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Bitcoin Sets Record For Worst Quarter Since 2011, What’s Next?

The second quarter of the year was dramatically bloody for Bitcoin. The coin ended Q2 down by 56% with the price dropping from $45,000 to $19,900, experiencing its worst quarter since Q3 2011. Bitcoin is now playing with its $20k level, a key zone.

Bitcoin trading at around $20k in the daily chart | Source: BTCUSD on TradingView.com
A Historic Decline For Bitcoin

Bitcoin had a 37% decline during June. But it is not just the numbers that have been gloomy.

June was also the month of the unsurprising rejection of Bitwise and Grayscale’s spot-based bitcoin ETF applications –immediately followed by Grayscale’s promised lawsuit–.

Moreover, the effects of the Terraform Lab’s UST stablecoin and Three Arrows Capital collapses seem to have turned into something contagious amongst crypto firms: another crypto lender and trading platform, Vauld, suspended all withdrawals, trading, and deposits quoting the “financial challenges” of current market conditions.

During 2022’s second quarter, Bitcoin opened at $45,000 and declined to below $20,000, managing to recover its key $20k price level just in time to close June above it. As NewsBTC reported recently, the coin “needs to break above $20,500 and continue above $22,000 to clear out any potential short-term downside risk.”

Overall, the latest Arcane Research weekly report notes that this decline “marked a historic quarter for the bitcoin price, and we have to go back 11 years to find a more brutal quarter. Bitcoin ended the quarter just below $20,000, dropping 56%.”

Bitcoin price action sees its worst quarter since 2011 Q3 | Arcane Research Weekly Report

Related Reading | Bitcoin Reserve Risk Falls To 2015 Levels, What Happened To BTC’s Price That Year?

What To Expect

However, the BTC price action could see more positive times soon.

Analyst Michaël van de Poppe thinks that the coin could soon flip the $20K-20.4K key level and then “go towards $23K and the summer relief rally.” He added today that the coin is “sustaining” and “looking ready for a big move relatively soon.”
As Arcane Research shared, Bitcoin’s $20k level marks the peak of its last bull run, adding that “Technically speaking, the close of the monthly candle was positive”, with June’s closing price being above the 2017 peak. The report also points to a possible support/resistance flip “where previous resistance will act as support.”

However, macroeconomic factors could be the ones to flip positive expectations later on. Global uncertainty keeps increasing pressure. S&P 500 is down by 20% from its January high, which also reflects on Bitcoin. Deutsche Bank AG Chief Executive Christian Sewing thinks there is a 50% chance of a global recession, other large banks see it coming as well. An economical decline that size could last for several quarters.

Bloomberg reported about the current effects of inflation rates and noted that “The gauge for the US is already 12.2%, similar to levels witnessed at the start of the pandemic and in the wake of the 2008 financial crisis.”

Anna Wong, the chief US economist at Bloomberg Economics, wrote that “The risk of a self-fulfilling recession—and one that can happen as soon as early next year—is higher than before. Even though household and business balance sheets are strong, worries about the future could cause consumers to pull back, which in turn would lead businesses to hire and invest less.”

Likewise, said feared self-fulfilled recession could also paint a grim picture for the crypto market. High-risk assets are expected to suffer investors’ retraction during economic declines, which can lead to panic selling and more gloomy prices.

Related Reading | Institutional Investors Remain Bearish As Short Bitcoin Sees Record Inflows

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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:

Crypto total market cap down to $879.871 billion in the daily chart | Source: TradingView.com
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.

Bitcoin underperforms all crypto indexes in June | Source: Arcane Research

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%.

Bitcoin dominance sees a big decline while altcoins take the lead | Source: Arcane Research
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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The Bitcoin Swing Set: Possible Outcomes Of A Dovish Vs Hawkish Fed

Bitcoin shed over 15% in the last 24 hours to around $21k and the whole crypto market sank below $1 trillion on Monday. Whether this gloomy start of the week will be followed by even more downside or some relief, could depend on next week’s meeting of the US Federal Reserve (FED).

Bitcoin trading at around $21k in the daily chart | BTCUSD on TradingView.com

Related Reading | Crypto Markets Lose $100 Billion As Bitcoin Drops Below $26K – More Pain Ahead?

Dovish Or Hawkish?

The US is seeing the largest year-on-year increase of the Consumer Price Index since December 1981. Inflation has not been “flattening out” as Fed Chair Jerome Powell expected in May.

Many analysts think this calls for a hawkish Fed and have predicted the next interest raise hike to be higher than previously announced. But others think that the Fed is not likely to surprise investors with a higher hike, so a hawkish scenario is still doubtful.

Nevertheless, the fear of recession is here and so is the bear market.

JPMorgan Chase & Co. strategist Marko Kolanovic explained in a note shared by Bloomberg why the next move could remain dovish:

“Friday’s strong CPI print that led to a surge in yields, along with the sell-off in crypto over the weekend, are weighing on investor sentiment and driving the market lower… However, we believe rates market repricing went too far and the Fed will surprise dovishly relative to what is now priced into the curve.”

But JPMorgan economist Michael Feroli thinks the opposite and expects a 75bps increase.

Meanwhile, Guy LeBas explained the mechanics of what happens at an FOMC meeting, stating that “Most of the time there are two realistic choices–“A” and “B”–but in times of extraordinary change or volatility, there are sometimes more. Incidentally, archived teal books are available here for the curious.”

“I am willing to bet that Option A is a 50bps rate hike with hawkish guidance for a faster pace of hikes thereafter. Option B is a 75bps hike with neutral guidance. Option C, if it’s serious, probably includes a faster pace of balance sheet runoff.”

LeBas took into account a WSJ article that also claimed the “troubling inflation reports” could lead to a surprise 75bps interest rate hike by the Fed.

The WSJ article quotes “Two consumer surveys have also shown households’ expectations of future inflation have increased in recent days,” previous statements by Fed Chairman Jerome Powell, and the analysis of several Wall Street forecasters.

On one hand, Powell had said: “What we need to see is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don’t see that, then we’ll have to consider moving more aggressively.” This could paint a  0.75bps scenario if we take into account the inflation reports.

Nevertheless, LeBas thinks that “Option A and B are both good possibilities for June. I lean towards A (hawkish 50) as most probable.”

50 basis points is only “Hawkish” if this is a hawk: pic.twitter.com/eyZzuXVzyv

— Graham Sanders (@geswolfcrest) June 13, 2022

Similarly, a Twitter user added that it is a tough situation:

“A. The Fed sticks with 50bps. Market sees them as too slow and not serious enough.

B. The Fed does 75bps. Market sees them as panicking and going against their word from 2 weeks ago.

Market falls either way.”

But the analyst Michaël van de Poppe is also leaning toward “option A”:

“J.P. Morgan expecting 75bps hike for Wednesday. I would say that’s likely not going to happen and 50bps or lower is going to call the reverse on Bitcoin.”

Several investors seem to agree with the “market falls either way” conclusion.

Anything below 75bps is usually seen as beneficial for Bitcoin, but is the US economy already too deep in the mud for 50bps to make an actual difference in the market?

President at EverGuide Financial Group, LLC. Mark R. Painter thinks that 50bps or 75bps “In the end it doesn’t matter because they already made their policy error and short-term moves are nothing more than position unwinding.”

So the big question for bitcoin is whether a dovish FED could actually bring a rally/reversal, or if this bear market still has more investors’ tears to shed. As always, both scenarios could happen, but it is still not likely that the crypto winter will be over with a 50bps hike.

Related Reading |  Bitcoin Plummets To $23000 ; How Long Till It Touches $20000?

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Ethereum’s Optimism Airdropped Governance Token, Here Is How It Went

A very expected launch went live as the governance token OP was airdropped by the Ethereum layer-2 scaling solution Optimism.

Why So Optimistic?

In a mission to fund public goods and create a sustainable future for Ethereum, the Optimism Collective firmly believes that “positive impact to the collective should be rewarded with profit to the individual,” thus this latest airdrop is one more step in their process of creating “a new model for properly rewarding those who create or sustain public goods.”

“The Optimism Collective will dispel the myth that public goods cannot be profitable. The Collective will consistently provide retroactive incentives for public goods which benefit Optimism, Ethereum, and the Collective as a whole. These public goods act as a propellant for the growth of the Collective economy.”

Their quest to “rebuild the internet to align with the values of its users” has excited many users, even Vitalik Buterin himself who previously described the effort as “Possibly the biggest attempt at non-token-holder-centric DAO governance so far.”

The team explained that ever since they opened up the system, the network has seen “more than 50 apps deployed on Optimism, resulting in over 60k ETH bridged in and more than $900M in total on-chain value.”

