Decentral Block Post

Bitcoin (BTC) recovered some lost ground on June 16 as markets shook off mixed United States macro signals.

BlackRock Bitcoin ETF plan buoys markets

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $25,500 on Bitstamp, after bouncing around $1,000 from the previous day’s lows.

Popular trader Skew followed moves on major exchange Binance around the price action, uncovering concerted buying efforts at the lows. Sellers subsequently stepped in closer to $26,000.

The uptick occurred in step with news that the world’s largest asset manager, BlackRock, had filed to list a spot Bitcoin exchange-traded fund (ETF).

For Michaël van de Poppe, founder and CEO of trading firm Eight, this formed a positive contrast to the slew of negative events concerning crypto regulation over the past ten days.

The Curve decentralized autonomous organization’s (DAO’s) governance token CRV dropped 12% on June 15 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 $101.5 million 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 (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.

While, intuitively, mining Bitcoin may appear like a highly profitable endeavor, research suggests otherwise. 

After discovering Bitcoin (BTC), most users go down the rabbit hole and consider whether it is better to mine or buy Bitcoin directly. They usually give up on mining due to the cost and rigor of running ASIC miners, regulatory uncertainty and the lack of technical expertise.

Hypothetically, if people overcome the above challenges, they could enjoy advantages such as full autonomy over their operations and diversification of their crypto investment via physical hardware instead of directly purchasing Bitcoin, but the entire venture can be risky and labor intensive.

To mine, or not to mine BTC?

An analysis by Bitcoin mining data firm Hashrate Index suggests that “buying bitcoin is preferable to mining it in most circumstances.”

Jaran Mellerud, a Bitcoin mining analyst at Hashrate Index, calculated the projected earnings of miners in the next five years under various bullish and bearish scenarios. Mellerud found that miners will likely incur a loss even in optimistic Bitcoin price projections.

Bitcoin (BTC) is copying the prelude to its 2020 breakout to an “insane” extent, the co-founders of Glassnode have said.

In a tweet on June 15, Yann Allemann and Jan Happel highlighted three BTC price metrics that are anything but bearish.

Metrics echo Bitcoin’s “major reversals and rallies”

BTC/USD reached local highs of $31,000 in April but, since then, has dipped around 20%. Sentiment has taken a beating in the process, with downward price predictions becoming the norm in the intervening weeks.

While recent events have placed additional pressure on the market, Allemann and Happel see at least three good reasons for optimism.

Several on-chain indicators, they revealed, now look uncannily like they did in Q3 2020, just before BTC/USD beat its old 2017 all-time high of $20,000.

Bitcoin (BTC) stayed below $25,000 on June 15 after a snap reaction to United States economic policy changes saw three-month lows.

Hawkish Powell “all bark, no bite”

Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it consolidated after the prior day’s losses totaled over 3%.

The U.S. Federal Reserve had delivered an expected pause in interest rate hikes — its first since 2021 — while keeping the mood hawkish. Fed chair Jerome Powell suggested that fresh hikes may be necessary in the future to tame inflation.

“As I noted earlier, nearly all committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” he said at a press conference, referencing the views of the Federal Open Market Committee (FOMC).

“But at this meeting, considering how far and how fast we have moved, we judged it prudent to hold the target range steady to allow the committee to assess additional information and its implications for monetary policy.”

Bitcoin's price has been pinned below $26,300 since June 10, reflecting a 14.8% correction in two months. Meanwhile, the Nasdaq tech stock market index gained 13.6% in the same period, indicating that investors are not exactly fleeing to the safety of cash and short-term debt. In fact, the demand for United States government bonds has been declining for the past six weeks.

The yield on two-year U.S. Treasurys, for example, increased from 3.80% on May 4 to 4.68% on June 14. Lower demand for debt instruments increases payouts, resulting in a higher yield. If the investor thinks that inflation will continue above target, the tendency is for those participants to demand a higher yield when trading bonds.

The U.S. Treasury is set to issue more than $850 billion in new bills between June and September. As additional debt issuance tends to cause higher yields, the market expects increased borrowing costs for families and businesses. Still, that does not explain why investors have been flocking to tech companies but avoiding Bitcoin (BTC), as depicted by the past two-month performance.

