Decentral Block Post

Bitcoin (BTC) checked losses while United States equities drifted down on June 22 as the Federal Reserve kept quiet on monetary policy.

Powell keeps quiet on Fed moves

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering near $20,500 at the June 22 Wall Street open.

The pair had wicked below the $20,000 mark overnight before recovering, still down from the previous day's $21,700 highs.

Markets braced for last-minute surprises from testimony to Congress by Fed Chair Jerome Powell on the day, this ultimately providing no fresh insight into the central bank's approach to taming rampant inflation.

"We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy," a copy of Powell's testimony released before his appearance read.

Bitcoin (BTC) saw a dramatic change of mood into June 22 as multi-day highs gave way to a fresh dive under $20,000.

BTC could see accumulation below key trendline

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD abruptly halting its latest gains to hit lows of $19,947 on Bitstamp.

The largest cryptocurrency had passed $21,700 the day before, its best performance since June 16, but momentum waned during Wall Street trading.

For popular trader and analyst Rekt Capital, there was danger in BTC/USD being unable to reclaim its 200-week moving average (MA).

As a classic support line in previous bear markets, Bitcoin had formerly retained the 200-week MA as support with wicks below it characterizing macro price bottoms.

Avalanche (AVAX) is down 45% in 30 days and in the same time the cryptocurrencies total market capitalization shrank by 29%.

Despite the recent downturn, this decentralized application (DApp) platform remains a top contender in the layer-1 and layer-2 race and it ranks high in terms of smart contract deposits and active addresses. Yet, the lackluster token price is still causing investors to rethink whether the network remains a “serious” competitor.

The brutal sell-off on risk assets caused AVAX to test the $14.80 support multiple times, while the current market capitalization stands at $4.8 billion. It’s important also to note that the network’s total value locked (TVL) holds an impressive $3.2 billion.

As a comparison, Solana (SOL) offers incredibly low network fees and holds a $2.1 billion TVL. Yet, SOL token’s market cap stands at $12.9 billion, which is almost three times larger than Avalanche’s valuation at the $14.80 price level.

The TVL indicator is extremely relevant because it measures the deposits on the network’s smart contracts. If we use Polygon (MATIC), an Ethereum layer-2 solution, as a proxy, the network holds a $1.8 billion TVL while the token's market capitalization stands at $3.5 billion.

There is good reason to be afraid. Previous down markets have seen declines in excess of 80%. While tightfisted hodling might hold wisdom among many Bitcoin (BTC) maximalists, speculators in altcoins know that diamond handing can mean near (or total) annihilation. 

Regardless of one’s investment philosophy, in risk-off environments, participation flees the space with haste. The purest among us might see a silver lining as the devastation clears the forest floor of weeds, leaving room for the strongest projects to flourish. Though, doubtlessly, there are many saplings lost who would grow to great heights themselves if they had a chance.

Investment and interest in the digital asset space are water and sunlight to the fertile ground of ideas and entrepreneurship. Less severe declines better serve the market; better a garden than a desert.

A brief history of crypto bear markets

In order to solve a problem, we must first understand its catalyst. Bitcoin and the wider digital asset space have survived a number of bear markets since its inception. By some accounts, depending on one’s definition, we are currently in number five.

The first half of 2012 was fraught with regulatory uncertainty culminating in the closure of TradeHill, the second-largest Bitcoin exchange. This was followed by the hacks of both Bitcoinica and Linode, resulting in tens of thousands of Bitcoin lost and dropping the market by some 40%.¹ But, the price rebounded, albeit briefly, finding new heights above $16 until further hacks, regulatory fears and defaults from the Bitcoin Savings and Trust Ponzi Scheme collapsed the price yet again, down 37%.¹