Ethereum and Optimism users are excited about the possibilities for this project to continue improving user experience and lowering transaction fee costs. And even more so, they are also excited about the rewards and governance possibilities that result from supporting and collaborating with this experiment.

As the collective’s vision explains, Optimism is “governed by a collaboration between the Optimism Foundation and the members of the Optimism Collective.” Likewise, the Collective has established its core governing structure divided into two equal chambers in order to enable a collaborative ecosystem:

  • The Token House and the Citizens’ House: to launch later in the year, it is meant to “facilitate and govern a process to distribute retroactive public goods funding, generated from the revenue collected by the network.”
  • The Token House: established today by the OP token airdrop, meant to create “an ongoing system of incentives for projects and users in the Optimism ecosystem.”

Related Reading | TA: Ethereum Dips From $2K, Why 100 SMA Might Spark Fresh Increase

The Ethereum Season Of Airdrops Has Started

What the Collective had described as “an entire season of airdrops” with over 250,000 eligible addresses, began today with the first OP airdrop that allocated 5% of the initial OP supply.

“Token holders will be able to vote on protocol upgrades, project incentives as a part of a Governance Fund, and more.”

It was a bumpy first airdrop for OP. The team admitted to having underestimated the amount of expected load that the event would have on their public RPC endpoint, they tweeted.

As the collective has been careful to constantly alert users about possible scams by impersonators and to only follow official announcements, it was strange at first that the claims of the OP token seemed to have started without the team giving out said announcement –a Twitter account dedicated to sharing airdrops announced it beforehand–, but this was later explained alongside other mistakes.

The source of the problem seems to the that the team failed to make their MerkleDistributor contract pausable. This meant that “claims were open, and we had no way to stop them.”

“We then deployed our claims UI in preparation for our official announcement,” they explained, and while underestimating the amount of traffic that would hit them, “website visitors found the claims link” before the announcement was officially made, thus “the public RPC started getting slammed.”

“We have NOT officially announced yet, but we’re already experiencing an all-time high demand,” the team had alerted earlier in the day, surprised by the high load that struck.

The team continued in a series of efforts that resulted in taking down the claims UI for a period of time “in an effort to decrease RPC load in the short-term,” however, “without access to the claims UI, users began to construct and share links to their own custom-built claim UIs.”

It took them several hours to “stabilize the public RPC.”

“While the sequencer remained stable throughout, this was the point where read-access was able to handle the expected load.”

Throughout the process, users experienced various issues like not being able to claim OP at the same time as other early users or seeing their status as “ineligible”, although they had previously checked the opposite.

Later on, it seemed like Binance had also been having trouble handling the OP hype as users reported that the exchange was not reflecting deposits even after a successful transfer.

Nonetheless, the team seems to have responsibly worked to solve the problems faced today and expects to apply the lessons learned to the next airdrop.

Meanwhile, many holders expect the OP price to experience a rally as it’s being listed by big exchanges like Binance and FTX. Currently, the token is trading at around $1.69 as per CoinGecko after reaching a peak of $2.10.

Related Reading | TA: Ethereum Dips From $2K, Why 100 SMA Might Spark Fresh Increase

ETH trading at $1,948 in the daily chart | TradingView.com

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Bitcoin Hash Rate Soars To New All-Time High, Will Price Follow

As Bitcoin jumped to $40k in the day following Federal Reserve’s raise hike by half a point, another number on the rise is its hash rate, which hit an all-time high of 221 EH/s.

Bitcoin climbs 6% in the day and trades around $40k | Source: BTCUSD on TradingView.com
Bitcoin, Hash Rate, And Price

The Hash Rate is the Bitcoin network’s measuring unit of the computational power and speed used to carry on the mathematical operations that confirm and process transactions on the blockchain. For this reason, the Hash Rate can reflect the global activity of bitcoin mining, increasing or decreasing side by side.

The price of Bitcoin and the measure of the Hash Rate are believed to be related. The higher the Hash Rate, the healthier and more secure the network is, and this can lead to an increase in price. However, this is not a guarantee because macroeconomic uncertainty is an important factor that could dominate the future of its trading value.

Also, many miners allege that the value of Bitcoin has an impact on the Hash Rate and not the other way around as the miners work around the network –joining or not– depending on the moment’s profitability.

Hash Rate And Difficulty Going Up At The Same Time

Just one week ago, Bitcoin difficulty hit an all-time high of 29.79 trillion after reaching block height 733,824. As the latest Arcane Research weekly report notes, the algorithm did this difficulty adjustment in order to lower the block production to the desired level, and now it has never been as difficult to mine bitcoin.

The difficulty was expected to drop 0.07% around next week during the next adjustment. However, the same Arcane report notes that this increase in difficulty has not been an obstacle to a rise in the new hashrate coming online. This means that the next adjustment could rather turn into another increase, “pushing the difficulty even further upwards.”

Although March and April had been slow months for the Bitcoin Hash Rate, it has now accelerated its pace and risen to an all-time high of 221 EH/s.

Related Reading | Bitcoin Hashrate Swells 15% Since Last Week As Analysts Expect Mining Difficulty To Increase

Bitcoin Hash Rate is up to 221 EH/s | Source: Arcane Research Weekly Report

The desired level of block production is 6 blocks per hour, but the surge in Hash Rate a week ago turned into a rapid block production rate of 6.45 blocks per hour.

The Arcane Research data also reports a 7% increase in Bitcoin’s daily transaction fees, going from $391,634 to $420,435 in a week. Ethereum, however, still takes the lead in the high daily transaction fees arena with an all-time high of $231 million last weekend, two times the former all-time high of $117 million.

This happened as a result of Yuga Labs’ minting of 55,000 NFTs, which demanded a great amount of gas given the activity of buyers increased. Ethereum’s scalability problem outshines Bitcoin’s 7% surge in daily fees.

Source: Arcane Research Weekly Report

This also highlights the higher earnings of Ether miners compared to Bitcoin’s for over a year.

“Bitcoin transaction fees have been minuscule since the summer of 2021, only making up around 1% of miner revenues, while the rest comes from the block subsidy,” Arcane Research explains, adding that Ether miners find higher profitability because of the elevated gas fees, although their earnings are also more volatile.

Related Reading | Bitcoin Could See 10% Jump, As Volatility Drops To 18-Month Low

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The Old Standard: Why Gold Is Beating Bitcoin In 2022

Bitcoin continues to underperform as a general “risk-off” sentiment has investors driving toward gold as a safe haven asset.

Not Risking It

Concerns about the Russo-Ukrainian war continue. The U.S. inflation struggles at a four-decade high and Fed rate hike fears prevail. The uncertainty extends to the world economy as a recession is expected instead of a recovery. The IMF’s managing director Kristalina Georgieva called it “a crisis on top of a crisis.”

“The war is a supply shock that reduces economic output and raises prices. Indeed, we forecast inflation will accelerate to 5.5 percent in advanced economies and to 9.3 percent in emerging European economies excluding Russia, Turkey, and Ukraine. ” The IMF stated last week.

Reuters recently quoted Commerzbank analyst Daniel Briesemann, who talked in a note about the factors that have “lent buoyancy to gold in recent days,” mentioning the “strong buying interest on the part of ETF (Exchange Traded Fund) investors” and news about the Ukraine war.

“Russia appears to be preparing to launch a major offensive in the east of the country – that is generating considerable demand for gold as a safe haven,” the analyst said.

This summarizes the “risk-off” sentiment at the moment. As expected, equities suffer as investors are selling risky assets and purchasing the ones negatively correlated to the traditional market. Thus, the crypto space is struggling alongside de stocks market and gold is rising.

Bitcoin Outperformed By Gold

Data from Arcane Research’s latest weekly report notes that it has been a gloomy year for the “digital gold.” In the first three weeks of 2022, Bitcoin sank 25% and it is still down by 18% in the year despite its slight recovery.

Similarly, Nasdaq records a 19% decline in the year, having underperformed against bitcoin “by a small margin,” notes the report, adding that “This is surprising given that bitcoin has tended to follow Nasdaq, albeit with higher volatility.”

The general fear over geopolitical and macroeconomic uncertainty has given gold the safe-haven asset spotlight once more. The asset outperformed all the other indexes seen below with a 4% gain.

Physical gold outperforming “digital gold” in 2022 | Source: Arcane Research

Meanwhile, the currency market is performing with “the same risk-off patterns.” The Dollar has been proving its “risk-off” dominance as the US Dollar Index (DXY) is up 7%. The Chinese yuan has taken a hit over concerns about the country’s “zero-covid” policy –which creates issues for the global supply chain– and the slowing down Chinese economy. In contrast, investors have been running to the US Dollar for safety.

Bitcoin supporters usually refer to the coin as “digital gold” alleging it is a safe haven asset, and this narrative had held well while BTC had been “uncorrelated with most other major asset classes,” but the tide is shifting with the 2022 scenario as investors are rather placing the coin “into the risk-on basket”.

