News Updates July 31, 2022

1. Bitcoin Balance on Exchange Sees Macro Decline

New data suggest that Bitcoins are continuously leaving exchanges.

* The balance on exchanges shrunk considerably in the last few months.

* This is a healthy sign of Bitcoin’s long-term performance and underscores a strong demand at lower price levels.

* The reversal in the trend first started in April.

* As the crypto winter deepens, some investors offloaded their wallets.

* However, on a macro level, players are still holding onto their tokens, but not on the exchanges.

* Instead, they are storing their coins offline in crypto wallets.

* The crypto analytic firm had earlier stated:

Bitcoin has seen a near complete expulsion of market tourists, leaving the resolve of HODLers as the last line standing”

* The further decline comes in the wake of Bitcoin performing an impressive rally, increasing by over 15% over the past few days. At the time of this writing, the cryptocurrency trades at around $23,600.

* Previous reports suggested that the holders of the world’s largest cryptocurrency were in an accumulation mode that subsequently did result in a short-term relief rally.

* It will be interesting to see if Bitcoin manages to retain the present momentum.

• Craig Johnson, chief market technician at Piper Sandler Companies had recently weighed in on the price action and said that only a close above $26,000 or $28,000 could finally put a stop to the downward slide that the crypto-asset has been on since April.

2. UK Foreign Office criticized over North Korea crypto conference organizer's detention in Saudi Arabia

* Christopher Emms’ local MP has spoken out against the UK Foreign Office for its lack of action as the  US attempts to extradite Emms for sanctions violations.

* In 2019, Emms organized a crypto conference in Pyongyang alongside Virgil Griffith, who is currently serving a 63 month sentence for his involvement

The UK Foreign Office has come under criticism for its lack of action in getting North Korea cryptocurrency conference organizer Christopher Emms out of Saudi Arabia, where he has been stuck since February at the behest of US authorities.

His local member of parliament, Crispin Blunt, told Sky News in an interview on Wednesday that previous foreign secretaries had been “more up to the mark in defending the interests of British citizens." The comment is a reference to UK Foreign Secretary Liz Truss, who is currently in the running to replace disgraced Prime Minister Boris Johnson as leader of the Conservative Party. Blunt is backing Truss's rival but said "at the front of my consideration... is my constituent Christopher Emms."

Emms was detained at the airport of Saudi capital Riyadh in February and has spent the last five months out on bail in Jeddah. The Saudi government is awaiting documents from US authorities on the basis of which they will decide whether to extradite him.

The crypto businessman is accused of conspiring to violate US sanctions on North Korea by working with US citizen Virgil Griffith to illegally provide cryptocurrency and blockchain technology services to North Korea, including helping them learn to evade banking embargoes imposed due to its nuclear weapons program.

The accusations stem from 2019, when Emms and Griffith organised the Pyongyang Blockchain and Cryptocurrency Conference. Held in the North Korean capital and open to all international visitors but South Koreans, Japanese and Israelis, tickets cost more than $3,000 for an all-inclusive stay in the closed-off country and included activities such as shooting and a trip to a local brewery.

Also named in the charges is bombastic North Korean fanboy Alejandro Car de Benos, the head of the Korean Friendship Association and a promoter of the regime on the international stage. The Spanish aristocrat, who has also been linked to facilitating international arms deals for the country, operates as a middleman for foreigners wishing to do business with the state.

The case against Emms and Car de Benos is controversial, however, and human rights groups have accused the US of overstepping itself. The particular sanctions they allegedly violated are not international ones, but US ones. As the conference did not take place on US soil and, unlike Griffith, neither are US citizens, it is not clear what jurisdiction the US actually has in this case.

"If they want him to come to the United States to face American justice for breaking American law, then they need to explain to British courts why that is the case,” Blunt said in the interview.

North Korea remains a major culprit of crypto hacks, and the funds they rake in are substantial. According to blockchain analytics company Chainalysis, from 2018 onward North Korea has stolen and laundered more than $200 million in cryptocurrencies each year. In 2021, this number hit almost $400 million. More recently, the country has been linked to the $540 million attack on Ethereum sidechain Ronin in March.

3. The United States banking regulator, Federal Deposit Insurance Corporation (FDIC), has issued a new advisory to banks in a bid to curb customer confusion regarding cryptocurrencies.

In the advisory published on July 29, the FDIC stated that it was concerned that customers might be confused in understanding how safe their money is when invested in cryptocurrencies. 

