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ARK Invest: Despite The 9 Red Candles, “Bitcoin’s Fundamentals Remain Strong”

The inaugural edition of ARK ’s “The Bitcoin Monthly” report contains some gems. It also contains a simple compilation of facts that paint a clear picture of the bitcoin market as it currently stands. A blockchain is an unalterable fountain of evidence, and ARK put their best analysts to review it in-depth and get stats and insights for us. Get some coffee and take a seat, let’s forget about the Fear & Greed index and see what the numbers are really saying.

Excited to introduce the first official issue of “The Bitcoin Monthly”

Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market's headed.

Here are the major highlights from this month’s report:

— Yassine Elmandjra (@yassineARK) June 3, 2022

Over at Twitter, ARK Analyst Yassine Elmandjra described “The Bitcoin Monthly” as: “Starting this month, ARK will be publishing an in-depth report covering Bitcoin’s market action and sharing where we think the market’s headed.” On ARK’s website, they describe the new venture as: “Considering the market’s fast pace of change, ARK publishes The Bitcoin Monthly, an “earnings report” that details relevant on-chain activity and showcases the openness, transparency, and accessibility of blockchain data.”

Related Reading | Bitcoin Price Closes Two Consecutive Weekly Red Candles, First Time Since Bottom

Let’s check the data and insights available in May’s edition.

The State Of The Bitcoin Market, With ARK

According to “The Bitcoin Monthly”:

  • “Bitcoin closed the month of May down 17.2%, declining from $38,480 to $31,835.”

Let’s be honest, this looks like the beginning of a bear market. And the Terra/ Luna crash appears to be the catalytic event. However, subsequent data will show that we might not be in one after all. 

  • “Bitcoin closed the month down 17.2%, printing its ninth consecutive negative weekly decline for the first time in history, suggesting a possible oversold condition.”

Nine consecutive red candles, a new record. That’s a horrific fact no matter how you dress it. However, according to ARK, it suggests “a possible oversold condition.” Which is promising. 

  • “Bitcoin is down 57% since reaching an alltime high in November 2021. For perspective, the average peak-to-trough drawdown during previous bear markets stands at 76%.”

Does this mean things could get worst? Or does it mean we’re not near bear market levels? It definitely feels bear-markety, but the stats are the stats. 

BTC price chart for 06/04/2022 on Exmo | Source: BTC/USD on TradingView.com
The Bitcoin Network Stands Strong

  • “Despite the continued sell-off, bitcoin has not broken below any major trendline. It is trading above its onchain cost basis at ~$24,000 and its 200- week moving average at ~$22,000.”

The bitcoin network absorbed Terra/Luna’s massive sell-off and the market’s subsequent one like a champ. The worst seems to be behind us and bitcoin “has not broken below any major trendline.”

  • “An all-time of nearly 66% of bitcoin’s supply has not moved in over a year, a testament to the market’s longer-term focus and a holder base with stronger conviction.”

Despite the massive market movement, bitcoiners keep HODLing like it’s the only chance at economic freedom that they’ll see in their lifetimes. Because it is.

  • “Short-term holder positions fell -35% below their breakeven price, on average.”

If bitcoiners are HODLing, who’s selling all those cheap sats? Short-term holders, that’s who. And they’re not even close to breaking even. It’s a short-term holders massacre out there.

ARK Sees A Way For The Market To Jumpstart Itself

Look, hear ARK out. First of all, “bitcoin’s open interest in the futures market has reached an all-time high of approximately 450,000 BTC.” Also, “perpetual contract basis typically hints at market direction. Currently, it is trading at a bullish discount to spot.” This is very important because, “given the high open interest outstanding, we believe the perpetual futures discount indicates a potential upward trajectory in BTC’s next major price movement.”

Related Reading | Revisiting Dorsey’s Hyperinflation Tweet: Elon, Wood, Saylor, Balaji, Chip In

That’s right, ARK closes “The Bitcoin Monthly” report predicting “a potential upward trajectory.”

Featured Image by Ricardo Gomez Angel on Unsplash | Charts by TradingView

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Bored Ape Yacht Club Plunges By 60% Last Month

While Bored Ape Yacht Club appears to be unfazed for several months now in the face of the crypto crash, the month of May tells a different storyline.

Bored Ape Yacht Club, a blue-chip NFT, appeared to have dipped in value, as evidenced in May when NFTs dropped in average sales price. May has been a challenging month for NFTs and crypto alike. BAYC has managed to end it with a sour trading price of $152,658.

Suggested Reading | Cardano TVL Sheds $205 Million Since Hitting All-Time High

BAYC Average Sales, Value Down 60%

Although BAYC sales are comparably higher than other NFTs like Otherdeed, Art Blocks, NBA Top Shot, and even Mutant Ape Yacht Club, BAYC values have crashed by 60% since May 1 with an average trading price of $382,894.