Eight consecutive weeks of crypto fund outflows

According to CoinShares' latest “Digital Asset Fund Flows Report,” the sector’s investment product outflows amounted to $88 million in the week ending on June 10. The substantial drawdown added to the ongoing eight-week streak of outflows, which now total $417 million.

The eight-week cumulative outflows for Bitcoin reached $254 million, representing approximately 1.2% of the total assets under management. Analysts at CoinShares have attributed this trend to monetary policy considerations, as interest rate hikes show no signs of slowing down, prompting investors to remain cautious.

The crypto market remains volatile after the June 14 Federal Open Market Committee (FOMC) announcement and presser with Federal Reserve Chairman Jerome Powell revealed that the central bank would pause rate hikes for June.

While this move aligned with investors’ expectations, the crypto market has yet to show any bullish momentum. Powell also mentioned that at least two more rate hikes would be needed in the future. 

The Bitcoin (BTC) price started the day up, trading above $26,000, but it has since retraced to a 24-hour low of $25,791 after the FOMC announcement. Some analysts are predicting that a drop to $25,000 is inevitable based on the current state of BTC derivatives data.

The muted crypto price action and lack of a bullish response to today’s rate hike pause could be the lingering effect of the charges by the Securities and Exchange Commission (SEC) against Binance and Coinbase.

Related: ‘Holy shit, I’ve seen that!’ — Coldie’s Snoop Dogg, Vitalik and McAfee NFTs

The price of BNB was up over 3% on June 14, in part due to bearish traders opening more BNB-tied contracts despite suffering losses via liquidations in the previous 24 hours. In addition, BNB (BNB) stands extremely “oversold," which may have prompted traders to buy the dip.

BNB price bounces after being “oversold” 

On June 14, the BNB price climbed nearly 4% to $253. The gains came as part of a recovery that saw the price rebounding 12% two days after falling to a six-month low of $220.

From a technical perspective, BNB’s rise on June 14 came on the heels of its “oversold" status. Notably, the daily relative strength index (RSI) dropped to around 16.6 two days earlier, its lowest reading since March 2020.

An RSI reading below 30 typically precedes a consolidation or recovery period in the market.

For instance, the BNB daily RSI stint below 30 in December 2022 preceded a 50% price rally in the next two months.

Bitcoin (BTC) stuck to $26,000 on June 14 as fresh United States macroeconomic data prints failed to move cryptocurrency markets.

PPI offers Bitcoin bulls little fuel

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD staying stubborn as Producer Price Index (PPI) data showed U.S. inflation continuing to slow.

In line with its reaction to the Consumer Price Index (CPI) print the day prior, the pair failed to offer traders volatility, sticking to a familiar range between various moving averages.

Market commentators thus turned to the day’s upcoming Federal Reserve decision on interest rates, as well as subsequent comments from Chair Jerome Powell, for a source of inspiration.

“Happy hawkish pause day!” financial commentator Tedtalksmacro wrote in part of the day’s analysis.

Bitcoin has been trading in a narrow 3.4% range for the past three days after successfully defending the $25,500 support on June 10. In this time, investors’ attention has shifted to the macroeconomic area as the United States Federal Reserve will announce its interest rate decision on June 14.

Cryptocurrencies might work independently from the traditional finance markets, but the cost of capital impacts almost every investor. Back in May, the Fed raised its benchmark interest rate to 5–5.25%, the highest since 2007.

All eyes will be on Fed Chair Jerome Powell's media speech 30 minutes after the rate announcement as markets are pricing in 94% odds of a pause at the June meeting, based on the CME FedWatch tool.

Crypto fears more than just an FOMC meeting

The upcoming Federal Open Market Committee meeting isn’t the only concern for the economy, as the U.S. Treasury is set to issue more than $850 billion in new bills between now and September.

Additional government debt issuance tends to cause higher yields and, thus, higher borrowing costs for companies and families. Considering the already-restrained credit market due to the recent banking crisis, odds are that gross domestic product growth will be severely compromised in the coming months.

