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The S&P 500 Index (SPX) has gained for five consecutive weeks, the first such instance since November 2021. In comparison, Bitcoin (BTC) is trading well below its local high of $31,000, made on April 14. This shows a clear divergence between the performance of the two asset classes.

Some analysts expect Bitcoin’s range-bound action to continue for some more time. Cryptocurrency traders will be looking for some positive triggers that could push the price above the range. One such rumor floating in the markets is that after BlackRock filed for a Bitcoin spot exchange-traded fund, Fidelity Investments may also follow suit. If that happens, it will be a positive sign for the markets.

Another positive for the cryptocurrency markets has been that the U.S. Dollar Index (DXY) softened in the past week. Historically, the dollar and Bitcoin have an inverse correlation, which may help limit the downside in Bitcoin and launch a relief rally.

Let’s look at the important resistance levels that need to be crossed to start a sustained recovery in Bitcoin and the major altcoins.

S&P 500 Index price analysis

The S&P 500 Index is in a short-term uptrend. The rally of the past few days pushed the relative strength index (RSI) into the overbought territory, indicating that a minor correction or consolidation is possible.

On June 19, European cryptocurrency investment firm CoinShares published its “Digital Asset Fund Flows Report,” revealing that cryptocurrency investment products experienced outflows totaling $5.1 million last week. The outflows contributed to the continuation of a nine-week streak of outflows, resulting in a cumulative total of $423 million.

The report noted that despite this downward trend, there was a glimmer of hope toward the end of the week, as news emerged that BlackRock, one of the world’s largest asset managers, had submitted an application for a Bitcoin (BTC) exchange-traded product (ETP) in the United States. This development resulted in minor inflows; however, they were not significant enough to offset the earlier outflows observed during the week. As a consequence, the streak of outflows persisted.

Examining the regional breakdown, the U.S. and Germany experienced minor inflows of $3.7 million and $2.4 million, respectively. The U.S. maintained its lead in terms of total inflows year-to-date, accumulating $147 million, while Canada struggled with outflows amounting to $277 million. CoinShares’ report author, James Butterfill, added, “Despite improving regulatory conditions in Hong Kong, we have not seen any measurable inflows into ETPs year-to-date while total assets under management (AuM) remain low at US$39m.”

According to CoinShares, the previous week’s crash in altcoin prices served as a catalyst for investors to increase their positions. Consequently, inflows totaling $2.4 million were observed. Noteworthy cryptocurrencies such as XRP (XRP), Cardano (ADA) and Polygon (MATIC) were the focus of these inflows, receiving amounts of $1 million, $0.6 million and $0.2 million, respectively.

On the other hand, Ether (ETH) experienced the largest outflows for the week, totaling $5 million. Additionally, both Tron (TRX) and Avalanche (AVAX) saw outflows of $0.4 million each. In a similar vein, CoinShares noted, “Blockchain equities saw the largest outflows since FTX, totalling $12.3m.”

The price of Cardano (ADA) is down over 3% on June 19 after dropping over 30% in the past two weeks. Is ADA price headed for its fourth red weekly candle in a row? 

No respite for Cardano price bulls

On June 19, ADA price fell over 3% to daily lows of $0.257 as traders continued to assess Cardano's mention in the list of crypto assets that the U.S. Securities and Exchange Commission (SEC) considers "unregistered securities."

In addition, Federal Reserve's hawkish guidance last week didn't help ADA price either, with another 50 basis points hike now likely in 2023. Higher rates typically decrease investors' appetite for risk assets, such as Cardano.

Meanwhile, open interest in the ADA-linked derivatives has dropped to around $111 million, the lowest since January 2021.

The past 24 hours have witnessed liquidations worth around $360,000, with long positions losing the most at $341,320. In other words, more bullish traders have closed their positions by selling ADA, which likely added to the downward pressure on June 19. 