According to FDIC, the advisory mainly targets companies that offer both uninsured crypto products and insured bank deposit products. The agency stressed that banks need to ensure customers understand which of their funds will be insured, especially in the event of a collapse.

 *Banks to monitor crypto companies*  

Part of the new advisory requires banks to confirm and monitor crypto companies, so they do not misrepresent the availability of deposit insurance. In such a case, the FDIC called on banks to take the necessary measures to address any misrepresentations.

Additionally, the agency stated that banks should have sufficient risk management measures in place, ensuring that any services provided by third-party crypto companies comply with the law. 

The advisory also pointed out the importance of clear communication requiring crypto companies that advertise or offer FDIC-insured products to minimize confusion through clear messages. 

Such entities were challenged to ensure that their customers understand that they are not an insured bank and to communicate the risks of such as high price volatility of cryptocurrencies. 

Nortably, the FDIC had earlier warned banks under its jurisdiction  regarding engaging with cryptocurrencies such as Bitcoin (BTC) noting that they pose a risk to financial stability. 

 *U.S. focus on crypto regulations*

The latest communication from the FDIC forms part of the ongoing initiative by the U.S. to regulate the crypto sector. Notably, since President Joe Biden signed an Executive Order on crypto development, several agencies have issued their views on the sector. 

Additionally, a bi-partisan bill before the congress by Wyoming Senator Cynthia Lummis seeks to offer comprehensive crypto regulations. 

The push toward crypto regulations has been motivated by the recent market meltdown and high-profile incidents like the Terra (LUNA) ecosystem crash. The current market conditions have pushed firms like crypto lending platform Celsius into bankruptcy while holding customer deposits with authorities focusing on the need to protect customers.

4. Amid Crypto Winter, Crypto Hardware Wallet Maker Ledger Seeks Fresh Funding

Although the crypto market has bounced back recently in the last two weeks, the signs of ‘crypto winter’ are not entirely over. With the regulatory onslaught, funding in the crypto space has shrunk considerably.

Despite the current headwinds, crypto hardware wallet maker Ledger is looking to raise a minimum of $100 million in fresh funding at a higher valuation. Last year in June 2021, the company raised $380 million at a valuation of $1.5 billion.

However, people familiar with the matter didn’t say what valuation the company is looking for now. As said, the recent fundraising from Ledger comes at a time when investments in the crypto sector have cooled down significantly.

However, there have been crypto firms that have seen their business grow this year. Citing people familiar with the matter, Bloomberg 

 *The Rising Demand for Hardware Wallets*

As said, this year we have seen several crypto lenders and exchanges facing the heat of massive liquidations. Several of the exchanges have suspended withdrawals overnight.

As a result, investors in the crypto space are getting even more cautious of their crypto holdings. Thus, they are looking to move their crypto to cold wallets or hardware wallets to take absolute control of their assets. With Ledger being a leader in the hardware wallet space, it has benefitted from the rising demand.

Since its inception in 2014, Ledger sold more than 3 million hardware wallets to date. Over the last eight years, the company has consistently grown in size.

Interestingly, as per the recent announcement, Ledger is stepping into the world of non-fungible tokens (NFTs). Last week, Ledger announced its own NFT marketplace which will host NFTs from different artists and brands.

5. Bitcoin due ‘one of greatest bull markets’ as July gains circle 20%
The future for Bitcoin price action may be much more bullish than the short-term charts, says Bloomberg Intelligence’s Mike McGlone.

Bitcoin (BTC) spoofed a breakout to fresh six-week highs into July 31 as a showdown for both the weekly and monthly close drew near.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD canceling out all its gains from early in the weekend, dropping from $24,670 to $23,555 in hours.

The resulting chart structure was all too familiar to long-term market participants, creating a “Bart Simpson” shape on hourly timeframes.

Liquidations nonetheless remained manageable, with the cross-crypto tally totaling $150 million in the 24 hours to the time of writing, according to data from analytics resource Coinglass — less than on previous days.

For popular trader and analyst Rekt Capital, there was no reason to believe that the coming weekly candle close would confirm that Bitcoin had reestablished a key trendline as support after weeks of failure.

6.    2 Worrying Signs That Can Lead to BTC’s Quick Drop Towards $20K.

The crypto industry is experiencing a prolonged ongoing bear market and is down more than 70% since recording its all-time high during the late months of 2021. However, the recent price action had seen Bitcoin bouncing over 35% since the current bottom recorded in mid-June.

Technical Analysis

The Daily Chart
The primary cryptocurrency had formed a continuation correction bearish flag pattern after failing to break the $19K significant support level and had been consolidating inside.

