Author: Wesleytyler

No action in the crypto market as Bitcoin still trades around the $29,000 to $30,000 area. The first crypto by market cap has been rangebound since the Terra ecosystem collapsed taking a hit on an already soft market.

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The “Black Swan” event has preceded one of the worst periods for the space as Bitcoin and Ethereum recorded record consecutive losses. At the time of writing, BTC’s price trades at $29,500 with a 2% loss in the last 24-hours.

BTC moving sideways on the 4-hour chart. Source: BTCUSD Tradingview

According to a pseudonym trader, Bitcoin could be ready to re-test the lows at $29,000 before resuming its bullish momentum. The trader expects BTC’s price to potentially dip below this level and then bounce back to $35,000.

This would put Bitcoin close to the bottom of its current range. Therefore, a move to the upside and some relief seems logical, if BTC is to continue to trend rangebound.

In that sense, the pseudonym trader recommended to “play the trend” and re-examining if BTC breaks above those levels. The trader said via Twitter:

Before you get discouraged about trading just remember this tiny little range of chop is what’s been so difficult for everyone to figure out. Once a direction is established from here it’ll get easier.

A report from QCP Research agrees that $28,700 is a major area of support, in case of further downside, as it stands as BTC’s current 61.8% Fibonacci retracement level. These Fibonacci levels have been “pivotal”, the report says, for Bitcoin across its history.

Particularly during 2020, when the start of the COVID-19 pandemic sent BTC to test the 61.8% Fibonacci level at around $3,800. This level was held during one of BTC’s worst drawdowns. QCP Research said:

For BTC and ETH, the current drawdown is now identical to the 2020 Covid drawdown. It is possible that we see a short-term bounce from these oversold levels.

Why Bad News Is Good For Bitcoin And Risk Assets

In addition, the report claims BTC, and other risk-on assets seem inversely correlated to the media. Whenever “good news” on inflation, unemployment, and other metrics in the U.S. break to the public, these assets seem to trade to the downside.

The opposite happened from 2020 to 2021 as bad news on COVID-19 translated into an economic stimulus. Now, the U.S. Federal Reserve (FED) is determined to stop inflation and has begun removing liquidity from global markets while it launches its Quantitative Tightening (QT) program.

This will force the institution to unload its balance sheet into global markets. As a result, Bitcoin and stocks will continue to suffer in the coming months, QCP Research believes. The report claimed:

This draining of liquidity will only be exacerbated by the upcoming QT balance sheet unwind as well, beginning 1 June. We expect these factors to weigh on crypto prices.

The current narrative in mainstream media is running on the back of inflation. If it changes to words like “recession” or “economic recession”, the U.S. FED might be forced to slow down on its tightening giving some relief for Bitcoin and stocks, the report claims.

Related Reading | Arthur Hayes Says Bitcoin And Ethereum May Not Be Ready To Recover Drastically

In other words, if news shifts from bad to worse, Bitcoin could change its direction to the upside. In the meantime, it seems likely to remain rangebound or with short live rallies.

The inaugural edition of ARK ’s “The Bitcoin Monthly” report contains some gems. It also contains a simple compilation of facts that paint a clear picture of the bitcoin market as it currently stands. A blockchain is an unalterable fountain of evidence, and ARK put their best analysts to review it in-depth and get stats and insights for us. Get some coffee and take a seat, let’s forget about the Fear & Greed index and see what the numbers are really saying.

Excited to introduce the first official issue of “The Bitcoin Monthly”

Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market’s headed.

Here are the major highlights from this month’s report:

— Yassine Elmandjra (@yassineARK) June 3, 2022

Over at Twitter, ARK Analyst Yassine Elmandjra described “The Bitcoin Monthly” as: “Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market’s headed.” On ARK’s website, they describe the new venture as: “Considering the market’s fast pace of change, ARK publishes The Bitcoin Monthly, an “earnings report” that details relevant on-chain activity and showcases the openness, transparency, and accessibility of blockchain data.”

Related Reading | Bitcoin Price Closes Two Consecutive Weekly Red Candles, First Time Since Bottom

Let’s check the data and insights available in May’s edition.

