3 key crypto price events to watch in the wake of the FTX and Alameda debacle

November 11, 2022 Coin Telegraph

FTX and Alameda’s Ponzi-like trading scheme has dealt a heavy blow to the entire crypto industry. Here are three developments to keep a close eye on.

Up until the start of this week, Bitcoin (BTC) had been demonstrating record-low volatility, and this gave altcoins enough latitude to paint some nice technical setups.

At the same time, on-chain data and technical analysis were beginning to suggest that BTC was midway through carving out a bottom, and many analysts believed that brighter days lay ahead.

Fast forward to the present, and the volatility spike the market received actually turned out to be a black swan event.

As you already know, FTX is kaput.

Alameda Research is kaput.

BlockFi has put a stop to withdrawals, citing an inability to “operate as usual,” so it’s “pausing client withdrawals as allowed under our Terms,” suggesting that the company is also kaput.

The contagion is spreading, and the shrapnel from this Krakatoa-level event is bound to ripple throughout the entire crypto ecosystem.

At this time, it’s difficult to make a confident short-term investment thesis for assets by simply looking at the chart, and the best thing unsure investors can do is either stick to a time-tested plan or do nothing.

The most likely short-term outcome is volatility will remain high, and crypto prices will continue to whipsaw for a while.

Nobody is comfortable focusing on the potential negative outcomes that lie ahead for the crypto sector and cryptocurrency prices, but it’s every investor’s responsibility to consider the absolute worst outcomes and have a contingency plan in place.

That way you don’t freak out when shit really hits the fan.

Here are a few things to keep an eye on over the coming days.

USDT/USD vs. USDC/USD

During high volatility events, stablecoins sometimes break their peg with the dollar. If there’s some wild FUD about Bitcoin being banned, hacked or dying, stablecoins prices sometimes rise above $1.00 as traders seek shelter in assets fixed to the dollar.

During crypto black swan events, sometimes Tether (USDT) loses its dollar peg. It’s happened a number of times in the past, and usually, once the smoke clears it regains the 1:1 peg.

On Nov. 9, USDT/USD broke below its dollar peg, dipping as low as $0.97 at one point, according to data from TradingView and Coinbase. While USDT dipped below its peg, USD Coin’s (USDC) value spiked to $1.01.

While we won’t explore the unconfirmed reasons why there was dislocation between the two, the unsubstantiated rumors related to Tether and Alameda Research can easily be found on Twitter.

What’s important to note here is that panic can easily be triggered by false information, rumors and lies, so it doesn’t matter if the rumors about Alameda/Tether are completely false.

If it spreads on social media and spooks investors, they’re going to act and in this case; many will or are in the process of flipping their USDT to USDC, BTC or other stablecoins.

Similar behavior was seen during the Terra and Celsius implosion. On May 12, USDC’s price spiked from $1.00 to $1.06–$1.19, according to data from TradingView and KuCoin. On the same day, USDT’s value briefly dropped to $0.98 and $0.94.

When the price is dislocated and there are spreads across exchanges, making stablecoin conversions becomes costly and the experience of swapping from one to the other or from an altcoin to stablecoin can become unpleasant.

The USDT and USDC dollar peg is something worth keeping an eye on.

Bitcoin price expectations

The Nov. 8 sell-off finally pushed BTC’s price out of the 146-day range where the price fluctuated between $24,500 and $18,600.

*BTC/USDT 1-day chart. Source: TradingView*

This is a significant range break, and from the viewpoint of technical analysis, failure to recapture this range and increased selling could see the price slice through the volume profile gap to find support in the $11,000–$12,000 range.

Unpleasant, yes, but that’s just the current reality.

If Bitcoin is able to reclaim and hold the $18,000 handle, at least the price will back in its previous range, and that would be a good sign.

A glance at the Ether (ETH) chart reflects a similar set-up where ETH dropped out of a 148-day range between $2,000 and $1,250, but the price has already reclaimed the previous range.

*ETH/USDT 1-day chart. Source: TradingView*

Bearish traders have a downside target in the $700 range, but it’s interesting to see how the price has rebounded to trade back around $1,250.

