In its latest report, on-chain analytics firm Glassnode indicates that after closing negative for 10 out of the prior 11 weeks, Bitcoin has entered unchartered bear territory, triggering a rare metric last seen in March 2020:
The #Bitcoin market has plunged into the low $20k range, coming into contact with the Realized Price.
In our latest edition, we assess how the market is entering the deepest and darkest phase of the bear.
The report notes that Bitcoin and digital assets are facing significant losses, hitting multi-year lows following the latest US CPI print which surprised to the upside.
Coupled with an inverted yielded curve, a strengthening dollar and a negative macro outlook, Bitcoin appears to be languishing in “the darkest phase of the bear”. Unlike prior cycles, Bitcoin is now unquestionably tied to the broader macroeconomic environment.
Notwithstanding, both “Shrimps” (less than 1 BTC) and “Whales” (more than 10k BTC) have continued to accumulate at these oversold levels, despite plenty of evidence that even long-term holders are capitulating:
“Shrimps” buy nearly 50% of the new coin issuance since early November. Source: Glassnode
💥Institutions are loading up on #Bitcoin, says Glassnode.
With bitcoin trading in the US$20,000-23,000 range, it has reached “Realised Price”, one of the most important on-chain metrics. In short, this metric tracks the average price of every coin in the supply, valued at the time it was last spent on-chain.
According to Glassnode, Realised Price (currently US$23,430) is “rarely visited by spot prices outside the deepest and latest stages of bear markets”. The last time we saw this metric reached was in March 2020, and at the end of the 2018 bear market where the market was in aggregate holding an unrealised loss:
BTC price and Realised Price. Source: Glassnode
Less than a week ago, Crypto News Australia reported that 2 percent of short-term bitcoin holders were in profit. Now, with the latest crypto collapse, that figure is zero. At the time of writing, bitcoin was trading at US$21,500, well below the Realised Price.
For investors with a long-term horizon who have been sitting on the fence waiting for an opportunity to get in – now may as good an opportunity as ever. While some metrics suggest we may be bottoming out, it’s equally likely there may be more pain on the horizon.
Either way, buckle up, it’s likely to be a bumpy ride – at least for the foreseeable future.
Coinbase is the latest in a slew of companies that have had to let employees go amid the current bear market. The exchange announced in a blog post that it would be slashing 1,100 jobs, or around 18 percent of its total workforce, as it prepares for an “extended” crypto winter:
Coinbase CEO @brian_armstrong announced today the difficult decision to reduce the size of the Coinbase team by 18%. More details and rationale in Brian’s email to employees, which has been made public for all to see ➡️ https://t.co/SpdZU3KdpS
Coinbase CEO Brian Armstrong has admitted “it is now clear to me that we over-hired”, noting that economic conditions are “changing rapidly” as the world appears to be entering a recession. He said it “could lead to another crypto winter, and [it] could last for an extended period”. Coinbase joins companies such as BlockFi and Crypto.com who announced this week that they would be shedding 400-plus jobs.
Armstrong’s latest plan, to be executed by the end of the second quarter, will see the company’s total workforce whittled down to 5,000 employees. The CEO conceded that the company “grew too quickly” in the bull market, scaling up from 1,250 employees at the start of 2021.
Coinbase shares are down almost 80 percent this year amid a sharp decline in crypto prices which has hurt the exchange’s transaction volumes.
Let’s take a closer look at today’s altcoins showing breakout signals. We’ll explain what the coin is, then dive into the trading charts and provide some analysis to help you decide.
1. Polygon (MATIC)
Polygon MATIC is the first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a modular, flexible framework that supports building multiple types of applications. The MATIC token will continue to exist and will play an increasingly important role in securing the system and enabling governance.
MATIC Price Analysis
At the time of writing, MATIC is ranked the 20th cryptocurrency globally and the current price is US$0.3749. Let’s take a look at the chart below for price analysis:
Since its Q1 highs, MATIC has been in a steady bearish trend, retracing nearly 75%. The price found support near $0.3520, at the 65.8% retracement level.
Last week’s sharp impulse up might have marked the start of a new trend. If so, higher timeframes suggest that $0.3639, near the 65.8% retracement and the 9, 18 and 40 EMAs, may see interest from bulls. The price could reach lower, near $0.3320, and still find support.
Currently, the price is contesting a region between $0.3039 and $0.3135. Closes over this level could confirm it as new support, leading to a move higher.
However, bulls are contending with probable resistance near $0.4631, while $0.5470 is also likely to be sensitive with the nearest support and resistance this close together.