The bears lost an opportunity when they failed to sustain Bitcoin (BTC) below the $25,000 level this week. That may have attracted buying from the bulls who are attempting to start a recovery in Bitcoin and select altcoins. 

Additionally, BlackRock’s application to launch a Bitcoin spot price exchange-traded fund and the sustained strength in the United States equities markets may have helped improve crypto sentiment. Bitcoin is on track to finish the week with a minor gain of 2% and institutional buying in the Grayscale Bitcoin Trust reduced its discount to Bitcoin spot from 44% on June 13 to 36.6%, according to CoinGlass data.

Although Bitcoin and select altcoins are trying to start a relief rally, the overall trend remains bearish. Therefore, short-term traders who buy for a pullback should consider booking profits or tightening their stops when the price struggles to break above stiff resistance levels.

The strategy may be different for long-term investors who may use the dips to strong support levels to acquire the cryptocurrencies of their choice. It is prudent to adopt a staggered buying approach as a runaway rally is unlikely.

Let’s look at the top-5 cryptocurrencies that are trying to start a recovery in the short term.

The cryptocurrency total market capitalization fell to $1.02 trillion on June 15, its lowest level in three months. But while the derivatives market's resilience and end-of-week price gains amid uncertainty in stablecoins' reserves provides hope for bulls, it might be too soon to celebrate.

Crypto regulatory conditions deteriorate

The past few week have seen a bearish trend fueled by regulatory uncertainty. Last week, Bitcoin (BTC) and BNB saw 2.5% gains, but XRP dropped 5.2%, and Ether (ETH) traded down 0.7%.

Notice that the 10-week long pattern has tested the support level in multiple instances, signaling that bulls will have a hard time breaking from the bearish trend while regulatory conditions have worsened across the globe.

For starters, New York-based derivatives exchange Bakkt is delisting Solana (SOL), Polygon (MATIC) and Cardano (ADA) due to recent regulatory developments in the United States. The decision follows last week's lawsuits brought by the Securities and Exchange Commission (SEC) against crypto exchanges Binance and Coinbase.

Related: Why is the crypto market up today?

The dollar-pegged Binance USD (BUSD) stablecoin sits now at the fourth position in market capitalization among other stablecoins following a dip of over $1 billion in the past 30 days, data from CoinMarketCap shows.

As of writing, BUSD market cap stands at $4.30 billion, down 29% from $5.54 billion on May 18. The stablecoin has been in a downward trend since December last year, when its market cap topped $23 billion.

The decline in BUSD market cap parallels major developments surrounding Binance following FTX's dramatic collapse in November 2022. Last December, a report indicating Binance would be targeted by the U.S. Department of Justice led to net withdrawals of $3.6 billion within seven days. The exchange saw large BUSD redemptions from market makers, including more than $245 million from Jump Finance.

A partnership between Binance and Paxos Trust created the BUSD stablecoin in September 2019. Paxos issues and owns the product, while Binance licenses its brand. For Paxos, the partnership brought new challenges. In February, the company was reportedly served a Wells Notice from the U.S. Securities and Exchange Commission alleging that Binance USD was an unregistered security.

Related: Stablecoins 101 - What are crypto stablecoins, and how do they work?

While the Arbitrum governance token ARB has been in a consistent downturn since the airdrop in late March, its ecosystem shows healthy growth. 

A recent Nansen report shows that Arbitrum’s activity improved after the airdrop, stabilizing “at a level higher” than before the airdrop. The daily active users, gas fees and transaction count have maintained consistently higher levels since April 2023.

The gap between the number of active users on Arbitrum and Optimism widened after the Aribtrum airdrop, closing in on Ethereum.

The trading volume on Arbitrum-based decentralized exchanges paints a similar picture, showing an evident rise in volume after the airdrop.

Moreover, Nansen’s report shows that ARB airdrop recipients only accounted for around 5% of the activity on the blockchain and that Arbitrum has attracted considerably more new users after the airdrop.