A hike in unique buyers increased from 475 to 591 in April, but the average sales have shed tremendously since.

Meanwhile, the APE token has lost 66% of its value from a May opening trading price of $20.02 to close at $6.76.

Source: Bored Ape Yacht Club Price Chart by Nomics
Why Own A Bored Ape Yacht Club

BAYC is an NFT collection owned by many celebrities and influencers like Stephen Curry, Eminem, Justin Bieber, and Shaquille O’Neal. It’s an overnight sensation that has also triggered high prices for the collection. Owning a BAYC is a status symbol that you belong to the elite circle.

To be relevant, it’s a must to own the most popular and royal NFT. It gives the owner that cool status, but the actual value of BAYC is exclusive membership access. It’s a digital club that provides member-only access and privileges such as the following:

  • Bathroom Access
  • Discord Access
  • Added NFTs
  • Access to ApeCoin

Suggested Reading | XRP Whales Boost Accumulation Appetite, Register 2-Month Peak Holding Supply

Crypto total market cap at $1.26 trillion on the weekend chart | Source: TradingView.com

It’s BAYC that unlocks the potential of NFTs to enter the mainstream and be a part of the elite and more giant circle.

Bored Ape and other blue-chip and premiere NFTs have been in a depressive state and down by more than 50% last month. BAYC has been robust and unassailable for several months despite the crypto market retreat, but the values are sliding now.

One of the apparent reasons for the decline is that Ethereum has also been down by 33% for the month following the Luna and UST stablecoin crashes. OpenSea trading volume has also suffered and has plunged by 40% for the past month.

The decline in the BAYC value is also largely attributed to the massive crypto crash that resulted in the waning of investor interest in all things NFT.

Featured image from CoinLive, chart from TradingView.com

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Polkadot At $9.30, But Is There A Chance Of Slight Shift In Trend?

Polkadot has been noting fall in price over the past few days. Although the coin has been laterally trading, there has been continuous dips in the price. Over the last 24 hours, DOT fell by 4.2% and in the last week the coin brought home minor gains.

Broader market weakness can be attributed to most altcoins either trading sideways or moving downtrend. The coin broke below its crucial support of $14 and ever since that Polkadot has been moving south.

Buying strength also automatically faded from the market as the bears took over the price action. Despite the bears strengthening, DOT continued to attempt moving on the upside but the coin was met with selling pressure each time.

The bulls just need to push the price a little above the $9.60 mark after which the buyers could attempt to re-enter the market. This could bring in some relief to the altcoin’s price.

Polkadot Price Analysis: One Day Chart
Polkadot was priced at $9.30 on the one day chart | Source: DOTUSD on TradingView

DOT was trading at $9.30 on the one day chart. Polkadot was mostly consolidating but was trying to break past the same every now and then. Bears have gotten stronger as buying strength has fallen. A fall below the $9.30 price mark will cause the coin to rest on the $8.71 support line.

This would mean DOT would touch the price level of August, 2021 again. Overhead resistance for the coin stood at $10 and a push above the same will make the altcoin trade near the $11.87 price mark.

The volume of the coin traded had fallen and was seen in red. This indicated that the bulls had weakened at press time.

Technical Analysis
Polkadot registered fall in buying strength on the one day chart | Source: DOTUSD on TradingView

DOT noted a consistent increase in buying strength as seen on the Relative Strength Index. There has been an uptrend on the RSI. At press time, the coin displayed fall in buying strength as the indicator captured a downtick signifying increase in selling pressure.

In regards to DOT registering a shift in price action, the price pf the asset was seen slightly above the 20-SMA line. This meant that buyers were slowly gathering momentum and that the sellers might not continue to drive the price momentum in the market.

Related Reading | Polkadot Surged Over 4%, What Are The Technicals Indicating?

Polkadot flashed a buy signal on the one day chart | Source: DOTUSD on TradingView

DOT flashed a buy signal which amounts to the coin displaying a possible change in the price action. Moving Average Convergence Divergence depicts the price momentum, and it indicated bullishness. MACD portrayed green signal bars which are tied to a buy signal.

Bollinger Bands that indicate price volatility showed narrowing of the bands. If the bands become narrowed it means that price volatility is about to drop.

A drop in the same means lesser price fluctuations. DOT can try to rise above the given immediate resistance if the buying strength increases in the market over the immediate trading sessions.

Related Reading | Bitcoin NUL Suggests More Downside To Come Before The Bottom

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Solana Below $40 Amidst Network Outage, Are The Bears Back?

Solana is on a downtrend currently, price of the altcoin has slid below the vital support line of $40. This downslide comes in the middle of a network outage, yet again! A software glitch was responsible for causing an outage that lasted over 4 hours.

Solana had also experienced another major outage in the month of January which stretched over 18 hours. This has apparently affected the Solana ecosystem as constant outages causes traders to lose their portfolio value simultaneously.