2. Fantom (FTM)
Fantom FTM is a directed acyclic graph (DAG) smart contract platform providing decentralised finance (DeFi) services to developers using its own bespoke consensus algorithm. Together with its in-house token FTM, Fantom aims to solve problems associated with smart-contract platforms – specifically transaction speed, which developers say they have reduced to under two seconds.
FTM Price Analysis
At the time of writing, FTM is ranked the 64th cryptocurrency globally and the current price is US$0.2189. Let’s take a look at the chart below for price analysis:
FTM‘s bounce during Q2 ran into resistance near the old monthly highs. This rejection created a set of relatively equal highs near $0.4267, possibly forming the next bullish leg’s target.
Currently, the price is testing possible support near the weekly open, around $0.2061. This level also has confluence with the 80.6% retracement of the current local range and the 18 and 40 EMAs.
If this level fails to provide support, a zone from $0.1834 to $0.1730 might mark a possible swing low or consolidation area. This zone is between the 65.8% and 78.6% retracement of August 2021’s swing.
A more bearish tone in the market could propel the price lower. The lows, near $0.1530, may mark an area of possible support as well as a bearish target.
3. The Sandbox (SAND)
The Sandbox SAND is a blockchain-based virtual world allowing users to create, build, buy and sell digital assets in the form of a game. By combining the powers of decentralised autonomous organisations (DAOs) and non-fungible tokens (NFTs), the Sandbox creates a decentralised platform for a thriving gaming community. The Sandbox employs the powers of blockchain technology by introducing the SAND utility token, which facilitates transactions on the platform.
SAND Price Analysis
At the time of writing, SAND is ranked the 42nd cryptocurrency globally and the current price is US$0.8427. Let’s take a look at the chart below for price analysis:
SAND‘s impressive gains during Q1 halted at $2.38 before retracing 80% of the move. This price action created several areas of possible higher-timeframe resistance in the process.
The price found resistance on its last swing upward near $1.15 – an area that could provide resistance again. If this swing high breaks, the price might find resistance near $1.26. If this area does provide resistance, it would suggest the formation of a higher-timeframe consolidation.
The fast move up left little higher-timeframe support. However, a vast zone between $0.8890 and $0.8146 has provided support before and could give support again on a retest. This zone is between the 71.8%-to-88.6% retracement levels of 2021 Q4’s parabolic move.
Continuation downward through this level, especially if the overall market remains bearish, could retrace most of Q2’s move to the next higher-timeframe support near $0.7055.
These coins have high liquidity on Binance Exchange, so that could help with trading on AUD/USDT/BTC pairs. And if you’re looking at buying and HODLing cryptos, then Swyftx Exchange is an easy-to-use popular choice in Australia.
Before halting all withdrawals this week, crypto lending platform Celsius is alleged to have quickly transferred over US$320 million worth of cryptos to Bahamian exchange FTX. Rumours are now running rampant that Celsius may be heading to zero.
🚨Celsius withdrew 50,000 Ether and 7,000 WBTC collateral from its Aave position in core DeFi wallet 0x8ace. 6,000 WBTC and 20,000 Ether (so far) have been sent to #FTX…
— Dirty Bubble Media: 🌡☠️ (@MikeBurgersburg) June 13, 2022
Celsius token (CEL) fell nearly 70 percent since the firm announced on June 13 it was pausing all withdrawals to “stabilise liquidity”. It now finds itself in troubled waters as the company is rumoured to have unstaked US$247 million in Wrapped Bitcoin from AAVE and sent it to FTX.
Transactions commenced over the weekend, with the first batch of 3,500 Wrapped BTC and 50,000 ETH, and continued to increase in subsequent hours. Celsius has yet to comment on the transfers, with the only communication coming from an announcement halting all users’ services, including withdrawals.
Twitter Accusations of Mismanagement
While the firm has not yet addressed the transfers to FTX, the crypto community is up in arms on Twitter and speculation runs wild that there are associated issues of liquidity.
Users have also criticised the platform for how they believe the project has mismanaged its funds following the collapse of the Anchor Protocol on the now-renamed Terra Classic blockchain. Celsius has been surrounded by scandal since its chief financial officer was arrested in December 2021 on charges of money laundering.
Traders on FTX are paying 2,500% annualized to short $CEL.
Driving the spot price into the dirt as Celsius is forced to liquidate to raise funds. pic.twitter.com/wX7rpZCmZw
Some believe that if Celsius were to fail, it would precipitate a sell-off of its significant stack of staked ETH, which could cause it to depeg further from ETH.
