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Bitcoin (BTC) fell $800 in minutes on July 13 as the latest United States Consumer Price Index (CPI) data came in far ahead of estimates.

Dollar smashes new 20-year highs on hot CPI

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it dived under $19,000 minutes after the June CPI print, which put U.S. inflation at 9.1%.

Expectations had favored 8.8% CPI year-on-year, this still being the highest reading since the start of the 1980s.

With inflation all but guaranteeing further rate hikes from the Federal Reserve, the mood among risk assets — including crypto — swiftly turned sour.

"Peak inflation is here with CPI coming in at 9.1%," Cointelegraph contributor Michaël van de Poppe reacted, adding that $19,500 should have held for BTC/USD to avoid "cascading south some more."

The high degree of penetration and adoption of crypto in Saudi Arabia makes it an important market for digital currencies, demonstrating the potential for expansion in the Middle East and North (MENA) region.

According to a survey conducted by crypto exchange KuCoin, around three million Saudi Arabians (or 14 percent of the adult population aged 18 to 60) have become crypto investors who either currently own cryptocurrencies or have traded in the past six months as of May 2022.

Another 17% of respondents are labeled crypto-curious and are likely to invest in cryptocurrencies in the next six months. As per the study's findings, there is a long-term interest among potential crypto investors in the Arab nation. In the first quarter of 2022, 49% of crypto investors intended to increase their investment in cryptocurrencies over the next six months.

In the second quarter of 2022, investor sentiment shifted toward more conservative cryptocurrency investment techniques as the bearish market began. Thirty-one percent of crypto owners in Saudi Arabia said they would keep their crypto balance as is rather than expand it. During the same period, investors with lower incomes sold off a portion of their holdings, per the survey.

In Saudi Arabia, the high number of new market entrants is unprecedented, with 76% of crypto investors having less than one year of expertise in the sector, including 49% who first began trading cryptocurrencies in the previous six months.

Dogecoin (DOGE) has missed a much-anticipated technical upside target and is down nearly 10% over the past week amid an ongoing spat between Elon Musk and Twitter.

Musk hurts DOGE price

To recap: Musk, whose companies Tesla, SpaceX, and Vegas Loop accept DOGE payments, had suggested introducing the same checkout option on Twitter this April.

Nonetheless, the Musk-Twitter deal has turned sour after the billionaire attempted to walk away from his $44 billion takeover bid. In response, the platform has sued Musk, alleging that his heart changed after suffering personal losses in the ongoing global market carnage.

Some Dogecoin traders had eyed Musk's Twitter takeover to stay bullish on DOGE/USD, considering the deal would boost the token's adoption across the platform's 330 million monthly active users.

Dogecoin misses IH&S target

Dogecoin dropped by 19.5% after Musk called off the Twitter deal on July 8. In doing so, DOGE also invalidated its prevailing "inverse head and shoulders (IH&S)" pattern that could have pushed its price per token toward $0.112, as shown below.

Bitcoin (BTC) rebounded from overnight lows on July 13 as markets nervously waited for United States inflation data.

Countdown to “highly elevated” inflation reveal

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing from $19,250 to $19,900 at the time of writing, up 3.3% on the day.

With three hours to go until the release of Consumer Price Index (CPI) data for June, crypto markets showed little sign of advance volatility.

Previously, the U.S. government had warned that the CPI figures were expected to be “highly elevated,” with unofficial projections from other sources indicating a year-on-year inflation increase of nearly 9%.

“CPI coming out at 8.8% today. Watch. I’ve got a strong feeling this is the number,” popular crypto YouTuber Ben Armstrong agreed.

Bitcoin (BTC) may have further to fall, but Coinshares chief strategy officer Meltem Demirors believes the top cryptocurrency will reach new all-time highs within the next 24 months.

Speaking on CNBC’s Squawk Box on July 11, Demirors noted that Bitcoin has always been a “cyclical asset” with drawdowns from peak to trough at 80 to 90% historically.

