More volatile than Bitcoin? Netflix shares plunge 25%

April 20, 2022 Coin Telegraph

The streaming service’s stock price took a major hit after releasing disappointing user numbers, making some in the crypto community cry foul at the volatility.

The stock market has once again made crypto look stable by comparison with the Netflix (NFLX) stock price dropping 25% in after-hours trading tod.

The news that sparked the dramatic tumble was the revelation on Tuesday that the streaming service has lost 200,000 customers in the first quarter of 2022 and projects it will lose a further two million subscribers this quarter. This marks the first time the company has tallied losses in user numbers since 2011 according to Bloomberg.

Investors reacted by dumping NFLX shares in after-hours trading, causing prices to crash to a new yearly low of $258.90. When trading opens for the day at 1:30pm UTC on April 20, it is unclear what price the stock will open at.

Such price action has drawn some glee from the crypto community who have long faced criticism from traditional investors that crypto is too volatile.

Crypto analyst and host of the YouTube channel Into the Cryptoverse Benjamin Cowen tweeted to his 622,000 followers today that the NFLX crash reminds him of “how stocks became more like #crypto, rather than the other way around.”

Watching $NFLX drop -26% after hours reminds me how stocks became more like #crypto, rather than the other way around
— Benjamin Cowen (@intocryptoverse) April 19, 2022

The NFLX stock price has performed worse in 2022 than Bitcoin (BTC) has this year. NFLX has lost 57% since Jan 1, 2022 when it was at its height for the year at $597.37. By comparison, BTC is down 11% overall since its 2022 opening price of $46,319 to $41,288 according to CoinGecko.

Other tech stocks have seen crypto-like daily losses this year. On Feb. 2, PayPal (PYPL) dropped 20% from $172.77 to $139.89. On the same day, Meta Platforms (META) — fomerly Facebook — dropped 25% from $327.82 to $244.65.

But before crypto pundits get ahead of themselves, it must be noted that Bitcoin has fallen harder than those tech stocks during previous crypto market crashes. The last time BTC fell at least 25% in a single day was March 12, 2020, when it fell 41% from $7969 to $4776.

Analysis carried out by crypto research firm Into The Block and released on April 16 found that BTC and Ether (ETH) “have been less volatile than many stocks, especially those with crypto offerings.”

Its analysis used the Sharpe ratio to compare volatility across different investments. The lower the score, the less volatile the asset. Bitcoin received a score of -0.02, while Square (-0.05), MicroStrategy (-0.02), and Coinbase (-0.02) either matched on underperformed BTC.

Lower Returns, More Volatility - Contrary to popular belief, $BTC and $ETH have been less volatile than many stocks, especially those with crypto offerings

The Sharpe ratio accounts for returns relative to price volatility. Here, most crypto companies match or underperform BTC pic.twitter.com/sV0QSsCR6J
— IntoTheBlock (@intotheblock) April 15, 2022

Host of the Coin Stories podcast Natalie Brunell tweeted today that Netflix might be able to solve some of its current problems by adding BTC to its balance sheet.

Maybe $NFLX should get some #Bitcoin content (and BTC on its balance sheet). ‍♀️
— Natalie Brunell (@natbrunell) April 19, 2022

Terra price key support level breaks after 30% weekly drop — more pain for LUNA ahead?

April 11, 2022 Coin Telegraph

Bitcoin

Macro, technicals and uncertainties concerning Terra's LUNA-burning mechanism could push the price further down in April.

Terra (LUNA) price slid on April 11 as a broader correction across crypto assets added to the uncertainties concerning its token burning mechanism.

Bitcoin (BTC) and Ether (ETH) led to a decline in the rest of the cryptocurrency market, with LUNA's price dropping by over 8% to nearly $91.50, and about 30% from its record high of $120, set on April 6.

The overall drop tailed similar moves in the U.S. stock market last week after the Federal Reserve signaled its intentions to raise interest rates and shrink balance sheets sharply to curb rising inflation.

Arthur Hayes, the co-founder of BitMEX exchange, said Monday that Bitcoin's correlation with tech stocks could have it run for $30,000 next. In other words, LUNA's high correlation with BTC so far this year puts it at risk of more downside if BTC doesn't rebound.

*The correlation between LUNA and BTC has been largely positive in 2022. Source: TradingView*

Tale of two exposés

LUNA picked additional downside cues from at least two "exposé" threads that went viral on Twitter over the weekend.

The first thread, penned by a pseudonymous analyst @DeFi_Made_Here on April 7, questioned LUNA's capability to maintain the peg of Terra's native stablecoin, TerraUSD (UST) since it is not backed by any tangible asset.

The second thread, published on April 9 by Jack Niewold, an analyst at the Crypto Pragmatist — a DeFi newsletter, accused Terra co-founder Do Kwon of receiving all the LUNA tokens meant to be "burned " to mint UST.