The market is searching for firmer footing

A lot of crypto-focused companies and investment groups have exposure to FTX and Alameda research, which also means these same companies now have some holes in their own balance sheets.

Companies with exposure to #FTX

-Sequoia Capital - $213.5 million exposure
-Galaxy Digital - $77 million exposure
-Crypto.com - Less than $10 million
-Amber Group – 10% funds
-Kraken – exposure to 9000 FTT
-Multicoin Capital – 10% funds
-Selini Capital – 3% of their funds
— Being Satoshi (@BeingSatoshi) November 10, 2022

A handful of these crypto-native companies also hold significant-sized bags of assorted altcoins and decentralized finance (DeFi) tokens. To salvage the current losses, make good on their own loans, and meet their client obligations, it’s possible that a number of these BTC, altcoin and DeFi token stashes could find their way to being market sold on spot exchanges.

Altcoins are already down badly, and some are relatively illiquid, meaning a sharp increase in selling could put strong downward pressure on price.

Before buying what looks like once-in-a-life-time dips and cycle bottoms, investors should dig around and take a closer look at who are some of the majority holders of the token/project and remember that FTX’s multi-billion-dollar implosion is yet to be fully felt throughout the sector.

Now is the time to research and do due diligence before making any investment in any cryptocurrency.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.

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.

How long will the bear market last? Signs to watch for a crypto market reversal

October 20, 2022 Coin Telegraph

Coin Telegraph

This crypto bear market has been long and painful, but here are a few signs that might signal when it could come to an end.

The current crypto bear market has induced panic, fear and uncertainty in investors. The dire situation started when the global crypto market capitalization dropped below the $2 trillion mark in January 2022. Since then, the price of Bitcoin (BTC) has decreased by over 70% from its all-time-high of $69,044.77 reached on Nov. 10, 2021. Similarly, the values of other major cryptocurrencies such as Ether (ETH), Solana (SOL), Avalanche (AVAX) and Dogecoin (DOGE) have decreased by around 90%.

So does history tell us anything about when the bear market will end? Let’s start by examining the causes of the 2022 bear market.

Catalysts of the 2022 bear market

There are several factors that caused the current bear run.

First off, the build-up to the bear market started in 2021. During this period, many regulatory authorities threatened to introduce stringent laws governing cryptocurrencies. This created fear and uncertainty in the market. For example, the U.S. Securities and Exchange Commission (SEC) issued a lawsuit against Ripple . China banned Bitcoin mining, resulting in most BTC miners having to relocate to other countries.

A global increase in inflation and rising interest rates instilled fear and uncertainty in the market resulting in lower crypto investment than expected. Although there is much publicity pertaining to the United States inflation and interest rate, other countries such as India have experienced similar challenges.

Notably, earlier this year the Federal Reserve announced that it was taking stringent measures to “accelerate tapering of monthly bond purchases." In other words, the United States planned to introduce measures that slow down its economy to control the ever-rising inflation in the country. The following graph shows the inflation trend from 2016 to 2022.

*FRED consumer price index. Source:* *St. Louis Fed*

In effect, to reduce the rate of inflation, the Federal Reserve increased the Federal Funds rate two times during the year. This reduced the disposable income of U.S. residents, thereby dampening investment effort in risk assets like cryptocurrencies.

*United States Interest Rate. Source:* *St. Louis Fed*

Crypto analysts believe that leverage was another primary cause of the current bear market. Leverage entails pledging a small amount of money as collateral to borrow a large amount for investing. In this case, investors borrow from exchanges to finance their investments in the market.

The downside of leverage is that once the price of an asset begins to fall, the trading positions liquidate, resulting in a cascading crash of cryptocurrency prices. This lowers investor confidence and tends to inject fear and uncertainty in the market.

Whereas traditional markets have circuit breakers and protections, this is not the case for the crypto market. Take, for example, the recent collapse of Terra Luna — formerly known as Terra Classic (LUNC) — and its UST stablecoin. Within the same period, several other crypto firms such as Celsius and Three Arrows Capital and Voyager Capital filed for bankruptcy.

