Decentral Block Post

The United States equities markets witnessed a sharp comeback last week, led by the Nasdaq Composite which gained 7.5%. The S&P was up about 6.5% for the week while the Dow Jones Industrial Average managed a gain of 5.4%.

Continuing its tight correlation with the equities market, the crypto markets are also attempting a relief rally. Bitcoin (BTC) has seen a modest recovery but some altcoins have risen sharply in the past week. This suggests that investors are taking advantage of the sharp fall in the price to accumulate altcoins at lower levels.

Smaller-sized investors have been using the decline in Bitcoin to build their position to at least one Bitcoin. Glassnode data shows that the number of Bitcoin wallet addresses having more than one Bitcoin rose by 873 between June 15 to June 25.

Could the recovery in Bitcoin and altcoins pick up momentum? Let’s study the charts of the top-5 cryptocurrencies that could charge higher in the short term.

BTC/USDT

Bitcoin’s relief rally is facing stiff resistance near $22,000 as seen from the long wick on the June 26 candlestick. This indicates that the bears are not willing to give up their advantage and are selling on rallies.

Bitcoin (BTC) focused on $21,000 into the weekend amid warnings that volatility could still consume the market before Monday.

S&P 500 sees second best week of 2022

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD broadly higher in its recent trading range after U.S. stocks ended the week strong.

As noted by markets commentators Holger Zschaepitz, the S&P 500 sealed its second best week of 2022, indicative of modest relief across risk assets.

Bitcoin was on track to log slights gains at its weekly close, the first weekly green candle — albeit small — since May.

Before then, however, anything could happens, according to on-chain analytics resource Material Indicators (MI).

Austrian crypto and stock trading platform Bitpanda joins the growing list of companies to announce a mass layoff as it aims to “get out of it financially healthy” amid an unforgiving bear market.

Over the past several weeks, the bear market resulted in numerous catastrophic outcomes for many ecosystems such as Terra’s (LUNA) and Abracadabra’s Magic Internet Money (MIM) de-pegging fiasco. Witnessing the crashes from a front-row seat, Bitpanda made the “tough decision” of cutting down its employee headcount to roughly 730 people.

While the exact number of employees intimated to stop working for Bitpanda remains undisclosed, data from LinkedIn indicates that the company is in the process of laying off approximately 277 full-time and part-time employees.

In the announcement, named ‘The Way Forward,’ Bitpanda supported the move to cut down employees by highlighting the need to be “robustly well-capitalized” amid uncertain market conditions, stating:

“It is a tough, but necessary decision and we are confident that the new organizational design will help us be more focused, effective and stronger as a company.”

The United States equity markets and the cryptocurrency space are witnessing a relief rally this week. Supporting the rise in risky assets is the U.S. dollar index (DXY), which retreated from its multi-year high. Generally, cryptocurrencies move inverse to the price of the U.S. dollar, but this week's bounce does not necessarily mean that bulls' grip over the market has come to an end.

Citing on-chain data, CryptoQuant senior analyst Julio Moreno, said that Bitcoin (BTC) miners may have already capitulated. Historical data suggests that miner capitulation usually precedes market bottoms.

Another on-chain metric that indicates that Bitcoin’s price may have reached an attractive level is the Mayer Multiple. The metric is calculated by dividing the price of Bitcoin by the 200-day moving average value. It points to whether Bitcoin is overbought, undervalued or fairly priced. On June 22, the indicator's reading was 0.5 and according to crypto entrepreneur Kyle Chasse, Bitcoin’s price has dipped below this reading only on 3% of all trading days.

Several on-chain indicators are suggesting that Bitcoin may be close to a bottom. Let’s study the charts of the top-10 cryptocurrencies to find out what the technicals suggest!

BTC/USDT

Bitcoin is attempting a recovery in a downtrend but the bulls are struggling to push the price to the 38.2% Fibonacci retracement level of $23,024. This suggests that demand dries up at higher levels.

Bitcoin (BTC) headed toward the upper end of its trading range on June 24 as optimism crept back into traders’ forecasts.

Bitcoin price "ready for $23,000"

Data from Cointelegraph Markets Pro and TradingView tracked a broadly stable BTC/USD as it hit local highs of $21,425 on Bitstamp.

The pair had shifted higher since wicking below the $20,000 on June 22, with United States equities similarly cool going into the weekend.

“Bitcoin ready for $23,000,” Cointelegraph contributor Michaël van de Poppe announced to Twitter followers on the day.

At just above the crucial 200-week moving average (WMA), $23,000 formed a popular upside target for commentators — and sellers.

Central bank digital currencies (CBDC) do not pose any direct threat to cryptocurrencies like Bitcoin (BTC) but are still associated with risks in relation to stablecoins, one industry executive believes.

According to Mikkel Morch, executive director at the digital asset hedge fund ARK36, a state-backed digital currency like the U.S. dollar doesn’t necessarily have to be a competitor to a private or a decentralized cryptocurrency.

