Decentral Block Post

The United States equities markets witnessed a sharp comeback last week, led by the Nasdaq Composite, which gained 7.5%. The S&P was up about 6.5% for the week, while the Dow Jones Industrial Average managed a gain of 5.4%.

Continuing its tight correlation with the equities market, the crypto markets are also attempting a relief rally. Bitcoin (BTC) has seen a modest recovery, but some altcoins have risen sharply in the past week. This suggests that investors are taking advantage of the sharp fall in the price to accumulate altcoins at lower levels.

Smaller-sized investors have been using the decline in Bitcoin to build their position to at least one Bitcoin. Glassnode data shows that the number of Bitcoin wallet addresses that have more than one Bitcoin rose by 873 between June 15 to June 25.

Could the recovery in Bitcoin and altcoins pick up momentum? Let’s study the charts of the top 5 cryptocurrencies that could charge higher in the short term.

BTC/USDT

Bitcoin’s relief rally is facing stiff resistance near $22,000 as seen from the long wick on the June 26 candlestick. This indicates that the bears are not willing to give up their advantage and are selling on rallies.

Bitcoin (BTC) made the most of weekend volatility on June 26 as a squeeze saw BTC/USD reach its highest in over a week.

“Unusual whale activity” flagged

Data from Cointelegraph Markets Pro and TradingView followed the largest cryptocurrency as it hit $21,868 on Bitstamp.

Just hours from the weekly close, a reversal then set in under $21,500, Bitcoin is still in line to seal its first “green” weekly candle since May.

The event followed warnings that volatile conditions both up and down could return during low-liquidity weekend trading. On-chain data nonetheless fixed what appeared to be buying by Bitcoin’s largest-volume investor cohort prior to the uptick.

“Unusual whale activity detected in Bitcoin,” popular analytics resource Game of Trades observed:

Ethereum’s native token Ether (ETH) has declined by more than 35% against Bitcoin (BTC) since December 2021, with a potential to decline further in the coming months.

ETH/BTC dynamics

The ETH/BTC pair’s bullish trends typically suggest an increasing risk appetite among crypto traders, where speculation is more focused on Ether’s future valuations versus keeping their capital long-term in BTC. 

Conversely, a bearish ETH/BTC cycle is typically accompanied by a plunge in altcoins and ETH’s decline in market share. As a result, traders seek safety in BTC, showcasing their risk-off sentiment within the crypto industry.

Ethereum TVL wipe-out

Interest in the Ethereum blockchain soared during the pandemic as developers started turning to it to create a wave of so-called decentralized finance (DeFi) projects, including peer-to-peer exchange and lending platforms.

That resulted in a boom in the total value locked (TVL) inside the Ethereum blockchain ecosystem, rising from $465 million in March 2020 to as high as $159 billion in November 2021, up more than 34,000%, according to data from DefiLlama.

Bitcoin (BTC) focused on $21,000 into the weekend amid warnings that volatility could still consume the market before June 27.

S&P 500 sees second best week of 2022

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD broadly higher in its recent trading range after United States stocks ended the week strong.

As noted by markets commentators Holger Zschaepitz, the S&P 500 sealed its second best week of 2022, indicative of modest relief across risk assets.

Bitcoin was on track to log slights gains at its weekly close, the first weekly green candle — albeit small — since May.

Before then, however, anything could happen, according to on-chain analytics resource Material Indicators (MI).

Bitcoin hit a 2022 low at $17,580 on June 18 and many traders are hopeful that this was the bottom, but (BTC) has been unable to produce a daily close above $21,000 for the past six days. For this reason, traders are uncomfortable with the current price action and the threat of many CeFi and DeFi companies dealing with the loss of user funds and possible insolvency is weighing on sentiment.

The blowback from venture capital Three Arrows Capital (3AC) failing to meet its financial obligations on June 14 and Asia-based lending platform Babel Finance citing liquidity pressure as a reason for pausing withdrawals are just two of the most recent examples.

This news has caught the eyes of regulators, especially after Celsius, a crypto lending firm, suspended user withdrawals on June 12. On June 16, securities regulators from five states in the United States of America reportedly opened investigations into crypto lending platforms.

There is no way to know when the sentiment will change and trigger a Bitcoin bull run, but for traders who believe BTC will reach $28,000 by August, there is a low-risk options strategy that yields a decent return with limited risk.

The "Iron Condor" provides returns for a specific price range

Sometimes throwing a "hail Mary" pays off by leveraging ten times via futures contracts. However, most traders are looking for ways to maximize gains while limiting losses. For example, the skewed "Iron Condor" maximizes profits near $28,000 by the end of August, but limits losses if the expiry is below $22,000.