Signs that the bear market is nearing an end

Analysts study market cycles to predict when a bear market will come to an end. Generally, market cycles include four phases: accumulation, markup, distribution and a mark-down. For Bitcoin, the market cycle occurs over four years or 1,275 days. The last phase usually relates to the bear market.

*Bitcoin market cycles. Source: Grayscale*

According to Grayscale, the crypto bear market commences when the realized price of Bitcoin surpasses its market price. Grayscale defines realized price as,

“The sum of all assets at their purchase price or realized market capitalization, divided by the market capitalization of the asset which provides a measure of how many positions are in or out of profit.”

The realized price of BTC surpassed the market price on 13 June 2022. The table below shows the prices of bitcoin when its market price was greater than the realized one.

*BTC’s realized price vs market price. Source: Grayscale*

It is interesting to note that by July 12, the cycle had completed 1,198 days. Since the entire cycle takes 1,725, it means that by that date there were 4 months until the realized price would cross above the BTC market price.

However at the end of the 4 months, Bitcoin would need another 222 days to reach its previous all-time-high. What this means is that from July, it would take a total of 5 to 6 months for the bear market to end. The graph summarizes the expected trajectory of the current crypto cycle.

*The 2020 Bear and bull market cycle. Source: Grayscale*

If the current market cycle takes a similar structure as the 2012 and the 2016 cycles, and if Grayscale’s findings are accurate, then the bear market could end between November 2022 and December 2022.

How long Bitcoin traders expect the bear market to last

Bitcoin maximalists tend to look toward the Bitcoin halving as an indicator to predict the next bull run. Examining history, Bitcoin has formed a peak within 18 months of each Bitcoin block reward halving.

*History of Bitcoin halving. Source:* *swyftx*

In the past, Bitcoin halving preceded the past crypto bull run as indicated in the above graph. So BTC maxis that contend the halving schedule directly impacts the bullish or bearish nature of Bitcoin, might be correct.

*Bitcoin and S&P 500 correlation chart on October 20, 2022. Source:* *TradingView*

The 2022 bear market is unique due to several reasons. First, key macroeconomic variables such as high interest rates and soaring inflation increased its impact. As well, the Terra Luna crash and a high leverage throughout the entire crypto ecosystem contributed to the onset of a bear run.

Remarkably, it is the first bear market where there is correlation between the stock market and bitcoin, with the correlation rate of over 0.6 in July, 2022 according to Coinmetrics data. Next, it is the first time that the value of BTC has fallen below the previous cycle peak. In this context, the value of BTC fell below $17,600.

*BTC and S&P 500 correlation rate. Source:* *Coin Metrics*

The contrasting situations between the 2021 crypto bull run and the 2022 bear market have baffled crypto investors. Analysts believe that the current bear market will end between November and December 2022, with a possible bull run expected at the end of 2024 to early 2025.

3 emerging crypto trends to keep an eye on while Bitcoin price consolidates

October 14, 2022 Coin Telegraph

Coin Telegraph

BTC’s price is range-bound, giving other assets room to gain a foothold in an otherwise down market.

This week, Bitcoin’s (BTC) price took a tumble as a hotter-than-expected consumer price index (CPI) report showed high inflation remains a persistent challenge despite a wave of interest rate hikes from the United States Federal Reserve. Interestingly, the market’s negative reaction to a high CPI print seemed priced in by investors, and BTC’s and Ether’s (ETH) prices reclaimed all of their intraday losses to close the day in the black.

A quick look at Bitcoin’s market structure shows that even with the post-CPI print drop, the price continues to trade in the same price range it has been in for the past 122 days. Adding to this dynamic, Cointelegraph market analyst Ray Salmond reported on a unique situation where Bitcoin’s futures open interest is at a record high, while its volatility is also near record lows.

These factors, along with other indicators, have historically preceded explosive price movements, but history will also show that predicting the direction of these moves is nearly impossible.

So, aside from multiple metrics hinting that a decisive price move is brewing, Bitcoin is still doing more of the same thing it’s done for the past 4.5 months. With that being the case, it is perhaps time to start looking elsewhere for emerging trends and possible opportunities.

Here are a few data points that I’ve continued to be intrigued by.