A previous Arcane Research report indicated that bitcoin’s 30 -day correlation with the Nasdaq is revisiting July 2020 highs while its correlation with gold has reached all-time lows.

A pseudonym traded noted that “As Bitcoin adoption goes on and more institutional investors enter the market, the correlation of BTC and stocks becomes more and more tight. That is a paradigm that the crypto world struggled to come to terms with in the past but is now more real than ever. A healthy stock market is good for Bitcoin.”

Meanwhile, the general sentiment of traders seems to be bearish, with many saying that the coin could visit the $30k level soon.

Bitcoin trading at $39k in the daily chart | BTCUSD on TradingView.com

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Could Netflix Tumble Down The Crypto Market?

On Tuesday, the crypto market looked good in comparison to Netflix (NFLX). The shares of the world’s leading streaming company fell 27% to $256 in after-hours trading reaching 2019 levels after announcing a massive loss of 200,000 subscribers in the first quarter of 2022. This translated to roughly a $40 billion loss in half an hour.

This is the first time the company loses customers since 2011 and is expecting to lose 2 million more in the current second quarter. NFLX is already 63% down from its All-Time High and over 40% this year.

 

“For those wondering how long a miss like this can sting: A reminder that $FB is still down ~33% since it disclosed Facebook’s user growth hit a ceiling,” Bloomberg’s Brian Chappatta noted.

Analyst Michael Nathanson of MoffettNathanson LLC told Bloomberg that “It’s just shocking,” adding, “Everything they’ve tried to convince me of over the last five years was given up in one quarter. It’s such an about-face.”

Will Crypto Follow?

The news site further reported that “Disney fell as much as 5.2% in extended trading after Netflix reported its outlook, while Warner Bros. Discovery Inc., the owner of HBO Max, declined as much as 2.8%. Shares of Roku Inc., the maker of set-top boxes for streaming, dropped as much as 8.3%.”

Many have wondered if this could drag down the crypto market as well. An economist noted that the last time a sharp shed like this happened for Netflix (Jan 22, 2022), “it triggered [an over] 30% 4-day crash across crypto.” However, he added that he doesn’t think this will be an issue this time. “It’s now an idiosyncratic event.”

The global cryptocurrency market vaporized $1.4 trillion in value after Jan 22, 2022

The reason why many do not think this scenario will repeat is that the previous case was highly related to the macroeconomics –the general stock market sell-off over fear related to interest rate hikes in the U.S.–, while this time the indicator seems to be specific to the company’s declining demand.

Related Reading | Bitcoin Nosedives Below $38k As Tech Stocks Take A Beating, Pandemic Gains Disappears

Back in January, the company admitted that the competition is “affecting marginal growth some.” Now, besides the increasing competition, they stated that the bad performance in Q1 was partly due to a large amount of customers who share their passwords, estimating 100 million households that use the service technically for free.

They also pointed out macro factors, ” including sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact as well.”

Netflix completely missed their forecast for a 2.5 million growth in subscribes as well as Wall Street’s estimate, which also expected them to add that many users in the first quarter of 2022.

In contrast, the anti-crypto propaganda that calls it “too volatile” and “too risky”, claiming that investors need protection from it, is looking weak and pale today.

BREAKING NEWS:

Stock traders realise that tech can drop as fast as #Crypto can.

My condolences, Netflix investors. $NFLX

— Michaël van de Poppe (@CryptoMichNL) April 19, 2022

Around January 27, after the first big Netflix plunge of the year, Bill Ackman had reported that his hedge fund purchased more than 3.1 million shares of the company. That makes his position currently 387.5M down.

Related Reading | Majority Of Crypto Holders Will Hold Through An 80% Crash, New Survey Shows

“Somebody Always Knows”

The second big thing that contrasts with crypto is that the industry is often called a fraud scheme, but to some analysts, this NFLX scenario is giving signs of insider trading.

The Twitter account Unusual Whales noticed that “the most active hot chain before close” was $NFLX with $300 put. “And the top floor trades were all bearish.” This means that traders with put options probably made a lot of money. Which sounds like they knew something would happen.

Similarly, the account also noted that “A trader took a huge $NFLX put position, buying +100k at ~$2 ask 7 days ago. The position had 4500 volume that day, 41 volume the day before, expiring in a month. Likely made 1000%.”

Crypto total market cap value at $1,8 trillion in the daily chart | Source: TradingView.com

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The Ronin Hack Aftermatch: Axie Infinity’s $1M Bug Bounty

The popular blockchain game Axie Infinity has been left shaking after the $650 million Ronin bridge hack. The studio behind the game, Sky Mavis, has been taking multiple measures to try to secure the network and win back the confidence of users. The latest move announced is a $1 million bug bounty program that invites white hat hackers to stress test the blockchain.

Co-Founder and COO of Sky Mavis and Axie announced: “Calling all whitehats in the blockchain space. The Sky Mavis Bug Bounty program is here. Help us keep the Ronin Network secure while earning a bounty up to $1,000,000 in bounty for fatal bugs.”

The Ronin Hack

On March 23rd, a hacker was able to scoop $600 million from the Ronin bridge. It is the largest hack in the history of decentralized finances so far. The Ronin Network team confirmed that Sky Mavis’s Ronin validator nodes and Axie DAO validator nodes were compromised as the attacker used “hacked private keys in order to forge fake withdrawals.”

The attack was uncovered after the attacker was unable to withdraw 5k ETH from the bridge. But it was too late, as they had already drained 173,600 Ethereum and 25.5M USDC from the Ronin bridge in two transactions.

The Ronin team stated that they are working with law enforcement officials, forensic cryptographers, and investors “to make sure all funds are recovered or reimbursed,” and added that “All of the AXS, RON, and SLP on Ronin are safe right now.”

“While racing for mainstream adoption, we made some trade-offs that ended up leaving us vulnerable to this sort of attack. It’s a lesson that we’ve learned the hard way. A lesson that will guide how we build Ronin out moving forward. We’re confident that we will come out stronger and wiser from this.”

As a response, the Sky Mavis team raised $150 million led by crypto exchange Binance with participation from Animoca Brands, a16z, Dialectic, Paradigm, with the goal to reimburse all the funds stolen during the hack to the affected users.

Since then, the team has been working with Chainalysis and Crowdstrike “to monitor the stolen funds” and “to handle forensics and the setup of surveillance tools.”

Bridges can be a vulnerable point for blockchain projects, and this hack set a big warning about it. Bridges connect blockchains with the purpose of enabling transactions between tokens built on different ecosystems. However, bridges have a complex code and don’t have enough security standards yet, and hackers are gazing upon them to spot any vulnerability.

Related Reading | Hacker Scoops Up $2 Million Bounty After Spotting Fatal Flaw In Ethereum Rollup

$1M Bounty

Bridges can be so complex that it is not 100% clear if code auditing is enough to ensure the Ronin bridge’s safety. The Ronin team had stated that they are in the process of “implementing rigorous internal security measures to prevent future attacks.”

“The Ronin Network bridge will open once it has undergone a security upgrade and several audits, which can take several weeks.”

Now, they are calling in all white-hat hackers of the blockchain to search for vulnerabilities in exchange for a handsome reward. The team has given a list of products that should be stress-tested while prioritizing smart contracts and blockchain, websites, and apps. They noted that the only vulnerabilities that are considered eligible for monetary rewards are those with a working proof of concept that shows how they can be exploited.

Rewards for Smart Contracts and Blockchain vary from $1,000 to $1,000,000, and for Web and Apps, they vary from $50 to $15,000. All rewards will be paid in AXS tokens and only a specified portion of the received funds can be liquidated per month.

“It is possible that extraordinarily severe issues or those with extreme impact may be rewarded up to $1,000,000″ the announcement stated and added that “Sky Mavis may award an additional reward bonus for exceptional reports.·

Axie Infinity (AXS) Price

For the past weeks, Axie Infinity’s token AXS has been tumbling, falling around 30% after the hack. However, traders are watching out for a breakout above the key resistance level of $58 as the current zone has previously served for accumulation, which could mean a rebound for AXS. However, there also seems to be a risk to trigger a head-and-shoulders pattern, which could sink AXS further down. The token is down 0.09% in the last 24 hours.

Related Reading | Axie Infinity Smooth Love Potion (SLP) Explodes With 300% Gain This February

AXS at 47 USDT in the daily chart | AXSUSDT on TradingView.com

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Dogecoin Soared After Elon Musk Bought 9.2% Of Twitter, What’s Next?

Dogecoin (DOGE) had a boost that took it to an almost two-month high after Elon Musk bought a 9.2% in Twitter (a $2,8 billion stake) according to a Securities and Exchange Commission 13G filing released Monday, thus becoming the company’s largest shareholder.

