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Are Small Cap Crypto Assets Rebounding A Sign Risk Appetite Returning?

The crypto market just saw some slight recovery, but the performances are upside down. Opposite to the way sellouts usually play out, the Bitcoin dominance dropped dramatically as the asset is underperforming the Small Cap index. From last November’s $3 trillion market cap, the crypto market is now down to around $800 billion: Smaller Altcoins Make A Strong Comeback Last week the crypto market saw its bottom, followed now by some slight recovery. As per Arcane Research’s latest weekly report, the smaller altcoins have also been seeing red numbers with the Small Cap index shedding 27%, but it has been the best performer overall. In contrast, Bitcoin had dropped 35%. Through this small window of relief during June, we have seen the blue-chip coin underperform all other indexes. As a result, BTC’s dominance in the market fell -1,51% this week to 43,5% while Ether fell -0,31. The latter has been declining since May from 19.5% to 15%. What’s Making This Crypto Winter Colder The report notes that the primary driver of this crypto crash has been the hedge fund Three Arrow Capital (3AC) collapse. Having invested over $200 million in Luna Foundation Guard’s token sale, 3AC’s liquidity ended up being wiped out and its margin call was the last straw for the already pressured market. Related Reading | How Long Will The CryptoWinter Last? Cardano Founder Provides Answers As per the Wall Street Journal, the crypto hedge fund hired legal and financial advisers to help work out a solution for its investors and lenders. The firm is looking for a way out, “including asset sales and a rescue by another firm”. The prognostic is not very positive at the moment, seeing the wave of liquidations and mitigations of losses by crypto exchanges that have followed the collapse. “We were not the first to get hit…This has been all part of the same contagion that has affected many other firms,” Kyle Davies, 3AC’s co-founder, said in an interview. Arcane Research explained that “In periods of insolvency, creditors unwind the most liquid assets first, which is likely the root cause of BTC and ETH’s relative underperformance in the last week.” The report adds that “illiquid altcoins are more challenging to sell at size, particularly during pressuring times, which explains why smaller coins have experienced less excessive selling pressure in the last week”. Meanwhile, Microstrategy CEO Michael Saylor described the events around this winter as a “parade of horribles” in which the consequences of lack of regulation in the crypto field have made it possible for wash trading and cross-collateralized altcoins to weigh down on Bitcoin. “What you have is a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure, and they are all cross-collateralized with Bitcoin.” “The general public shouldn’t be buying unregistered securities from wildcat bankers that may or may not be there next Thursday,” Saylor added, slamming at the recent collapses and suggesting that future actions by regulators could prevent the level of volatility that BTC is now experiencing. Related Reading | Crypto Investors Find Safety In Stablecoins, Bitcoin, Ditch Altcoins En Masse

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Circle, The Company Behind The USDC Stablecoin, Announces Euro Coin

