News Updates July 04, 2022
1. Bitcoin Struggles At $19K, Is $17K The Next Target?
Bitcoin has been extremely choppy lately, the king coin lost 7% over the last week. This marks the worst quarter for Bitcoin as the coin shed close to 50% in the second quarter of this year. Post June, the cryptocurrency has noted the worst bearish price action.
Over the last few days, BTC broke below the $20,000 mark and touched the $19,000 level. Consistent fall on the chart can push BTC to the next support line. Buying strength lowered considerably pushing BTC to lower levels over the last 24 hour.
The bulls tried to revive on the chart and dragged the coin towards $22,000, however, intense sell-off dragged the coin to $19,000. The critical support level for the coin stood at $17,000 and as bears mauled harder, the aforementioned level could be a possibility for BTC over the upcoming trading sessions.
The global cryptocurrency market cap today is $914 Billion with a 0.3% increase in the last 24 hours.
*Bitcoin Price Analysis:*
BTC was trading for $19,000 on the four hour chart. The coin previously traded at the same level some weeks back and then tried to recover on the chart. Resistance for BTC stood at $20,000 and then at $22,000.
BTC has witnessed stiff resistance at $22,000 as the coin struggled to trade above the same for a considerable period. If BTC’s current price momentum continues then $17,000 is just a matter of time.
Volume of Bitcoin traded declined significantly and the bar was in red displaying bearishness on the chart. The selling pressure had taken over in the market.
BTC registered dearth of buying pressure in the market. The Relative Strength Index was parked below the half-line, near the 40-mark. The indicator depicts buying strength in the market. Although the indicator noted an uptick, buyers had not regained confidence in the asset.
The Parabolic SAR demonstrates the price direction and trend reversal of the cryptocurrency. The dotted lines above the candlestick indicated bearishness and change of price direction in the market. This signified negative price action for Bitcoin.
This formed green histograms on MACD, this is tied to buy signal on the chart. Although the indicator displayed a buy signal, buyers were still struggling in the market. Bollinger Bands portray price volatility of the asset.
The narrowing of the bands are tied to upcoming chances of volatility in the market. The technical outlook suggested that price of BTC could fall further and aim for $17,000.
2. Wild ride’ lower for BTC? 5 things to know in Bitcoin this week
*The holiday weekend is making everyone nervous as BTC price action hovers at $19,000.*
Bitcoin (BTC) starts a new week still in holiday mode with United States financial markets off for Independence Day.
The largest cryptocurrency, stuck below the increasingly daunting $20,000 mark, continues to feel the pressure from the macro environment as talk of lower levels remains omnipresent.
After a quiet weekend, hodlers find themselves stuck in a narrow range while the prospect of a breakout to the upside appears increasingly hard to believe.
As one trader and analyst singles out July 4 as the site of a “wild run to the downside” for crypto markets, the countdown is on for Bitcoin to weather the aftermath of the latest Federal Reserve rate hike.
What else could the coming week have in store? Cointelegraph takes a look at the potential market-moving factors for the days ahead.
*BTC price bides its time over long weekend*
Bitcoin emerged from the weekend unscathed, but the classic pitfalls of off-peak trading remain.
The United States will not return to trading desks until July 5, providing ample opportunity for some classic weekend price action in the meantime.
So far, the market has held off when it comes to volatility — with the exception of a brief spike to $18,800, BTC/USD has circled the area between $19,000 and $19,500 for several days.
Even the weekly close provided no real trend change, as data from Cointelegraph Markets Pro and TradingView showed, with the psychologically significant $20,000 unchallenged.
While below the range low we can expect a drop down to $18,000,” popular trading account Crypto Tony reiterated to Twitter followers as part of a fresh update on July
*Mining difficulty is still rising*
Despite considerable concern over miners’ ability to withstand the current BTC price downturn, Bitcoin’s network fundamentals remain calm.
An impressive testament to miners’ resolve to stay on the network, the difficulty is not planning to reduce at the upcoming readjustment this week.
After decreasing by a modest 2.35% two weeks ago, difficulty, which automatically rises and falls to take into account fluctuations in miner participation, will hardly change at all this time around.