Will Elon Musk Buyout Twitter?

The large buy by co-founder and CEO of Tesla, Elon Musk, seems to follow a recent Twitter poll made by himself where users expressed disconformity with the platform.

“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle? The consequences of this poll will be important. Please vote carefully,” Musk’s poll read, and over 70% of users responded ‘No’.

Free speech is essential to a functioning democracy.

Do you believe Twitter rigorously adheres to this principle?

— Elon Musk (@elonmusk) March 25, 2022

Although he is very popular on the social media network, Musk has been an open critic of Twitter for a while now. He has flirted with the possibility of building his own platform. Now, he owns a stake four times bigger than the shares held by Twitter co-founder Jack Dorsey. Many expect this move to mean that Musk will be pushing a plan to adjust Twitter closer to his beliefs and lead to a buyout.

Dan Ives, an analyst at Wedbush Securities, commented to The Guardian: “We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter.”

Musk’s buy was reflected in the company’s shares price with a spike of over 25% in pre-market trading. Twitter added roughly $8 billion in value when it reached its peak, and Musk’s $2,8 billion stake appreciated to over $3,5 billion.

Related Reading | Price Analysis: Dogecoin Appreciates, Where’s It Headed Next?

How Does it Affect Dogecoin?

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done? Is a new platform needed?” Musk had tweeted after the poll. To which the creator of Dogecoin responded:

“I think it starts with them clearly articulating their rules – the way they do verification for example seems completely arbitrary, and I feel that many are afraid to tweet what they really think due to risk of being deplatformed if the rules are not clear, it’s a minefield.”

As this buy hints at Musk having a personal interest in turning Twitter’s policy around as he sees fit, it may also read as the CEO acting accordingly to the desires of his followers. And beyond freedom of speech, a lot of Musk’s followers are Dogecoin supporters.

Recently, the CEO tweeted a video about the coin, which was mostly a satire that suggests the price of the meme coin will surge exponentially and surpass all larger coins. But Elon Musk jokes aside, he is a strong supporter of DOGE, and his popular events have become a determining factor for DOGE’s price.

Related Reading | Dogecoin Spikes 10% After Elon Musk Reveals He’s Not Selling

For this reason, users expect that Elon Musk will push the social media platform into taking Dogecoin as a payment option and further integrate the coin. The CEO has already integrated DOGE as a form of payment for Tesla merch, after which it soared in value by 15% to $0.20.

DOGE spiked 8.36% on the day following the news, jumping from $0.1431 to as high as $0.155. After a four-month gloomy downtrend, the meme coin’s market cap added over $1.5 billion in less than an hour.

A day before the buy was revealed, a few traders predicted DOGE’s price to climb up to $0.17-$0.18 after it broke local trend resistance with bulls defending the $0.13 zone.

The meme coin could see a significant uptrend in the following days if the bulls manage to fuel above the 200-day SMA price. Recent Musk-related events might jump in as an important factor for a climb up depending on further developments and announcements, and as the meme coin records a high correlation with larger coins, Bitcoin’s price movement will also be important for future action.

Dogecoin (DOGE) trading at $0,1480 in the daily chart | Source: DOGEUSD on TradingView.com

 

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Possible Timelines For Bitcoin To Hit $100k: Why CEOs See Bullish Signs

After bitcoin broke above the $45k resistance level reaching the $48k mark, it has retested the $45k level. Some analysts still expect a rise to above $50k, others have abandoned their bullish approach. Meanwhile, leading CEOs from Pantera Capital and Skybridge Capital remain positive that the coin will reach the $100k mark in a period of one to two years.

Bitcoin trading at $45,754 in the daily chart | BTCUSD on TradingView.com
Pantera Capital CEO Is ‘Wildly Bullish’

In an interview with Yahoo Finance, the CEO of Pantera Capital Dan Morehead commented on Bitcoin’s price action so far in the year. Morehead noted that within the history of Bitcoin cycles, it’s had six previous bear markets that average about 60%, and 2022’s has been 50%.

In his opinion, the bitcoin cycles will begin to moderate thanks to large institutional engagement, and “a 50% bear market is probably all you’re going to get going forward.”

“I think we’re either at the lows or very close to it.”

Morehead said he is “wildly bullish right now” because he believes that Bitcoin and the asset classes will decouple, noting that the high correlation that usually happens during periods of stress –similar to 2022’s turmoil– eventually breaks, usually after a 72-days average. “I think stocks and bonds may keep going down potentially for years, whereas blockchain assets can go up.“

Morehead accepted that Pantera Capital failed to predict how fear over the Fed’s rates rising would affect the crypto market, but believes that “in this case, the markets have it wrong, and blockchain will decouple from the other asset classes.”

“If you think about it, with rates rising, that is mathematically negative for bonds. It also has a negative impact for anything else with discounted cash flows like equities or real estate, but blockchain’s totally independent of rates.”

In his forecast, Morehead expects that six months from now bitcoin will be back to the typical 2.5X yearly growth that it’s been doing for 11 years. If so, then in a year Bitcoin could be worth about $100,000 per coin.

Scaramucci Sees a $500k Bitcoin

Similarly, in an interview with CNBC, the CEO of Skybridge Capital Anthony Scaramucchi predicted again that “Bitcoin will hit $100k in the next two years” based on adoption growth.

Scaramucchi quotes Glassnode claiming that “there’s probably 245 million wallets out there or accounts related to Bitcoin,” while in October-November of 2020 there were about 85 million wallets. The CEO believes the growing adoption turns into people being more confident in the coin.

“Somebody like Cathie Wood would say to you, a billion wallets, Bitcoin could easily trade to $500,000 a coin.”

While Scaramucchi’s predictions from 2021 were not spot on, he accepts that he failed to anticipate the Russo-Ukrainian war and the elongation of COVID, but he sees no reason for Bitcoin not to hit the $100K mark within two years “given the way it’s scaling globally” and its many use cases.

Related Reading | Will Strike Announce A Partnership With Apple At Bitcoin 2022? Here’s The 411

A Bullish Pattern

Meanwhile, analyst Yuriy Bishko believes that BTC follows a Wyckoff re-accumulation pattern. The Wyckoff market cycle theory is used to predict the market’s direction, and it supports the idea that prices move in a cyclical pattern of four phases: accumulation, markup, distribution, and markdown.

These phases can reflect the investors’ behavior, thus possibly predicting future price movement.

Within the Markup phase price action moves in a long uptrend, and the re-accumulation phase is a sideways range that interrupts Markup with small consolidation patterns. After re-accumulation, prices start to move higher, but the support zone needs to hold strongly. Note the example shared by a pseudonym analyst:

Like so, Bishko believes that Bitcoin is following this same pattern, currently entering Phase D. If true and the price continues to replicate the movements, it could retest an ATH.

“Globally, Bitcoin is in a larger consolidation channel with a range of $30-67K. This consolidation is not a bear market until the price creates lower lows. Right now we see on the chart higher highs (HH) and higher lows (HL) on the higher timeframes(1d,1w).”

Related Reading | Data Shows Bitcoin Investors Afraid To Take Risk As Leverage Remains Low

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Small Cap Altcoins Beat Bitcoin And Other Crypto Assets 10 To 1, But Why?

The Small Cap altcoins index has been outperforming the larger coins’.  As NewsBTC has been reporting, smaller caps have been looking like the best investment in the past months. Now that the larger Caps found relief recording gains once more during March, the Smaller Cap is still crushing the numbers.

Total crypto market cap at $2,1 trillion in the daily chart | Source: TradingView.com
Small Caps Outperforming

According to data from the latest Weekly Report from Arcane Research, the whole crypto market has seen relief during March. However, even with recent gains, the Small Cap Index still has completely outperformed the other indexes.

As seen in the chart below, Bitcoin, the Large Cap, and Mid Cap indexes have all seen relevant gains during March in the 8-11% increase range. But compared to the Small Cap Index, the larger indexes are lagging behind its massive 40% gains.

Source: Arcane Research

The massive gains have a few lead characters. Primarily, the Waves token is outshining all top 50 coins by market cap. It has seen surprising growth in the past month with a 300% increase in price.

Source: Arcane Research
Why Is The Waves Token Outperforming?

Waves is a global open-source platform for decentralized applications. Their native token just rallied 50% in 24 hours, which might have been a result of the Wave Labs launch, a U.S. venture that intends to headquarters in Miami. As the data points out, the token came out of the past week as the best performer of all top 50 coins by market cap.

Source: Arcane Research

As per Wave Labs press release, the venture aims to integrate Waves with leading blockchain protocols, form an Ecosystem fund, support projects building on Waves, and other strategic international plans aimed to become the “growth engine for the Waves ecosystem” so it can reach mass adoption.