While it is still unclear what the team at Celsius plans to do with the crypto it has moved, there is a real possibility that it could sell the assets it sent to FTX. Another option might be that it intends to stake the tokens it is sending to the exchange to earn yields. At this early stage, there appear to be more questions than answers. Hopefully some clarity will emerge shortly, particularly for those users who funds remained locked up.
Lending platform BlockFi and major cryptocurrency exchange Crypto.com are set to cut more than 400 jobs between them in the wake of this week’s 12 percent crypto market slump.
In a June 14 tweet, BlockFi CEO Zac Prince said “roughly 20 percent” of its workforce would be shed, which amounts to 170 employees:
This morning we announced that after taking significant time to plan and consider, we are reducing our headcount by roughly 20%. This is not a decision we take lightly and is one that brings us great sadness.
Both bosses blamed this year’s steadily deteriorating crypto market following its US$3 trillion peak last November. But surely the catalyst for the pending dismissals would have been this week’s 12 percent plunge, which pushed the market cap below US$1 trillion.
Neither firm is unique in its intention to downsize staff. Gemini, helmed by Winklevoss twins Cameron and Tyler, has cut 10 percent of its workforce, and Coinbase, another major US exchange, has withdrawn more than 300 job offers and introduced a hiring freeze. Middle Eastern exchange Rain Financial has reportedly culled “dozens” of jobs.
Gone Big Too Soon?
Like BlockFi, Crypto.com was riding high just a matter of months ago. In November last year, it paid a reported US$700 million in naming rights for the Los Angeles sports and culture arena formerly known as the Staples Center. Earlier this year, the company signed a five-year sponsorship deal worth A$25 million with the Australian Football League. The highly visible exchange, whose name is now ubiquitous in sporting circles, also has partnerships with the UFC, Formula 1, Italian Football Lega Serie A and French football powerhouse Paris Saint-Germain.
The Ethereum difficulty bomb – a crucial step toward Ethereum’s long-awaited Merge – has been delayed, according to core developer Tim Beiko:
In short, we agreed to the bomb delay. We were already over time, and want to be sure that we sanity check all the numbers before selecting an exact delay and deployment time, but we are aiming for a ~2 month delay, and for the upgrade to go live late June.
— Tim Beiko | timbeiko.eth 🐼 (@TimBeiko) June 10, 2022
The Ethereum difficulty bomb is a special code in the Ethereum blockchain and is an essential part of its major upgrade, the Merge, which will turn the network into a PoS ecosystem.
The difficulty bomb is designed to intentionally increase block difficulty (the amount of time it takes to produce a new block) exponentially over time. After a certain period, it becomes nearly impossible for validators to mine a new block, thus discouraging miners from remaining in the Proof-of-Work (PoW) consensus.
This Won’t Delay the Merge – Hopefully
Ben Edgington, another Ethereum core developer, also tweeted about the bomb difficulty delay, saying: “It won’t delay the Merge. I sincerely hope not.”
So, we will push back the Ethereum difficulty bomb.
We say it won't delay the Merge. I sincerely hope not. Every extra week on PoW generates close to 1 Million tonnes of CO2 emissions.https://t.co/pNER0LnAzU
Despite the current bloodbath in the crypto market (ETH dropped briefly below US$1,100 on June 13), Ethereum has managed to sustain its user base throughout the past couple of months. According to data from Etherscan, daily transactions have stayed above 1 million and the number of unique addresses is still growing every month.
Crypto services business Nexo is interested in buying “qualifying” assets from rival Celsius, since the latter appears destined for insolvency after freezing user withdrawals and transfers due to what it terms “extreme market conditions”:
After what appears to be the insolvency of @CelsiusNetwork and mindful of the repercussions for their retail investors & the crypto community, Nexo has extended a formal offer to acquire qualifying assets of @CelsiusNetwork after their withdrawal freeze. https://t.co/JFtKTHRLcY
In its now infamous June 13 blog post, Celsius said it would pause its swap and transfer products, without offering any timeline as to when withdrawals would be resumed.
We are working with a singular focus: to protect and preserve assets to meet our obligations to customers. Our ultimate objective is stabilising liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options; this process will take time, and there may be delays.
In a now widely circulated letter addressed to Celsius, Nexo has suggested that it is specifically interested in the former’s collateralised loan portfolio, however no mention of price was made:
We firmly believe that acquiring all or part of Celsius’ qualifying, outstanding collateralized loan receivables will go a long way in providing immediate liquidity to @CelsiusNetwork clients. We are still waiting to hear from their management and will update you.
As per the letter, Celsius has until June 20 to respond, however unconfirmed reports have circulated online that Nexo’s advances have been rejected.
