Crypto Analysis by FxPro

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Bitcoin fell 1.8% on Tuesday, ending the day around $37,700 and temporarily below a meaningful support line. Notably, it was a cryptocurrency selloff as stock indices developed gains. The demand for risk recovery has likely returned interest in cryptos that went into the green on Wednesday.

Locally, bitcoin manages to maintain its balance on support, which has withstood the onslaught of sellers over the past four months. On the other hand, we see a sequence of increasingly lower local peaks since the last days of March. The lines of these two trends have reached their intersection point with a potential climax later today.

More often than not, the outcome of such triangles is to break the support because if it goes under $38K, we might see a rising wave of selloffs. A return to the uptrend will require confirmation with a decisive move above $40K, the area of previous local lows. Today, the market driver will be the FOMC, whose decisions and comments could reverse or reinforce the multi-week trend of the dollar leaving and curtailing demand for risky assets.

According to Senior analyst FxPro Alex Kuptsikevich, The cryptocurrency market is approaching the big event in a state of extreme fear, with the relevant index dropping 6 points to 21 by Wednesday. The total capitalization of the crypto market, according to CoinMarketCap, fell 1.3% overnight to $1.72 trillion. According to Morgan Stanley, bitcoin's dependence on the stock market undermines the cryptocurrency's potential as an inflation risk hedge. Meanwhile, the correlation between bitcoin and a protective asset such as gold has fallen to its lowest level since 2018.

 

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The stock market puts bitcoin back in a downward trend Bitcoin was down more than 10% intraday on Thursday, stabilising at $36.4K from the end of the day and losing 8.3% overnight. Ethereum lost 6.7% in the last 24 hours, while other leading altcoins in the top 10 fell from 5.6% (DogeCoin) to 14% (Avalanche). Total cryptocurrency market capitalisation, according to CoinMarketCap, fell 7.6% overnight to $1.67 trillion.

The Bitcoin Dominance Index fell 0.4% to 41.5%, as the most institutionalised coins took the brunt of the hit. The cryptocurrency Fear and Greed Index fell 5 points to 22 by Friday and moved back into “extreme fear” status. This indicator has been hovering between the 20 and 30 levels for almost four weeks. On Thursday, Bitcoin fell sharply in the US session, losing more than $3,000 in a few hours and closing the day at its lowest level since late January. Once again, the pressure came from the US stock and bond market, where traders were furiously pricing in a sharp tightening of the Fed’s monetary policy in June after a day’s break.

The decline in BTC was the highest in the last 3.5 months and was observed simultaneously to the sell-off in the US stock market. Expectations of increasingly steep policy tightening are draining liquidity, primarily hitting risky assets, from equities to commodities to cryptocurrencies. With yesterday’s sharp collapse, bitcoin confirmed its downtrend in late March and returned to the area of lows at the beginning of the year. Bitcoin’s supply in the market could increase sharply in the second half of 2022 when a plan to compensate former users of the MtGox cryptocurrency exchange will begin to be implemented said Alex Kuptsikevich senior analyst from FxPro.

However, the purchase of BTC by algorithmic stack coin issuers could potentially offset the increase in supply, according to Coinbase. Luna Foundation Guard (LFG), a non-profit organisation, purchased 37,863 BTC on the OTC market, worth approximately $1.5 billion. LFG was one of the top 10 bitcoin holders.

 

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Bitcoin volatility is also driven, to an extent, by these investors. It is unclear how Bitcoin whales—investors with BTC holdings in the tens of millions or more—would liquidate their significant positions into fiat currency without affecting Bitcoin's market price. If the whales were to begin selling their Bitcoin holdings suddenly, prices would plummet as other investors panicked as well.

 

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Bitcoin is trading near $33.5K on Monday morning, declining for the fifth consecutive day. Over the past 24 hours, losses are 2.3%, and are approaching 14% over the past seven days. Ether loses 3.5% in 24 hours and 14.3% for the week, settling near $2450. Altcoins from the top ten are down between 0.8% (XRP) and 4.3% (Cardano).

