“An unusual confluence of bearish fundamentals caused all cryptocurrencies to fall Wednesday, but traders seem to be scooping up cheaper crypto, sparking something of a rebound.
Bitcoin, the world’s largest cryptocurrency by market capitalization, was in the red Wednesday by 8.7% as of press time. BTC was above the 10-hour moving average and below the 50-day, a sideways signal for market technicians. The total drop for bitcoin in the past 24 hours was 26.7%, going from a high of $43,602 around 21:15 UTC to as low as $31,926 around 13:15 UTC. Bitcoin has recovered somewhat from that low, at $39,461 as of press time. Bitcoin has fallen almost 50% from its high on April 12.
The second-largest cryptocurrency by market capitalization, ether, was trading around $2,609 as of 21:00 UTC, slipping 23.1% over the prior 24 hours.
What we saw today was a black swan event of cascading liquidations.
However, BTC is trending back up. Wednesday is shaping up to be the highest spot volume day for bitcoin in 2021. As of press time, daily volume is over $14 billion on the eight major exchanges tracked. Global Digital Asset’s Friedman sees price support at $37,000, where traders will keep scooping up more bitcoin should the price head back down to that level.
We have more than likely seen the bottom here.”
“Amid the market-wide risk aversion, exchanges offering crypto futures have liquidated $8 billion worth of positions. Bitcoin futures account for almost 50% of the total market-wide liquidations.
Total liquidations seen in the past 24 hours, however, are still short of the record $10 billion worth of forced closures observed on April 17, when bitcoin fell sharply from $60,000. Since then, the market has mostly seen daily liquidations of less than $4 billion, barring today’s brief spike.
The data shows the major part of the recent decline from $55,000 to below $40,000 is primarily driven by increased selling in the spot market. The number of bitcoin held on exchanges has risen by more than 65,000 BTC in the past seven days, according to data provided by Glassnode.
The correction could soon run out of steam as technical indicators show oversold conditions. Further, the order book is flashing signs of capitulation. Capitulation is widely considered the final stage of the price sell-off.”
“Bitcoin’s steepest price correction since March 2020 coincided with a growing sense of risk aversion on Wall Street, where investors are growing concerned that rising inflation might prompt the Federal Reserve to tighten monetary policy – a move that could undermine the bullish case for riskier assets.
Stocks, oil and industrial metals were nursing losses. Prices for gold, seen as a traditional safe-haven asset or inflation hedge, rose.
Crypto is considered to be an emerging market, and as such, a risk correlated market vulnerable to downturns in global sentiment.”
“MicroStrategy, the business intelligence firm with billions in bitcoin reserves, is down 10% to $435 in the last 24 hours. Square, the owner of Cash App and another holder of bitcoin reserves, is down 3% to $197. Coinbase, the leading crypto exchange in the U.S., is down 7% and flirting with all-time lows at $222.
The Bitwise Crypto Industry Innovators ETF, which tracks 30 prominent publicly listed crypto firms, is down 9.3% at press time. Even furniture maker Ethan Allen, the shares of which have benefited from the rise in ether due to the company’s stock ticker being ETH, may now be paying the price for that association today, falling 5% to $27.”
“The investment strategy has been in development for months and is likely to be available to qualified investors around mid-June. Wells Fargo is one of the U.S.’s largest financial services companies, with assets of almost $2 trillion.
We think the cryptocurrency space has just kind of hit an evolution and maturation of its development that allows it now to be a viable investable asset.”
“ETH 2.0 will see the Ethereum blockchain switch from the energy-hungry proof of work consensus mechanism to a proof of stake model.
By my (very conservative) calculations, Ethereum will see a greater than ~99.95% reduction in energy use post-merge. In total, a Proof of Stake Ethereum, therefore, consumes something on the order of 2.62 megawatt. This is not on the scale of countries, provinces, or even cities, but that of a small town (around 2,100 American homes).
Ethereum’s power-hungry days are numbered, and I hope that’s true for the rest of the industry too.”
“The prevailing view is that proposals for a blanket ban are now outdated, according to the report. A pivot away from prohibition and toward regulation would be a sizable boon for crypto in India, which has witnessed considerable adoption despite the uncertainty.
The committee would also explore the wider use of blockchain technology and study ways to develop a digital rupee.”
“Acting Comptroller Michael Hsu told a House Financial Services Committee hearing in Washington, D.C., that he had spoken with fellow regulators about forming a “sprint team” around crypto. This work could include creating a legal definition for what a cryptocurrency is in the U.S.
We are engaged with the other agencies in a joint effort to think through some of these crypto definition[s] and some of the applications in crypto areas.”
“About 80% of central banks are exploring use cases involving central bank digital currencies (CBDCs), with 40% already testing proof-of-concept programs. CBDCs are moving toward global implementation, and the infrastructure of a digital currency is critical for a successful rollout, according to the report.
Facebook-backed cryptocurrency Diem, formerly known as Libra, is motivating many central banks to develop CBDCs, the report noted. Most recently, Diem formed a partnership with Silvergate Bank with plans to test the U.S. dollar-pegged stablecoin later this year.
Diem offers a whole new paradigm in economics: a diverse association of enterprise and social impact stakeholders developing digital currencies on a permissioned, open-source chain built with the most cutting edge tech – with a built-in global market and limited barriers for growth once live.”
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“The crypto bull market of early 2021 was a boon to Ledger’s top line. The company is looking to fill hundreds of positions as it expands its business operations.
Ledger is expanding its in-house capacity significantly, with over 150 open positions needing to be filled. The company recently filled the role of vice president of NFTs, or nonfungible tokens, as it expands its services to artists and NFT management.
The entire industry is in hyper-growth, and we are proud to be a part of it.”