That’s because the use cases and value proposition of the decentralized digital assets “often go beyond the realm of simple transactions,” Morch said in a statement to Cointelegraph on Thursday.

The exec referred to Federal Reserve Chair Jerome Powell who earlier this year hinted that the United States government would not stop a “well regulated, privately issued stablecoin” from coexisting with a potential Fed digital dollar.

As such, active commitment to the CBDC development does not mean that other countries like Singapore are unfriendly to non-state-backed cryptocurrencies, Morch said. The executive suggested that a CBDC roll-out may even “facilitate the proliferation of non-sovereign cryptocurrencies and blockchain technologies.”

XRP's ongoing upside retracement risks exhaustion as its price tests a resistance level with a history of triggering a 65% price crash.

XRP price rebounds 30%

 XRP's price gained nearly 30%, rising to $0.36 on June 24, four days after rebounding from $0.28, its lowest level since January 2021.

The token's retracement rally could extend to $0.41 next, according to its "cup-and-handle" pattern shown in the chart below.

Interestingly, the indicator's profit target is the same as XRP's 50-day exponential moving average (50-day EMA; the red wave).

Major resistance hurdle

The cup-and-handle bullish reversal setup tends to meet its profit target at a 61% success rate, according to veteran analyst Thomas Bulkowski. 

The Horizon Bridge to the Harmony One layer-1 blockchain has been exploited for $100 million in altcoins which are being swapped for Ether (ETH).

The hack may vindicate previously raised community concerns about the robustness of the two of four multisig that reportedly secures the bridge.

Starting at about 7:08 am until 7:26 am ET, 11 transactions were made from the bridge for various tokens. They have since begun sending tokens to a different wallet to swap for ETH on the Uniswap decentralized exchange (DEX), then sending the ETH back to the original wallet.

So far, Frax (FRAX), Wrapped Ether (WETH). Aave (AAVE), Sushi (SUSHI), Frax Share (FXS), AAG (AAG), Binance USD (BUSD). Dai (DAI), Tether (USDT), Wrapped BTC (WBTC), and USD Coin (USDC) have been stolen from the bridge through this exploit.

The Horizon Bridge facilitates token transfers between Harmony and the Ethereum network, Binance Chain and Bitcoin. Harmony, the operator of the bridge, announced late on June 23 that the bridge has been halted. It said the BTC bridge and its assets have not been affected by the attack.

Bitcoin (BTC) saw further losses on June 12 as thin weekend trading volumes fueled an ongoing sell-off.

Analyst likens risk asset 'pump' to 1929

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting lows of $27,150 on its sixth straight day of downside.

With hours to go until the weekly close, the pair was in danger of resuming the losing streak, which had previously seen a record nine weeks of red candles in a row.

To avoid that outcome and put in a second “green” close, BTC/USD needed to gain over $2,000 from the current spot price, which at the time of writing was $27,400.

With support levels failing to change the mood thanks to the thinner liquidity during the weekend’s “out-of-hours” trading, analysts feared that a retest of May’s ten-month lows was due.

The spectacular implosion of the Terra ecosystem in mid-May left the crypto industry scarred. Though there were some brave critics who understood just how thin the razor’s edge was for TerraUSD (UST) — now TerraUSD Classic (USTC) — I think it’s safe to say that most people didn’t expect Terra to fail so fast, so dramatically and so completely irrevocably.

I’m writing this as the Terra community is voting on a plan to restart some kind of Terra 2.0 — a plan to salvage the layer-1 ecosystem without the UST stablecoin. The old Terra, now to be known as Terra Classic, is completely dead. An ill-fated attempt to backstop UST holders printed trillions of LUNA tokens, destroying their value and ultimately jeopardizing the safety of the network itself.

The complete wipeout of $50 billion in value seems to have made people decide once and for all that algorithmic stablecoins cannot work. But I think it’s important to have a more nuanced understanding of why the original LUNA failed and how others can learn from its lessons.

Related: Terra 2.0: A crypto project built on the ruins of $40 billion in investors’ money

Stablecoins: New name for an age-old concept

The term stablecoin mostly evokes United States dollar-pegged currencies that aim to maintain a $1 value. But it’s important to remember that this is mostly a matter of convenience. The same mechanisms underpinning today’s USD stablecoins can be used to create coins that are pegged to the euro, gold, even Bitcoin (BTC), Nasdaq futures, or some specific stock, such as Tesla (TSLA).

Do Kwon, the CEO and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted the claims of cashing out $80 million every month for nearly three years. 

Numerous unconfirmed reports surfaced on Saturday, claiming Kwon’s participation in draining liquidity out of Luna Classic (LUNC) and TerraUSD Classic (USTC), before the crash to purchase United States dollar-pegged stablecoin such as Tether (USDT).