Bitcoin (BTC) headed toward the upper end of its trading range on June 24 as optimism crept back into traders’ forecasts.

Bitcoin price "ready for $23,000"

Data from Cointelegraph Markets Pro and TradingView tracked a broadly stable BTC/USD as it hit local highs of $21,425 on Bitstamp.

The pair had shifted higher since wicking below the $20,000 on June 22, with United States equities similarly cool going into the weekend.

“Bitcoin ready for $23,000,” Cointelegraph contributor Michaël van de Poppe announced to Twitter followers on the day.

At just above the crucial 200-week moving average (WMA), $23,000 formed a popular upside target for commentators — and sellers.

Bitcoin (BTC) miners may have already sparked a “capitulation event,” fresh analysis has concluded.

In an update on June 24, Julio Moreno, senior analyst at on-chain data firm CryptoQuant, hinted that the BTC price bottom could now be due.

BTC price bottom “typically” follows miner capitulation

Miners have seen a dramatic change in circumstances since March 2020, going from unprecedented profitability to seeing their margins squeezed.

The dip to $17,600 — 70% below November’s all-time highs for BTC/USD — has hit some players hard, data now shows, with miner wallets sending large amounts of coins to exchanges.

This, CryptoQuant suggests, precedes the final stages of the Bitcoin sell-off more broadly in line with historical precedent.

Recently, bad news has abounded, and the resulting fear is real. DeFi is looking dead, altcoins completed their lifecycle by returning back to $0 (I guess that’s a joke), and Bitcoin’s (BTC) price fell lower than even the smartest brains in the room expected. 

A unifying theme of the most recent bull market appears to have been greed. Everyone got too confident and too greedy, and it shows by the amount of debt and leverage that is being unwound as 3AC, Celsius, BlockFi and Voyager contend with the real threat of going belly up.

It seems Bitcoin miners and BTC mining companies also were not immune to the sentiment of over-exuberance and the belief that “up only” was a fact until Bitcoin’s price hit the long-awaited $100,000 target most analysts stuck to.

Historically, Bitcoin miners are an elusive species that are quiet and unwilling to spill the sauce to the public, but Cointelegraph had some success in securing a moment with HashWorks CEO and founder Todd Esse to discuss the current state of the mining industry and his predictions on where the market might head over the next year.

Cointelegraph: Bitcoin is trading below the realized price, and it is also below the miners’ cost of production. The price is also below the previous all-time high and the hash rate is dropping. Typically on-chain analysts pinpoint these metrics hitting extreme lows as a generational purchasing opportunity, thoughts?

The Singapore-based crypto venture firm Three Arrows Capital (3AC) failed to meet its financial obligations on June 15 and this caused severe impairments among centralized lending providers like Babel Finance and staking providers like Celsius.

On June 22, Voyager Digital, a New York-based digital assets lending and yield company listed on the Toronto Stock exchange, saw its shares drop nearly 60% after revealing a $655 million exposure to Three Arrows Capital.

Voyager offers crypto trading and staking and had about $5.8 billion of assets on its platform in March, according to Bloomberg. Voyager's website mentions that the firm offers a Mastercard debit card with cashback and allegedly pays up to 12% annualized rewards on crypto deposits with no lockups.

More recently, on June 23, Voyager Digital lowered its daily withdrawal limit to $10,000, as reported by Reuters.

The contagion risk spread to derivatives contracts

It remains unknown how Voyager shouldered so much liability to a single counterparty, but the firm is willing to pursue legal action to recover its funds from 3AC. To remain solvent, Voyager borrowed 15,000 Bitcoin (BTC) from Alameda Research, the crypto trading firm spearheaded by Sam Bankman-Fried.

Bitcoin (BTC) preserved $20,000 for another day on June 23 with calls for another 20% drop still surfacing.

Bitcoin under $10,000 not impossible

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD ranging just above the $20,000 mark over the 24 hours to the time of writing.

As ever, the behavior reflected moves in United States equities markets, which stayed flat on the day.

Remarks by Federal Reserve chair Jerome Powell had provided only brief volatility. Cointelegraph noted that Powell's Congress testimony provided no new information regarding macro policy.

As such, crypto commentators stuck to previous assertions — the outlook was uncertain, they said, but a potential fresh drawdown may only involve a trip to $16,000.

Ethereum's token Ether (ETH) could be entering a "bull trap" zone after rebounding back above the $1,000 mark from 18-month lows of $885. 