With Bitcoin currently sitting at about 65% down from its all-time highs in November 2021, Demirors believes “there is still room for some downward correction.”

However Demirors noted there has been strong support around $20,000 and that she did not expect Bitcoin to fall below $14,000. She predicted the pain would be a distant memory by 2024, saying:

“In the next 24 months, we will see new all-time highs in Bitcoin.”

Positive price movement during bear markets are notoriously hard to come by due to the non-stop FUD of media and lackadaisical interest from crypto investors.

One crypto that managed to flash green on June 12 is the Nervos Network (CKB), an open blockchain protocol designed for universally accessible decentralized applications (DApps).

Data from Cointelegraph Markets Pro and TradingView shows that CKB put on a 50% gain in July after climbing from a low of $0.0033 on June 30 to a daily high of $0.005 on July 12.

Three reasons for the positive gains for the Nervos Network include the launch of the network's layer-2 (L2) solution Godwoken, the integration of the Celer c-Bridge within the Godwoken protocol and the launch of a new nonfungible token (NFT) marketplace on the Nervos mainnet.

Nervos launches a layer-2 solution

The recent price rally for CKB was ignited on June 29 when the protocol announced that its L2 solution “Godwoken” had officially launched on the Nervos Network mainnet.

Bear markets are always tough, but one of the positives is they clear the clutter and this allows legitimate projects to stand out. 

While most investors are focused on the latest CeFi and DeFi scandal, the blockchain gaming sector has quietly weathered the storm better than other niches of the market.

As shown on the chart above, all sectors of the market have experienced a noticeable decline in active users, but the gaming sector has proven to be the most resilient at retaining users as the bear market intensified.

Transactions continue to rise

Further proof of the continued engagement by gamers can be found by looking at the number of transactions occurring in the top sectors of the market.

With a current count of 173.17 million, the number of gaming-related transactions is significantly higher than any other sector of the market with the second closest sector being decentralized finance with 8.86 million.

Cloud mining is the process of mining cryptocurrency without the direct use of mining equipment or hardware. The process allows users to mine Bitcoin or altcoins without having to manage their own resources.

Related: What is an altcoin? A beginner’s guide to cryptocurrencies beyond Bitcoin

In traditional crypto mining, cryptocurrency is produced through a computational process. Miners need to solve complex mathematical problems using mining hardware to be rewarded with coins. The process of cloud mining is similar, but instead of using their own resources, miners rent or buy resources from a service provider.

As more players entered the cryptocurrency scene, mining became more complex, requiring more computing power. For this reason, many people who used to mine crypto using their own hardware now find it unsustainable due to high electricity costs and the wear and tear on their hardware. Cloud mining has therefore become an attractive option.

How does cloud mining work?

In cloud mining, third-party providers rent out computing power to miners. This means miners don’t have to invest in their own resources, which generally requires a large upfront investment. Cloud mining also removes the need for miners to maintain and update their own equipment.

Bitcoin (BTC) carried through threats of new local lows July 12 as the White House warned of “highly elevated” inflation.

White House warns ahead of "decisive day"

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $19,500 prior to the Wall Street open, down over 4% on the day.

Having failed to hold $20,300 support, the pair appeared to react badly to comments on the inflation outlook from White House press secretary Karine Jean-Pierre.

Markets were already primed for higher than expected figures for June from the Consumer Price Index (CPI), which made new forty-year highs in May.

“So on Wednesday, we will have new CPI inflation data, and we expect the headline number, which includes gas and food, to be highly elevated, mainly because gas prices were so elevated in June,” she told reporters at a press briefing July 11.

In a fresh episode of the longstanding battle between the Central Bank of Russia (CBR) and the country's Ministry of Finance, representatives of the former have criticized the latter’s idea of supporting the stablecoins, which some private investors have sought to launch in the country. 

According to local media, an unnamed representative of the central bank dismissed talk of Russia-based stablecoins, started last week by the Ministry of Finance’s director of financial policy department Ivan Chebeskov.

