News updates May 21, 2022
1. Here’s Why Bitcoin (BTC) Could Be In for Another 50% Correction Under $15,000.
Bitcoin has struggled to hold above the $30,000 level after making a brief move on Friday. It has already corrected 3% since and is currently trading at $29,330 with a market cap of $557 billion.
As this happens, Bitcoin could be in for another major price correction going ahead, and if history were to repeat, we could see it going all the way to $15,000 and below. The author of Rekt Capital Newsletter has shared a detailed case study about bitcoin death cross cycles of the past and the Bitcoin corrections that followed.
So what’s a death cross. Death Cross occurs when the 50 EMA crosses UNDER the 200 EMA on a technical chart. In the past decade, Bitcoin has been through a few cycles of death cross in different years.
Bitcoin Death Cross for 2022.
Rekt Capital analyst believes that this year BTC is more like to follow the trend of 2013, 2017, and 2019. this is because Bitcoin has already corrected more than 36% since January 2022 instead of reversing the trend.
Also, Bitcoin has corrected 43% from its November 2021 peak before hitting the death cross. A similar retracement of 43% after the death cross would mean that the BTC price could reach $22,700.
A %5 correction from the January 2022 death cross would mean Bitcoin could bottom at $18,000.
A 65% correction would mean it could bottom at $13,800.
A 71% crash would mean Bitcoin would bottom at $11,500. Here, the BTC price would have been corrected by more than 80% since its November 2021 peak.
Rekt Capital adds that “What’s interesting about the scenario of a -43% post-Death Cross crash however is that it would result in a $22,000”. The analyst believes it would present fantastic buying opportunities for BTC investors with high ROI.
2. Brazilian Crypto Exchange Refunds TerraUSD (UST) at $1 for Customers, a New Precedent Set?
IN BRIEF
UST holders on the exchange will get USDT at $1.
The crypto brokerage wants to maintain customer confidence.
The move may spur more exchanges to reimburse their customers.
A cryptocurrency exchange in Brazil has taken the unprecedented step of spending its own money to refund customers for their TerraUSD coins at the full rate.
3. European Central Bank head slams crypto assets says they are ‘worth nothing.
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The president of the European Central Bank, Christine Lagarde, has made it quite clear about her position on the value of cryptocurrency assets in a recent interview.
Speaking on the Dutch television show College Tour in an interview which will be aired on Sunday, May 22, the ECB head maintained her stance that crypto assets are extremely speculative and very dangerous investments.
4. Investors Continue To Trade LUNA Despite Massive Crash
Investors continue to trade the LUNA token despite its enormous fall, seeing the coin lose 99% of its value from $62 on May 9 down to less than a cent by May 14. However, on May 20, LUNA remains the most trending cryptocurrency searched on CoinMarketCap.
With a market cap of $918 million, LUNA is trading at $0.00013 per coin. The coin has gained 1% in the last 24 hours and 75% last week.
It’s worth noting that even though the price of this cryptocurrency had fallen dramatically over the past few days and South Korean officials were looking into penalizing its inventor for $78 million in tax avoidance, we see the coin trending higher than ever before.
The South Korean authorities are investigating why the value of Terra’s dollar-pegged stablecoin, UST lost its peg on May 9. The market for this coin quickly melted down within four days. As a result, the stablecoin lost $18 billion. This affected not only the stablecoin UST but also all networks built upon it, such as LUNA, whose price plummetted from $62 per coin down to a fraction of a penny.
*Tax Authorities Fined LUNA Founder For Avoiding Taxes*
In order to investigate, both South Korean regulatory bodies, the Financial Supervisory Service and the Financial Services Commission called the local cryptocurrency exchanges to submit the transactions data.
The information requested from the local exchanges includes trade volumes for LUNA and UST as well the number of investors who have suffered losses because their investments declined during this time period.
On the data request, a local exchange operator, Yonhap, said;
The Korean National Tax Service has found that Terra’s parent firms have avoided paying corporate and income taxes. The company moved LUNA from its software firm, Terraform Labs, to Singapore’s Luna Foundation Guard (LFG) to avoid paying taxes.
The founder of Terra is being sued by 200,000 people in Korea who invested in either LUNA or UST.