New rotations will emerge

ETH’s price has lost its luster in the now post-Merge era, and the asset now reflects the bearish trend that dominates the rest of the market. Since the Merge, ETH’s price is down 30% from its $2,000 high, and it’s likely that a good deal of the speculative capital that backed the bullish Merge narrative is now in stablecoins looking for the next investment opportunity.

Aside from ETH being an asymmetrical performer in the last four months, Cosmos (ATOM) also defied the market downtrend by posting a monster rally from $5.40 to $16.85. As covered thoroughly by Cointelegraph, oversold conditions, along with the hype of Cosmos 2.0, backed the bullish price action seen in the altcoin, but this chart continues to capture my imagination.

*ATOM emissions schedule (old vs. new). Source: Cosmos Hub*

According to the revised Cosmos white paper, the current supply of ATOM will dynamically adjust based on the supply and demand of its staking. As shown in the chart above, when Cosmos 2.0 “kicks in” for the first 10 months, issuance of new ATOM tokens is high, but after the 36th month, the asset becomes deflationary.

*ATOM/USDT 3-day chart. Source: TradingView*

From the vantage point of technical analysis, ATOM’s price appears to have hit a local top as the months leading up to Cosmos 2.0 were a “buy the rumor, sell the news” type of event, but it will be interesting to see what transpires with ATOM’s price as the market approaches month 20 in the diagram above.

Keep an eye on Ethereum Network activity

*Ether emissions plummet post Merge. Source: Delphi Digital*

Since the Ethereum Merge, Ether emissions have dropped by 97%, and while the price has pulled back significantly, over the coming months, investors might keep an eye on Ethereum network activity, developments with ETH staking across decentralized finance (DeFi) and institutional products, along with any spikes in gas (connected to network activity).

*Ether supply dynamics. Source: Delphi Digital*

While the price could succumb to bearish pressure in the short term, if the market begins to turn around if new trends trigger increased use of DeFi products, it’s possible that ETH’s price could react positively to those developments.

Post-Merge, BTC price action will likely remain king

While new trends across various altcoins may emerge, it’s important to remember the wider context in which crypto assets exist. Global economies are on the rocks, and persistently high inflation remains an issue in the United States and many other countries. Bond prices are whipsawing, and a looming debt crisis makes its presence known on a daily basis. Risk-on assets like cryptocurrencies are incredibly volatile, and even the strongest price trends in crypto (whether backed by fundamentals or not) are subject to the whimsy of macro factors such as equities markets, geopolitics and other market events that impact investors’ sentiment.

Keeping this in mind, Bitcoin remains the largest asset by market capitalization within the crypto sector, and any sharp moves from BTC’s price are bound to support or suppress the micro trends that might be gaining traction in the market. There is still the possibility of a sharp downside in Bitcoin’s price, so traders are encouraged to calculate investment size according to their own appetite for risk, and while multiple metrics might support opening long positions in various crypto assets, it still seems too early to fully ape in.

So what if Bitcoin price keeps falling! Here is why it’s time to start paying attention

September 30, 2022 Coin Telegraph

Bitcoin

Tune out the noise and focus on the signal. 5 important BTC price indicators are in multi-year “buy zones.”

For bulls, Bitcoin’s (BTC) daily price action leaves a lot to be desired, and at the moment, there are few signs of an imminent turnaround.

Following the trend of the past six or more months, the current factors continue to place pressure on BTC price:

Persistent concerns of potential stringent crypto regulation.
United States Federal Reserve policy, interest rate hikes and quantitative tightening.
Geopolitical concerns related to Russia, Ukraine and the weaponization of high-demand natural resources imported by the European Union.
Strong risk-off sentiment due to the possibility of a U.S. and global recession.

When combined, these challenges have made high volatility assets less than interesting to institutional investors, and the euphoria seen during the 2021 bull market has largely dissipated.

So, day-to-day price action is not encouraging, but looking at longer duration metrics that gauge Bitcoin’s price, investor sentiment and perceptions of valuation do present some interesting data points.

The market still flirts with oversold conditions

On the daily and weekly timeframe, BTC’s price is pressing against a long-term descending trendline. At the same time, the Bollinger Bands, a simple momentum indicator that reflects two standard deviations above and below a simple moving average, are beginning to constrict.

