the 100-day EMA, bitcoin price negative.

A return to $29,000 would give the bulls a run at the 50-day EMA.

Inflation and Fed policy weighs on BTC.
BTCUSD 120622 4 Hourly Chart

Crypto Weekly Review June 12 – BTC Resumes Downward Trend

Key Insights:

  • Bitcoin (BTC) and the broader crypto market took a hit, with US inflation and sentiment towards Fed monetary doing the damage.
  • For BTC, it was a tenth weekly loss in 11 weeks, with the broader crypto market following BTC into the deep red.
  • News updates from several leading crypto networks failed to soften the blow.

Crypto market conditions deteriorated rapidly after a brief pause at the turn of the month. While the markets moved on from the collapse of (UST) and Terra LUNA, investors were unable to shake inflation jitters.

US inflation numbers on Friday suggested that free money could be coming off the table sooner than many had anticipated.

Calls from lawmakers for greater regulatory oversight of the digital asset space added to the market angst in the week.

Bitcoin (BTC) on Target for a Tenth Weekly Loss in 11 Weeks

Bitcoin enjoyed a bullish start to the week before hitting reverse. Hopes of a market bottom, following a first weekly gain in ten weeks, supported the broader market.

On Monday, bitcoin rallied by 4.8%, returning to $31,700 before succumbing to broader market forces.

Going into Sunday, bitcoin was down for five consecutive days. Barring a Sunday rebound, a 4% fall for the week would leave bitcoin at its lowest weekly close since December 21, 2020.

At the time of writing, bitcoin was down 4.73%% to $28,507 for the week ending June 12. Bitcoin would need to wrap up the week at $30,000 to log a second consecutive weekly gain.

BTC and crypto market see deep red.
BTCUSD 1206 Weekly Chart

Bitcoin movements through to Friday closely tracked the NASDAQ 100, which ended the week down 5.60%.

An inverse correlation with WTI crude oil prices was also evident in the week, reflecting the influence of market sentiment towards inflation on the crypto market.

BTC correlation with the NASDAQ weighs.
BTC-NASDAQ-WTI 1206 Daily Chart

The Crypto Bears Regained Control in a Bearish Week for the Top Ten

In the week ending June 12, SOL is set for a 12% fall to log a tenth consecutive weekly decline.

At the time of writing, ETH leads the way done for the week, sliding by 15.13% to $1,500 levels. News of a possible migration delay to a proof-of-stake protocol added to the selling pressure.

Things were not much better for BNB (-9.47%), DOGE (-13.80%), and XRP (-8.96%), which were also heading for weekly losses.

ADA (-2.12%) fared the best, with support ahead of the Vasil hard fork limiting the losses.

The total crypto market cap rose to a Monday high of $1,284 billion before sliding to a Saturday low of $1,105 billion.

Barring a broad-based crypto rebound on Sunday, the total market cap will fall for a ninth week out of ten, with another $100 billion coming off the table.

Crypto bearish trend resumed.
Crypto Total Market Cap 1206 Weekly Chart

Crypto News Highlights of the Week

  • SEC investigates whether BNB was a security when sold in 2017.
  • Reuters reported Binance being a ‘conduit for laundering at least $2.35 billion in illicit funds.’ Binance responded to the report.
  • PayPal announced the option to send and receive crypto to other wallets.
  • A bipartisan bill backed by Republican Cynthia Lummis and Democrat Kirsten Gillibrand would make the CFTC the crypto watchdog.
  • Citadel Securities builds a crypto trading marketplace.
  • Updates from the June 7 court-scheduled SEC-Ripple conference favored Ripple Lab.
  • The New York Department of Financial Services (NYDFS) published guidelines on the issuance of stablecoins.
  • Tether announced the launch of USDT on Tezos, making it the thirteenth blockchain.
  • Global bitcoin (BTC) adoption could be up by a further 10% by 2030.
  • Ethereum core developers announced another delay, sinking ETH.
  • Deloitte survey showed more than 75% of US merchants are planning to accept digital currencies within the next 24 months.

SEC Is Reportedly Probing the Firm Behind Stablecoin TerraUSD

Key Insights:

  • SEC is investigating whether Terra’s tokens are illegal securities.
  • Terra founder Do Kwon and Terraform Labs are already facing scrutiny from SEC over offering the Mirror Protocol.
  • However, Terraform is not aware of any SEC probes into UST.