However, the lower boundary supported the price, leading to another mini rally toward the upper trendline. BTC then successfully broke above the 50-day moving average (~$21.3K) and completed a pullback.

Looking ahead, the 100-day moving average (currently at $27K) and the flag’s upper boundary will likely be the next major resistance levels for Bitcoin’s price.

The 4-Hour Chart
Bitcoin formed a wedge pattern a few weeks ago, resulting in the fact that the $19K level has served as excellent support and initiated a new bullish rally resulting in the breakout of the wedge. Then, we saw a breakout to the upside, which carried the recent rally we saw. BTC now facing its prior swing high.

A clear double-top price action pattern (which is a bearish reversal pattern) can be identified in Bitcoin’s 4-hour timeframe chart if the current level of $24K won’t get broken. In addition, there is an evident bearish divergence between the RSI indicator and the price, increasing the odds against Bitcoin’s latest movements.

Considering the double top pattern and the divergence between the RSI indicator and the price, Bitcoin seems likely to retest support at lower levels, even below $20K. If the $19K critical support level fails to hold the price, Bitcoin’s next destination will be the $16K mark.

Onchain Analysis: NUPL
To identify current trends, it is helpful to examine the general sentiment of market participants. A bullish cycle frequently ends when key players reach the “distribution phase,” when they start selling their assets and realize profits.

Contrarily, a bearish cycle often concludes when big players enter the “accumulation phase” as they start buying coins sold by weak hands at discount prices.

Due to a sharp collapse in Bitcoin’s price below $20K for the first time since the Covid crash, the indicator has dropped to the blue region (= -0.09).

The market had previously seen considerable capitulation when this measure crossed into the blue area, which had led to a renewed bullish rally. However, following Bitcoin’s recent spike towards the $24K mark, the NUPL indicator has soared and entered the Green area.

The measure started a significant bullish cycle every time it crossed into the green zone after dipping into the blue site.

7. BITCOIN EDUCATION IS A WAY OUT OF GLOBALIST OPPRESSION FOR ETHIOPIA.

True to their history as an uncolonized people, Ethiopians are more determined than ever to build sovereign value through principled education and civic action.

Various multinational institutions are failing to complete their intended missions and objectives. Institutions like the United Nations and the many offices they work with publish narratives of “sustainable finance reforms,” but recent events in Canada, Sri Lanka and the Netherlands share characteristics that may help the research of dynamic groups in various nation-states today.

Addis Ababa, Ethiopia, is arguably the diplomatic capital of Africa. With increasing aid, investment and high-risk financing from various institutions over the past century, Ethiopia has trended toward being a feudalist monarchy and then a Marxist/Leninist State. Most recently, our history consists of revolutionary democracy under a collection of poly-ethnic federalist states.

As these dynamic populations gain greater access to freedom tools like telecommunications and bitcoin, I suspect there will be “good deflation,”.

We are seeing innovations on the Lightning Network and most recently, with the FediMint scaling solution. To catalyze our imagination further, I assume we may see case-studies within tribes and villages living off-grid. As this education emerges, we will enter a new phase in our financial history where a village can request the audit of its village elders and receive a verifiable response on a trustless ledger. I imagine that will bring billions of people into this digital century.

Understanding channels and how they relate to community safety will yield a growing bounty. Social contracts and difficult questions of collective security will increasingly be negotiated without the interference of global institutions like the United Nations and the many more three-letter institutions that are proving to be cancerous, vestigial organs. Instead, decentralized tools and tech-savvy uncles will help groups and identities build consensus.

8. What are crypto liquidations and why do they matter?

Liquidation occurs when a trader is unable to meet the allocation of a leveraged position and does not have enough funds to keep the trade operating.

In the last several months, liquidations have become top of the news cycle in the crypto world. This article will explain what liquidations are in the context of crypto, including how they happen and what you can do to avoid them.

 *What is a Crypto Liquidation?*

A liquidation is the forced closing out of all or part of the initial margin position by a trader or asset lender. Liquidation occurs when a trader is unable to meet the allocation of a leveraged position and does not have enough funds to keep the trade operating.

A leveraged position refers to using your existing assets as collateral for a loan or borrowing money and then using the principal already pledged and the borrowed money to buy financial products together to make a bigger profit.

Most lending protocols, such as Aave, MakerDAO, and Abracadabra, have a liquidation function. According to Footprint Analytics data, on June 18, when the price of ETH fell, there were 13 liquidation events in the DeFi market. On the same day, lending protocols liquidated 10,208 ETH, with a liquidation amount of $424 million.