The State Of The Bitcoin Market, With ARK

According to “The Bitcoin Monthly”:

“Bitcoin closed the month of May down 17.2%, declining from $38,480 to $31,835.”

Let’s be honest, this looks like the beginning of a bear market. And the Terra/ Luna crash appears to be the catalytic event. However, subsequent data will show that we might not be in one after all. 

“Bitcoin closed the month down 17.2%, printing its ninth consecutive negative weekly decline for the first time in history, suggesting a possible oversold condition.”

Nine consecutive red candles, a new record. That’s a horrific fact no matter how you dress it. However, according to ARK, it suggests “a possible oversold condition.” Which is promising. 

“Bitcoin is down 57% since reaching an alltime high in November 2021. For perspective, the average peak-to-trough drawdown during previous bear markets stands at 76%.”

Does this mean things could get worse? Or does it mean we’re nowhere near bear market levels? It definitely feels bear-markety, but the stats are the stats. 

BTC price chart for 06/04/2022 on Exmo | Source: BTC/USD on TradingView.com
The Bitcoin Network Stands Strong
“Despite the continued sell-off, bitcoin has not broken below any major trendline. It is trading above its onchain cost basis at ~$24,000 and its 200- week moving average at ~$22,000.”

The bitcoin network absorbed Terra/Luna’s massive sell-off and the market’s subsequent one like a champ. The worst seems to be behind us and bitcoin “has not broken below any major trendline.”

“An all-time of nearly 66% of bitcoin’s supply has not moved in over a year, a testament to the market’s longer-term focus and a holder base with stronger conviction.”

Despite the massive market movement, bitcoiners keep HODLing like it’s the only chance at economic freedom that they’ll see in their lifetimes. Because it probably is.

“Short-term holder positions fell -35% below their breakeven price, on average.”

If bitcoiners are HODLing, who’s selling all those cheap sats? Short-term holders, that’s who. And they’re not even close to breaking even. It’s a short-term holders massacre out there.

ARK Sees A Way For The Market To Jumpstart Itself

Look, hear ARK out. First of all, “bitcoin’s open interest in the futures market has reached an all-time high of approximately 450,000 BTC.” Also, “perpetual contract basis typically hints at market direction. Currently, it is trading at a bullish discount to spot.” This is very important because, “given the high open interest outstanding, we believe the perpetual futures discount indicates a potential upward trajectory in BTC’s next major price movement.”

Related Reading | Revisiting Dorsey’s Hyperinflation Tweet: Elon, Wood, Saylor, Balaji, Chip In

That’s right, ARK closes “The Bitcoin Monthly” report predicting “a potential upward trajectory.” Rejoice.

Featured Image by Ricardo Gomez Angel on Unsplash | Charts by TradingView

While Bored Ape Yacht Club appears to be unfazed for several months now in the face of the crypto crash, the month of May tells a different storyline.

Bored Ape Yacht Club, a blue-chip NFT, appeared to have dipped in value, as evidenced in May when NFTs dropped in average sales price. May has been a challenging month for NFTs and crypto alike. BAYC has managed to end it with a sour trading price of $152,658.

Suggested Reading | Cardano TVL Sheds $205 Million Since Hitting All-Time High

BAYC Average Sales, Value Down 60%

Although BAYC sales are comparably higher than other NFTs like Otherdeed, Art Blocks, NBA Top Shot, and even Mutant Ape Yacht Club, BAYC values have crashed by 60% since May 1 with an average trading price of $382,894.

A hike in unique buyers increased from 475 to 591 in April, but the average sales have shed tremendously since.

Meanwhile, the APE token has lost 66% of its value from a May opening trading price of $20.02 to close at $6.76.

Source: Bored Ape Yacht Club Price Chart by Nomics
Why Own A Bored Ape Yacht Club

BAYC is an NFT collection owned by many celebrities and influencers like Stephen Curry, Eminem, Justin Bieber, and Shaquille O’Neal. It’s an overnight sensation that has also triggered high prices for the collection. Owning a BAYC is a status symbol that you belong to the elite circle.