According to estimates from on-chain monitoring resource BTC.com, difficulty will even rise should current prices stay the same, adding 0.5% to what is a metric still near all-time highs.
3. Top 5 cryptocurrencies to watch this week: BTC, SHIB, MATIC, ATOM, APE*
The trend continues in July, as the network returns to scenarios not seen since the aftermath of the March 2020 cross-market crash.
According to on-chain analytics firm Glassnode, the number of coins being spent at a loss is now the highest since July 2020. Glassnode analyzed the weekly moving average of unspent transaction outputs (UTXOs) in a loss.
Bear markets can produce some welcome, if rare, silver linings. Bitcoin transaction fees, once painfully high during bullish periods of intense network activity, are now also at their lowest since July 2020. The median fee, Glassnode reveals, is $1.15.
4. Second Round of Investigation Begins on Kwon, TFL, LUNA Crash
* Seoul Southern District Prosecutor’s Office is launching a full-scale investigation against
* Terraform Labs.
The investigation will commence on July 4 after the new director takes over.
* There are three suspicions that the Prosecutor’s Office will focus on initially.
Over a month and a half after Terraform Labs’ (TFL) LUNA UST plummet, the Seoul Southern District Prosecutor’s Office is launching a full-scale investigation by reorganizing staff and appointing mid-level prosecutors.
In detail, the Joint Financial and Securities Crime Investigation Team of Seoul Southern District Prosecutor’s Office, also known as the Hapsudan will begin a full-scale investigation against the LUNA and UST crashes on July 4, after the newly appointed director, Dan Seong-han takes over.
Initially, Hapsudan will focus on reviewing legal principles and interrogating witnesses after taking over the case. The three legal allegations raised against TFL’ CEO Do Kwon are — Violation of the Fraud and Receiving Acts Act, Tax Portal, and Money Flow Controversy.
Hapsudan has suspended all TFL employees from traveling outside the country and summoned them as witnesses to investigate further into the process of TFL and the anchor protocol.
The team has discovered that some employees left the company after they questioned the sustainability of the anchor protocol, which has a fixed annual interest rate of 20%.
An official from Hapsudan mentioned that,
LUNA and UST plummeted by 99.99% within a week since the beginning of May 2022. Due to this, investors slapped charges against Kwon for money laundering and foreknowing the algorithmic flaws in the system, yet taking advantage of the situation.
5. Singapore regulators mulling more restrictive crypto policies.
The Monetary Authority of Singapore (MAS) says it is considering more restrictive crypto regulations, the financial regulator stated in a letter to the country’s parliament dated July 4.
According to Tharman Shanmugaratnam, senior minister and minister in charge of MAS, the regulator is considering measures that will offer more protection to retail participants in the crypto market.
“These may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies,” the letter stated.
6. Treasury departments of US and UK to work together to regulate crypto.
On June 29, Her Majesty’s Treasury and its US equivalent, the US Treasury Department, held the regulatory component of the US-UK Financial Innovation Partnership. The need to work together to foster safe innovation and improve regulatory outcomes for crypto across jurisdictions was recognized by both parties.
Top domestic watchdogs, including the SEC, the CFTC, employees from the Bank of England, and the Financial Conduct Authority(FCA), attended the meeting, which was primarily focused on the recent growth of stablecoins and CBDCs, according to the joint statement released. The document stated that the panel had set a structure for similar discussions in the future.
Crypto regulatory bodies focused on stablecoins
The current “role of stablecoins and crypto trading and lending platforms” in the digital asset ecosystems, as reflected by the recent drama of Terra and Celsius collapse, has raised the alarm from watchdogs worldwide. The report reads:
The UK and US governments also updated their strategies to deal with CBDCs, exchanging opinions on their ideas for doing policy research and discovering different technologies. A poll by the Bank of International Settlements (BIS) revealed that nine out of ten central banks are looking into how to start their own CBDCs; thus, this finding did not come as a surprise.
7. ECB to issue warning to eurozone over aligning crypto laws.
Following the European Central Bank (ECB) president’s calls for greater oversight in cryptocurrency staking and lending, as well as the finalization of the Regulation on Markets in Crypto-Assets (MiCA) rules, the regulator’s concern continues and it is expected that it will issue a warning.