5. Bitcoin mining stock report: Friday, May 20
As another week came to a close, most bitcoin miners' stocks were once again down by the end of Friday's trading session.
Argo, for instance, saw its stock drop by -10.55% on the London Stock Exchange and -9.8% on Nasdaq. On the other side, Stronghold Digital Mining's stock rose by +12.45%.
Bitcoin's value was close to $29.300 as of press time.
6. U.S. Dollar Index (DXY) Breaks Down From Exponential Uptrend
The U.S. Dollar Index (DXY) reached an area of long-term resistance in the range of 103-104 by April 2022’s end.
A rejection from this area could initiate a DXY correction, which, attributed to its negative correlation with the Bitcoin price, could be a bullish signal for the crypto market.
A sharp upward move was initiated after a bullish double bottom pattern (blue circles) appeared on the weekly chart of DXY between January and May 2021. Since that period, the DXY has risen from a low at 89.5 to a peak at 105 reached on May 13.
Consequently, the U.S. Dollar Index has risen 17%, following an exponential uptrend line (blue dashed).
*A bullish re-test for the DXY?*
There is a possibility, however, that despite the bearish signals, DXY has not yet finished its upward wave. This was also presented on Twitter by crypto market analyst @KevinSvenson_, drawing a five-year falling resistance line.
He believes that the U.S. Dollar Index has already broken out above this line, which he feels is currently taking a bullish re-test of it.
*Negative correlation with BTC*
A possible collapse in the DXY valuation could be a strong signal for growth in the cryptocurrency market.
Since Bitcoin’s inception, there has been a clear negative correlation of its price with the U.S. Dollar Index. If DXY is rising (green areas on the top chart), BTC is falling (red areas on the bottom chart) – and vice-versa.
The potential end of the bull market in the DXY could end the bear market in crypto. However, if the DXY has not said its last word and continues to rise, the crypto market – along with traditional markets – could plunge into a long-term bear market.
7. WHY SERVICE MEMBERS SHOULD BUY BITCOIN
Bitcoin serves as a defense for financial freedom for members in the military as they serve to defend others and provides economic opportunity.
I’ve been around soldiers for nearly a decade. Bitcoin seems like a natural fit for the American service member, and yet, so few of them can get over their skepticism and choose to invest. My hope for this article is that it can work its way through the ranks of all services to help our servicemen and servicewomen make a better life for themselves and a better future for their families.
Bitcoin will make your life measurably better in a multitude of ways: It will serve as a defense for your freedom as you serve to defend others’; it will serve as a defense to your purchasing power, as there is virtually no way military pay can keep up with inflation. Lastly, it will provide you with the economic opportunity that you likely never had, as that’s one of the major factors that drive people to enter the military in the first place.
I was one of the lucky few. I worked hard in high school and was fortunate enough to stumble onto West Point, attending a four-year college for free in exchange for years of service. I found bitcoin through a series of unusual events leading me to start buying seriously just before the COVID-19 crash in 2020. Again, through some luck and serendipity, I found my way into a graduate school program with the Army, allowing me to obtain two master’s degrees from a reputable university in less than 18 months. All paid for by the Army. The military can be an incredible sacrifice at times, but it can also serve as an incredible opportunity for personal development and societal advancement.
Bitcoin is your icing on the cake if you play your cards right. It is your best opportunity to make one of your best opportunities even better.
*Bitcoin fixes this.*
Bitcoin is the first thing I actually own. I hold my own keys making it incredibly difficult for anybody to access my funds and essentially impossible to “freeze” my account. Furthermore, Jack Mallers, CEO of the Bitcoin-focused company Strike, partnered with some of the largest point-of-sale device companies in the world to enable bitcoin payments in stores at thousands of locations you probably use on a regular basis. The freedom to transact and maintain your self-sovereignty just got a whole lot easier.
8. Cyprus Drafts Crypto Rules, May Introduce Them Before EU Regulations
Cyprus has prepared its own legislation to regulate crypto assets and is likely to adopt it before Europe finalizes a common regulatory framework, a government official has indicated. The authorities in Nicosia welcome the “careful” use of cryptocurrencies, he added.