To be relevant, it’s a must to own the most popular and royal NFT. It gives the owner that cool status, but the actual value of BAYC is exclusive membership access. It’s a digital club that provides member-only access and privileges such as the following:

Bathroom Access
Discord Access
Added NFTs
Access to ApeCoin

Suggested Reading | XRP Whales Boost Accumulation Appetite, Register 2-Month Peak Holding Supply

Crypto total market cap at $1.26 trillion on the weekend chart | Source: TradingView.com

It’s BAYC that unlocks the potential of NFTs to enter the mainstream and be a part of the elite and more giant circle.

Bored Ape and other blue-chip and premiere NFTs have been in a depressive state and down by more than 50% last month. BAYC has been robust and unassailable for several months despite the crypto market retreat, but the values are sliding now.

One of the apparent reasons for the decline is that Ethereum has also been down by 33% for the month following the Luna and UST stablecoin crashes. OpenSea trading volume has also suffered and has plunged by 40% for the past month.

The decline in the BAYC value is also largely attributed to the massive crypto crash that resulted in the waning of investor interest in all things NFT.

Featured image from CoinLive, chart from TradingView.com

El Salvador has been planning to release the world’s first Bitcoin bond for a while. This move had garnered a lot of interest from investors in the space who have been looking forward to taking advantage of this unique opportunity. However, the launch of the bitcoin bond has now been postponed for a second time. El Salvador’s finance miner, Alejandro Zelaya, gives the reason for the multiple delays.

Not A Good Time

The finance minister had put forward that it was not a good time for the launch of the El Salvador Bitcoin Bonds. This is due to the fact that the price of bitcoin had been in a decline and had therefore not provided a favorable time for the launch of the bitcoin bonds. It has started to irk some in the space because this is not the first time that the country would be postponing the launch of its infamous Vulcano Bonds, also known as bitcoin bonds.

Related Reading | Bitcoin Dominates Derivatives Market To End May On A High Note

The first time had been back in late March when the El Salvadorean government had announced that it had to postpone the launch. The reasons behind the postponement had been the same then as they are now; the financial market was not in a favorable place for the launch. Introducing an untested bond into the market at a time when there is a lot of geopolitical unrest may work against the success of such a bond. 

Finance minister Alejandro Zelaya explained that the move to push the launch back once more was “Because of the price [of bitcoin]. The price is still disrupted by the war in Ukraine. There were many movements in the stock market.”

On the other side though, it is being said that the postponements have not been due to geopolitical unrest and declining prices. But rather, the interest in these bitcoin bonds was low. This is because investors are not willing to bet their money on an untested bond that does not promise quick returns.

Although there has been no official date announced for when the bitcoin bonds will be placed, the minister expressed that “the currency is strong” and continues to recover. 

El Salvador’s Bitcoin

El Salvador has been purchasing bitcoin since last year when it had made the cryptocurrency a legal tender. During the time when the country started purchasing bitcoins, it has been trading at one of the highest points of the year. As such, with the recent decline in the value of BTC, El Salvador finds itself at a loss when it comes to its bitcoin holdings.

Related Reading | Brace For Impact: Bitcoin Miners Have Begun Dumping Their Holdings

Nevertheless, the country remains unshaken in its resolve to incorporate bitcoin into its treasury. The finance minister said that the government continues to hold on to its BTC despite being $38 million in the loss. According to him, since they have not sold anything, then the country “has not lost” any money.

Zelaya, however, revealed that El Salvador had indeed “traded” some of its BTC to build Chivo Pet but that the coins remain in their possession. At the time of this writing, El Salvador holds 2,301 valued at approximately $70 million.

Featured image from Bitcoinist, chart from TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… 

On-chain data shows the Bitcoin NUL indicator is still below a value of 0.5, a sign that more downtrend could be in store for the crypto before the bottom is in.

Bitcoin Net Unrealized Loss Surges Up, But Still Remains Below 0.5

As pointed out by an analyst in a CryptoQuant post, the cryptocurrency’s price may still be nowhere near a bottom.

The relevant indicator here is the “net unrealized loss” (or NUL in brief), which tells us about the total number of coins that are currently holding an unrealized loss.

The metric works by comparing the last selling price of each coin on the chain to the current value of Bitcoin. If the previous previous of any coin was more than the current one, then that coin is holding a loss right now.