Tightening in the bands usually occurs before a directional move, and price trading at long-term resistance is also typically indicative of a strong directional move.

Bitcoin’s sell-off from March 28 to June 13 sent its relative strength index (RSI) to a multi-year record low, and a quick glance at the indicator compared against BTC’s longer-term price action shows that buying when the RSI is deeply oversold is a profitable strategy.

*BTC/USD weekly chart relative strength index. Source: TradingView*

While the short-term situation is dire, a price agnostic view of Bitcoin and its market structure would suggest that now is an opportune moment to accumulate.

Now, let’s contrast Bitcoin’s multi-year price action over the RSI to see if any interesting dynamics emerge.

*BTC/USD weekly chart. Source. TradingView*

In my opinion, the chart speaks for itself. Of course, further downside could occur, and various technical and on-chain analysis indicators have yet to confirm a market bottom.

Some analysts have forecast a drop to the $15,000–$10,000 range, and it’s possible that the buy wall at $18,000 is absorbed and turns into a bull trap. Aside from that event, increasing position size at the occurrence of an oversold weekly RSI has yielded positive results for those brave enough to take a swing.

Another interesting metric to view in the longer timeframe is the moving average convergence divergence (MACD) oscillator. Like the RSI, the MACD became deeply oversold as Bitcoin’s price collapsed to $17,600, and while the MACD (blue) has crossed above the signal line (orange), we can see that it still lingers in previously untested territory.

The histogram has turned positive, which some traders interpret as an early trend reversal sign, but given all the macro challenges facing crypto, it should not be heavily relied upon in this instance.

What I find interesting is that while Bitcoin’s price is painting lower highs and lower lows on the weekly chart, the RSI and MACD are moving in the opposite direction. This is known as a bullish divergence.

*BTC/USD weekly chart reflecting bullish divergences. Source: TradingView*

From the vantage point of technical analysis, the confluence of multiple indicators suggests that Bitcoin is undervalued. Now, with that said, the bottom does not appear to be in, given that a bevy of non-crypto-specific issues continues to inject weakness into BTC’s price and the wider market. A drop to $10,000 is another 48% slide from BTC’s current valuation near $20,000.

Let’s take a look at what the on-chain data is showing at the moment.

MVRV Z-Score

The MVRV Z-Score is an on-chain metric that reflects a ratio of BTC’s market capitalization against its realized capitalization (the amount people paid for BTC compared to its value today).

According to co-creator David Puell:

“This metric clearly displays the peaks and busts of the price cycle, emphasizing the oscillation between fear and greed. The brilliance of realized value is that it subdues ‘the emotions of the crowds’ by a significant degree.”

Basically, if Bitcoin’s market value is measurably higher than its realized value, the metric enters the red area, indicating a possible market top. When the metric enters the green zone, it signals that Bitcoin’s current value is below its realized price and that the market could be nearing a bottom.

*Bitcoin MVRV Z-Score. Source: Glassnode*

Looking at the chart, when compared against Bitcoin’s price, the current 0.127 MVRV Z-Score is in the same range as previous multi-year lows and cycle bottoms. Comparing the on-chain data against the technical analysis indicators mentioned earlier again suggests that BTC is undervalued and in an optimal zone for building a long position.

Reserve Risk

Another on-chain data point showing interesting data is the Reserve Risk metric. Created by Hans Hauge, the chart provides a visual of how “confident” Bitcoin investors are contrasted against the spot price of BTC.

As shown on the chart below, when investor confidence is high, but BTC price is low, the risk to reward or Bitcoin attractiveness versus the risk of buying and holding BTC enters the green area.

During times when investor confidence is low, but the price is high, Reserve Risk moves into the red area. According to historical data, building a Bitcoin position when Reserve Risk enters the green zone has been a good time to establish a position.

*Bitcoin reserve risk. Source: LookIntoBitcoin*

As of Sept. 30, data from LookIntoBitcoin and Glassnode both show Reserve Risk trading at its lowest measurement ever and outside the boundaries of the green zone.

