- Unhashed Newsletter
- Posts
- Panic signs for Bitcoin investors
Panic signs for Bitcoin investors
Reading time: 5 minutes
Bitcoin dropping below $60K could trigger “panic selling“- Analyst
Key points:
Crypto traders believe Bitcoin hiking above $65,000 can turn the market sentiment bullish.
Short-term holders could be forced to sell to the whales during the next potential price drop.
News - Bitcoin was trading above $62.5K at the time of writing, but a price drop below $60K could incite panic selling. Popular analyst Alex Kuptsikevich claimed that a series of lower highs and lower lows has characterized its price action. This may be a sign of investors selling into the lower timeframe bounces, outlining bearishness.
Fear in the market is rising - According to the analyst, the halving event may still trigger asset sell-offs by miners since the halving has increased the costs of mining. Fears of tighter regulation around crypto have also contributed to the selling, he said.
In his opinion, a price move above $65K would be the main positive scenario. This would see BTC reclaim the 50-day SMA and fix the reversal area in early May.
Impact of short-term holders - Crypto investment firm Ryze Labs said in its weekly note that market participants who have held Bitcoin for under 155 days could drastically influence prices.
From late February to early April, 94% of both long and short-term BTC holders were at a profit. Following this peak, the losses of short-term sellers have historically increased rapidly, leading to a large downturn in prices in the following four to six months.
The institutional demand this cycle could see the current cycle differ. However, analysts believe that if macroeconomic conditions continue to weaken, a Bitcoin price drawdown similar to previous cycles could occur.
GameStop’s rally gives PEPE, POPCAT bullish impetus
Key points:
Roaring Kitty posted a meme that led to a 110% GameStop rally.
Social media engagement and community-driven hype helped the memecoins’ cause.
News - On Sunday night, popular meme stock retail trader Roaring Kitty posted a meme on X (formerly Twitter). The account has been inactive since June 2021, while GameStop [GME] has fallen since too.
The meme post was followed by a triple-digit rally in prices. It forced trading to halt and liquidated roughly $5 billion in shorts over just two days.
How did this impact the crypto meme sector - As GME made rapid gains, Solana-based memecoins PEPE and POPCAT went up by more than 20% within 24 hours.
Since memecoins are driven almost entirely by sentiment and crowd speculation and have few fundamentals that could boost traction, the post from Roaring Kitty galvanized crypto crowds as well.
Trading volume went up by 34% among top meme assets, according to Santiment. Social media volume also went haywire, with Shiba Inu seeing a 46% hike. Additionally, Coinglass revealed that Open Interest behind PEPE rose by close to 30%.
Technical analysis for both POPCAT and PEPE revealed bullish sentiments and a short-term uptrend in play too.
Dencun upgrade now affecting Ethereum’s deflationary status
Key points:
Reduced burn rate led to a reduction in the amount of Ethereum removed from circulation.
Ethereum’s total supply has trended higher since the latter half of April.
News - Ethereum seemed to be at risk of losing its label as “ultrasound money” after its supply started to hike over the past four weeks.
Ethereum has been deflationary for most of the last few years owing to the gas fees which are “burnt,” but the Dencun upgrade has slowed the deflation rate by reducing transaction costs.
The increasing supply came alongside decreasing fees. The Dencun upgrade slashed transaction fees, making things easier for network users. However, this also led to a fall in the overall fees and in turn, the amount of fees burnt.
Supply on exchanges climbs - Not only is the total Ethereum supply going up, but the supply on centralized exchanges is also on an uptrend.
This increase in supply on exchanges began in March, before the total supply’s uptrend.
While an uptick in this metric usually signals greater selling pressure, it amounted to only 3 million ETH. Compared to the total exchange supply of 16.8 million ETH, the recent hike might not be an immediate risk to Ethereum’s price on the charts.
Franklin Templeton CEO - “All ETFs, mutual funds to be on blockchain”
Key points:
President and CEO of Franklin Templeton Jenny Johnson believes blockchain is a “very efficient technology.”
Lowered costs of verifying data a big plus, compared to traditional methods.
News - President and CEO of financial firm Franklin Templeton, Jenny Johnson, has claimed that eventually all ETFs and mutual funds would be on the blockchain. At the moment, the firm has $1.6 trillion in assets under management (AUM).
In a recent interview, she stated that she is a big fan of blockchain and its technology, adding that the financial firm could benefit from it.
Blockchain removes a huge cost - She described how the company ran an experiment for six to eight months. The experiment involved processing records side by side using traditional methods and blockchain technology.
The results were strongly in favor of blockchain technology, with the CEO noting how much less costly it was to process records this way. This was because of the enormous costs associated with verifying data between disparate systems. This is a problem that blockchain is designed to solve, making in-house data reconciliation much cheaper compared to traditional methods.
Johnson concluded by commenting that blockchain would open up new investment opportunities.
More stories from the crypto ecosystem
Did you know?
Network outages and transactions not going through are not uncommon in the crypto-space. However, a Bitcoin uptime tracker revealed that Bitcoin’s total uptime has been 99.99% and it has only been down twice, once in 2010 and the other in 2013. Since the last bug in 2013, the network has maintained a remarkably stable uptime.
Milton Friedman, the American economist who received the 1976 Nobel Memorial Prize in Economic Sciences, predicted the rise of something like Bitcoin in an interview in the year 1999. He talked about reliable e-cash that would soon be developed where person A could transfer funds to person B through the Internet without either party knowing each other’s identities.
Roughly 1.46% of the total Bitcoin supply is owned by publicly listed companies. This amounts to 306,669 Bitcoin, with Michael Saylor’s MicroStrategy (MSTR) leading the pack. The company holds a whopping 214,278 BTC through a unique strategy of raising debt capital to purchase Bitcoin.
Top 3 coins of the day
Ondo (ONDO)
Key points:
ONDO’s trading volume has been in decline.
The mid-range rejection saw bearish sentiment strengthen.
What you should know - ONDO has traded within a range for nearly two months. This range extended from $0.683 to $0.976, and its mid-range mark at $0.83 has been particularly important. It has served as resistance for nearly a month. ONDO’s move south from this level was accompanied by significant capital outflows. This was supported by the -0.08 reading on the Chaikin Money Flow. In fact, the indicator has been below -0.05 throughout May to denote dominant selling pressure. The Awesome Oscillator also slipped below neutral zero to signal a hike in bearish momentum.
Solana (SOL)
Key points:
SOL maintained its range formation.
Momentum was bearish in the higher timeframes.
What you should know - Solana (SOL) has traded within a range that extends from $116 to $156. Over the past week, it has lost close to 3% of its value but its higher timeframe trend remained bullish. However, momentum was bearish as reflected by the 50-day simple moving average. This was a sign of a major retracement and a consolidation phase for the asset. Additionally, the A/D indicator has been trending higher steadily in recent months - A sign that investors must patiently wait for an upward breakout.
Toncoin (TON)
Key points:
TON was unable to close a daily session above $7.03.
Fears of rejection increased based on the OBV’s findings.
What you should know - Toncoin (TON) had a strongly bullish bias on the 1-day timeframe. The RSI was at 65, reflecting firm upward momentum. However, the Fibonacci retracement levels based on the TON’s retracement to $4.59 last month showed that the $7.03-level resistance was unbeaten. It was the 78.6% retracement level, and a daily session close above it would have indicated a bullish conviction. Additionally, the OBV also faced resistance at a level that has been significant since mid-March. This could be an early sign that buying pressure might not be enough to lead Toncoin prices to $8.4 - The next Fibonacci extension level.
How was today's newsletter? |