Ether price paints a "rising wedge"

The first among these indicators is a "rising wedge," a classic bearish reversal setup that forms after the price trends upward inside a range defined by two ascending but converging trendlines. The wedge setup gains further confirmation if the trading volume drops alongside the rising prices.

Theoretically, a rising wedge resolves after the price breaks below its lower trendline and eyes a run-down toward the level at length equal to the maximum height between the wedge's upper and lower trendline

Ether has been forming a rising wedge since mid-June, as shown in the chart below.

Hence, its interim bias appears to the downside, with a decisive breakdown below the lower trendline risking a decline toward the $870–$950, depending on where the breakdown begins. 

Bitcoin (BTC) could have already seen a price bottom or be “really close” to one, analysts believe after eyeing new data this week.

In a Twitter thread on June 22, well-known indicator creator David Puell revealed what he argues “looks interesting” about current Bitcoin buying and selling.

"High likelihood" bottom is in

With many sources calling for BTC/USD to dip to $14,000 or lower, bullish takes on current price action are few and far between.

For Puell, however, the dynamics between long-term (LTHs) and short-term holders (STHs) hint that the situation is not necessarily as bearish as many fear.

Highlighting the cost basis for each group, Puell showed that those who have been in the market longer paid less as a whole for their BTC than recent investors.

Polygon (MATIC) took a break from its prevailing bearish course, posting one of the sharpest rebounds in the crypto market this week.

Notably, MATIC's price has risen to $0.50 this June 23, four days after hitting $0.317, its lowest level since April 2021. This amounts to roughly a 60% gain, surpassing the performances of even Bitcoin (BTC) and Ether (ETH) in the same timeframe. 

Nevertheless, MATIC is still down significantly from its December 2021 high of $2.92, coinciding with the overall crypto bear market and a hawkish Fed putting pressure on risk-on assets. 

MATIC "in a pretty big accumulation"

Meanwhile, some of its richest investors have been accumulating MATIC tokens despite the general downtrend, on-chain data suggests.

Notably, the so-called MATIC sharks and whales have been in accumulation, according to data provided by Santiment. That includes the tiers of Polygon token holders ranging from 10,000 to 10 million coins, which have "collectively added 8.7% more to their bags" since May 9.

The explosiveness and high dollar value of nonfungible tokens (NFTs) seem to either distract investors from upping their operational security to avoid exploits, or hackers are simply following the money and using very complex strategies to exploit collectors’ wallets.

At least, this was the case for me way back when after I fell for a classic message sent to me over Discord that caused me to slowly but all too quickly lose my most valuable assets.

Most of the scams on Discord occur in a very similar fashion where a hacker takes a roster of members on the server and then sends direct messages to them in hopes they will bite at the bait.

“It happens to the best of us,” are not the words you want to hear in relation to a hack. Here are the top three things I learned from my experience on how to double-up on security, starting with minimizing the use of a hot wallet and simply ignoring DM’d links

A quick crash course in hardware wallets

After my hack, I was immediately reminded and I cannot reiterate it enough, never share your seed phrase. No one should be asking for it. I also learned that I could no longer forego security at the privilege of convenience.

Bitcoin (BTC) has been trying to break out of a descending trend for the past week and the first attempt on June 16 failed to break the $22,600 resistance. The second attempt at $21,400 on June 21 was followed by an 8% price correction. After two failed breakouts, the price currently trades below $20,000 and raises questions on whether $17,600 was really the bottom.

The longer it takes for BTC to break from this bearish pattern, the stronger the resistance line becomes and traders are following the trend closely. That is precisely why it’s important for bulls to show strength during this week’s $2.25 billion monthly options expiry.

Regulatory uncertainty continues to weigh down on crypto markets after European Central Bank (ECB) president Christine Lagarde voiced her conviction on the necessity of tighter scrutiny. On June 20, Lagarde expressed her thoughts on the sector’s staking and lending activities: "[...] the lack of regulation is often covering fraud, completely illegitimate claims about valuation and very often speculation as well as criminal dealings."

Bitcoin miners being forced to liquidate their BTC holdings is adding more negative pressure to BTC price and data from Arcane Research shows that publicly-listed Bitcoin mining firms sold 100% of their BTC production in May compared to the usual 20% to 40% in previous months. Collectively, miners hold 800,000 BTC, which creates concerns about a possible sell-off. The Bitcoin price correction drained miners' profitability because the production cost has, at times, exceeded their margins.

The June 24 options expiry will be especially alarming for investors because Bitcoin bears are likely to profit by $620 million by suppressing BTC below $20,000.

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.