Does the world need Euro Coin? There are already stablecoins pegged to the Euro in the market. The difference here, however, is Circle. As the issuer of the well-regarded USDC, they have the reputation, the know-how, and the clientele to make this happen. Even with all of those advantages, it’s the market that will decide if the world needs Euro Coin. Related Reading | Crypto Investors Find Safety In Stablecoins, Bitcoin, Ditch Altcoins En Masse On the project’s page, they describe it as, “Euro Coin (EUROC) is issued by Circle under the same full-reserve model as USD Coin (USDC), a trusted dollar digital currency with more than $54 billion in circulation.” At first, Euro Coin will exist on the Ethereum blockchain, it’ll be a traditional ERC-20 already compatible with everything out there. 1/ CIRCLE LAUNCHES EURO COIN: Today, we announced our 2nd major fiat-backed stablecoin, Euro Coin, which went live on Ethereum mainnet, and will be available to mint and redeem on June 30th. https://t.co/vPZkItL0Fu — Jeremy Allaire (@jerallaire) June 16, 2022 The Euro Coin will be “100% backed by euros held in euro-denominated banking accounts so that it’s always redeemable 1:1 for euros”. The difference with regular euros is that EUROC will be “available 24/7 and moves at internet speed”. The new stablecoin debuts on June 30th. “Businesses can mint Euro Coin straight from the source by depositing euros into their Circle Account using Silvergate’s Euro SEN network.” What’s Euro Coin ’s Main Use? In a recent tweet, Circle CEO Jeremy Allaire summarized the product’s value proposition. “Like USDC, Euro Coin is being issued under a regulated framework for money transmission, under the same statutes that regulate USDC, with full-reserves in Euro, with the same security, liquidity and transparency that the market has come to expect from Circle”. Does it solve a problem, though? Two words: foreign exchange. 4/ Euro Coin expands opportunities for payments, on-chain FX, trade finance, commerce and broader digital asset markets use-cases. The launch is symbolic of a shift in crypto markets towards greater and greater utility value from blockchain infrastructure. — Jeremy Allaire (@jerallaire) June 16, 2022 Back to the project’s page, Circle promises “multi-currency digital banking and near-instant foreign exchange, where daily volume in traditional markets can top $6.6 trillion globally.” As we read a while ago in the Bitcoinist Book Club, “The Bitcoin Standard” explains how that huge market emerges just to solve “the age-old problem of lack of coincidence of wants.” As explained by Saifedean Ammous, the process goes like this: “The seller does not want the currency held by the buyer, and so the buyer must purchase another currency first, and incur conversion costs. As advances in transportation and telecommunications continue to increase global economic integration, the cost of these inefficiencies just keeps getting bigger. The market for foreign exchange, at $5 trillion of daily volume, exists purely as a result of this inefficiency of the absence of a single global homogeneous international currency.” As Circle’s numbers show, since the book’s publication the foreign exchange market kept growing. And since we’re far from living in a bitcoin standard, with a “single global homogeneous international currency,” the foreign exchange will keep growing. And that’s where Euro Coin comes in.  ETH price chart for 06/16/2022 on Kraken | Source: ETH/USD on TradingView.com The New Stablecoin’s Characteristics Where will the money that backs the operation be? “Circle will hold euros in euro-denominated banking accounts at leading financial institutions, beginning with Silvergate Bank in the U.S.” Related Reading | Crypto Company Circle Seeks To Become Global Digital Currency Bank “Businesses can use a free Circle Account to mint and redeem Euro Coin at no additional cost”. Circle can afford to treat businesses like that because they’re that big and established.  Circle will audit the Euro Coin. “Grant Thornton LLP will be issuing monthly attestations of Euro Coin reserves, starting with an attestation for the month of July 2022. Circle will publish the attestation reports on this webpage, with July’s report being available to view online by the end of August 2022.” It’s also worth noting that the main criticism the project received was because they choose Ethereum to start with. However, Circle promises the Euro Coin in other blockchains soon. And considering that USDC exists in every smart contract-enabled blockchain under the sun, there’s no reason not to believe them. Featured Image: Screenshot from Circle’s website | Charts by TradingView