Back then, Chebeskov voiced his ministry’s support for creating stablecoins tied to assets like “the ruble, gold, oil or grain”. He called it “the right path for developing new technology” and urged private companies to try this kind of financial tool if they find it necessary.

The CBR speaker said that private stablecoins “are characterized by higher risks,” because the pool of underlying assets doesn’t belong to the issuer. They also stated that there is no guarantee of redemption at par by the issuer and the price of stablecoin isn’t really stable.

Related: Russian bank Sber to complete its first digital currency deal

The upcoming Ethereum (ETH) Merge is one of the most talked about developments in the cryptocurrency ecosystem as the world’s second-largest cryptocurrency by market cap undergoes the difficult transition from proof-of-work (PoW) to proof-of-stake (PoS). 

One protocol whose fate is largely tied to the successful completion of the Merge is Lido DAO (LDO), a liquid staking platform that allows users to tap into the value of their assets for use in decentralized finance and earn yield from staking.

Data from Cointelegraph Markets Pro and TradingView shows that since LDO hit a low of $0.42 on June 30, its price has climbed 107.6% to hit a daily high of $0.874 on July 9, but at the time of writing the altcoin has pulled back to $0.65.

Three reasons for the sharp turnaround for LDO include the successful Merge on the Sepolia testnet, the continued increase in Ether deposits on the platform and the slow recovery of staked Ether (stETH) price in comparison to Ether's spot price.

Sepolia testnet merge

Migrating to proof-of-stake has been a challenging process, but it came one step closer to completion on July 6 with the successful Merge of the PoW and PoS chains on Ethereum’s Sepolia testnet.

The Financial Stability Board (FSB), a global financial regulator including all G20 countries, is preparing to propose international regulations for cryptocurrencies and stablecoins in October.

The FSB on Monday issued a statement on the international regulation and supervision of crypto asset activities, announcing a major crypto regulation effort.

The watchdog is planning to report to the G20 finance minister and central bank governors in October 2022 on regulatory and supervisory approaches to stablecoins and other crypto assets. By that time, the FSB targets a public consultation report on the review of recommendations, including “how existing frameworks may be extended to close gaps and implement the high-level recommendations.”

The G20 authority also plans to submit another public consultation report that proposes recommendations for promoting global consistency of regulatory and supervisory approaches to other crypto-assets.

“These combined efforts of the FSB and the international standard setting bodies are aimed at minimizing the risk of fragmentation and regulatory arbitrage,” the FSB noted.

Solana (SOL) still has room to fall in the near term, but SOL/USD can rally 5,000% if it follows in the footsteps of its top rival Ethereum. 

That Ethereum 2018 fractal

SOL's risks dropping to $15 on anticipations it would behave like Ethereum during the market crash in 2018.

Notably, Ethereum's native token Ether (ETH) price fell to nearly $79 in December 2018 after undergoing a 95% correction earlier that year from its peak of $1,529. Afterward, it underwent a long recovery, rising nearly 6,000% over the next four years and thus hitting a record high of around $4,950 in November 2022.

Solana, which rivals Ethereum for its top spot in the smart contracts sector, has fallen by over 85% after peaking out in November 2021 at nearly $267. That leaves the token with the room to fall by another 10% when measured from its said record high.

Popular analyst PostyXBT says SOL could decline to $15, thus mirroring Ethereum's bear cycle in 2018. What's more, the Solana token could see an Ethereum-like recovery in the coming years that could take SOL price to over $750, he adds.

There is an old Arabic proverb: “The dogs bark, but the caravan moves on.” It could summarize the journey to date of Tether (USDT), the world’s largest stablecoin. 

Tether has been embroiled in legal and financial wrangling through much of its short history. There have been lawsuits over alleged market manipulation, charges by the New York State attorney general that Tether lied about its reserves — costing the firm $18.5 million in fines in 2021 — and this year, questions voiced by United States Treasury Secretary Janet Yellen as to whether USDT could maintain its peg to the U.S. dollar. More recently, investment short sellers “have been ramping up their bets against Tether,” the Wall Street Journal reported on June 27.