The Securities and Exchange Commission (SEC), which is already investigating Terra (LUNA) tokens following its collapse, is now probing whether Terraform Labs, the company behind UST, violated federal investor protection laws.

The investor protection regulation details regulatory priorities and issues surrounding new financial products, fee structures, and trading strategies.

Did Terraform violate US laws?

Discussing the confidential probe, an unnamed source told Bloomberg that members of the SEC’s Division of Enforcement are examining whether Terraform’s token marketing violated the investor protection rules.

This is a separate probe from the ongoing investigation on the firm and its founder Do Kwon in connection with offering another cryptocurrency project dubbed Mirror Protocol.

The Mirror Protocol trading platform allows users to trade mirrored assets representing synthetic stocks.

Meanwhile, the Singapore-based Terraform noted that it is unaware of any such investigation by the US watchdog. Kwon said in a statement,

“We are not aware of any SEC probes into TerraUSD at this time – we’ve received no such communication from the SEC and are aware of no new investigation outside of that involving Mirror Protocol.”

Terra’s trauma – A brief recall

Unlike other stablecoins such as tether (USDT) or USD Coin (USDC), backed by real-world assets such as fiat currencies and government bonds, UST relies on an algorithm, which is not a central issuer.

Terraform Labs, the company behind the token, developed a forex reserve for UST following the criticism faced by algorithmic stablecoins. A separate entity called the Luna Foundation Guard (LFG) stepped in to provide backing.

In February, the LFG created a bitcoin (BTC) denominated reserve for UST and announced plans to hold $10 billion in BTC reserves for the stablecoin. Since then, LFG has been actively purchasing BTC, announcing a sizeable purchase totaling $1.5 billion in May.

LFG would use its BTCs to buy back UST from the market in case the stablecoin price drops below $1. This strategy failed when BTC experienced a sharp downfall on May 7, following Fed’s rise in interest rates by half-point.

Terra investors woke up on May 9, only to fall victim to an unexpected implosion. Bloomberg calls this as one of the biggest crypto busts in history, wiping out billions of dollars in value.

Following this, Terraform relaunched its blockchain and renamed the Luna coin that was struggling close to zero. However, this new version of the blockchain did not include UST.

Lummis and Gillibrand Bill Aims to Give Crypto Oversight to the CFTC

Key Insights:

  • Cynthia Lummis and Kirsten Gillibrand filed the Responsible Financial Innovation Act, which would give digital asset oversight powers to the Commodity Futures Trading Commission (CFTC).
  • The crypto market showed little reaction, with the bill in its early stages of passage.
  • Any final approval of the bill may come too late for Ripple Labs, currently embroiled in a lengthy legal battle with the Securities and Exchange Commission (SEC).

Regulatory chatter spiked in recent weeks, with the collapse of TerraUSD (UST) and Terra LUNA incentivizing governments and regulators to expedite new crypto regulations. Both the CFTC and the SEC have been vocal, as the SEC v Ripple (XRP) case drags on.

For some jurisdictions, began work on introducing a more robust crypto regulatory framework sooner than in others.

In the US, the Biden Administration put cryptos front and center with the release of the White House Executive Order in March.

While the Executive Order was silent on which authority should regulate the crypto sector, the administration identified the need for lawmakers to deliver a regulatory framework.

This week, senators from both sides of the aisle introduced a bill looking to address the very issues that the crypto industry faces within the US.

Lummis and Gillibrand Deliver a Bipartisan Bill to Regulate Cryptos

In March, Democrat Kirsten Gillibrand announced that lawmakers are working on a “broad-based regulatory framework for how this industry should potentially be regulated in the future.”

At that time, Gillibrand reportedly said,

“Some parts will be regulated by the Commodity Futures Trading Commission, some parts will be regulated under the Securities and Exchange Commission.”

This week, news hit the wires of US lawmakers aiming to put the oversight of cryptos and other digital assets into the hands of the CFTC.

US senators Cynthia Lummis and Kirsten Gillibrand filed the Responsible Financial Innovation Act. The bill would give digital asset oversight powers to the CFTC.

While crypto companies side with the CFTC, lawmakers remain undecided. Indecision leaves the digital asset space in a regulatory black hole.

For the digital asset space that encompasses crypto and NFTs, a resolution to the classification of cryptos and NFTs would be a step in the right direction.

