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Correction or crash for PEPE?
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Ethereum soars on ETF hopes, but network challenges cast doubt
Key points:
Ethereum’s price has been up following ETF hype.
The market has seen strong investors’ interest despite profit taking.
News - Following the announcement of Ethereum (ETH) ETFs receiving preliminary approval, ETH experienced a significant surge in both price and popularity. However, despite this positive momentum, the broader Ethereum ecosystem faced several challenges.
The juxtaposition - On 23rd May, the on-chain data platform, Token Terminal reported an unprofitable Q2 for the king alt. However, interest in ETH remained high, as over $3 billion worth of ETH was withdrawn from centralized exchanges between 23rd May and 2nd June, indicating a potential supply squeeze.
This reduction brought exchange reserves to their lowest level in years at 10.6%, which could boost ETH prices coupled with increased demand.
Nonetheless, concerns persist about the impact of Grayscale’s Ethereum Trust (ETHE) on Ethereum’s price, given the precedent set by the Grayscale Bitcoin Trust's (GBTC) significant outflows.
What’s more? There has been a slight dip in interest from both whale and retail investors. Despite the recent sell-offs, the price decline has been minimal, suggesting that the market remains robust.
MicroStrategy CEO settles $40 million tax evasion lawsuit
Key points:
Michael Saylor settles tax evasion lawsuit.
Attorney General, Schwalb sees the violation of law as an insult to law-abiding taxpayers.
News - Michael Saylor, CEO of MicroStrategy and vocal Bitcoin advocate, settled a hefty $40 million tax evasion lawsuit with the District of Columbia (DC). The lawsuit alleged Saylor avoided paying taxes on hundreds of millions by claiming residency in lower-tax states while living in DC.
Attorney General’s criticism - Despite the settlement, D.C. Attorney General Brian Schwalb accused Michael Saylor of tax evasion. He further pointed out Saylor's alleged public bragging about his scheme and its unfair burden on honest taxpayers who fund essential city services. While Saylor maintains that he is innocent, he agreed to settle the lawsuit citing the burden of litigation as reasons. He claimed that he was a resident of Florida throughout the period in question.
Not the first time? Despite Saylor's denials and claims of residency in Florida, a US judge rejected his motion to dismiss the tax evasion lawsuit in March 2023. This highlights that authorities are increasingly scrutinizing tax compliance within the crypto industry, with Saylor's case following similar charges against prominent figures like "Bitcoin Jesus" Roger Ver.
Bitcoin blues hit memecoins: Can Shiba Inu outperform Dogecoin?
Key points:
Dogecoin and Shiba Inu showed declining social media trends.
On-chain data suggests more selling pressure for Dogecoin compared to Shiba Inu.
News - Following Bitcoin [BTC]'s struggle to surpass $70,000, the memecoin market has witnessed a downturn as well. Both Dogecoin [DOGE] and Shiba Inu [SHIB] saw price drops, with only dogwifhat [WIF] seeing a positive price change in the past week.
What are the metrics saying? Social media trends also mirrored the declining price action of the dog-themed memecoins. Both DOGE and SHIB had negative sentiment scores, but for DOGE it seems to be a longer trend.
While SHIB had some positive buzz recently, Dogecoin has been consistently bearish since April. However, despite this sustained negativity, Dogecoin is still generating much more online chatter compared to the younger Shiba Inu, likely because of its established status as the king of memecoins.
More details - Amidst uncertainty, a significant portion of the dormant DOGE tokens recently moved wallets on 30 May, hinting at potential selling. This is typically seen as a sign of volatility. Meanwhile, SHIB holders seem more committed, with fewer tokens changing hands.
However, SHIB investors are currently holding onto bigger potential losses compared to DOGE. Overall, social media sentiment is similar for both coins.
PEPE sees a slump, but outflows hint at a potential reversal
Key points:
PEPE saw a strong bearish trend with over 5% decline in the past 24 hours.
Despite bearish sentiment, strong outflows hint at a possible price rebound.