“With the founding of Waves Labs, the ecosystem fund, and the extremely talented team in place, I do not doubt that Waves will reach mass adoption in 2022 and beyond,” says Sasha Ivanov, Founder of Waves.

The Waves 2.0, the new version of Waves Consensus based on Practical Proof-of-Stake Sharding (PPOSS), has been gaining new attention as it promises a “highly scalable and EVM-compatible network” set to start this spring.

Still unknown in the U.S. compared to other Small Cap altcoins, Waves has a lot of room to grow into. This incentivizes investors as they might see a potential for the digital asset to deliver larger returns.

Even though smaller coins and projects are riskier and more likely to fail, their higher volatility and size can also mean that they can grow exponentially and show greater returns than much larger coins like Bitcoin and Ethereum over the same period of time. Plus, the communities that are formed around Small Cap altcoins projects are often committed to its trajectory and seeing a boost in the price.

However, even though they can turn into greater returns, smaller altcoins can also crash the hardest.

Related Reading | Small Cap Altcoins Continue To March Ahead Of Bitcoin And Ether Gains

More on the Waves token, the pair WAVESBTC just hit a new high, breaking through previous peaks. Traders have been long expecting an ‘alt season’ to happen soon and Waves’ movements could be seen as a bullish sign.

WAVESBTC broke a new high | Source: TradingView.com
Is Altcoins Season Around The Corner?

Many investors have been expecting an altcoin season to happen this year. This dominance of altcoins over Bitcoin could happen after a BTC bull run as other digital tokens make breakthroughs and gain dominance over the market.

Bitcoin seems to be making big moves this week as it broke its 3-month consolidation. A bullish ascending triangle pattern is on the lookout along with a possible around-$51k target. In the crypto market, coins usually follow other coins’ moves. This means that Ethereum can follow Bitcoin’s price movements, and then other altcoins as well.

It can be similar for the smaller coins. If some altcoins are greatly outperforming, others can follow. The movement in question seems to be whether BTC can truly go above its $48k latest high. And as the report noted “the bitcoin dominance has been sitting at its highest levels since November,” and the time for altcoins might be around the corner if optimistic market sentiment continues.

Related Reading | Bitcoin Dominates Altcoins During War-Torn Month Of February

 

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Why Bitcoin Could See A 2020 Like Rally

After a rough couple of months, this week started with a strong upward movement from Bitcoin as the coin broke out above the $45,000 level on Monday to $48,215 before fluctuation, thus erasing yearly losses and anticipating a $50,000 target.

Despite the decline over the year, a large amount of the coin was never sold. A scenario that shows how holders strongly believe in the long-term game and remain surprisingly calm over a period of turmoil.

Building Up To A Rally

Senior Analyst Dylan LeClair noted that, as Bitcoin is trading at around $48,000, “there has only been one other time that the percentage of supply that hadn’t moved in over a year was at this level,” which was during September 2020.

On the mentioned date Bitcoin recovered from the dramatic crash of march 2020. The strong bounceback saw a 185% hike in the prices, taking to coin to over $10,000. A high number of committed ‘hodlers’ had also kept their BTC dormant despite the extreme swings in prices during the year.

This was followed by a performance that catapulted Bitcoin’s reputation amongst investors as “digital gold”. It closed the year trading at record highs of close to $30,000, outperforming gold with an increase of 416% over the year.

Brett Munster at Blockforce Capital had also noted last week a near-record highs percentage of the total Bitcoin supply that hasn’t moved in over a year, further pointing out that it is growing at a much faster pace than the last time Bitcoin was at these levels.

“I expect this number to set new all-time highs in coming weeks and months because it’s exactly this cohort that stepped in and aggressively bought in April and May of last year when Bitcoin’s price fell.”

Bitcoin trading at $47,670 in the daily chart | Source: BTCUSD on TradingView.com

Related Reading | Bitcoin Likely To Continue Upward Trajectory, Is $50K Its Next Target?

Bitcoin Derivatives Paint A New Picture

Furthermore, Dylan LeClair also noted that BTC derivatives “are still somewhat defensive & nowhere near as risk-on as 2021 despite same price levels.”

Illustrated by the following chart, the analyst showed the movement of BTC derivatives throughout 2021 “when the price was trading at this current level.”

Note that funding rates “represent traders’ sentiments in the perpetual swaps market,” with positive funding rates (over 0) indicating that long position traders are dominant and negative funding rates (under 0) indicating the opposite, CryptoQuant explains.

Compared to previous years, the BTC hourly perpetual funding rates are significantly closer to zero. “Excessive long-biased derivative market speculation is near non-existent currently,” says LeClair.

What the analyst is pointing out means that excessive speculation and leverage drove the market to these price levels in 2021, and “now its basically nowhere to be seen and bitcoin is rallying.” This could imply that the price is now rising because of demand, not market speculation.

Similarly, in the following chart, LeClair displays annualized perpetual future funding rates on a 24-hour Moving Average, while adding that “Traders were paying ~100% annualized to go long BTC early in 2021. A similar but less severe speculative market arose in the fall. Today? Funding has been flat/negative for most all of 2022.”

“Lastly, look at the collateral makeup of BTC derivative open interest,” LeClaire adds.

“In 2021 up to 70% of OI was collateralized with BTC. Traders were paying outrageous rates to long with BTC collateral, leading to massive liquidations. Now a majority of OI is collateralized with stables.”

Related Reading | TA: Bitcoin Saw Key Technical Breakout: Big Reaction From Bulls Imminent

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Here’s Why ADA Could Replicate Ethereum’s 2017 bullish break-out 

ADA has been reacting to the upside after its latest network upgrade. It recently went over its $1 hard-to-cross barrier to $1,191, but saw a retracement. A pattern that could mean an extremely bullish momentum for the coin could still play out.

Cardano (ADA) retraced to $1,09 in the daily chart | Source: ADAUSD on TradingViewcom

Related Reading | Cardano Completes Network Upgrade, ADA Reacts To The Upside

ADA’s Up and Downs

The seventh-largest cryptocurrency is trading at $1,09 at the moment of writing. A retracement from its near $1,2 mark. A pseudonym trader expects a mild bearish continuation during the weekend followed by a bullish rebound. They noted that Ada’s resistance levels are $1.150, $1.200, and $1.250, and support levels are $1.100, $1.050, and $1.000.

Source: ADAUSD on TradingView.com

“ADA has finally snapped the $1 barrier and has tapped the $1.191 top following a four-day parabolic bull run. However, the cryptocurrency has retraced to the $1.100 support area , as bulls ran out of steam near the $1.200 resistance.”

The trader noted that ADA has put the 100-day Exponential Moving Average (EMA) below it.

“As we head into the weekend, I expect a mild bearish continuation towards the $1.050 support. After that, I expect to see a bullish rebound to the $1.200 – $1.250 range.”

Moreover, the Coin’s RSI could be pointing at an oversold market, which might translate into a pullback or even a similar upside trend to previous upward movement scenarios:

“The last 3 times ADA has hit 70 Stoch RSI and dipped back down on the daily chart – like it is today – it has exploded to the upside in days after,” a trader noted per TradingView.

Break-Out Still To Come?

Despite the retracement, a pattern that resemblances to a cycle Ethereum had back in 2017 could still play out, meaning a bullish momentum for ADA. Notice the comparison by a pseudonym trader below:

If the coin sees a bounce, which is expected to happen if Bitcoin breaks its current resistance level, then ADA could follow the previous Ethereum movements to a very bullish uptrend.

Earlier, the pseudonym trader who showed the resemblance was on the lookout for the 1D candle to close above the near $1.2 level ADA had moved upwards to, which did not happen because of the mentioned pull back. However, in their opinion, it already looked “as if ADA is replicating Ethereum’s (ETHUSD) bullish break-out in early January 2017.”

“See how the price action that led to this since March 2016 is also quite similar to ADA’s price action since May 2021. Same Channel Down, followed by a Higher High, a near Support test and the start of the Lower Highs. Even the RSI fractals are similar.”

Another trader believes that ADA is in a measured move nearing its target. “There we will have some trading range and possible 2nd leg… Watch closely,” they added.

Related Reading |  ADA Surges 12% With Best Performance In Top 10, Will It Tackle $2?

 

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The Weird Relationship Between Ethereum’s Price And Vitalik Buterin

As Ethereum saw a 16% increase from a rally that took the coin to $3,000 on Monday, someone might have spotted an unusual link between Ether’s highs and times where the Ethereum Founder’s name, Vitalik Buterin, was trending on Google Searches worldwide.