At present, the Securities and Exchange Commission is embroiled in a lengthy legal battle with Ripple Labs over the sale of XRP, claiming that XRP are securities and not commodities.

For Ripple Lab and XRP, the passing of a bill may come too late. It remains to be seen, however, whether the outcome of the SEC v Ripple case has any influence.

A Ripple victory, either by way of settlement or in court, would put the CFTC on a stronger footing.

Regulatory uncertainty continues to weigh on the crypto market. Progress towards handing the reins to the CFTC should be crypto market positive.

The crypto majors have shown little reaction, however, with the bill in its early stage of passage.

XRP Price Action

At the time of writing, XRP was down 0.32% to $0.3988.

A mixed morning saw XRP rise to an early high of $0.4014 before falling to a low of $0.3968.

Cryptos struggle this morning.
XRPUSD 090622 Daily Chart

Technical Indicators

XRP will need to move through the $0.4016 pivot to target the First Major Resistance Level at $0.4084. XRP would need the broader crypto market to support a return to $0.40.

In a broad-based crypto rebound, XRP should test the Second Major Resistance Level at $0.4168 and resistance at $0.42.

Failure to move through the pivot would bring the First Major Support Level at $0.3932 into play.

Barring an extended sell-off throughout the day, XRP should avoid the Second Major Support Level at $0.3864.

An XRP return to $0.40 key this morning.
XRPUSD 090622 Hourly Chart

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. At the time of writing, XRP sits below the 50-day EMA, currently at $0.3990. Today, the 50-day EMA flattened on the 100-day EMA. The 100-day EMA fell back from the 200-day EMA, XRP negative.

A move through the 100-day EMA, currently at $0.4072, would support a run at the 200-day EMA and $0.45. For XRP, however, a breakout may be unlikely ahead of any court ruling on the Hinman documents following Tuesday’s conference.

EMAs send bearish signal for XRP.
XRPUSD 090622 4-Hourly Chart

Solana Invests $100M in South Korean web3 Startups, Focus on Gaming

Key Insights:

  • Solana Ventures and the Solana Foundation have committed $100M to support South Korean crypto startups.
  • The seed investment will focus on gaming studios, GameFi, NFTs, and DeFi.
  • Solana is currently trading flat, down by 0.30 % over the last 24 hours.

The recent collapse of the Terra network has triggered South Korean authorities to introduce measures to scrutinize crypto exchanges. Reports noted that around 280,000 South Koreans had been victims of the unexpected plunge in UST and LUNA.

However, users are still holding strong, and investors aren’t backing down. The crypto plunge hasn’t left them in dismay, with some clinging to the belief that it is just too big to be allowed to fail.

To add more hope, Solana (SOL) has become the latest to bring funds to the crypto sector.

$100 million fund to support NFT, gaming, and DeFi projects

Solana blockchain’s key players Solana Ventures and Solana Foundation have jointly set up a $100 million fund to support crypto projects in South Korea. The funds will particularly focus on projects in gaming, non-fungible tokens (NFTs), and DeFi.

Johnny B. Lee, general manager of games for the Solana Foundation, told Bloomberg that it would also support platforms based on Terra, which was stranded by the blockchain’s collapse. He noted,

“The developers did nothing really wrong, but they’re left in the lurch.”

According to Austin Federa, head of communications at Solana Labs, the fund is backed by money from the Solana community treasury in addition to the venture arm’s pool of capital.

Lee predicted that there would be more “high-quality and fun games” launching on the Solana blockchain in the second half of 2022. He also noted that the industry would soon adopt web3 games as much as free-to-play games on mobile devices. He told TechCrunch,

“A big portion of Korea’s gaming industry is moving into web3, and we want to be flexible.”

Apart from capital inflows, Solana is also planning to offer developers in South Korea help with product and engineering.

South Korean crypto gaming sector

According to data from Statista, the overall gaming market in South Korea is projected to be valued at $18.3 billion this year.

While this figure accounts for the whole gaming industry and not crypto-related games, the number has increased steadily. Andrew Campbell, a program lead for Esports and content creator programs at Sky Mavis (the company that develops Axie Infinity), told Blockworks,

“There’s such a strong gaming culture in South Korea, and their distribution channels are a lot more centralized there.”

In what is the world’s fiercest gaming market, South Korean tech and gaming leaders like Nexon, Smilegate, and Netmarble have been pinning hopes on blockchain tech to create new business models. For instance, with a market cap of $21.43 billion, Nexon made headlines in 2021 for buying 1,171 bitcoins (BTC).