Bitcoin price slips under $19K as official data confirms US recession

September 29, 2022 Coin Telegraph

Bitcoin

Politicians continue to argue about whether the U.S. economy is in recession, even as data highlights two consecutive quarters of negative growth. Meanwhile, BTC holds $19,000, for now.

Bitcoin (BTC) wobbled in its narrow trading range at the Sep. 29 Wall Street open as official data put the United States economy in recession.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

U.S. meets technical definition of recession

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD still hovering just above $19,000 at the time of writing.

The pair weathered gloomy figures for the U.S., with the second quarter gross domestic product (GDP) growth estimated at -0.6%. This, despite protests of the White House to the contrary, meant that the U.S. met the standard criteria for recession — two consecutive quarters of negative growth.

"Everyone talks about recessions as if they should never happen," financial commentary resource The Kobeissi Letter reacted.

"Any economy that is healthy in the long run will have many recessions. If you never have a recession, you just have a bubble. In this case, we just have a bubble and a recession. Fake markets don’t work."

Analyzing the situation in Europe, meanwhile, Robin Brooks, chief economist at the Institute of International Finance (IIF), warned that a "deep" recession was also about to hit the Eurozone on the back to consumer confidence data.

"With the second quarterly GDP revision negative, reminder the White House has stated that this is not the definition of a recession," popular Twitter account Unusual Whales continued about the confusion over what constitutes a recession which began earlier this year.

"Rather, they advocate for NBER’s, which is 'a significant decline in economic activity spread across the economy lasting more than a few months.'"

The event follows the Bank of England abruptly intervening in the United Kingdom bond market, returning to quantitative easing (QE) in a move reminiscent of the atmosphere at Bitcoin's birth.

$19,000 looks unstable

Bitcoin price action nonetheless managed to avoid any significant volatility as the figures flowed in, even with the monthly close just a day away.

At the time of writing, BTC/USD was attempting to break through $19,000 support.

Noting that the -0.6% GDP result was better than the forecast -0.9%, on-chain analytics resource Material Indicators nonetheless had little reason to celebrate.

Alongside a screenshot of the BTC/USD order book on Binance, Material Indicators warned that the market bottom was "not in."

"Strong economic report means FED tightening hasn't had much if any impact yet. Translation: More aggressive rate hikes through Q4 and into 2023," it predicted in part of accompanying comments.

*BTC/USD order book data (Binance) chart. Source: Material Indicators/ Twitter*

Bitcoin ‘great detox’ could trigger a BTC price drop to $12K — Research

September 28, 2022 Coin Telegraph

Bitcoin

A lack of interest below the June macro lows could spell serious problems for Bitcoin, Glassnode warns.

Bitcoin (BTC) is in a “dire condition” when it comes to adoption — but a silver lining is already visible, new research says.

In the latest edition of its weekly newsletter, the Week On-Chain, crypto analytics firm Glassnode said that Bitcoin was going through a “great detox.”

Bitcoin adoption returns to March 2020

Current BTC price action is pressuring everyone from long-term holders (LTHs) to miners, and relief is hard to come by.

Macro turmoil and resistance at $20,000 is keeping BTC/USD at levels visited only once since 2020.

With this week’s push above $20,000 accompanied by major profit-taking, warnings remain that more pain is due for the market first before a recovery takes place.

For Glassnode, sustained lower levels are causing a seismic shift in the Bitcoin investor profile, with retail and speculators — so-called short-term holders (STHs) — now pushed out.

“Network activity remains in a dire condition as network adoption levels slump to levels last seen during the COVID crisis,” it summarized.

“However, one constructive observation would be the expulsion of retail participants from the network leaving just the HODLers class, career traders and everyday Bitcoin users remaining. This suggests the user-base is at its foundational level.”

This reset in network composition could provide a positive nuance in the face of flatlining on-chain adoption.

LTHs, as Cointelegraph reported this week, are notorious for their stubbornness during bear markets, and data shows that they are in no mood to sell.

“The HODLer class remain resolute with both mature coin USD wealth reaching ATHs, and a multitude of lifespan metrics fully resetting to historical lows, emphasizing the unwillingness to spend held coins,” Glassnode continued, referencing its latest data analysis.

