Monday, 27 June 2022

Market Summary

Market Summary 27 June 2022

Bitcoin Price: US$ 21,038.07 (-2.11%)
Ethereum Price: US$ 1,197.79 (-3.59 %) 


Bear Market Woes: When Is Enough, Enough?

  • What To Expect In the Short To Medium Term
    • It is impossible to know what is going to happen in markets for certain, the best we can do is try to figure out what the most likely outcome is going to be. In many of our Market Insights notes, we have discussed liquidation events, how they work, and what we can likely expect in the aftermath of such events. It makes sense to revisit this mental framing given BTC’s recent 35%-40% liquidation cascade.
  • Now that the dust has started to settle, we can attempt to map out a post-nuke thesis. For longer-term readers, this will not be new information. In the aftermath of most liquidation cascades, we typically experience a period of price consolidation. In other words, BTC needs a little bit of time to find a new ‘fair value equilibrium price’ agreed upon by buyers and sellers at these new, post-nuke price levels. A simple heuristic is that the length of the ensuing price consolidation is typically a function of the severity of the impulse move before it. Since the most recent price move was more severe and fast than the one experienced in May 2022, the resulting price consolidation may also last longer as well.
  • The most obvious range for this price consolidation to form is roughly $19.5K – $23.5K. This is a combination of the 2017 ATH price level, in addition to the last remaining areas of YTD and Quarterly market structure/volume profile support and resistance. The impulse price move outside of the consolidation range will likely be a result of a new wave of macroeconomic data (or crypto-native news such as Celsius/3AC). This will either show an improving situation, giving asset prices some relief… or show a worsening situation sending asset prices on another leg lower


FTX may be planning to purchase a stake in BlockFi: Report

  • Crypto exchange FTX is reportedly in talks to acquire a stake in BlockFi after the company issued a $250 million credit to the lending firm.
  • According to a Friday report from the Wall Street Journal, FTX is currently in discussions with BlockFi regarding the crypto exchange purchasing a stake in the firm, but no equity agreement has been reached. The reported ongoing talks followed BlockFi signing a term sheet with FTX to secure a $250 million revolving credit facility on Tuesday.
  • “BlockFi does not comment on market rumors,” a BlockFi spokesperson told Cointelegraph. “We are still negotiating the terms of the deal and cannot share more information at this time. We anticipate sharing more on the terms of the deal with the public at a later date.
  • FTX founder and CEO Sam Bankman-Fried, or SBF, has helped support many crypto projects in recent weeks amid a bear market forcing a lot of companies to reduce staff. Trading firm Alameda Research, under SBF’s management, announced it had loaned 15,000 Bitcoin (BTC) to Voyager Digital on Wednesday aimed at covering losses from its exposure to Three Arrows Capital.


Axie Infinity to compensate Ronin exploit victims and relaunch bridge

  • Sky Mavis, the creator of the play-to-earn game Axie Infinity (AXS), announced that it will reimburse victims of the Ronin bridge hack and reopen the bridge next week.
  • In March, hackers stole more than $620 million in the heist, which included roughly 17,600 Ether (ETH) and 25.5 million USD Coin (USDC) tokens. According to a Bloomberg report on Friday, once the bridge reopens on Tuesday, users will be able to withdraw one ETH for each one they possessed before the attack.
  • In April, Cointelegraph reported that Sky Mavis closed $150 million in fresh capital led by Binance to refund hack victims. Animoca Brands,16z, Dialectic, Paradigm and Accel were among the investors during the funding round.


White hat hacker attempts to recover ‘millions’ in lost Bitcoin, finds only $105

  • Joe Grand, a computer engineer and hardware hacker known by many for recovering crypto from hard-to-reach places, spent hours breaking into a phone only to find a fraction of a Bitcoin.
  • In a YouTube video released on Thursday, Grand traveled from Portland to Seattle in an effort to potentially recover “millions of dollars” in Bitcoin (BTC) from a Samsung Galaxy SIII phone owned by Lavar, a local bus operator. Lavar originally purchased the BTC in July 2016 in a “super sketchy” way, paying a person at a cafe and storing the crypto in a wallet on the phone before putting it in storage and losing track of the device.
  • After finding the phone in 2021, Lavar couldn’t recall the swipe password, but remembered setting up the option of erasing the data if too many incorrect attempts were made. He and a friend connected with Grand after discovering his YouTube videos, allowing the white hat hacker to make several attempts to get into the phone’s memory and recover the crypto.
  • Following some micro soldering, downloading the memory and discovering the Samsung’s swipe pattern for access — which turned out to be the letter “L” — Lavar opened his MyCelium Bitcoin wallet and discovered only 0.00300861 BTC — worth $105 USD at the time, down to roughly $63 USD at the time of publication. Grand was later able to determine the bus operator purchased $400 worth of BTC in 2016, most of which went to a crypto mixing service called BitBlender, which was shut down in 2019.