Solana price analysis

Solana’s price has been bullish after breaking down by 0.30% over the last 24 hours. The altcoin faced resistance at the $44.44 level, and firm support is seen at the $38.44 level. The digital asset is currently trading at $39.56 at press time.

SOL price

On June 1, the Solana network was down for more than six hours, and transactions could not be processed. This has led to a 12% decline in the value of SOL.

This sharp single-day decline came less than a month after the token experienced a 24% drop, driven by the market instability due to the collapse of Terra’s flagship stablecoin UST.

Chainlink (LINK) Jumps 9% on LINK Staking News and a New Roadmap

Key Insights:

  • On Tuesday, Chainlink (LINK) jumped by 9.16% to end the day at $8.70.
  • The release of a new roadmap, including the option to stake LINK delivered support.
  • Key technical indicators are bullish. LINK sits above the 200-day EMA.

On Tuesday, Chainlink (LINK) surged by 9.16%. Following a 4.32% rally on Monday, LINK ended the day at $8.70.

A bullish afternoon session, supported by a bitcoin (BTC) rebound from a day low of $29,210, delivered support.

A pickup in risk appetite across the US equity markets also provided crypto market support.

For LINK, however, investor reaction to updates from the Chainlink was key to the breakout session.

Chainlink Releases a New Road Map and Staking Plan

On June 7, Chainlink announced the network’s long-term goals, roadmap, and initial implementation that included LINK staking.

According to the announcement,

“Chainlink staking is being built around four long-term goals. These goals serve as the guiding principles behind its development and will be the pillars upon which to define its success over time as the staking system matures.”

The four long-term goals include:

  • Increase the cryptoeconomic security and user assurances of Chainlink Services.
  • Enable community participation in the Chainlink network.
  • Generate sustainable rewards from real long-term use.
  • Empower node operators to access higher-value jobs by staking.

The announcement went on to say,

“The initial staking pool in v0.1 will be capped in size, offering distinct allotments to node operators, community members, and the coordinator of oracle networks. The pool will start with an aggregate size of 25 million LINK tokens, with the planned goal of scaling to a pool size of 75 million LINK tokens in the months after the launch, based on demand.”

Stake rewards will be up to 5.0% in v0.1 and will then vary after the release of V1, where rewards will depend on user fees and commitment periods.

Chainlink Price Action

At the time of writing, LINK was down 0.16% to $8.69.

LINK to target $9.00.
LINKUSD 080622 Daily Chart

Technical Indicators

LINK will need to avoid the $8.33 pivot to test the First Major Resistance Level at $9.35.

Broader crypto market gains would support a breakout from Tuesday’s high of $8.98.

In the event of another extended rally, LINK should test the Second Major Resistance Level at $10.00.

A fall through the $8.33 pivot would bring the First Major Support Level at $7.68 into play.

Barring an extended sell-off throughout the day, LINK should avoid sub-$7.50. The Second Major Support Level sits at $6.66.

A LINK return to $9.00 would bring $10.00 into play.
LINKUSD 080622 Hourly Chart

The EMAs and the 4-hourly candlestick chart (below) send a bullish signal. At the time of writing, LINK sat above the 200-day EMA, currently at $8.17.

This morning, the 50-day EMA pulled away from the 100-day EMA. The 100-day EMA narrowed to the 200-day EMA; LINK positive. Overnight, the 50-day EMA crossed through the 100-day EMA, supporting the breakout session.

A hold above the 200-day EMA would support a move through $9.00 to bring $10.00 into view.

LINK last visited $10.00 on May 9, several days before the collapse of TerraUSD (UST) and Terra LUNA, which left LINK at a current year low of $5.30.

A hold above the 200-day EMA key.
LINKUSD 080622 4-Hourly Chart

Crypto Turmoil Doesn’t Affect Bermuda’s Plans To Emerge As Crypto Hub

Key Insights:

  • Bermuda’s minister doesn’t see crypto market volatility as a hindrance to becoming a crypto hub.
  • Jason Hayward said Bermuda wants to attract more cryptocurrency-related projects and firms.
  • Bermuda Monetary Authority has licensed 14 digital-asset companies, including four in 2022.