Ether (ETH) price plunged 7% between June 14 and June 15, reaching its lowest level in three months and impacting investors’ view that the altcoin was en-route to turning $2,000 to support. 

It is worth noting that the $1,620 bottom represents a $196 billion market capitalization for Ether, which is higher than PetroChina’s $186 billion, and not far from chipmaker AMD’s $198 billion.

Being the 66th largest global tradable asset in the world is no small feat, especially considering that the cryptocurrency is merely 8 years old and does not return any kind of direct profit for the project’s maintenance. On the other hand, securities enjoy the benefits of corporate earnings and eventual government subsidies, so perhaps investors should be concerned by the recent price drop from Ether.

Ether price pressured succumbs to regulation and lowered network activity

Regulatory pressure helped to subdue investors’ appetite for Ether as the Securities and Exchange Commission (SEC) proposed a rule change regarding the definition of an exchange. Paul Grewal, chief legal officer of the Coinbase exchange, has pushed back against the proposed change, claiming that it violates the Administrative Procedure Act.

More concerningly, decentralized applications (Dapps) usage on the Ethereum network failed to gain momentum despite gas fees plummeting by 75%. The 7-day average transaction cost dropped to $4 on June 14, down from $16 one month prior. Meanwhile, Dapps active addresses declined by 18% in the same period.

A combination of escalating interest rates and a tight regulatory environment in the United States has driven a $417 million outflow from the crypto industry in the past eight weeks, with halts in trading for many altcoins draining liquidity and prolonging the ongoing crypto winter.

This environment is forcing crypto companies to rethink and adapt their business strategies.

Crypto exchange Binance, for instance, is moving forward with efforts to diversify its sources of revenue amid legal challenges with regulators. The company is launching a new subscription-based cloud mining product dedicated to Bitcoin (BTC), allowing users without equipment to purchase Bitcoin hash rates via Binance’s cloud mining service.

Also taking a new direction is venture capital firm Andreessen Horowitz (a16z), opening its first office outside the U.S. in London, United Kingdom. Chris Dixon, a16z’s managing partner, cited a “predictable business environment” as one of the main factors behind the decision. U.K. Prime Minister Rishi Sunak attributed the expansion to having the “right regulation and guardrails” to “foster innovation” while protecting consumers.

According to the Sovereign Wealth Fund Institute, a16z is the largest venture capital firm in the world, with $35.8 billion in assets under management. With this move, the company joins many other crypto businesses setting up operations in more friendly regulatory environments outside the United States.

Bitcoin (BTC) is witnessing a tough battle between buyers and sellers near the $25,000 mark. A minor cause of worry for the bulls is that even the news of BlackRock having filed an application for a Bitcoin spot exchange-traded fund could not boost prices higher. This suggests that investors remain cautious due to the regulatory overhang.

However, this does not mean that professional investors have abandoned plans to invest in cryptocurrencies. The Laser Digital Investor Survey of institutional investors conducted in April shows that 90% of the respondents were ready to consider putting money into crypto if the asset was backed by a “large traditional financial institution.” Another positive was that 82% of the investors polled were positive on crypto’s prospects over the next 12 months.

Glassnode co-founders Yann Allemann and Jan Happel said in a tweet on June 15 that a traditional technical analysis indicator and two on-chain indicators for Bitcoin were looking similar to how they did in Q3 2020, just before Bitcoin soared above its 2017 high of $20,000.

Could Bitcoin and the altcoins start a recovery from the current levels? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin price analysis

Bitcoin plunged below the crucial support at $25,250 on June 14, indicating aggressive selling by the bears.

Proof-of-work coins that had a fair distribution at their launch are the most likely to avoid being labeled as securities by the U.S. SEC, according to Bitcoin OG and educator Dan Held. 

Last week, the SEC sued Binance and Coinbase, accusing them of offering a number of altcoins as  unregistered securities. As a result, many of the tokens mentioned in the lawsuit were delisted by major trading platforms which made their price tank.