Bitcoin (BTC) fell back in line at the June 12 Wall Street open after a brief macroeconomic data jolt failed to shift the status quo.

Markets expect first Fed pause since 2021

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD continuing to circle $26,000, avoiding major volatility.

The largest cryptocurrency saw a brief spike toward $26,500 on the back of the latest United States Consumer Price Index (CPI) print, which came in below expectations.

While ostensibly a boon to risk assets, crypto markets remained cautious on the day, with comments from the Federal Reserve and further macro prints due in the coming days.

Bets on the Fed pausing its rate hike cycle on June 14 after the meeting of the Federal Open Market Committee (FOMC), meanwhile, climbed following the CPI event. At the time of writing, per CME Group’s FedWatch Tool, the odds stood at over 90%, having started the day at 75%.

Bitcoin's (BTC) percentage share in the crypto market has risen to nearly 50% in the aftermath of the last week's altcoin market rout.

On June 13, the Bitcoin Dominance Index (BTC.D), which tracks BTC's weight against other cryptocurrencies, reached 49.29%, slightly down from its two-year highs of 49.66% seen earlier this week. 

BTC not an "unregistered security" 

The surge in Bitcoin dominance comes after the United States' Securities and Exchange Commission's (SEC) lawsuit against the crypto exchanges Binance and Coinbase. In its court filings, the commission accused many leading altcoins, including Cardano (ADA) and Solana (SOL), of being "unregistered securities."

Related: SEC’s Gensler says BTC, ETH ‘not securities’ in a newly surfaced video

Bitcoin's market share typically rises during high market stress, given that traders view it as the least volatile, non-stablecoin crypto asset than most cryptocurrencies. For instance, at the height of banking crisis in March 2023, Bitcoin's dominance versus altcoins had also rebounded to 50%.

Bitcoin (BTC) returned above $26,000 on June 13 as analysts eyed resistance overhead. 

Bitcoin price inches between trend lines

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD attempting to reclaim $26,000 support after the daily close.

The pair had seen a curiously uneventful start to the week despite ongoing fallout from United States legal action and markets preparing for a slew of macroeconomic data releases.

Thus, Bitcoin remained in a narrow range, which has been in place since midway through the weekend.

“Risky day for any deep trades,” popular trader Crypto Tony wrote in part of the day’s Twitter analysis, considering upside potential should the support flip occur.

Bitcoin’s on-chain data provides evidence that Bitcoin miners are offloading their holdings. The factors influencing the selling pressure could be reduced earnings from a cooldown in Ordinals activity as well as mining difficulty and hash rate reaching an all-time high. 

According to on-chain analytics firm Glassnode, “Miners have been sending a significant amount of coins to exchanges.”

Glassnode data shows Bitcoin (BTC) miners’ inflows to exchanges spiked to a three-year high on June 3 to levels last seen during the bull market of early 2021.

Coin Metrics data also shows a decline in the one-hop supply metric of miners, which measures the quantity of Bitcoin stored in addresses that receive coins from mining pools.

The metric recorded a consistent uptrend in miner holdings since May 2023; however, the miners reversed their accumulation trend in the second week of June.

A bearish trend formation has been pressuring cryptocurrency prices for the past eight weeks, driving the total market capitalization to its lowest level in more than two months at $1.06 trillion, a 2.4% decline between June 4 and June 11.

This time, the move wasn’t driven by Bitcoin (BTC), as the leading cryptocurrency gained 0.8% during the seven-day period. The negative pressure came from a handful of altcoins that plunged over 15%, including BNB (BNB), Cardano (ADA), Solana (SOL), Polygon (MATIC) and Polkadot (DOT).

Notice that the downtrend initiated in mid-April has tested the support level in multiple instances, indicating that an eventual break to the upside would require extra effort from the bulls.

The United States Securities and Exchange Commission tagged multiple altcoins as securities in separate lawsuits filed last week against crypto exchanges Binance and Coinbase.

Despite the worsening crypto regulatory environment, two derivatives metrics indicate that bulls are not yet throwing in the towel but will likely have a hard time breaking the bearish price formation to the upside.