Rumors about Kwon cashing out LUNA and UST reserves surfaced after a Twitter thread by FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

However, the entrepreneur advised the crypto community to steer away from fueling the rumor until it was proven true:

“This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.”

Bitcoin (BTC) is threatening to drop to its worst weekly close since December of 2020. The crypto markets are in are held firmly in a vice grip, and the selling accelerated following a higher-than-expected inflation report from the United States on June 10. 

It is not only the crypto markets that are facing the brunt, even United States equities markets finished the week ending June 10 with sharp losses. Risky assets may remain volatile in the near term as traders await the outcome of the U.S. Federal Open Market Committee meeting on June 14 and June 15.

Bloomberg Intelligence senior commodities strategist Mike McGlone warned that if the stock markets continue to drop, then it will signal that most assets may have seen their peak exuberance in the past two years.

Could Bitcoin find support at lower levels and will that attract buying in select altcoins? Let’s study the charts of the top-5 cryptocurrencies that are likely to move up if the sentiment improves.

BTC/USDT

Bitcoin broke below the trendline on June 10, which negated the developing ascending triangle pattern. The bears maintained their selling pressure and pulled the price below the strong support of $28,630 on June 11.

Bitcoin (BTC) faced continued selling pressure before the June 13 Wall Street open as Ether (ETH) revisited multiyear lows.

Bitcoin battles for $24,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD eclipsing its 10-month lows set in mid-May.

The largest cryptocurrency faced bearish triggers on multiple fronts, these coming from both within and beyond the crypto sphere.

Fintech protocol Celsius appeared on the brink of meltdown after operations were halted, turning billions of dollars in collateral into new risk for crypto markets. In an event ironically similar to that which caused the May rout, Bitcoin and altcoins kept falling as fresh uncertainty filled the air.

Macro conditions were hardly better, with Asian markets selling off and Wall Street futures looking set to continue the downtrend that set in last week.

Crypto exchange Binance announced it is ending support for Litecoin (LTC) transactions sent through the latest MimbleWimble (MWEB) upgrade.

Binance warned that any transaction sent through the MWEB function would be lost since the crypto exchange can’t verify the sender’s address. The crypto exchange didn’t respond to Cointelegraph’s request for comments at the time of publishing.

The announcement comes just days after major South Korean crypto exchanges delisted LTC due to the latest upgrade, which makes transaction information confidential. The delisting came just weeks after five crypto exchanges issued warnings similar to Binance. However, the delisting didn’t come as a surprise, as South Korea is known for its strict privacy laws, which prohibit anonymous transactions on crypto exchanges.

The MWEB upgrade on LTC is one of the critical updates that went live earlier this year, nearly two and half years after it was first proposed. The upgrade added several privacy features and made the LTC blockchain more scalable.

Gate.io, another popular crypto trading platform, also ended support for MWEB Litecoin transactions, claiming anonymous transactions are not supported on the platform.

Usually, bear markets bring about a feeling of uncertainty in any investor. Even more so for a newcomer, for whom it can feel like the end of the world. It may even be common knowledge that during bull cycles, investors are sure of making gains. Whereas in bear markets such as this, an unimaginable amount of pessimism sets in.

The co-founder and strategic lead at the Kylin Network, Dylan Dewdney, told Cointelegraph that the two major mistakes that investors make while feeling anxious are “One, over-investing and two, not investing with conviction.”

“You need to find the sweetspot where you have enough conviction in your investments while managing the resources devoted to them such that you are 100% comfortable with being patient for a long time. Lastly, bear markets are where the magic really happens — buying Ether at $90 in December 2019, for example,” Dewdney said.

According to data from blockchain analysis firm Glassnode, traders made almost 43,000 transactions buying and selling requests on crypto exchanges in early May. This accounted for a whopping $3.1 billion worth of Bitcoin. But, the panic that caused those requests came from the crash of Terra, which saw the market dip even further.

Bear markets occur when there is a general dip in the prices of assets, of at least 20%, from their most recent highs. For example, the current bear market has Bitcoin (BTC) down by more than 55% from its November record high of $68,000. Bitcoin is now trading below the $25,000 mark at the time of writing.

The ongoing crisis of Celsius’s native token has nothing to do with the stablecoin provider Tether and will not impact its USDT reserves, according to the company.

Tether issued a statement on Monday regarding the major cryptocurrency lending platform Celsius halting withdrawals due to its rumored liquidity crisis.

According to the statement, Tether’s lending activity with Celsius has “always been overcollateralized” as with any other borrower and “has no impact” on the company’s reserves.

The announcement also described the ongoing issues with Celsius as an “unfortunate result of market volatility and extreme market conditions.”

The Tether company is the issuer of USDT, the largest stablecoin pegged to the United States dollar based on a 1:1 ratio. At the time of writing, USDT’s market capitalization amounts to $72 billion, significantly exceeding the market value of its major competitor, the Circle-backed USD coin (USDC).