Total crypto market capitalisation, according to Senior analys FxPro Alex Kuptsikevich, is down 2.3% overnight to $1.54 trillion. More worryingly, volumes are rising along with falling prices. This situation points to an increasingly rapid exit from cryptocurrencies, even though the process takes place without sharp dips. We see an orderly exit – a sure sign that downward sentiment may prevail.

The optimists, however, have something to hang on to. The Cryptocurrency Fear and Greed Index has collapsed to 11. Over the past year, the index has been at the current or lower level six times, and on each occasion, we have seen either consolidation or the start of a rally and a rebound.

In March 2020, when the index similarly reached single digits, we saw an influx of long-term buyers.

The current extreme fear may attract buyers who have been waiting for extreme oversold conditions to buy cryptocurrencies long term.

However, we note that the amplitude of crypto market fluctuations does not resemble either a capitulation of enthusiasts or a wave of stop orders triggering. Typically, a trend reversal is preceded by a sharp increase in momentum with the eventual resignation of those who stood against the trend.

In our case with Bitcoin, this could translate into a sharp acceleration of the sell-off after falling below $30K, all the way to the $23K or even the $20K area. It is only from this level that major long-term buyers can be expected to emerge.

 

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According to senior analyst FxPro Alex Kuptsikevich, Bitcoin collapsed 9.5% on Monday and dipped temporarily below $30K in early trading on Tuesday, stabilising at $31.3K. Ethereum has lost 3.9% in the past 24 hours, while other leading altcoins in the top 10 have fallen from 8.7% (Solana, Cardano) to 12% (Avalanche).

Total crypto market capitalisation, according to CoinMarketCap, fell 7% overnight to $1.44 trillion. Bitcoin's dominance index rose 0.3% to 41.8% on more altcoin weakness.

The cryptocurrency Fear and Greed Index was down 1 point to 10 by Tuesday and remains in a state of "extreme fear", touching a low point for the seventh time in the past year. An even higher level of fear in the last four years that we have only seen in March 2020 and September 2019.

Terra and TerraUSD continue to lose ground. Against this backdrop, the Luna Foundation Guard (LFG) has committed $1.5bn to protect the "stability of UST and the Terra ecosystem as a whole". Stablecoin UST, designed to be as close to the value of the USD as possible, lost more than 30% at one point overnight. But at the time of writing, it is trading at a 14% discount to the US currency.

The current plunge is a retouch of the lows made in January and July last year for the first cryptocurrency. This could look like a last line of defence for the bulls, who may try to push back from the lower end of the trading range since early January.

However, many markets are on a similar informal frontier separating a correction from a potential collapse, so the situation in the crypto market could largely determine sentiment in the deeper debt and equity markets.

Judging by the dynamics of Stablecoin, the crypto market is undergoing one of its most massive tests of the entire market periphery, which could determine the credibility of the crypto market for many months or years to come. As we can see, Ether and Bitcoin remain resilient and robust enough to make them somewhat of a safe harbour within the stormy crypto sea.

At the same time, the collapse in quotations has not yet affected miners' confidence in the cryptocurrency's future, as the BTC network's hash rate continues to grow.

 

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Bitcoin added a symbolic 0.1% on Tuesday, ending the day around $31K and adding another $500 this morning. Ethereum has been adding 0.2% in the past 24 hours. Other leading altcoins from the top 10 showed mixed dynamics, ranging from a 10.8% decline (Avalanche) to a 0.2% gain (Binance Coin). The total capitalisation of the crypto market, according to CoinMarketCap, declined 1.6% overnight to $1.42 trillion. The Bitcoin Dominance Index rose 0.4% to 42.2%. The Cryptocurrency Fear and Greed Index added 2 points to 12 by Wednesday, starting recovery from an area where it rarely lingered.

Although Bitcoin managed to close Tuesday’s trading with a proper strengthening, a powerful offensive did not happen, as bull buying was choked again by stock market pessimism. It remains a situation where the stock or debt markets will determine whether we see another rebound from the critical $30K level or a failure of support and a complete surrender of the buyers. Cardano creator Charles Hoskinson has announced the beginning of new crypto winter. However, he does not see any factors that could trigger the market to rebound soon.