Bitcoin Crypto News

When Greed? Bitcoin Market Crushed Under One Full Month Of Fear

Data shows the Bitcoin market has been stuck in a state of extreme fear since the 5th of May, meaning this run of bottom sentiment has gone on for more than a full month now. Bitcoin Fear And Greed Index Continues To Point At An Extremely Fearful Market According to the latest weekly report from Arcane Research, the crypto market is currently going through its longest run of extreme fear since the COVID crash back in 2020. The “fear and greed index” is an indicator that tells us about the general investor sentiment in the Bitcoin and wider crypto market. The metric uses a numeric scale that goes from one to hundred for displaying this sentiment. When the value of the index is less than fifty, it means investors are fearful at the moment. Related Reading | Glassnode: Bitcoin Long-Term Holders Own 90% Of Supply In Profit On the other hand, values of the indicator above the threshold imply that investors currently share a sentiment of greed. Values towards the end of the range of below 25 and above 75 indicate sentiments of extreme fear and extreme greed, respectively. Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year: The value of the metric seems to have been very low recently | Source: Arcane Research’s The Weekly Update – Week 22, 2022 As you can see in the above graph, the Bitcoin fear and greed index is showing a value of 15 right now, suggesting that the general sentiment is that of extreme fear. These low values of the metric have now been there for more than a month now. Such a long streak last occurred following the COVID crash two years ago. Then, the run lasted for 48 consecutive days before the sentiment saw any improvement. Related Reading | Crypto Investors Find Safety In Stablecoins, Bitcoin, Ditch Altcoins En Masse Historically, bottoms have tended to form during periods of extreme fear, while tops have occurred during extreme greed. Because of this, some investors believe the former periods provide ideal buying opportunities for Bitcoin, while the latter could be fitting selling points. The trading technique that follows this idea is called contrarian investing. Warren Buffet’s famous quote encapsulates it best: Be fearful when others are greedy, and greedy when others are fearful. If this philosophy is anything to go by, then the current sentiment may mean now could be the time to buy Bitcoin. At the moment, it’s unclear how long this streak of extreme fear will last. It could be as long or longer than the last one, or the sentiment may soon see an uplift. BTC Price At the time of writing, Bitcoin’s price floats around $30.4k, down 3% in the past week. Looks like the value of BTC has jumped back above $30k | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradngView.com, Arcane Research

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One Coin, Two Trades: Why Bitcoin Futures And Spot Signals Don’t Match Up

Bitcoin price bounced to the tune of 5% following yesterday’s Federal Reserve meeting. However, the move has almost fully retraced. What’s interesting about the situation, is that traders at one particular platform could have seen this coming a lot more clearly, while others might have suffered a fake out. Here is a closer look at a comparison between BTCUSD spot index price charts and BTC CME Futures that puts a spotlight on the strange discrepancy. We also shed some light on how to possibly take advantage when these instances occur. Why You Can’t Ever Sleep On Crypto Markets The crypto market never sleeps. It trades night and day, 24/7 days a week. Even stock market futures take a break for short periods. But when it comes to CME Group’s BTC futures contracts, it more closely follows the stock market’s trading hours. CME takes a break from Friday to Sunday evening. If Bitcoin price moves substantially during the time the trading desk is offline, it will leave a gap on its chart that regularly becomes a target that gets “filled” in the following days. Related Reading | Bitcoin Indicator Hits Historical Low Not Seen Since 2015 Because certain spot market trading days are missing from the CME BTC futures chart, certain technical indicators can produce minor deviations. More often than not, these minor discrepancies are early signs that a fake out is coming. Need proof? In the chart below, we’ve compared the BTCUSD spot price index, BTC CME futures, and SPX futures. Bitcoin’s spot index produced a bullish crossover of the LMACD yesterday, while the CME chart remained bearish. Interestingly, the CME chart more closely mimics the popular US stock market index. BTC CME futures performs more on par with the stock market | Source: BTCUSD on TradingView.com How To Potentially Predict Bitcoin Fake Outs Using Spot Vs CME Comparison The LMACD – the logarithmic version of the Moving Average Convergence Divergence indicator – is considered a lagging indicator. For this reason, bullish or bearish crossovers are typically considered reliable signals to take or close a position. It isn’t clear if the discrepancy above happened naturally due to the missing trading days from the chart, or if something else was at play. The crossover appears to have been used as a bull trap, clearing out any last minute longs. Momentum on the daily is currently bearish again, so there is risk of continued downside until it turns up again. Related Reading | Time Vs Price: Why This Bitcoin Correction Was The Most Painful Yet Traders need not ditch the indicator altogether, but instead can use such discrepancies between the two indicator’s performance to try and predict when fake outs, stop runs, or other nasty moves will occur. The last time the LMACD produced a false signal on spot exchanges, yet not on the CME BTC chart, was the exact peak in November 2021. Is there a chance this latest fake out is a sign the bottom is in, or is it merely suggesting more downside ahead? The missing bullish crossover called the top in November 2021 | Source: BTCUSD on TradingView.com Bitcoin bulls must push momentum back in their favor on daily timeframes, and follow through with enough strength to force higher timeframes to follow. Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com

