Bitcoin's 2024 cycle bottom

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Bitcoin’s ‘deepest cycle correction’ puts pressure on market traders

Key points:

  • BTC down by over 20% from its ATH on the charts.

  • Crypto has recorded a series of lower highs and lower lows since early June.

News - Bitcoin has recovered somewhat after it crashed to $53,000. However, it can only be characterized as lukewarm recovery since the crypto is still well away from its ATH recorded earlier in the year.

In fact, according to Glassnode, Bitcoin’s bout of depreciation is its “deepest cycle bottom since late 2022.”

All the pressure - As expected, this had a corresponding effect on the crypto’s holders, especially short-term holders. For instance, 83% of the supply held by STHs fell into unrealized losses thanks to BTC’s fall below $60,000 on the charts.

Here, it’s worth pointing out that BTC’s decline came on the back of Bitcoin’s active addresses falling too. It fell from over 900K to 600K in just 2 months, underlining a decrease in retail interest.

In fact, despite Bitcoin holding steady at press time, there remains a risk of the cryptocurrency falling even further, again, on the price charts. This was the assessment of the crypto’s Profit & Loss Index. According to CryptoQuant, if this index falls below its 365-day MA, the drawdown could be worse.

Not all bad news - Despite the scale of the cryptocurrency’s devaluation, there is some hope for Bitcoin in the short-term. Especially since according to Glassnode, the ongoing drawdown is much shallower than the ones seen in the past.

This might be the case because of its strong market structure and Bitcoin’s maturity as an asset class.

Solana-based BONK flips WIF after token burn proposal

Key points:

  • BONK is now the market’s 4th-largest memecoin after flipping WIF.

  • Flip came on the back of BONK hiking by 16% in a week.

News - Solana-based memecoins were all the rage earlier in the year, with many of them recording double-digit hikes consistently. However, that hasn’t been the case lately, with most falling victim to the wider market’s downtrend.

BONK, however, registered a reversal of sorts recently, hiking by over 16% in a week. While the altcoin is still some way away from hitting its ATH, this hike allowed the crypto to flip another Solana-based memecoin - dogwifhat (WIF).

More details - Unlike BONK, WIF has depreciated on the charts, losing almost 7% of its value over the aforementioned period. Since its market cap fell on the back of the same, BONK’s surge pushed it above WIF on the rankings.

Here, it’s worth pointing out that while the broader market remains ambivalent, BONK’s price hike was triggered by a new token burn proposal.

According to the same, BONK DAO has received a proposal to burn 84 billion tokens from its treasury, “representing 100% of the BONK earned by BONK DAO from its revenue sharing agreement with BONKBot in Q2.”

The community now has six days to vote on the proposal.

What’s next for its price action? - In the past, whenever such proposals have gone through, they’ve been followed by bouts of price appreciation. In April, for instance, BONK’s team burned 278 billion tokens. Following the same, the memecoin hiked from $0.000014 to $0.000041 in less than six weeks.

Bitcoin, Ethereum are both commodities - CFTC Chair

Key points:

  • CFTC Chair lobbied to have his agency oversee the crypto-sector.

  • Statement made before a U.S Senate Committee.

News - On the back of Spot Bitcoin ETFs being approved in January, there has been a sustained push among institutions across the board to clarify everything associated with the crypto-space. Regulators in the United States have been leading the charge, with the SEC and the CFTC among them.

In fact, the latter has always claimed that it should get wider regulatory oversight over cryptos since the likes of BTC and ETH are commodities.

This was the crux of what CFTC Chair Rostin Benham said before the U.S Senate Committee on Agriculture, Nutrition, and Forestry.

Time of urgency - In his statement, Benham cited a ruling made by a court in Illinois, a ruling which claimed that both Bitcoin and Ether qualify as commodities. Here, the case in question involved an Oregon man accused of fraud in a $120 million Ponzi scheme.

According to the exec, regulatory inaction will contribute to greater financial risks to the market and its investors.