Cryptocurrency investment company Galaxy Digital reported a net loss of $111.7 million for the first quarter of this year. Galaxy Digital founder Mike Novogratz allowed bitcoin to decline further in the coming quarters due to the negativity on Wall Street. Meanwhile, last week saw an influx of institutional investors into crypto funds after four weeks of capital withdrawals.

FxPro Senior analyst said it has no plans to sell its cryptocurrency reserves. He said bitcoin would have to fall below $3562 for the firm to have insufficient assets to secure loans. El Salvador has bought another 500 bitcoins at an average of $30,744 amid a fall in the crypto market. Last autumn, the country’s recognition of BTC as legal tender was a landmark event for the global economy.

 

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Bitcoin runtuh 8,4% pada hari Rabu, mengakhiri hari di sekitar $28,4 ribu. Penurunan Kamis berlanjut, mengirim cryptocurrency pertama turun 5% menjadi $27K. Ethereum turun 24% dalam 24 jam terakhir, setelah kembali ke $1815. Altcoin terkemuka lainnya di 10 besar telah jatuh harganya dari 6% (Tron) menjadi 37% (Solana). Total kapitalisasi pasar crypto, menurut CoinMarketCap, turun 19,4% semalam menjadi $1,14 triliun.

FxPro senior analis berbicara Indeks dominasi Bitcoin melonjak 2,5 poin persentase menjadi 44,7% karena aksi jual altcoin. Bitcoin melanjutkan penurunannya pada hari Rabu, tetapi mengungguli pasar saham dengan amplitudo yang cukup besar kali ini. Bahkan mungkin menariknya ke bawah. BTC menembus posisi terendah Juli lalu dan menguji posisi terendah akhir Desember 2020, tepat di atas $26,5 ribu.

Altcoin turun tajam di belakang Terra (LUNA), kehilangan 96% hanya dalam satu hari karena penarikan UST (project's stable coin). Terlepas dari patok yang dinyatakan terhadap dolar AS, stablecoin algoritmik ekosistem Terra, UST sendiri, terus kehilangan nilainya pada hari Rabu. Senilai $1 baru-baru ini pada awal minggu, UST turun menjadi $0,30. Menurut The Block, upaya Luna Foundation Guard (LFG) untuk menstabilkan stablecoin UST telah gagal. Sekarang perhatian pelaku pasar crypto beralih ke kepercayaan pada stablecoin.

Tether adalah stablecoin yang paling banyak diperdagangkan dengan perputaran harian dua kali lipat dari Bitcoin dan - 2% di bawah dolar karena arus keluar modal terus mendorongnya ke satu arah.

Volatilitas Stablecoin adalah kenyataan baru untuk pasar kripto. Sebelumnya, investor lebih suka memarkir modal dalam mata uang stabil, keluar dari altcoin dan menariknya dari cryptocurrency. Sekarang kita melihat eksodus penuh dari sektor ini, dan seluruh pasar crypto runtuh seperti rumah kartu. Menambahkan bahan bakar ke api, Federal Reserve AS telah menerbitkan Laporan Stabilitas Keuangan semi-tahunan, menyoroti risiko menggunakan koin stabil.

Demokrat di Komite Perbankan Senat AS telah mengusulkan peningkatan pengawasan terhadap cryptocurrency, termasuk stablecoin. Menurut CryptoQuant, penipu telah menjual beberapa bitcoin mereka. Investor yang memegang BTC selama lebih dari setahun telah membawanya ke bursa untuk dijual selama sebulan terakhir. CEO pertukaran cryptocurrency Kraken, Jesse Powell, mengatakan dia ingin melihat bitcoin turun menjadi $20.000. Dia akan mengalokasikan bagian terbesar dari modalnya untuk membeli BTC dalam kasus ini.

 

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

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

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

Alex Kuptsikevich a senior analyst FxPro, presented a recovery plan for the UST stable coin. Against this backdrop, the cryptocurrency LUNA lost nearly 100% of its value. The Terra blockchain has halted. According to media reports, Do Kwon was previously behind Basis Cash – another failed stable coin blockchain project.

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

 

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

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

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

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

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