Ethereum And Google Trends

“The last time Vitalik surged on Google Trends, $ETH pumped 2x from April-May,” a Twitter user noted while showing a recent surge of the founder’s name:

The blue line represents searches of ‘Vitalik Buterin’ on Google and the red line represents ‘Vitalik’

To see if this could actually be taken into account as a possible indicator, we compared different moments in time in which Vitalik Buterin has surged on Google Trends and the price action that followed. In the following chart we can see the most relevant moments during 2022:

And tracing back to 2021, we can further see this price action (yellow arrows still point at moments in which ‘Vitalik Buterin’ surged on Google Trends):

Yellow arrows point at moments when “Vitalik Buterin” surges on Google Trends | TradingView.com

But does it really mean the price has increased after people get interested in googling Vitalik?

The trending searches most likely followed these news: Buterin revealing he has burnt 505 trillion SHIB tokens in January 2022; similar SHIBA related news in October 2021; earlier in the same month he trended after calling El Salvador’s decision of making Bitcoin a legal tender “reckless”; then on August of the same year, it was the five-year anniversary of Ethereum and he addressed several issues and the complexity of Ethereum 2.0; on May 2021 Vitalik became a billionaire as Ether hit $3k.

The most recent spike in searches is most likely due to the article on Vitalik released by TIME Magazine, which features the Ethereum founder on the cover and is titled “The Prince of Crypto Has Concerns.”

The article’s writer, Andre Chow, called him “one of the most fascinating and arguably important people on earth,” and on Vitalik’s side, he expressed several concerns about the decentralized finances (DeFi) and NFTs spaces.

“Ultimately, the goal of crypto is not to play games with million-dollar pictures of monkeys, it’s to do things that accomplish meaningful effects in the real world.”

After comments such as this one and the intriguing public figure of Vitalik (often portrayed as a myth of a modern genius), it is only natural for a spike on Google Searches.

Related Reading | What This Pattern Spells For Ethereum In The Coming Weeks, Pullback In The Cards?

However, going back to the possibility of this to push Ether’s price up 2x, we further noticed that for the mentioned April-May case there do not seem to be any big surges for Vitalik’s name until May 13th, which was already after Ether hit an all-time high of $3,456.57 around May 4.

Alongside this uptrend of May 2021, it would be more relevant to take into account Bitcoin’s upward movement at the moment and a growing institutional interest in Ethereum.

‘Vitalik Buterin’ on Google Trends, April-May
But Will ETH Go Up?

As NewsBTC reported before, ETH is currently outperforming, and this is probably linked to the upcoming updates of the network as the Mainnet is ready to perform The Merge after it was recently deployed on the last testnet, meaning an official switch to proof-of-stake consensus.

There has been a lot of excitement about reaching the final phase of these updates, and it is clear that as the final phase is set to begin around mid-2022, many people are paying attention to the network and its coin.

Related Reading | Vitalik Buterin On How To Eliminate Ethereum Network Congestion And High Fees

A pseudonymous trader noted that “ETH is currently at the resistance of $3040 which is an important level for ETH to break in order to rally higher. A rejection will drop the price back to $2.9k to $2.8k.” Moreover, there seems to be an inverse head and shoulders forming, and as the coin approaches the neckline, it will need an uptrend next week to trigger the bullish pattern. A downtrend remains possible.

BTC Takes A Tumble?

On a similar note, Blockware Solutions recently shared a chart that showed Google searches for ‘Bitcoin’ taking a tumble and tweeted: “While the rest of the world ignores Bitcoin, hodlers continue to stack the most scarce asset on the planet.”

While the rest of the world ignores Bitcoin, hodlers continue to stack the most scarce asset on the planet.#bitcoin pic.twitter.com/2xQgsOJuAy

— Blockware Solutions (@BlockwareTeam) March 23, 2022

However, if we search ‘Bitcoin’ (the red line below) on the Google Trends analyzer and compare it to ‘Ethereum’ (the blue line), we see the following action:

 

And even if we add in ‘Vitalik Buterin’, ‘Bitcoin’ searches still seem to remain higher than anything Ethereum-related. Here we can see ‘Bitcoin’ represented by the blue line, ‘Ethereum’ by the yellow line, and ‘Vitalik Buterin’ by the red line.

 

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LUNA to Spike 80%? Here’s What Analysts Think

Terra’s LUNA has been trending to the downside in the past few days, but different indicators show interesting signs and the next price movements could be fundamental to confirm either an extremely bullish or a bearish signal.

Related Reading | LUNA Sees 17% Loss In One Week, UST De-Peg Rumors Affect Its Price?

What Is Boiling Up In LUNA’s Weekly Timeframe?

When an anonymous trader used Moving Average Convergence Divergence (MACD) to analyze LUNA’s next possible movements, the weekly chart showed an interesting crossover.

“Something is up on $LUNA weekly timeframe. Last time the MACD crossover occured it sent $LUNA from $12 to $106.”

A MACD crossover can give a bullish signal when the MACD (see the blue line in the chart below) rises above the signal line (see the yellow line). The opposite crossover would give a bearish signal, which can also be seen below in previous months as an example.

LUNA’s MACD crossovers overtime | LUNAUSD on TradingView.com

Another pseudonym trader noted that multiple time frames are looking good for the digital coin, which they think could be because a result of “the massive amount of BTC being bought to help support stable UST or it could be that the whole market is bubbling up”

“1 hour pointing upwards, 4 and 6 hours are about to print bullish twist above the cloud (max bull signal in my mind), 12 hour and daily charts look happy enough and will likely look even nicer as Luna presses to all time highs.”

4,36 Sharpe Ratio

The Sharpe Ratio is a risk/return measure highly used in finance. As per Investopedia, the Ratio describes how much excess return you receive for the extra volatility you endure for holding a riskier asset, determining the investment choice that will deliver the highest returns while considering risk.

  • “Usually, any Sharpe ratio greater than 1.0 is considered acceptable to good by investors.

  • A ratio higher than 2.0 is rated as very good.

  • A ratio of 3.0 or higher is considered excellent.

  • A ratio under 1.0 is considered sub-optimal.”

Similarly, a pseudonym crypto analyst explained during a Youtube Video analyzing LUNA’s share ratio that, in general, “If you are [the Sharpe ratio] at one, it is a superb result and it means you are crushing the market, you’re beating everything out there,” and LUNA Sharpe ratio is 4.36.

“It’s off the charts positive. This thing is just a beast and there’s many people calling for a $200 Luna in in the near term, but also potentially, $200 Avalanche, $200 SOL. Either way these three are kind of winners right now.”

However, there are limitations when using Sharpe Ratio, as it can oversimplify risk and treat all volatility as the same. Some inflated Sharpe Ratios can turn out to be misleading if the whole story of the investments was not addressed correctly.

Related Reading | What’s Behind LUNA’s Rally, Could Its Price Decouple From Bitcoin?

Possible Double-Top

On the other hand, there is a possibility of a double top that could be triggered if the price breaks out from the support level neckline. This would be extremely bearish for LUNA.

LUNAUSD 4-hour timeframe on TradingView.com

There are limitations when spotting a double top, and “Basing a double top solely on the formation of two consecutive peaks could lead to a false reading and cause an early exit from a position,” Investopedia explains.

Because of this reason, this is not a confirmed bearish signal and the following movements will be vital to identify a possible trend. A failed double top could shoot up LUNA’s price proving previous signs right.

In a different analyst’s opinion, he noticed LUNA’s double top but added that it is still showing a bullish mark structure in the 4-hour timeline.

“There’s a lot of high sell volume coming in, and it looks like there is potentially some type of head and shoulders pattern playing out. But I would be careful shorting this one personally just because I think that usually, you don’t want to short stuff that’s super strong in general.”

At the moment, it looks like the coin could go either way: a huge spike or a crash around 50%. Regarding Terra’s ecosystem, it is also important to see how recent developments unfold as they dig into the unknown territory of bitcoin-backed currencies.

At the time of writing, LUNA is down 2.04% in the day to $93,31.

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Today’s Crypto Boost: The FED, Inflation, And Global Adoption

Crypto assets saw some wild swings in the day and are now trading to the upside. Risky assets are reacting to the FED’s decision to raise rates by 25-basis points, and the increasing global adoption might be adding weight to the boost.

Related Reading | Expectations Of Aggressive FED Drop, Here’s Why Bitcoin Could Rise To $50K

What Hikes? Crypto Reacts To The FED

The Federal Reserve just lifted rates 25 basis points, raising rates for the first time since 2018. Six more hikes are expected in 2022.

The markets have been experiencing volatility following expectations for a more hawkish FED, given the implications of the Russo-Ukrainian war, rising U.S. inflation, and increasing Covid-19 cases. In the day, the crypto market had a downward reaction first, which experts described as a fake-out, then started to react to the upside.