For now it appears as if users will need to sit on the sideline hoping that all turns out well. However, with the price of digital assets collapsing, the situation is likely to get even worse for some users, according to Casa CEO Nick Neuman:
Just realized people with open borrows at low collateral ratios on Celsius are having to choose between getting liquidated due to market crash or depositing more collateral into a service that has frozen withdrawals and is potentially insolvent.
In a fascinating breakdown of the mechanics behind Celsius, Bitcoiner Dylan LeClair outlines how the company has earned a yield on its products. In short, it used user funds to arbitrage inefficiencies in the crypto market, and over time, found itself employing increasingly risky strategies to maintain artificially high yields.
Initially, it was the Grayscale Bitcoin Trust, which when implementing the so-called “contango trade” enabled a “risk-free” return:
In 2021 crypto yield services had the GBTC arbitrage and the massive contango (futures price above spot price) to arbitrage and secure *risk free* yield.
That all was gone in late fall, and the largest emergent “yield product” in crypto became…
Later, when that opportunity closed, on-chain analysts found evidence of Celsius turning to Terra’s Anchor protocol for its “risk-free” 20 percent return:
🚨#CelsiusNetwork sent 99,780 Ether ($275 million) to #Anchor protocol in the last two weeks- *half of it in the last 24 hours.*
— Dirty Bubble Media: 🌡☠️ (@MikeBurgersburg) May 3, 2022
And then following the Terra meltdown, Celsius relied upon synthetic ethereum (sETH) to earn a yield on Lido. However, sETH has since decoupled from ETH:
Celsius is a massive holder of stETH (Liquid staked ETH using Lido) to earn yield on their ETH waiting on the merge to PoS.
However staked ETH cannot be unstaked, so there are secondary markets to trade stETH<>ETH.
Notably, as LeClair comments, bitcoin is expected to wick down further in the days to come as the position is likely to be attacked until Celsius is liquidated:
Arguably the most egregious part of this saga is that Celsius is using user funds to defend its risky yield strategies. You’d imagine that few users were fully informed of the risks upfront. It’s become trite, but now more than ever – “not your keys, not your coins”.
An unprecedented class-action lawsuit numbering more than 2,000 plaintiffs has been filed against Binance.US in the aftermath of the Terra collapse, accusing the exchange of “misleading investors”.
We begin today. Partnered with one of the law firms I'm working with, Roche Freedman, our group of UST victims are bringing a class action against Binance US for tortious deceit & more.
I prefer a world where when crypto companies lie & prey on the weak, there are consequences. https://t.co/wKw0seQgEy
Filed in the US District Court for the Northern District of California, the lawsuit marks the first Terra class-action in the US. Roche Freedman LLP will be championing the investors’ case in alleging that Terra’s US dollar-based UST was marketed with higher stability than claimed and promoted by misleading advertising.
Roche Freedman also alleges that Binance.US is not registered as an exchange, nor as a broker-dealer, meaning it could have been violating securities law by listing an unregistered security in UST:
If you want to resolve a dispute or request arbitration, Binance US asks you to email an address that doesn't even exist.
This is the behemoth company equivalent of sticking your fingers in your ears and yelling "lalalala I can't hear you!" pic.twitter.com/OHbWoJDXN7
Binance.US has responded to these claims in stating that “Binance.US is registered by FinCEN [US Treasury’s financial intelligence unit] and adheres to all applicable regulations. These assertions are without merit, and we will defend ourselves vigorously.” The lawsuit also names Binance’s chief executive, Brian Shroder, as a co-defendant.
Binance Challenges Money-Laundering Allegations
Only a week ago, Binance challenged allegations regarding the laundering of US$2.4 billion. According to a Reuters report, the stolen funds had been laundered through the exchange between 2017 and 2021. The report, which Binance labelled a “woefully misinformed op-ed”, followed previous investigations into unreported crypto income.
Let’s take a closer look at today’s altcoins showing breakout signals. We’ll explain what the coin is, then dive into the trading charts and provide some analysis to help you decide.
1. Solana (SOL)
Solana SOL is a highly functional open-source project that banks on blockchain technology’s permissionless nature to provide decentralised finance (DeFi) solutions. The Solana protocol is designed to facilitate decentralised app (DApp) creation. It aims to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain.
SOL Price Analysis
At the time of writing, SOL is ranked the 9th cryptocurrency globally and the current price is US$30.10. Let’s take a look at the chart below for price analysis:
SOL has retraced 87% from its Q2 highs and reached possible support last week near $26.34. Resistance might begin near $33.64, which has confluence with the 9 and 18 EMAs.