During the Digital Currency Group Founders’ Summit in 2019, Edward David Burt, the youngest Premier of Bermuda, shared how determined he is to make the country the biggest crypto hub.

Since then, the British island territory has been taking steps to make Bermuda the most crypto-friendly jurisdiction. For instance, the country enacted a regulatory regime governing initial coin offerings (ICO) and awarded its first ICO certification to the fintech company Uulala (UULA).

Now, the country is optimistic that the recent Terra network crash, causing a deep plunge in the price of its stablecoins TerraUSD (UST) and Luna, would have a positive impact in the long run.

Bermuda proposes crypto-friendly laws to attract more businesses

In a move to become a prominent player in the crypto industry, Bermuda has had high hopes that the recent crypto price crash won’t affect their crypto-hub ambitions.

Jason Hayward – Bermuda’s Minister of Economy and Labor – believes that the country’s transparent crypto regulations and comprehensive regulatory framework could attract more crypto companies.

Speaking with the Wall Street Journal, Hayward noted that the recent devaluation in the price of cryptocurrencies such as bitcoin (BTC), which has fallen over 50% from its November record high, “does not threaten the island’s ability to become a crypto hub.” He further said,

“This industry downturn is likely to advance our goal and positively impact our long-term growth and role in this sector.”

According to Bermudan regulators, 27% of Bermuda’s economy accounts for international businesses, including their local trained workforce. Competing with other crypto-friendly countries like Malta and Liechtenstein, Bermuda is enticing crypto companies to get a foothold in the sector.

The move comes at a time when crypto firms blamed regulatory uncertainty as a barrier to the sector’s broader acceptance.

Additionally, crypto experts believe that Bermuda is one such jurisdiction that has enacted a proper regulatory framework for cryptocurrencies. 

David Schwartz, president of the Financial & International Business Association, said Bermuda is leading the way in crypto regulation in establishing an infrastructure for the crypto industry.

Schwartz added that it is unknown how the regulators intend to supervise and examine the crypto firms. He said,

“They’ve got great rules and regulations and laws, but it’s all about the implementation at the end of the day.”

Per the 2018 legislation, all cryptocurrency companies in Bermuda should get a license from the Bermuda Monetary Authority (BMA), which oversees the island’s insurance and reinsurance industry.

So far, the BMA has approved licenses to 14 digital-asset companies, including four crypto companies, in 2022. This includes stablecoin USD Coin (USDC) provider Circle, crypto-lending startup BlockFi, and crypto exchange Bittrex.

Crypto Market Daily Highlights – June 5 – BTC Ends 9-Week Losing Streak

Key Insights:

  • It was a mixed end to the week for the crypto majors. Bitcoin (BTC) managed to avoid red, however, to end a nine-week losing streak.
  • Another bearish start to the day saw bitcoin and the broader market face another day in the red before afternoon support kicked in.
  • Concerns over Fed monetary policy, following Friday’s US nonfarm payrolls, continued to weigh on investor appetite.

It was a mixed Sunday session for the crypto market, with lawmaker chatter from the US testing investor resilience over the weekend.

In recent days, a number of lawmakers targeted cryptos, highlighting the risks and calling for increased oversight.

The collapse of TerraUSD (UST) and Terra LUNA has given lawmakers cause to put the spotlight on the crypto market.

Crypto winter chatter and talk of exchanges laying off employees or freezing headcounts continued to add to the negative mood.

For bitcoin (BTC), five sessions in the green from seven, which included a 7.69% rally on Monday, ended a nine-week losing streak.

Crypto Market Cap Visits Sub-$1,200bn for a Third Consecutive Day

On Sunday, the total crypto market cap fell to a day low of $1,196 billion before ending the day at $1,214 billion.

A fall to sub-$2,000 billion for a third consecutive session continued to reflect the bearish sentiment across the market.

For the crypto bulls, steering well clear of the May 12 current year low of $1,082 billion will remain the key.

Crypto market cap revisits sub-$1,200bn.
Total Market Cap 060622 Daily Chart

BTC rose by 0.18% on Sunday. Following a 0.56% gain on Saturday, BTC ended the week up by 1.51% to $29,898.

Across the rest of the top ten, ADA (+0.18%), ETH (+0.07%), and XRP (+0.77%) joined BTC in positive territory.

BNB (-0.76%), Dogecoin (DOGE) (-1.03%), and SOL (-1.28%) ended the day in the red, however.