“Our current trajectory is not sustainable. Federal legislation is urgently needed to create a pathway for regulatory framework that will protect American investors and possibly the financial system from future risk”

After stating that the CFTC should assume a greater position for crypto oversight, he concluded that the agency is ready to propose and introduce key crypto policies that will be the key to better regulating commodities.

This, the CFTC wants to do “in partnership with the SEC.”

Argentina leads crypto adoption charge on the back of weak Peso

Key points:

  • Argentina has the highest crypto adoption rates in the Western Hemisphere.

  • Economic instability has spurred interest in alternative investments like cryptos.

News - The last few years have seen crypto adoption rates go through the roof, especially on the back of the performances of cryptos like Bitcoin. However, adoption hasn’t always been uniform, or universal for that matter.

As far as the Western Hemisphere is concerned, Argentina is the country leading the charts, with a recent Forbes report finding that 2.5 million of its citizens accessed over 55 of the world’s top crypto-exchanges.

Fiat vs. crypto - While many in Argentina have dived into the likes of Bitcoin, Dogecoin, Ethereum, etc., the report found that a majority of the country’s crypto-using public instead buys USDT and simply holds on to it. What this implies is that most aren’t interesting in the idea of trading or profits or losses in the traditional sense.

Instead, they are looking for a safe haven.

From an Argentinian perspective, this makes sense. Especially since the local Peso has weakened considerably over the last few years. That’s not all either, with annual inflation rates being as high as 275%, contributing to everyday goods being unaffordable to many in the country.

By investing in a stablecoin that is pegged to the U.S Dollar, most Argentinians intend to store their wealth and preserve the value of their savings.

Binance to Argentina’s rescue - That wasn’t the report’s only finding though. In fact, Forbes also found that the country’s citizens constituted around 7% of all visitors to the exchange.

Simply put, Argentinians prefer Binance over other crypto exchanges in the market.

Did you know?

  • Over 21,000 cryptocurrencies have entered the market since Bitcoin’s debut back in 2009.

  • Back in 2014, Dogecoin’s community raised over $55K in an effort to sponsor NASCAR driver Josh Wise. 

  • In the United States, people making over $100,000 annually constitute over 25% of all crypto-holders, but only 15% of the general population.

Top 3 coins of the day

Stacks (STX)

Key points:

  • STX’s downtrend came to a halt after its latest bout of appreciation.

  • STX hiked by over 27% in just under a week.

What you should know - On a downtrend since March, STX saw a reversal in fortunes after it hiked by over 27% in less than a week. This, on the back of Bitcoin’s own recovery from its lows near $53,000. Now, while the aforementioned hike did little to regain all the altcoin’s losses over the last few months, it did introduce some bullishness in the market. This was evidenced by the findings of the crypto’s indicators as while the Moving Average was positioned below the price candles, the MACD line just crept above the Signal line.

Avalanche (AVAX)

Key points:

  • At press time, AVAX was trading at $25.72.

  • Altcoin now trading at levels last seen in December 2023.

What you should know - Like STX, AVAX’s downtrend has been going on for months too. In fact, such has been the scale of depreciation that at the time of writing, the crypto was trading at its December 2023 levels. Earlier in the month, AVAX lost over 15% of its value as BTC crashed under $60,000. While it recovered soon after to record some gains, this recovery wasn’t nearly enough to help AVAX holders. The sheer bearishness of the altcoin’s market was highlighted by the findings of the crypto’s indicators. While the Parabolic SAR’s dotted markers were well above the price candles, the RSI was closer to the oversold zone on the charts.

Ondo (ONDO) 

Key points:

  • Compared to AVAX and STX, ONDO’s recent performances have been better.

  • Altcoin still too volatile to make any short-term projections though.

What you should know - Ranked 62nd, ONDO’s recent price action has been fairly volatile. For instance, the altcoin recorded a hike of 12.5% after falling by over 25% during the first week of July. This volatility was underlined by the crypto’s Bollinger Bands too, with the bands widening around the price candles - A sign of incoming volatility. Here, it’s worth pointing out that ONDO’s capital inflows haven’t quite recovered since the fall in June. This was highlighted by the Chaikin Money Flow being found under zero, at press time.

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