On the other hand, the current price being more than the last selling value would imply that the coin is in profit at the moment.

Related Reading | Bitcoin Falls Below $30k As 10k BTC Flow Into Gemini

The NUL metric only takes into account the former type of coins. Another indicator, the net unrealized profit (NUP), measures the latter category.

Now, here is a chart that shows the trend in the Bitcoin NUL over the history of the coin:

The value of the indicator seems to have been rising recently | Source: CryptoQuant

In the above graph, the quant has marked the two different zones of the Bitcoin NUL, with the metric value equal to 0.5 line being the divider between them.

It looks like historically, the price of the crypto has tended to observe the major bottoms when the indicator’s value has been greater than 0.5

Related Reading | Can FTX Token (FTT) And Parody Coin (PARO) Join Bitcoin (BTC) As The Biggest Cryptocurrency In 2022?

As you can see in the chart, the NUL metric has observed some uptrend in recent months. This is because the value of Bitcoin has been declining during this period, leading to more coins going underwater.

However, despite this recent rise, it seems like the net unrealized loss’ current value is still well below the 0.5 level.

If past trend is anything to go by, Bitcoin may observe further downtrend in the coming future before the NUL’s value exceeds the threshold and a bottom is formed.

BTC Price

At the time of writing, Bitcoin’s price floats around $29.7k, up 3% in the last seven days. Over the past month, the crypto has lost 23% in value.

The below chart shows the trend in the price of the coin over the last five days.

Looks like the value of the crypto has gone down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Solana is on a downtrend currently, price of the altcoin has slid below the vital support line of $40. This downslide comes in the middle of a network outage, yet again! A software glitch was responsible for causing an outage that lasted over 4 hours.

Solana had also experienced another major outage in the month of January which stretched over 18 hours. This has apparently affected the Solana ecosystem as constant outages causes traders to lose their portfolio value simultaneously.

Over the last 24 hours, the altcoin lost about 6.4% of its value. In the last week, SOL depreciated over 12%. After a period of consolidation, SOL attempted to rise but the bears came back soon after. Right after the altcoin lost its critical support of $50, it has been constantly value ever since. Buying strength has also dropped owing to the recent downtrend.

Solana Price Analysis: One Day Chart
Solana was priced at $38 on the one day chart | Source: SOLUSD on TradingView

SOL was trading at $38 at the time of writing. It lost its crucial support of $40 and was on a downtrend. If SOL does not manage to stay at its current price level, it might aim for $34. The coin touched these price levels last at the month of August 2021. The descending trendline (yellow) agrees with downtrend in the market.

For the bulls to accumulate in order to invalidate the bearish thesis, the coin has to attempt for $50. The volume of the coin traded had declined and was in the red. This reading signified bearish dominance in the market.

Technical Analysis
Solana registered a fall in buying strength on the one day chart | Source: SOLUSD on TradingView

SOL had attempted to briefly recover on the Relative Strength Index but at the time of writing the indicator noted a downtick. The Relative Strength Index was slightly above the oversold zone but pressure from the bears can cause SOL to become oversold.

As the sellers have taken over the market, the coin has fallen below the 20-SMA line. A reading below the 20-SMA line indicated that the sellers were driving the price momentum in the market. A slight push from the bulls could however, drag the price of SOL above the 20-SMA, which would then ease the selling pressure in the market.

Related Reading | Solana (SOL) Could Register An Upswing, Thanks To This Pattern

Solana flashed buy signal on the one day chart | Source: SOLUSD on TradingView

The Bollinger Bands responsible for depicting price volatility indicated that there was a squeeze release. A squeeze release essentially means that price volatility could be expected. Price of Solana could sway either way considering the above chart has painted mixed signals.

The Awesome Oscillator depicts the current price momentum and also a change in the same. The indicator flashed green signal bars which indicated a change in the momentum along with a buy signal.

A buy signal can be considered bullish if traders act on it.

Going by other indicators, it seems though SOL might be stuck in the same price action over the immediate trading sessions. A change can be expected if broader market extends support.

Related Reading | Can Bitcoin Bounce Back To $35K? Here’s What Stands In The Way

The best risk-on asset in the past decade, Bitcoin, is in a process of transition. Senior Commodity Strategist for Bloomberg Intelligence, Mike McGlone, said in a recent interview with Kitco News’ “On The Spot”.