Indeed, the ECB plans to send out a stern warning to eurozone countries this week about the dangers of national regulators potentially getting ahead of the MiCA law that isn’t expected to come into full effect before 2024, Laura Noonan of Financial Times reported on July 4.
As a matter of fact, the MiCA rules are set to become law in 2023, and their full implementation is planned over the subsequent 18 months. Reportedly, their primary role is to protect investors’ and consumers’ interests in the crypto market and its key assets, such as Bitcoin (BTC), which have been suffering heavy losses.
According to the people familiar with the discussions, the warning will be issued at a meeting of the ECB’s supervisory board on July 5 and will call for harmonization of different rules before the EU-wide agreement becomes law.
8. Massive Fall in Indian Crypto Exchange Volumes.
The trading volume in major crypto exchanges has nose-dived to the bottom. Wazirx, CoinDCX, and Zebpay have seen more than 90% fall in their volumes. This fall was expected when the Indian government announced heavy taxes on crypto earnings. However, now we know how much the volume has dried up.
CryptoIndia, a verified account on Twitter, posted details about the magnitude of the reduction. According to their data, Wazirx has lost 98 % of its volume, from $ 195 million to $ 4.5 million. CoinDCX, another exchange, saw a similar loss in volume. It came down to $ 2.1 million from $ 32 million, which is a 93 % reduction. Zebpay, another Indian exchange, lost 94 % volume. It used to be $ 19 million earlier. But, now it gets only $ 1.1 million in volume. By any measure, these are huge drops.
However, one exchange, Bitbns, did not see as much drop. It saw only a 17 % drop in volumes, from $ 24 million to $ 19.8 million.
9. How Safe Are Funds On Vauld, And Other Crypto Exchanges?
As the management of Vauld ties to come up with a solution to the financial challenges, the situation raises doubts over exchange security. Earlier on Monday, the Singapore-based exchange suspended all withdrawals, trading and deposits on its platform.
Funds Safe On Vauld
Meanwhile, as the overall cryptocurrency ecosystem tries to cope with the volatile environment, calls for securing assets off the exchanges are rising. In the case of Vauld, its funds are managed through a multi signature system with the co-founders as signatories.
Also, Vauld claims that almost all of its funds are kept in a cold wallet. This means it is not connected to the internet and thus is almost immune to external attacks, it explained.
As Vauld is also a lending platform, the user funds are moved from user wallets to a centralized lending pool. From this pool, the money is lent to borrowers. Vauld’s centralized lending pool is stored with BitGo, which is a top player in the cryptocurrency custody segment.
10. Public companies holding Bitcoin face impairment losses amid market crash
With over $1 trillion wiped off the crypto market this year, public companies holding Bitcoin could be reporting significant impairment losses for Q2.
CRYPTOSLATE
MicroStrategy, Tesla, and other public companies holding Bitcoin face significant impairment losses as Bitcoin (BTC) closed the second quarter below $19,000.
MicroStrategy BTC holding down 58%
According to Bloomberg News, MicroStrategy could report a significant impairment loss of $3.4 billion due to the sharp decline in BTC prices between April and June 2022.
The company reported $5.9 billion in Bitcoin holdings at the end of the first quarter.
That number has now dropped to $2.4 billion, representing a 58% drop in value within three months.
MicroStrategy, however, remains committed to its Bitcoin goal as it bought 480 bitcoins for $10 million between May 3 and June 28.
Tesla facing $400M loss
Meanwhile, Tesla’s holdings — $1.5 billion worth of BTC bought in February 2021 — were valued at $1.2 billion at the end of the first quarter.
Tesla’s holdings fell around 33% during the second quarter to the current estimated value of $820 million — an impairment loss of over $400 million.
Meitu records impairment losses
Meitu, a Hong Kong-listed company, has recorded impairment losses on its Ethereum (ETH) and Bitcoin holdings. According to a filing released by the firm, it lost $45.6 million.
The company attributed this loss to the rapid decline in the crypto market.
Meitu has yet to sell any of its crypto holdings.
Jack Dorsey’s Block could record losses too
Apart from the companies mentioned above, another public company that could face impairment losses from its Bitcoin investment is Jack Dorsey’s Block.