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Whales Dive Into Top Ethereum (ETH) Competitor and Ditch Shiba Inu (SHIB) As Crypto Volatility Returns

The richest Ethereum (ETH) whales in the world are accumulating a top ETH competitor as the overall crypto market continues to pull back. WhaleStats reports on Twitter that scalable smart contract-enabled blockchain Fantom (FTM) became the top target of the 500 biggest ETH address on record over one 24-hour period this week, flipping popular dog-themed […]

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Bitcoin Price Rises As El Salvador Rejects IMF Call To Ditch BTC

Bitcoin started rising with the news El Salvador rejected the IMF request to drain BTC as a currency. In response, Bitcoin grew to a 14-day high price level, adding more than a quarter trillion US dollars into the crypto market. Price tendency follows the pathetic month for cryptocurrency since March 2020. At that time, Bitcoin reached a price level of $5,000 due to panic selling off after the Covid-19 pandemic threat. After that, Bitcoin raised and achieved its all-time high price level of $69,000 in November 2021.  But soon after that, Bitcoin started a downward journey, coming to the seven-month low of $33,000 on January 24, 2022. However, on the same day, Bitcoin began an upward trend and gradually achieved a price level of $39,000 on Tuesday, February 01, 2022, showing positive crypto market growth. Bitcoin price retrieval started after El Salvador declined IMF request to withdraw Bitcoin as a medium of exchange. El Salvador is the first country to do so in the world after many months.   El Salvador Reaction After IMF Call To Ditch Bitcoin The decision to adopt Bitcoin as an official currency was met with fierce resistance from many governments, but it looks like El Salvador is taking a different approach. Treasury Minister Alejandro Zelaya says that his country sees cryptocurrencies not just for financial transactions and investments but also embracing this new technological advancement. In a local TV interview, he added by referring to AP report; “Countries are sovereign nations, and they take sovereign decisions about public policy. No international organization is going to make us do anything, anything at all.” IMF reported many risks involved regarding consumer protection, financial stability, and financial integrity as reasons for not adopting Bitcoin. In addition, IMF added there is high crypto price fluctuation, and criminals can misuse it for their illegal activities.  IMF had already warned El Salvador that its involvement in Crypto could cause hindrance from getting borrowing from international institutions. Marcus Sotiriou, a British digital currency analyst at GlobalBlock, said; “It seems that El Salvador may not need the coercive loans from the IMF any longer by issuing the innovative the Bitcoin Bond. This bond allows them to raise funds to set up mining infrastructure.” A continuous worldwide crypto acceptance and day by rumors that Latin American countries are accepting Bitcoin as an official exchange source are significant concerns of IMF.  The president of El Salvador, Nayib Bukele, shared a meme from The Simpsons on Twitter. Its caption read “I see you IMF,” and he responded with laughter at its parody nature in his own words.    Featured image from Flickr, chart from TradingView.com  

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Senior IMF Official Says Crypto Poses “Acute Risks” For Emerging Economies

IMF Issues Fresh Warning To El Salvador Over Bitcoin Adoption But President Bukele Focuses On The Positives

Days after the International Monetary Fund (IMF) urged El Salvador to ditch bitcoin as legal tender, a top official from the organization has voiced concerns over risks involved with cryptocurrencies especially in emerging markets. Price Fluctuations In Crypto Are Destabilizing Developing Nations The IMF, a UN organization that looks to boost monetary cooperation and financial […]