Related Reading | Arthur Hayes Says Ethereum (ETH) Could Reach $10K Level By The End Of Year

This process is painful as crypto investors can confirm but could take the benchmark crypto to new highs. In the past 6 months, the price of Bitcoin dropped from an all-time high of $69,000 to its current levels of around $30,000.

In the short term, the pain has been more pronounced with Bitcoin recording 9 consecutive weeks in the red. McGlone believes the cryptocurrency and other risk-on assets are responding to the current macro-economic outlook.

The crypto market has experienced some of the best performance in global markets. The rally in the nascent asset class usually corresponds to 4 years cycles with parabolic bull runs followed by multi-year bear markets.

Many in the sector believe cryptocurrencies entered their bear phase or the “Crypto Winter”. The losses have been compounded by two factors: the beginning of economic tightening measures by the U.S. Federal Reserve, and the collapse of the Terra ecosystem.

In that sense, McGlone argued that Bitcoin and other cryptocurrencies must face the biggest losses as they recorded the largest gains. This process is called “Mean Reversion” when an asset trends in a direction and then reverses to a “mean” price or bottom.

On the latter, the Senior Commodity Strategist said it’s “hard” to calculate an exact price bottom. Bitcoin has been moving in tandem with the Nasdaq 100, and both recently hit their 100-week moving average when BTC’s price dropped to $30,000.

McGlone claims the trends seem to hit at further losses, but Bitcoin should “come out ahead”. This potential rally will be driven by “institutional bids”, as BTC continues to be adopted by worldwide institutions, and because of the cryptocurrency’s “inelastic supply”.

What Will Take Bitcoin To $100K

Despite its recent growth, McGlone claims a small part of investment firms included BTC as part of their portfolio. This could change in the coming years, as Bitcoin becomes “global collateral” and begins a new ascent towards $100,000 by 2024.

On BTC’s price future outlook and potential bottom, McGlone added:

I think $30,000 is a very good support pivot in Bitcoin. It basically needs the equity to keep going down for it to push it lower. But what I sense it’s (BTC) pumping into good support and I fully expect, it could get to $20,000 but I doubt it does, within the next two years it’s going to get back to and get to $100,000.

The current downtrend might be a good thing for some of the strongest projects in the crypto industry. This will help remove speculative assets and leave those projects with robust fundamentals.

These projects could be able to continue getting market shares from traditional markets. As the expert said, the crypto market was only 0.5% of the market cap for global equities. Now it’s around 1%.

In the coming years, as the economy becomes deflationary and equities trend lower, McGlone believes Bitcoin and Gold will be two of the best assets to hold. However, the precious metal could lose market share to the number one crypto.

Related Reading | ARK Invest: Despite The 9 Red Candles, “Bitcoin’s Fundamentals Remain Strong”

At the time of writing, BTC’s price trades at $29,700 with sideways movement in the last 24-hours.

BTC moving sideways on the 4-hour chart. Source: BTCUSD Tradingview

XRP among other leading altcoins have been consolidating on its chart. Bitcoin slid below the $30,000 price level which has dampened the price action of altcoins. Over the last 24 hours, XRP made no price movement. In the last 24 hours, the altcoin gained a minor 2.4%.

On the chart, the coin displayed bearish price action as the coin might be breaking the consolidation. The coin currently has found support at $0.34. The coin last touched the price level in the month of February 2021. If the coin pushes below further then it may touch the support level of $0.28.

The global cryptocurrency market cap today was at $1.28 Trillion with a 0.7% positive change in the past 24 hours. If bulls still continue to struggle to break past the $0.43 resistance level then the coin is headed for another downslide.

XRP Price Analysis: One Day Chart
XRP was priced at $0.38 on the one day chart | Source: XRPUSD on TradingView

The coin was trading at $0.38 at the time of writing. The local support level for the coin stood at $0.33. If the coin continues to experience selling pressure then it could fall to a low of $0.28. Overhead resistance for the coin stood at $0.40.