The total crypto market cap at $1,7 billion in the daily chart | Source: TradingView.com

Experts expressed during a Fox Bussiness Live that the FED is lagging behind and this move will not affect the economy. They added that the FED is giving investors a plain field to do well in stocks, “not worrying about the U.S. economy.”

Similarly, the light interest raise hikes are looking positive for bitcoin and consequently for other crypto-assets as well.

Chair Jerome Powell claimed that “the probability of a recession within the next year is not particularly elevated,” and added, “All signs are that this is a strong economy, one that will be able to flourish — not to say withstand, but certainly flourish — in the face of less accommodative monetary policy.”

As NewsBTC has been reporting, the 25bps hike scenario looks bullish for Bitcoin for its more passive stance.

As many believe the FED’s dovish move comes as a late reaction and will do little to nothing to the U.S. inflation, investors might be taking refuge in Bitcoin as it has happened before. Inflation is expected to remain high at 4.3% by the end of 2022, above the Fed’s annual target of 2.3%.

Keeping savings in the bank only means a loss of purchasing power, and as a result, many people might start to see Bitcoin as a hedge against these losses. Cameron Winklevoss, the co-founder of Gemini, argues that the best way to shield yourself from rising inflation is Bitcoin.

“Imagine paying a money manager 7.9% a year to do absolutely nothing with your money. That’s what inflation is. It’s a hidden management fee that comes with no return. Today, if you hold USD cash, you are paying the US government 7.9% to do nothing with your money. Scary.”

Ukraine Sings Crypto Regulation

Amidst the Russo-Ukrainian war, crypto has also been looking like the only feasible option to the people affected by the invasion and sanctions.

Ukraine has benefited from crypto assets in several ways during the war. They have received over $108 million in donations in crypto-assets and reportedly, citizens have been able to use digital coins as a tool to safely take their funds with them when fleeing the country.

Moreover, regulatory clarity for crypto in the U.S. and other places is expected. Many politicians are taking stances in favor of cryptocurrencies, and Ukraine’s president Zelensky is not lagging behind.

Volodymyr Zelensky just signed a law “on virtual assets” to legalize crypto. An official statement says that this law “creates conditions for the launch of a legal market for virtual assets in Ukraine.”

“The signing of this Law by the President is another important step towards bringing the cryptocurrencies sector out of the shadows and launching a legal market for virtual assets in Ukraine.”

The deputy minister of digital transformation, Alex Bornyakov, expressed that they believe “that crypto industry offers new economic opportunities. We will do our best to bring the bright new future closer as soon as possible.”

This does not mean cryptocurrencies are a legal tender in Ukraine, but crypto holders are now legally protected in the country. This favorable sentiment appears to be growing amongst many politicians and governments around the world, which could turn into a rapidly growing institutional adoption of crypto.

As both Russians and Ukrainians have found themselves in need of an alternative to the traditional financial institutions, they have also sought refuge in bitcoin and stablecoins.

Besides the functional side experienced by Ukrainians, Russians could be finding in crypto a refuge from their devalued ruble. This sets a worldwide example and could end in a positive scenario for the market.

Related Reading | Leading News Outlets In Ukraine Aim To Secure $1 Million By Selling NFTs

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This Rugged FTM-Based Protocol Sends A Warning About DeFi Projects

The safety of the DeFi and especially the FTM ecosystem is shaking as “Tomb Fork” projects seem to be the perfect place for scams to thrive. Even after some investigation, what might look like a safer project can still turn out to be a fraud.

Recently, PulseDAO got rugged. Allegedly, their own dev turned against the and KYC might not be enough to hold this person accountable.

Tomb Forks And Rug Pulls

As per Chainalysis data, in 2021 DeFi rug pulls took over $2.8 billion worth of crypto and accounted for 37% of all cryptocurrency scam revenue in the year, versus just 1% in 2020.

A risky model called Tomb Fork, often FTM-based, has become perfect for rug pulls and many investors keep falling in.

Pulse was a project that allowed users to “create their own prediction markets about anything.” They launched a token model with the promise of rewarding “all participants fairly, while also making the network resilient.”

PulseDAO was a Tomb Fork. Based on Tomb Finance, Tomb forks are algorithmic stablecoin projects that peg their token to another coin, originally FTM.

In the case of Tomb Finance, they intend to “create a mirrored, liquid asset that can be moved around and traded without restrictions.” 

The PulseDAO Rug

The rug was confirmed by Rugdoc.io, who had previously warned that the project had a risk of governance mishandling and they needed their contracts to be subjected to a full audit with a reputable auditor. They highlighted the following risk vectors:

  • Not KYC’d with RugDoc

  • No reputable audits as of date

  •  Liquidity is not locked with RugDoc

  • Not in a multisig. We highly recommend the project to use one with community members or reliable 3rd parties as an approver due to the said governance risk.

Then, they spotted that 4243 FTM was removed from the project by the contract owner here. It seems like they pulled out almost all of the project’s liquidity.

“It appears Tomb forks have inherent governance risks, which is why it is critical to have renounced contracts and KYC in place before entering.”

However, RugDoc missed that PulseDAO did KYC with ApeOClock, but it was not enough for safety, and this is a very important detail for investors to take into account. Is KYC enough? More on that below.

About 5 days ago, PulseDAO said via Discord they were having issues with their cross-chain bridge, but nothing more. After March 13, all accounts and websites were down or deleted.

There is not much information running around, but scraping screenshots of messages from the team, this is one of the excuses they gave:

But even Ape O’Clock, the platform they used for their KYC, was confused:

The team’s cited a person who was “poised to kill the project”, “DAOKing”. He is a YouTuber who apparently had made a deal with PulseDAO to review them in a video. This YouTuber claims they used him as a scapegoat and that he is actually one of their largest holders and got rugged as well.

He listed his wallet in a recent video and movements can be checked via FTMScan. Although he claims otherwise, some users say it is unclear if he owns other wallets. However, he seems to be actively collaborating with Ape O’Clock to investigate the pull and take action.

So far, it does appear like a dev rugged the whole project.

PulseDAO Telegram channel claims the following:

The team also said they are investigating the “attack” and fixing their website and will take responsibility.
They also claimed the reason they took their Discord channel and Twitter down was that they need “encouragement, support and optimism not FUD and disheartening comments” while they manage to restore services. 
Deciding to take down all main sources of information is a very odd choice when you want to take responsibility.

Moreover, the pattern of rug pulls points out an unsustainable model: Tomb Forks.
Some are quickly spotted as hard pulls, meaning that the devs coded the token with a malicious backdoor; some are soft pulls, meaning that the project gets dumped. 

An Archive of Rugged & Abandoned Projects by Ape O’Clock – March

Related Reading | A Race For The Truth: Fantom Vs. Rekt, What Went Down

Why KYC Didn’t Matter

Many investors check a safety box when a project has KYC, but the PulseDAO example shows its weak face.

Some of the reasons it might not do any difference are:

  • Recovering crypto thefts from some countries can be difficult or even impossible.
  • Authorities might not look into smaller crypto projects.
  • Scammers might not even be held accountable in several countries because the rug pull falls into grey areas.

A user pondered: “How do we expect DeFi as a whole to develop and grow if the is no safeguard in place?”

FTM Price

Fantom (FTM) has been trading around $1.08 in the daily chart, down 5.50% in the last 24 hours. The coin has experienced fear from investors because of the departure of main developers. The foundation has claimed this will not affect their plans.

Related Reading | Why Fantom Fell 22% Following Key Personnel Exit

FTM price in the daily chart | TradingView.com

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A Race For The Truth: Fantom Vs. Rekt, What Went Down

A recently taken down investigation by Rekt News about the Fantom Foundation dug into several moves that could point to a lack of transparency from the DeFi platform. The article had called it “an elaborate scheme,” but apparently failed to approach the subject with enough accuracy.

1-2 hours after publishing the piece, Rekt deleted it and tweeted an apology. An archive from the original investigation can be found here.

This response from Rekt was not seen as clear enough by their readers. Why didn’t they publicly clarify their mistake? Several users have pointed out that it is fundamental for crypto journalism to carefully fact-check allegations because they could have an impact on the market.

However, the readers who debunked the investigation also added important data and signaled that there might still be gaps of information about Fantom that need to be looked into.

A Quick Sum-Up

Following the news of Andre Cronje and Anton Nell leaving the DeFi and crypto space, Rekt took a look into the first wallet of farm YFI (wallet 0x431), which they had previously started to investigate.

“We found that 0x431 had an unmatched level of power over the entire network, all in the hands of one EOA wallet.”

Seemingly, the 0x431 wallet had made huge transfers in FTM over the last 5 months ($750M in FTM) “using another address as a buffer before sending to Binance.” This and many other details found by Rekt suggested a “centralised money-making scheme” and “gross mismanagement of their foundation funds.”