But, Tether has weathered all those storms and seems to keep moving on — like the proverbial caravan. On July 1, the company announced that it had dramatically reduced the amount of commercial paper in its reserves, which has been a sore point with critics for some time.

Embracing U.S. Treasury reserves?

Tether’s commercial paper reserves are expected to reach a new low of $3.5 billion by the end of July, down from $24.2 billion at the end of 2021. The company added that its “goal remains to bring the figure down to zero.” 

Many stablecoins like Tether are stand-ins for the U.S. dollar, and they are supposed to be backed 1:1 by liquid assets like cash and U.S. Treasury bills. But, historically, as much as half of USDT’s reserves were in commercial paper, which is generally seen as less secure and more illiquid than Treasuries. Hence, the potential significance of the commercial paper statement.

Bank of England (BoE) deputy governor for financial stability, Jon Cunliffe, recommended forming a set of regulations — similar to conventional financial systems — to tackle risks within the crypto ecosystem while improving investor confidence. 

Speaking at a press conference, Cunliffe highlighted the recent downfall of the Terra ecosystem, pointing out that cryptocurrencies that fail to maintain their value induce stress across crypto markets. He compared his idea for a crypto regulatory framework to similar instances in traditional finance wherein regulations shelter investors from unrecoverable losses, adding:

“For me, it underlines the fact that we need now to bring in the regulatory system that will manage those risks in the crypto world in the same way that we manage them in the conventional world.”

While acknowledging crypto’s “real potential for use in the financial system,” Cunliffe stated that regulations for crypto need not be fundamentally different from traditional finance. However, it may need to be applied differently while considering the underlying technology powering  cryptocurrencies.

BoE Governor Andrew Bailey stressed the need for involvement of international bodies in borderless or cross-border trading of cryptocurrencies. Bailey said that “unbacked crypto” does not have an intrinsic value but can be better viewed as an investment. On the other hand, the governor believed that stablecoins are better suited as a means of payment, adding:

The Ethereum (ETH) network moved one step closer to completing its transition to proof-of-stake (PoS) this week after the successful completion of its second-to-last major Merge trial on the Sepolia public test network.

Data from Cointelegraph Markets Pro and TradingView shows that following the Sepolia Merge on July 6, the price of Ether rallied to a high near $1,280 on July 8 but has since trended down to hit a daily low of 1,153 on July 10.

With the Ethereum network nearing the home stretch in its shift to PoS, here is what analysts are saying could happen with its price in the short term.

Look out for a pullback to $1,020

The recent price action for Ether that followed the successful Merge on Sepolia “is giving more clarity than $BTC atm [at the moment]” according to crypto trader and engineer Crypto Feras, who posted the following chart outlining the rejection at $1,280.

Crypto Feras said,

Bitcoin (BTC) has given up ground over the weekend as investors remain cautious about the United States consumer inflation data to be released on July 13. Analysts anticipate June’s consumer price index to be higher than May’s 8.6% level.

Due to the macro uncertainty, investors are not confident that Bitcoin’s correction is over. However, Fidelity Investments’ director of global macro Jurrien Timmer said that Bitcoin is back at the 2013 bull market levels “if the price per millions of non-zero addresses“ is considered for valuing it. That implies that “Bitcoin is cheap.”

The readings on the Reserve Risk indicator, which shows long-term holder sentiment, plunged to a new all-time low in July. Commentator Murad said this meant that “we are in the high timeframe bottoming zone” or the indicator may be broken.

Could Bitcoin turn around and start a new rally or will it continue lower? Are altcoins showing signs of bottoming out? Let’s study the charts of the top-5 cryptocurrencies to find out?

BTC/USDT

Bitcoin broke above the symmetrical triangle pattern on July 7 but the bulls could not sustain the momentum at higher levels. This suggests that the bears have not surrendered and are attempting to defend the overhead resistance at $23,363.