“This suggests the majority of current market churn is associated with the Short-Term Holder class.”

"Large supply airgap" threatens a return to $12,000

Despite the increasing prevalence of LTHs as an investor majority, STHs could nonetheless produce some dramatic downside in the event of Bitcoin falling below the $17,600 macro lows seen in June this year.

This, Glassnode explains, comes as a result of the volume gap below that level — meaning that any sell-off could easily snowball into the next bid zone, currently at $12,000.

“A large supply airgap is apparent below $18k until the $11k–$12k range,” the Week On-Chain states elsewhere.

“Trading below the current cycle low would put an extraordinary volume of Short-Term Holder coins into a deep unrealized loss, which may exacerbate downside reflexivity, and trigger yet another wide ranging capitulation event.”

An accompanying chart showed the lack of volume between the two price areas, this contrasting starkly with the area around $20,000, now full of STH interest.

*Bitcoin entity-adjusted unspent realized price distribution annotated chart (screenshot). Source: Glassnode*

Macro factors, meanwhile, have chiefly contributed to other warnings over BTC price stability in recent weeks and months, with predictions including BTC/USD dropping below $10,000.

Bitcoin price fails to hold $20K again, but there is a silver lining

September 27, 2022 Coin Telegraph

Bitcoin Price

BTC’s attempt to recapture $20,000 as support failed, but on-chain data reveals a handful of positives.

Markets briefly flashed green on Sept. 27 as equities markets bounced back from Sept. 26’s pullback, bringing the Bitcoin (BTC) price back to the long-term descending trendline resistance, which currently resides at $20,100.

Unfortunately for bulls, the positive momentum for stocks and cryptocurrencies rapidly eroded and Bitcoin price gave up a majority of the intraday gains as it slipped back below $19,000.

As has been the case since March 25, BTC price has been unable to kick above the resistance for more than a few hours and the Sept. 27 breakdown at the trendline continues the trend of successive bear flags that see a continuation to the downside.

*BTC/USD 1-day chart. Source: TradingView*

According to Arcane Research, Bitcoin’s tight rally above $20,000 is relatively insignificant, given that futures premiums are still low and it “contributes little to improving the market risk appetite.”

*BTC perpetual contract funding rate versus Bitcoin price. Source: Arcane Research*

Additional data from Arcane Research shows funding rates flipping neutral for the first time since Sept. 13, but generally, traders are reluctant to add longs, given the concerns over macro challenges and the continuous threat of unfriendly crypto regulation.

There is a silver lining

As mentioned in previous analysis, despite the breakouts and breakdowns, BTC price is simply trading within the exact same $24,300 to $17,600 range of the past 103 days. To date, a catalyst to set off a breakdown below swing lows or to push price above resistance and confirm the former hurdle as support has yet to occur.

Fortunately, it’s not all doom and gloom for Bitcoin. A positive bit of news comes from on-chain analytics provider Glassnode, who noted that more mature investors have decided to hunker down and hold their positions rather than sell at the current price.

According to the Revived Supply 1+ Years metric, an indicator that tracks the “total amount of coins that come back into circulation after being untouched for at least 1 year,” the flow of latent supply shifting back into the active supply pool is “extremely low.”

*Revived Supply 1 year+ Z Score. Source: glassnode*

The compression in mature spending seen in the last stages of the 2018 bull market is not present during the most recent revisits below $20,000, suggesting that long-term holders are well accustomed to volatility and unwilling to sell at the current prices.

Given that BTC is 72% down from its all-time high and a portion of investors expect prices to crumble toward $10,000 in the next unexpected capitulation event, one could interpret the lack of panic selling from mature investors as positive.

Why is the crypto market down today?

September 23, 2022 Coin Telegraph

Coin Telegraph

Crypto prices keep crashing, and it seems like there’s no bottom in sight. Here are three reasons why cryptocurrency prices keep falling.

Crypto prices keep falling, but why? This year’s market crash has turned most winning portfolios into net losers, and new investors are probably losing hope in Bitcoin (BTC).