*Government of Cyprus to Submit ‘Attractive’ Crypto Bill*
Cyprus has an “enviable position” in the EU when it comes to innovation, with the second-best progress last year, according to the European Innovation Scoreboard, the country’s Deputy Minister for Research, Innovation and Digital Policy Kyriacos Kokkinos stated at a meeting with the local fintech community. The event was devoted to digital assets, entrepreneurship and financial technology.
Commenting on the future of digital assets in Cyprus, including cryptocurrencies, the minister walked a fine line between embracing innovation and having to pay heed to laws, the Cyprus Mail wrote in a report on Thursday. Quoted by the English-language daily newspaper, Kokkinos elaborated:
The government representative gave an example with Malta, the regulatory framework of which attracted many crypto companies and investors but also led to increased scrutiny and investigations into some of its companies and banking institutions. “We have to be careful of the frameworks of the European Union since we are a member state,” Kokkinos emphasized.
The deputy minister then revealed that the Cyprus government has already drafted a “very attractive bill on crypto assets.” The legislation has been published and interested parties can review it, he pointed out. The executive power has also commissioned a New York-based firm to assist the island nation with the implementation of the regulations.
Our challenge is not being aligned with the EU, it’s about the dilemma of whether to wait for the ECB to finalize their own regulatory framework or do we go alone on our own, with the former scenario also involving the possibility of that framework being overregulated,” Kyriacos Kokkinos remarked. “My answer is that we will go at it alone while respecting the rules,” he added.
The deputy minister acknowledged that certain challenges exist, including some disagreements between the government and the Central Bank of Cyprus (CBC). “We must remember that the CBC is subject to the ECB and central banks tend to be conservative, so our job is to challenge them through the debates we are having with them,” he told the audience at the event which took place in Larnaca.
9. South Korean Government, Prosecution Turn up the Heat on Do Kwon and Terraform
South Korean lawmakers and financial regulators are taking aim at Do Kwon (full name Kwon Do-hyeong) and his firm Terraform Labs.
Following the news that three or more separate civil legal cases – each potentially involving hundred of South Korean terra (LUNA) investors – have already been formulated, further trouble appears to be in store at the governmental and parliamentary levels.
Adding to the legal “complaint process” leveled against both Kwon and Shin Hyun-seong, Kwon’s Co-founder at Terraform Labs and the head of the TMon e-commerce empire, a joint meeting on “the Luna-Terra incident” will be held at the National Assembly on the afternoon of May 24, Herald Kyungjae reported. The meeting will be headed by the People’s Power Party’s Policy Committee Chairman Seong Il-jong and the recently formed Virtual Assets Special Committee’s Chairman Yoon Chang-hyun.
Officials from all three of the top financial regulators – the Financial Services Commission (FSC), the Financial Intelligence Unit (FIU), and the Financial Supervisory Service (FSS) – will be attending, including the FSC’s Vice Chairman Kim So-young.
The report noted that the prosecution service will be a notable absentee from the joint meeting, but added that an official from the National Police Agency was “expected to attend and report on the status of ongoing investigations.”
The group will focus not only on the LUNA crash and subsequent fallout, but also on exchanges’ responses to it – a matter that has fallen under scrutiny following a burst of speculatory activity on domestic platforms. It will also focus on a range of other policy-level measures aimed at bolstering “investor protection” in the crypto space.
Yoon will also chair a separate “emergency seminar” named “The LUNA/Terra Incident: Causes and Countermeasures” with “experts from the virtual asset industry” in attendance on May 23.
However, the aforementioned prosecution service is also launching its own probe into Kwon and his firm. YTN reported that the service has now officially made its move. The Seoul Southern District Prosecutors’ Office announced that it had “assigned the investigation of the CEO of Terraform Labs Kwon Do-hyung, who is suspected of fraud under the Act on Aggravated Punishment for Specific Crimes,” to the Financial and Securities Crime Coalition Team on May 20.
The team, which also goes by the somewhat macabre name of the Yeoido Grim Reaper (Yeoido is the part of Seoul where most major government organs are based), was abolished some two and half years ago by the former justice minister Choo Mi-ae, but has been reformed under the current minister, Han Dong-hoon. The LUNA case will be the team’s first since reforming.
10. Former BitMEX CEO Arthur Hayes Sentenced to 2 Years Probation
Hayes pleaded guilty to one count of violating the Bank Secrecy Act (BSA) in February, and faced a sentence of up to 12 months in prison.