According to Held, Tokens that “had fair or transparent launches”, such as Litecoin, Dogecoin and Monero, do not match the definition of a security that the SEC is following and therefore are likely to avoid the current crackdown. 

Related: SEC charges against Binance and Coinbase are terrible for DeFi

“It definitely seems like the SEC has carved that out as something that they won't be going after”, he said in an exclusive interview with Cointelegraph.

The Hinman documents were finally unsealed and made publicly available on June 12 after a lengthy back and forth between Ripple and the United States Securities and Exchange Commission (SEC), but what exactly do they reveal?

The documents are extensive, and while they can be found in public resources like the Public Access to Court Electronic Records (PACER) or CourtListener, lawyer James Filan tweeted on June 13, compiling them into two URLs.

Speaking to Cointelegraph soon after the unsealing, pro-XRP lawyer and founder of CryptoLaw John Deaton shared his belief that “the documents themselves don’t impact the judge’s underlying analysis of whether XRP (XRP) was offered/sold by Ripple as an investment contract, or XRP’s status in the secondary markets in the United States.“

This is considered a key defense of Ripple during its legal battle with the SEC. But those keeping a close eye on the case will know that the documents were not expected to do so, despite the then SEC chair Jay Clayton referencing the speech as “the approach we take to evaluate whether a digital asset is a security,” the 2018 speech carried disclaimers that it was the personal views of the then director of corporation finance William Hinman, which “does not necessarily reflect those of the Commission.”

With the Hinman documents being such a hot topic, many other crypto lawyers have also wondered what the documents might mean for XRP and Ether (ETH).

Curve DAO’s governance token CRV dropped 12% on June15 after reports surfaced of risky loans taken by its founder, Michael Egorov, on Aave. The token recorded its lowest trading level against ether (ETH) at 0.00035010 ETH on June 15.

According to on-chain analytics outlet LookOnChain, Egorov deposited 431 million CRV (worth around $246 million) across multiple decentralized lending protocols and borrowed $101.5M of stablecoins on multiple platforms. The deposits by Egorov account for 50.5% of CRV’s circulating supply.

DeFiLlama data shows that CRV faces a liquidation threat of $107 million on Aave if its value falls below $0.37. After a liquidation is triggered, the CRV tokens will be locked in Aave’s smart contracts until an interested buyer settles and liquidates the collateral. A proposal has been made to freeze Egorov’s loans on Aave and prevent further CRV loans to avoid a catastrophic situation.

While the size of Egorov’s loans puts the token under tremendous pressure, the negative bets on CRV have risen considerably, providing fuel for a possible quick upside move.

Is a CRV short squeeze in the making?

The open interest volume for CRV perpetual swap contracts has increased from $35.5 million to $46.3 million following the revelation of Egorov’s loans.

Move-to-earn platform Sweat Economy is set to repurpose over 2 billion native $SWEAT tokens that were locked up in inactive user wallets.

The tokens, valued at around $10 billion, were locked up in dormant user accounts following a token airdrop event in Sep. 2022. According to the platform, Sweatcoin users that opted into the Web3 move-to-earn’s crypto offering received $SWEAT tokens that were locked up in a 24-month lock-up contract.

Users that failed to install the Sweat Wallet over the past year and claim locked tokens essentially left a sizable portion of the ecosystem’s token supply frozen in inactive accounts.

Sweat Economy’s foundation controls the keys to the lockup contract responsible for the token generation event, allowing for the platform to repurpose the tokens that otherwise would have been ‘abandoned’ and unrecoverable.

Sweat Economy users were invited to take part in a decentralized autonomous organization (DAO) voting process to decide the fate of the locked $SWEAT tokens. Users could opt to have the 2 billion tokens recovered, transferred and potentially repurposed in the future or leave them unrecovered in respective inactive accounts.