He also alleged that the Luna Foundation Guard, a nonprofit organization that backs the Terra ecosystem, has been using a percentage of burned LUNA supply to buy Bitcoin.

Kwon refuted the claims in a tweet-to-tweet response to Niewold, calling him a "made up clickbait." The self-proclaimed "master of stablecoin" asserted that Terra burns LUNA 1:1 to mint new UST, which can be seen by testing a swap on the Anchor Protocol dashboard.

Jose Maria Macedo, head of crypto research platform Delphi Digital, also rubbished Niewold's thread as "absolutely terrible."

Key LUNA price support breaks

The latest LUNA selloff also led its price below its key moving average support against the U.S. dollar.

In detail, the Terra token dropped below its 50-day exponential moving average (50-day EMA; the red wave in the chart below), now near $90, almost two months after reclaiming it as support.

The latest support-to-resistance flip exposes LUNA to the possibility of extending its downtrend toward its 200-day EMA (the blue wave) around $67 (around 20% lower than April 11's price) in April.

*LUNA/USD daily price chart featuring 50-day EMA support. Source: TradingView*

The 200-day EMA also coincides with the 0.382 Fib line of the Fibonacci retracement graph, drawn from the $4-swing low to the $106-swing high, thus offering LUNA double-layered support against bears.

Conversely, an early rebound from 0.236 Fib line (near $82) could have LUNA retest $106 as its interim upside target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Ethereum eyes $3.5K as ETH price reclaims pandemic-era support with 40% rebound

February 5, 2022 Coin Telegraph

Ethereum eyes .5K as ETH price reclaims pandemic-era support with 40% rebound

Amazon

Ethereum price is back above its 50-week exponential moving average, a credible support level from the 2020-2021 market boom.

Ethereum's native token Ether (ETH) looks poised to hit $3,500 in the coming sessions as it reclaimed a historically strong support level on Feb. 5.

Ethereum price back above key trendline

ETH price rising above its 50-week exponential moving average (50-week EMA; the red wave in the chart below) means the price also inched above $3,000, a psychological support level that may serve as the ground for Ether's next leg up.

*ETH/USD weekly price chart. Source: TradingView*

The 50-week EMA was instrumental in maintaining Ether's bullish bias across 2020 and 2021. For instance, it served as a strong accumulation zone during the market correction in the second and third quarters last year, pushing ETH price from around $1,700 to as high as $4,951 (data from Binance).

As a result, reclaiming the 50-week EMA as support has opened up the possibility of additional upside moves toward the next resistance target near the 20-week EMA (the green wave in the chart above), which comes to be around $3,500.

Meanwhile, a decisive break above $3,500 could have ETH/USD test a horizontal resistance trendline that constitutes an ascending triangle pattern. Such a move would put the Ethereum token en route to its previous record high near $5,000.

Jobs report could play spoilers

The latest buying in the Ethereum market appeared as strong earnings from Amazon.com Inc. boosted investors' confidence in riskier assets, including technology stocks and Bitcoin (BTC).

*ETH/USD versus Nasdaq Composite weekly price chart. Source: TradingView*

Ether rallied by more than 11% after the earnings release on Friday. The price jump also boosted its week-to-date profits higher to nearly 16%, its best week since August 2021.

However, the rally appeared in conflict with the latest nonfarm payroll (NFP) data, also released on Friday. Despite fears that Omicron would curtail business activity, the U.S. companies added 467,000 jobs in Jan. 2022, beating market expectations by a wide margin.

*U.S. nonfarm payroll data. Source: Bureau of Labor Statistics, Bloomberg*

The NFP report underscored how difficult it is for the Federal Reserve to forecast interim changes in the economy. Nonetheless, it also ensured that the U.S. central bank would go ahead with its plans to raise short-term benchmark rates at its March 15-16 meeting.

In a press conference last month, Fed chair Jerome Powell said they would continue raising interest rates after the March hike, faster than they did during the past decade if the labor market looks stronger and inflation remains above their 2% target.

The news prompted a selloff across riskier assets, with data showing that cryptocurrency investment products processed outflows worth $61 million every week in January 2022.

"It’s important to note that there’s still significant investor demand for digital asset investment products, but institutions seemingly reacted to the Fed by offloading their positions," noted Michael Sonnenshein, chief executive of Grayscale Investments.

*Crypto investment vehicles performance in Jan. 2022. Source: CryptoCompare, FT*

The pullback scenario

The bearish scenario with the price below the 50-week EMA could have ETH test its ascending channel's lower trendline near $2,500 as support. Meanwhile, a decisive close below the trendline would bring Ether's Fibonacci retracement levels closer, as shown in the chart below.