A more substantial rally might reach near the swing high at $37.23 and the 40 EMA. This high is less likely to break if bears plan to continue the downtrend without a lengthier consolidation.
While not highly probable in the current market conditions, a more animated move upward could reach a wide resistance area between $40.42 and $45.94. This zone is where the last movement down accumulated positions before breaking down.
Possible support rests near $25.34, which showed sensitivity on the last test. While it could provide support again, the higher-timeframe bearish trend is more likely to propel the price into an inefficient area between $23.10 and $20.54. If the price reaches this zone, the Q1 2021 swing high near $17.12 might mark a more sensitive level.
2. Cardano (ADA)
Cardano ADA is a proof-of-stake blockchain platform whose stated goal is to allow “changemakers, innovators, and visionaries” to bring about positive global change. The open-source project also aims to “redistribute power from unaccountable structures to the margins to individuals”, helping to create a society that is more secure, transparent, and fair. Cardano is used by agricultural companies to track fresh produce from field to fork, while other products built on the platform allow educational credentials to be stored in a tamper-proof way, and retailers to clamp down on counterfeit goods.
ADA Price Analysis
At the time of writing, ADA is ranked the 7th cryptocurrency globally and the current price is US$0.4951. Let’s take a look at the chart below for price analysis:
ADA‘s near 60% drop during Q2 found a low near $0.4335 during early June before closing over a short-term high.
This daily close over the high could signal a shift in market structure that may reach probable resistance near $0.5915. A sustained bullish move may target the swing high at $0.6322. If this stop run occurs, a run beyond the high into probable resistance near $0.7210 and $0.7719 is possible.
Bulls could buy a retracement to possible support near $0.4570, just above the weekly open. A bearish turn in the marketplace may propel the price toward possible support near $0.4325.
However, relatively equal lows near $0.4057 and $0.3922 provide an attractive target for bears if the market resumes its bearish trend. A run on these lows might find support between $0.3647 and $0.3552.
3. Axie Infinity (AXS)
Axie Infinity AXS is a blockchain-based trading and battling game that is partially owned and operated by its players. The Axie Infinity ecosystem has its own unique governance token, known as Axie Infinity Shards AXS. These are used to participate in key governance votes and give holders a say in how funds in the Axie Community Treasury are spent.
AXS Price Analysis
At the time of writing, AXS is ranked the 49th cryptocurrency globally and the current price is US$14.05. Let’s take a look at the chart below for price analysis:
AXS‘s relatively small 20% range could suggest that a recovery is setting up in June.
Aggressive bulls could look for entries at the most recent area of support formed near $13.34. However, equal lows near $12.42 make a tempting target for a stop run into this support. This move could reach support near $11.90.
A decisive move to the downside could run stops below the second set of relatively equal lows near $11.20, possibly reaching support at an old swing high and a daily gap near $10.58.
A recent level near $17.84 provided resistance and caused a swing high to form near $19.88, offering first targets. A move through this high may arrive at new monthly high levels near $20.31 and $23.50.
These coins have high liquidity on Binance Exchange, so that could help with trading on AUD/USDT/BTC pairs. And if you’re looking at buying and HODLing cryptos, then Swyftx Exchange is an easy-to-use popular choice in Australia.
International law firm Holland & Knight served the defendant on-chain using a “service NFT“. The hacker, who cannot be named, stole US$7.94 million in digital assets from a hot wallet belonging to LCX, a Liechtenstein-based fintech company.
Method Approved by NY Supreme Court
The service method was approved by the New York Supreme Court and “is an example of how innovation can provide legitimacy and transparency to a market that some believe is ungovernable”, according to LCX.
The hack, which took place in January this year, saw assets including Ether, USDC, Sandbox and more stolen from LCX, whose blockchain tracing specialists were subsequently able to identify the addresses of the hacker’s wallets.
LCX has been working with law enforcement authorities in Liechtenstein, Ireland, Spain and the US to trace the funds, which were initially appropriated via Tornado Cash, a crypto mixer protocol for concealing the digital trail of blockchain transactions. LCX traced the funds and wallets through what it describes as “algorithmic forensic analysis”.
Could Legal Precedent Save NFTs?
Perhaps this legal first could be the saviour of NFTs. Earlier this month, crypto analytics firm IntoTheBlock reported that Ethereum transaction volume was down 80 percent on the same period last year due in large part to plummeting interest in NFTs. Google search data showed a concurrent 75 percent reduction in searches for the term NFT, contributing significantly to the drop in transaction volume.
Future of the legal system forming right in front of our eyes 🔥