Rekt interviewed Fantom, but the answers –or lack of them– did not clear up their many assumptions and raised more concerns, which led the investigation to believe that “basic operational security measures are simply not being met”

“Either the foundation is lying, or this is a gross mismanagement issue from the Fantom Foundation.”

The Inaccuracies

A Twitter user shed some light and debunked one by one most of the claims published in the article by adding overseen valuable data. They also stated that the kind of investigations conducted by Rekt are crucial for the crypto and DeFi environment, but this time they “missed to spot the shady practices.”

The user explained that “The wallet in question [0x431] sent FTM ERC20 tokens to Binance ETH and then withdrew it to the same wallet address on Fantom. Why? To fuel the bridge with Fantom native tokens.”

This was verified by the CEO of Multichain, Zhaojun:

“I can confirm fantom guys use 0x431e81 account to reblance the Multichain bridge’s fantom liquidity.

1. Deposit FTM-erc20 to Binance,

2. Withdraw native FTM and deposit to Bridge. https://ftmscan.com/tx/0xa16cc05ccb8a2c5ced10ae0ba80fd1dff736fff19b18d2c277d457725dce4202…

3. Repeat steps.”

The other wallet in question, 0x579, also seems to be a bridge, although the Fantom Foundation had claimed otherwise.

The user added that “it appears not ALL FTM which entered Binance on Ethereum reappeared on Fantom. Yes, the majority did, but further investigation in exact numbers would be useful.”

Rekt had noted that the wallets in question made huge moves during a period of increased FTM FOMO, but the quoted user finds that this makes sense since “in this time A LOT of people wanted to enter Fantom Network via the bridge. So the team put more effort into fueling it with native FTM.”

However, some questions done by Rekt remain open, like why are the foundation’s funds not being stored on a multisig?

The Foundation had also claimed that the funds from wallet 0x57900 were in part supposed to be for the incentives program announced in August along with other FTM that the foundation holds. The cited user also considers it important to know “how & to whom (and why) incentives are distributed.”

NewsBTC reached out to the Rekt team with several questions about the investigation process behind the article, but they did not reach back for comments.

Some have claimed they are liable for losses.

The Fantom Foundation released a statement alleging that Rekt had made “many false claims about the Foundation” and seemingly attempted to calm the investors’ concerns over Andre Cronje’s departure. It does not seem like they will be taking legal measures against Rekt.

Fantom Price

Fantom (FTM) has responded with a downward movement to the news of Andre Cronje and Anton Nell leaving the DeFi and crypto space. FTM also seems to be following the general crypto market trend and it is down 5.12% in the last 24 hours.

FTM trading at $1,20 in the daily chart | Source: FTMUSD on TradingView.com

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War, Inflation, & Geopolitical Tensions Bring Gold-Backed Crypto Tokens To $1B

In the first few months of 2022 macro uncertainty has been felt in the crypto and traditional markets as economic, regulatory, and political scenarios unfold.

Historically, investors see gold as a reliable safe-haven asset they can run to when stocks and bonds decline. It is not surprising for gold prices to have seen a 19-month high as the U.S. and UK decided to ban Russian energy products. It seems that now investors are not only attracted to the metal, but to gold-backed tokens as well.

What Crypto Can Expect From Macro Uncertainty

The macro uncertainty has only increased in 2022, starting with Russia’s invasion of Ukraine, then escalating as the sanctions on Moscow have a direct effect on commodities prices.  Moreover, analysts expect that a rising U.S. inflation will be reflected in the CPI numbers to be published next Thursday.

Arcane Research data noted that CPI is expected to reach 7.9%, and the Federal Reserve might perform the 25 basis point rate hike that chair Jerome Powell said he is inclined to support.

Bloomberg experts, however, project for “February CPI to show an increase of 8.0% year over year and top out in the vicinity of 9% in March or April,” and added that “CPI could rise above 10%” if energy prices continue to rise.

The Fed has also said that they might move more aggressively later on if inflation does not come down. If the market’s expectations on the rate hike do not meet reality, crypto prices could see increased volatility.

As Arcane Research pointed out, the implications of the Russo-Ukrainian war on the surging commodity prices might turn into a hurdle race for central banks trying to bring inflation down.

Related Reading | Gold-Backed Tokens Outperform Crypto Market. Further Upside Coming?

60% Growth For Gold-Backed Tokens

Furthermore, Arcane Research reported massive growth for gold-backed tokens in 2022. The macro uncertainty has led the gold price to rally with an 11% surge in the year as investors look for safety in a hedge against the expected risks.

The gold price rally could be calling the investors’ attention towards the top gold-backed tokens. Their market capitalization recently surpassed $1 billion, a 60% growth in 2022.

As per Investopedia, “Gold-backed digital currencies link one token or coin to a specific quantity of gold (for instance, 1 token equals 1 gram of gold),” and “If the digital currency becomes popular, the price of the coin can actually exceed that value. In this way, gold-pegged digital currencies offer protection against the bottom dropping out of a digital currency’s value.”

The top gold-backed tokens to consider are PAX Gold and Tether Gold. Indicated in the chart below, Tether Gold has seen little growth during the year, and as a consequence, PAX Gold overtook its position in the market cap after it saw a high influx in February.

Source: Arcane Research’s The Weekly Update, Week 9

However, the share of gold-backed tokens in the total crypto market is still around 0.05%, a tiny size compared to the top cryptocurrencies.

What About Bitcoin?

The report also notes that “Bitcoin has underperformed in this uncertain macroclimate, but many investors still view it as an inflation hedge.” Bitcoin price is up 8.93% in the last 24 hours after President Joe Biden announced the executive order on digital assets, which took a benefitial position for the crypto industry.

Related Reading | Battle Of The Hedges: How Gold And Bitcoin Have Performed With Russia-Ukraine Conflict

Bitcoin rallying at $41,923 in the daily chart | Source: BTCUSD on TradingView.com

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Bitcoin Sets Record For Largest Single Day Pump After One Year

Bitcoin recorded its largest single-day pump in a year as the Russian ruble tanked 20% in its value against the dollar amidst worldwide economic sanctions imposed in the country after their attack on Ukraine.

Sanctions Pump Bitcoin

The most influential countries in the world have imposed penalties on Russia aiming for its economic collapse to stop Putin’s efforts to invade Ukraine. However, it is not only politicians who are threatened by penalties but common citizens.

State Duma deputy from the Communist Party Nikolai Arefiev commented to a local news portal that savings of Russians could be confiscated by the Russian government:

“If all funds that are abroad are blocked, then the government will have no other choice but to seize all the deposits of the population – there are about 60 trillion rubles – in order to get out of the situation.”

Both Russians and Ukrainians have recorded enormous increases in crypto trading volume as they run to use it as a safe haven for their savings and wealth and a financial tool that allows them to take their money abroad or avoid sanctions.

Similarly, bitcoin also became a valuable tool to send donations to Ukrainian efforts. The cryptocurrencies that have recorded the highest trading volumes in the countries have been bitcoin and tether.

Bitcoin’s original narrative seems to be winning amongst the people who need it and so, its price has increased while recording other historical marks.

Related Reading | Bitcoin Soared 20% In Two Session With Crypto Demand As Haven

The Pump

As per Arcane Research data, the bitcoin price increased 14.5% on Monday, its largest pump since February 8th, 2021, when the crypto coin reacted positively being shot up to an ATH after Elon Musk announced Tesla had bought $1.5 billion in bitcoin.

Furthermore, data shows that the digital coin was back at providing better returns after a rough month. Bitcoin’s 7-day volatility increased to 5.4%, its highest mark since June 2021. Arcane Research notes this proves that the digital coin “behaves opposite of the rest of the financial markets concerning volatility, as upwards price movements often cause the most significant volatility spikes.”

Source: Arcane Research Weekly Report

Similarly, many were already used to the possible correlation between bitcoin and tech stocks, but that correlation has decoupled as bitcoin price increased 5% during the past day while equity stocks closed at lower prices. Bitcoin use case as a store of value might be making a return to the markets.

Before Monday’s big pump, bitcoin trading volume reached over $10 billion last Thursday as a reaction to Russia’s attack on Ukraine. This is the highest level reached since December 4th.

Related Reading | Bitcoin Breaks Above 50-Day SMA, Will BTC Ride It Out To $50,000?

BTC Price

Arcane data further noted that the digital coin has returned to its $40-44k trading range and the resistance level of $44,000, found during early February’s rally, is an important mark since the coin has yet to convincingly break through that resistance.

Data suggests that if BTC breaks through $44k again, then “$47,000 is the next resistance area to pay attention to.”

Meanwhile, bitcoin was slightly up in the last 24 hours. At the time of writing the digital coin’s price is $43,894.

Bitcoin trading at $43,894 in the daily chart | Source: BTCUSD on TradingView.com