Investors know that cryptocurrencies exhibit higher than average volatility, but this year’s drawdown has been extreme. After hitting a stratospheric all-time high at $69,400, Bitcoin price crumbled over the next 11 months to an unexpected yearly low at $17,600.

That’s a nearly 75% drawdown in value.

Ether (ETH), the largest altcoin by market capitalization, also saw an 82% correction as its price tumbled from $4,800 to $900 in seven months.

Years of historical data show that drawdowns in the 55%–85% range are the norm after parabolic bull market rallies, but the factors weighing on crypto prices today differ from those that triggered sell-offs in the past.

At the moment, investor sentiment remains soft as investors avoid risk and wait to see whether the Federal Reserve’s current monetary policy will alleviate persistently high inflation in the United States. On Sept. 21, Fed Chair Jerome Powell announced a 0.75% interest rate hike and hinted that similar-size hikes would occur until inflation drops closer to the central bank’s 2% target.

Let’s take a deeper look at three reasons why crypto prices keep falling in 2022.

Federal Reserve interest rate hikes

Raising interest rates increases the cost of borrowing money for consumers and businesses. This has the knock-on effect of raising business operational costs, the costs of goods and services, production costs, wages, and eventually, the cost of nearly everything.

High, unsupressable inflation is the primary reason the United States Federal Reserve is raising interest rates. And since rate hikes began in March 2022, Bitcoin and the broader crypto market have been in a correction.

When monetary policy or metrics that measure the strength of the economy shift, risk assets tend to signal, or move, earlier than equities. In 2021, the Fed started signaling its plans to raise interest rates eventually, and data shows Bitcoin price sharply correcting by December 2021. In a way, Bitcoin and Ethereum were the canaries in the coal mine that signaled what lay ahead for equities markets.

If inflation begins to taper, the health of the economy improves, or the Fed begins to signal a pivot in its current monetary policy, risk assets like Bitcoin and altcoins could again be the “canaries in the coal mine” by reflecting the return of risk-on sentiment from investors.

The persistent threat of regulation

The cryptocurrency industry and regulators have a long history of not getting along either due to various misconceptions or mistrust over the actual use case of digital assets. Without a working framework for crypto sector regulation, different countries and states have a plethora of conflicting policies on how cryptocurrencies are classified as assets and precisely what constitutes a legal payment system.

The lack of clarity on this matter weighs on growth and innovation within the sector, and many analysts believe that the mainstreaming of cryptocurrencies cannot happen until a more universally agreed upon and understood set of laws is enacted.

Risk assets are heavily impacted by investor sentiment, and this trend extends to Bitcoin and altcoins. To date, the threat of unfriendly cryptocurrency regulations or, in the worst case, an outright ban continues to impact crypto prices on a nearly monthly basis.

Scams and Ponzis triggered liquidations and repeat blows to investor confidence

Scams, Ponzi schemes and sharp market volatility have also played a significant role in crypto prices crashing throughout 2022. Bad news and events that compromise market liquidity tend to cause catastrophic outcomes due to the lack of regulation, the youth of the cryptocurrency industry and the market being relatively small compared with equities markets.

The implosion of Terra’s LUNA and Celsius Network as well as misuse of leverage and client funds by Three Arrows Capital (3AC) were each responsible for successive blows to asset prices within the crypto market. Bitcoin is currently the largest asset by market capitalization in the sector, and historically, altcoin prices tend to follow whichever direction BTC price goes.

As the Terra and LUNA ecosystem collapsed on itself, Bitcoin price corrected sharply due to multiple liquidations occurring within Terra — and investor sentiment tanked.

The same happened with even greater magnitude when Voyager, 3AC and Celsius collapsed, erasing tens of billions in investor and protocol funds.

What to expect for the rest of 2022 through 2023

The factors impacting falling prices within the crypto market are driven by Federal Reserve policy, meaning the Fed’s power to raise, pause or lower rates will continue to have a direct impact on Bitcoin price, ETH price and altcoin prices.

In the meantime, investors’ appetite for risk is likely to remain muted, and potential crypto traders might consider waiting for signs that U.S. inflation has peaked and for the Federal Reserve to begin using language that is indicative of a policy pivot.

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