News - Pepe [PEPE] experienced a downturn in trading activity. Key metrics suggest traders are closing positions and potentially leaving the market. Exchange outflow data indicates more holders are keeping their PEPE rather than selling. With such market uncertainty, the question arises - Will the price rebound?
Here’s the answer - Data from Coinglass showed a 5.10% decrease in contract volume (over $764 million) within the past 24 hours. This decline was mirrored by a fall in Open Interest, which sat at $158.02 million suggesting traders are closing positions and potentially exiting the market.
This trend could be linked to PEPE's recent price slump of 8.78% over the past week. If the price continues this downward trajectory, interest in the memecoin might dwindle further.
Some optimism prevails - While exchange inflows, indicative of selling pressure, reached 5.28 billion tokens in the past week, exchange outflows, suggesting holding behavior, were significantly higher at 14.71 billion. If this trend of holding outweighs selling, Pepe's price could rebound to $0.000017.
However, this optimistic scenario relies on sustained dominance of outflows. At press time, investor sentiment remained bearish, with the Long/Short ratio hovering around 0.69. Historically though, Pepe has experienced price increases following periods of extreme negativity. So, while the near future may be uncertain, a price upswing can't be entirely ruled out.
More stories from the crypto ecosystem
Did you know?
Gemini announced plans to reimburse users affected by its discontinued Gemini Earn program. On 29 May 2024 ‘Earn’ users received $2.18 billion in digital assets, representing 97% of the owed amount and surpassing the amount held when Genesis suspended withdrawals by $1 billion, achieving a 232% recovery.
A survey conducted by Harris Poll on behalf of Grayscale from 30 April to 2 May 2024, revealed that 32% of voters are more open to crypto investing since early 2023. Compared to November 2023, 23% of voters now view crypto as a good long-term investment (up from 19%), and 47% plan to include it in their portfolios.
On 10 May, JPMorgan Chase disclosed in an SEC filing that it has invested in Bitcoin ETFs from Grayscale, ProShares, Bitwise, BlackRock, and Fidelity, holding around $760,000 in shares. The bank also reported owning 25,021 shares worth approximately $47,000 in Bitcoin Depot, a crypto ATM provider.
Top 3 coins of the day
Kaspa (KAS)
Key points:
KAS saw a massive jump from $1.37 to $1.71 with bulls in charge.
Technical indicators suggest a potential correction ahead.
What you should know - While Bitcoin struggles to break the $70,000 barrier, Kaspa (KAS) sees strong bullish momentum, surging 14.41% in the last 24 hours. As of the latest update, KAS was changing hands at $0.1706 with a market cap exceeding $4 billion with daily and weekly charts showing green candlesticks. Thus, reflecting strong bullish momentum. This positive trend was further reinforced by the RSI (Relative Strength Index) entering the overbought territory. However, a sudden influx of selling pressure could trigger a sharp pullback, potentially pushing KAS below its $0.119 support level.
Dogwifhat (WIF)
Key points:
WIF failed to maintain its positive momentum.
Dog-themed memecoin suffered over 6% drop in the last 24 hours.
What you should know - Echoing the performance of other memecoins, Dogwifhat (WIF) too struggled to maintain investors’ enthusiasm. At press time, WIF was down by 6.47% in the past 24 hours, trading at $3.22. With no recent social media buzz or positive industry news, a further drop to its $2.50 support level seems likely. Well, the ongoing correction started on 30 May and the selling pressure can be seen in the reading of Chaikin Money Flow (CMF) indicator, which sat at -0.06 during press time. However, a breakout above the $4.09 resistance level could signal a bullish reversal.
Floki (FLOKI)
FLOKI’s bloodbath continued for weeks.
Buying pressure persisted despite the bearish price movement.
What you should know - FLOKI mirrored the broader market slump, dropping 4.92% in the past 24 hours. The weekly chart painted a bleaker picture, with FLOKI down over 13%. If this trend continues, FLOKI could dip further below its $0.00022 support level. However, there's a potential silver lining. Technical indicators like the MACD hinted at continued buyers’ interest. If FLOKI can break through the $0.00029 resistance level, a price swing upwards could be on the horizon. However, in case sellers dominate the market, bearish movement will lead the market structure.
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