For the bulls to be back, XRP needs to break past the aforementioned price resistance and trade near $0.43. The volume of XRP traded had plummeted as seen on the one day chart. The volume bar was seen in the red which showed bearish significance in the market.

Technical Analysis
XRP showed signs of recovery on the RSI on the one day chart | Source: XRPUSD on TradingView

The buying strength tried to rise on the chart. After the coin was oversold it recovered slightly as seen on the Relative Strength Index. At the time of writing, the RSI was above the oversold zone, despite the same selling pressure was strong in the market.

The price of XRP was struggling to move over the 20-SMA line. At press time the coin was still below the 20-SMA signifying that bears were driving the price momentum in the market. In case the demand for the coin shows up, the coin can move above the 20-SMA line which could push XRP to trade near $0.40 price mark.

Related Reading | Arthur Hayes Says Ethereum (ETH) Could Reach $10K Level By The End Of Year

XRP registered a buy signal on the one day chart | Source: XRPUSD on TradingView

XRP could soon bottom out and then aim for the next resistance level. The coin displayed a buy signal on the chart. The Awesome Oscillator depicts the price momentum and it displayed a change in price momentum.

The green signal bars on the AO are synonymous to a buy signal which can also mean a change in the price action. The Directional Movement Index was positive which corresponded with the AO. The +DI was above the -DI line indicated bullish build-up.

The Average Directional Index was also above the 40 mark and that is a mark of price trend strengthening in the market.

Related Reading | Polkadot At $9.30, But Is There A Chance Of Slight Shift In Trend?

Arthur Hayes, the youngest crypto billionaire of American Africa and the former CEO and co-founder of the derivatives platform BitMEX, predicted Ethereum could hit $10,000 by the end of 2022. Notably, Hayes once speculated a downtrend in Ethereum’s price in an April blog post that came true.

He further urged that the Fed’s strict policies and increasing rates had the main role behind Terra’s crash as it was a byproduct of the macroeconomic environment. The crypto market is at the bottom or likely to touch the grounds, afterward, it will bounce, Hayes says, reiterating that Ethereum still has the potential to reach $10,000 by the end of the year or at the start of 2023.

Related Reading | Arthur Hayes Says Bitcoin And Ethereum May Not Be Ready To Recover Drastically

The former CEO in an April post portended Ethereum’s price would decrease its value by June which came to pass in May and even ETH dropped below $1,700 on a couple of crypto exchanges.

Developer’s choice and widely being used for executing smart contracts, Ethereum stands at the second spot in the rank list, currently trading at around $1,770. ETH’s investors saw the all-time high (ATH) of the coin by November 2021 when it touched the $4,870 level. Now it has been six months since the token’s value facing dips.

Ethereum’s price currently fluctuates at over $1,770. | Source: ETH/USD price chart from TradingView.com
Will Ethereum Price Would Go Up Next Year?

The analyst predicted even more volatility in the market for the mid-term saying that he would like to purchase Bitcoin at $20,000 and Ethereum at  $1,300. This figure decreases over 70% of Ethereum’s price from its ATH. Remarkably, investors have lost over 60% who bought Ethereum’s top.

Truly, the predicted low will ruin the interest of investors who invested when ETH was hovering at the top but Hayes believes the token has a bright future ahead. Indeed, the time will tell better if it may come true considering a massive crash.

Hayes’s statement of buying Ethereum at $1,300 definitely expresses what he is on to. Ethereum price could experience quick price moves when the value plummets below the support level. It signs the possibility of further dips in the value, to make the weak-hand investors leave. Then, the massive investment will come to form grounds under the support level that will make the bulls run again.

Although it shows the possibility of a price reversal, does not Hayes’s prediction of $10,000 sounds extraordinary?

Bitcoin experienced an 80% crash before setting a new ATH. And it happened many times in the crypto market over the past few years. Likely, Ethereum could claim the speculated price of $10,000 in 2023 or in 2024 if it takes longer for the next bull market.

Related Reading | Bored Ape Yacht Club Plunges By 60% Last Month

Crypto traders who believe Arthur’s convictions and invest in the token at the time, would get an ROI of over 500% if the market follows the bull cycle by ending the year and ETH claims the target price of $10,000.

Featured image from Pixabay and chart from TradingView.com