Over the last 24 hours, the altcoin lost about 6.4% of its value. In the last week, SOL depreciated over 12%. After a period of consolidation, SOL attempted to rise but the bears came back soon after. Right after the altcoin lost its critical support of $50, it has been constantly value ever since. Buying strength has also dropped owing to the recent downtrend.

Solana Price Analysis: One Day Chart
Solana was priced at $38 on the one day chart | Source: SOLUSD on TradingView

SOL was trading at $38 at the time of writing. It lost its crucial support of $40 and was on a downtrend. If SOL does not manage to stay at its current price level, it might aim for $34. The coin touched these price levels last at the month of August 2021. The descending trendline (yellow) agrees with downtrend in the market.

For the bulls to accumulate in order to invalidate the bearish thesis, the coin has to attempt for $50. The volume of the coin traded had declined and was in the red. This reading signified bearish dominance in the market.

Technical Analysis
Solana registered a fall in buying strength on the one day chart | Source: SOLUSD on TradingView

SOL had attempted to briefly recover on the Relative Strength Index but at the time of writing the indicator noted a downtick. The Relative Strength Index was slightly above the oversold zone but pressure from the bears can cause SOL to become oversold.

As the sellers have taken over the market, the coin has fallen below the 20-SMA line. A reading below the 20-SMA line indicated that the sellers were driving the price momentum in the market. A slight push from the bulls could however, drag the price of SOL above the 20-SMA, which would then ease the selling pressure in the market.

Related Reading | Solana (SOL) Could Register An Upswing, Thanks To This Pattern

Solana flashed buy signal on the one day chart | Source: SOLUSD on TradingView

The Bollinger Bands responsible for depicting price volatility indicated that there was a squeeze release. A squeeze release essentially means that price volatility could be expected. Price of Solana could sway either way considering the above chart has painted mixed signals.

The Awesome Oscillator depicts the current price momentum and also a change in the same. The indicator flashed green signal bars which indicated a change in the momentum along with a buy signal.

A buy signal can be considered bullish if traders act on it.

Going by other indicators, it seems though SOL might be stuck in the same price action over the immediate trading sessions. A change can be expected if broader market extends support.

Related Reading | Can Bitcoin Bounce Back To $35K? Here’s What Stands In The Way

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El Salvador Postpones Bitcoin Bonds A Second Time, Here’s Why

El Salvador has been planning to release the world’s first Bitcoin bond for a while. This move had garnered a lot of interest from investors in the space who have been looking forward to taking advantage of this unique opportunity. However, the launch of the bitcoin bond has now been postponed for a second time. El Salvador’s finance miner, Alejandro Zelaya, gives the reason for the multiple delays.

Not A Good Time

The finance minister had put forward that it was not a good time for the launch of the El Salvador Bitcoin Bonds. This is due to the fact that the price of bitcoin had been in a decline and had therefore not provided a favorable time for the launch of the bitcoin bonds. It has started to irk some in the space because this is not the first time that the country would be postponing the launch of its infamous Vulcano Bonds, also known as bitcoin bonds.

Related Reading | Bitcoin Dominates Derivatives Market To End May On A High Note

The first time had been back in late March when the El Salvadorean government had announced that it had to postpone the launch. The reasons behind the postponement had been the same then as they are now; the financial market was not in a favorable place for the launch. Introducing an untested bond into the market at a time when there is a lot of geopolitical unrest may work against the success of such a bond. 

Finance minister Alejandro Zelaya explained that the move to push the launch back once more was “Because of the price [of bitcoin]. The price is still disrupted by the war in Ukraine. There were many movements in the stock market.”

On the other side though, it is being said that the postponements have not been due to geopolitical unrest and declining prices. But rather, the interest in these bitcoin bonds was low. This is because investors are not willing to bet their money on an untested bond that does not promise quick returns.

Although there has been no official date announced for when the bitcoin bonds will be placed, the minister expressed that “the currency is strong” and continues to recover. 

El Salvador’s Bitcoin

El Salvador has been purchasing bitcoin since last year when it had made the cryptocurrency a legal tender. During the time when the country started purchasing bitcoins, it has been trading at one of the highest points of the year. As such, with the recent decline in the value of BTC, El Salvador finds itself at a loss when it comes to its bitcoin holdings.

Related Reading | Brace For Impact: Bitcoin Miners Have Begun Dumping Their Holdings

Nevertheless, the country remains unshaken in its resolve to incorporate bitcoin into its treasury. The finance minister said that the government continues to hold on to its BTC despite being $38 million in the loss. According to him, since they have not sold anything, then the country “has not lost” any money.

Zelaya, however, revealed that El Salvador had indeed “traded” some of its BTC to build Chivo Pet but that the coins remain in their possession. At the time of this writing, El Salvador holds 2,301 valued at approximately $70 million.

Featured image from Bitcoinist, chart from TradingView.com

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