For the week, divergence across the top ten was evident. ADA was the success story, rallying by 22.0%, while SOL slid by 11.9%.

Total Crypto Liquidations Point to Calmer Market Conditions

Market conditions were benign relative to mid-week. According to Coinglass, 24-hour liquidations stood at $81.52 million. While up from levels seen on Saturday, liquidations remained well below $500 million levels seen mid-week.

1-hour and 4-hour liquidations suggest an easing in selling pressure, which supported the bitcoin recovery from early losses.

At the time of writing, total liquidations over one hour stood at $2.62 million.

The markets will likely continue to keep an eye on liquidations, with any spike a test of support.

Crypto liquidation pressure eases.
Total Crypto Liquidations 060622

Crypto News Highlights from the Day,

  • Luna 2 ended the week up by 23.4% but remained down 40.3% from an opening price of $10.69.
  • STEPN (GMT) announced that it was under multiple DDOS attacks on Sunday, leaving GMT down 6.2% on the day.
  • The Tron Foundation delivered stablecoin transparency via the ‘Tron DAO Reserve’ page to allay fears following the collapse of TerraUSD.
  • Over the weekend, Bored Ape Yacht Club announced a discord server exploit, impacting 200 ETH worth of NFTs.

Bitcoin (BTC) Will Need to Return to $30,000 to Avoid a Sunday Reversal

Key Insights:

  • On Saturday, bitcoin rose by 0.56% to log a sixth daily gain from eight sessions.
  • Negative chatter over crypto regulations and market sentiment towards Fed monetary policy pegged bitcoin back from a more material gain.
  • Bitcoin (BTC) technical indicators remain bearish, with bitcoin sitting at the 100-day EMA.

On Saturday, bitcoin (BTC) rose by 0.56%. Partially reversing a 2.50% fall from Friday, bitcoin ended the day at $29,845.

A bearish start saw bitcoin fall to an early morning low of $29,467 before finding support.

Steering clear of the day’s Major Support Levels, bitcoin struck an afternoon intraday high of $29,954.

Falling short of the First Major Resistance Level at $30,488, however, bitcoin slipped back into the red before a late recovery.

Saturday’s upside came despite the US nonfarm payroll figures on Friday, which supported a more aggressive Fed interest rate path trajectory.

The Bitcoin Fear & Greed Index Sits Deep in the Extreme Fear Zone

Today, the Fear & Greed Index fell from 14/100 to 10/100 despite bitcoin’s Saturday gain and the prospect of ending a nine-week losing streak.

While falling deeper into the “Extreme Fear” zone, the Index continued to hold above May’s low of 8/100.

Fear & Greed Index bearish for BTC.
Fear & Greed 050622

Regulatory chatter was market negative, with regulators and lawmakers calling for greater oversight.

Going into the weekend, Governor Christopher J. Waller talked about “Risk in the Crypto Markets.”

The governor talked of high volatility being the rule and not the exception and the frequent occurrence of fraud and theft.

Waller also focused on retail users with a lack of crypto experience and the need for some standard rules.

South Korean lawmakers were also active going into the weekend. According to local media, regulators plan to move beyond the Capital Markets Act following the collapse of TerraUSD (UST) and Terra LUNA.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 0.45% to $29,712.

A range-bound start to the day saw bitcoin rise to an early morning high of $29,882 before falling to a low of $29,712.

BTC starts the day under pressure.
BTCUSD 050622 Daily Chart

Technical Indicators

BTC will need to move back through the $29,754 pivot to target the First Major Resistance Level at $30,045.

BTC would need the broader crypto market to support to break out from Saturday’s high of $29,954.

An extended rally would test the Second Major Resistance Level at $30,241 and resistance at $30,500. The Third Major Resistance Level sits at $30,728.

Failure to move back through the pivot would test the First Major Support Level at $29,554. Barring another extended sell-off, BTC should steer clear of sub-$29,000 levels. The Second Major Support Level at $29,267 should limit the downside.

A BTC move through the pivot needed to avoid a loss.
BTCUSD 050622 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal. Bitcoin sits below the 50-day EMA, currently at $30,051. The 50-day pulled back from the 100-day EMA. The 100-day EMA slipped back from the 200-day EMA; BTC negative.

A move through the 100-day EMA, currently at $30,260, would support a run at $31,000.

EMAs send bearish signal.
BTCUSD 050622 4 Hourly Chart