Uganda’s gold discovery: What it could mean for crypto

  • These are fraught times for the cryptocurrency and blockchain sector, so it isn’t surprising that industry proponents might seize upon any promising news to help charge flagging markets. A Reuters report out of Uganda last week about a massive gold ore discovery supplied just this kind of fuel.
  • What does the state of gold mining in Africa have to do with the price of global Bitcoin (BTC)? Quite a bit, potentially.
  • Bitcoin has periodically laid claim to being digital gold largely on the strength of its strict 21 million supply limit, which makes it non-inflationary and a good store of value — in theory. Gold, of course, is the store of value par excellence, with a limited supply and a solid track record that goes back millennia.
  • But, if Uganda is sitting on 31 million metric tons of gold ore, as the government declared, might not that substantially boost the world’s gold supply? That in turn could lower the price of gold — and make it a less secure “store of value” generally. Gold’s loss could be the cryptocurrency’s gain.
  • Some drew encouragement from this notion. Microstrategies CEO Michael Saylor, for instance, posted a video on Twitter about the Ugandan discovery of “huge gold deposits” which might net 320,158 metric tons of refined gold “valued at $12.8 trillion.” As Saylor noted on June 17: “#Gold is plentiful. #Bitcoin is scarce,” further telling CNBC:
  • “Every commodity in the world has looked good in a hyperinflationary environment, but the dirty secret is you can make more oil, you can make more silver, you can make more gold […] Bitcoin’s the only thing that looks like a commodity that is scarce and capped.”


Bitcoin payments make a lot of sense for SMEs but the risks still remain

  • The last six odd months has seen the cryptocurrency market witness an unparalleled amount of financial volatility, so much so that the total capitalization of this fast-maturing space has dropped from $3 trillion to approximately $1 trillion. This comes after the industry hit all-time highs across the board last November, with Bitcoin (BTC) reaching a price point of $69,000.
  • Despite the previously stated volatility, a recent report shows that small to medium-sized enterprises (SMEs) across nine separate countries, Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, United Arab Emirates and the United States, are extremely open to the idea of accepting cryptocurrency payments — especially Bitcoin.
  • Within the study — which surveyed a total of 2,250 market entities — 24% of the respondents said that they plan on accepting Bitcoin alongside other digital assets in the near term, while a whopping 59% of participants revealed that they plan on transitioning exclusively to the use of digital payments by the start of 2025.


Bitcoin miner ‘capitulation event’ may have already happened — Research

  • Bitcoin (BTC) miners may have already sparked a “capitulation event,” fresh analysis has concluded.
  • In an update on June 24, Julio Moreno, senior analyst at on-chain data firm CryptoQuant, hinted that the BTC price bottom could now be due.
  • Miners have seen a dramatic change in circumstances since March 2020, going from unprecedented profitability to seeing their margins squeezed.
  • The dip to $17,600 — 70% below November’s all-time highs for BTC/USD — has hit some players hard, data now shows, with miner wallets sending large amounts of coins to exchanges.
  • This, CryptoQuant suggests, precedes the final stages of the Bitcoin sell-off more broadly in line with historical precedent.
  • “Our data demonstrate a miner capitulation event that has occurred, which has typically preceded market bottoms in previous cycles,” Moreno summarized.
  • Miner sales have been keenly tracked this month, with the Bitcoin Twitter account even describing the situation as miners “being drained of their coins.”


Solana smartphone Saga triggers mixed reactions from crypto community

  • The Solana team has brought mobile phones to Web3 after revealing Saga, Solana’s Android mobile device that will go out with the project’s latest stack for Web3 developers, the Solana Mobile Stack. The community welcomed the new development with various reactions from comparing the project to Apple and Ethereum to bringing up concerns over Solana’s network outages. 
  • Vinny Lingham praised the move and called it Web3’s very own “iPhone moment” and thanked Solana co-founder Anatoly Yakovenko for making it possible. Meanwhile, David Ticzon was also impressed, calling Solana the “Apple of Web3” in a tweet.
  • Some community members also took this opportunity to compare Solana’s progress to the Ethereum network. Twitter user Thesolmane pointed out that while Solana launched a Web3 phone, Ethereum stays “without innovation in years.”
  • In a Twitter thread, user Nathanweb3 also explained how Solana is becoming a growing threat to Ethereum. According to the Twitter user, SOL’s developers are able to grasp the shortcomings of ETH when it comes to user experience. Because of this, Solana’s team is addressing the issues and is simplifying things for everyday users.v

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