News updates May 27, 2022

1. Bitcoin Price Resumes Decline, Why BTC Remains At Risk

Bitcoin spiked below the key $28,500 support zone against the US Dollar. BTC is declining and might continue to move down towards the $27,500 support.

* Bitcoin is moving lower and facing a major resistance near the $29,600 zone.

* The price is now trading below the $29,000 level and the 100 hourly simple moving average.

* There is a major bearish trend line forming with resistance near $29,600 on the hourly chart of the BTC/USD pair (data feed from Kraken).

* The pair could continue to move down if it settles below the $28,500 support

 *Bitcoin Price Faces Selling Pressure*

Bitcoin price remained below the key $30,000 resistance zone. BTC started a fresh decline and there was a sharp move below the $28,500 support zone.

The bears pushed the price below the $28,000 level. The price even tested the $27,500 support and a low is formed near $27,505. However, there was a strong recovery and the price climbed above $28,500. The bulls pushed the price above $29,000, but they struggled near $29,600.

There is also a major bearish trend line forming with resistance near $29,600 on the hourly chart of the BTC/USD pair. Bitcoin traded below the 23.6% Fib retracement level of the upward move from the $27,505 swing low to $29,749 high.

It is now trading below the $29,000 level and the 100 hourly simple moving average. An immediate resistance on the upside is near the $29,250 level. The next major resistance is near the $29,600 level and the 100 hourly simple moving average.

The main resistance sits near the $29,750. It is near the 50% Fib retracement level of the upward move from the $27,505 swing low to $29,749 high. A clear move above the $29,750 resistance level might start a strong increase. In the stated case, the price may perhaps rise towards the $30,600 resistance zone.

 *More Losses in BTC?*

If bitcoin fails to clear the $29,600 resistance zone, it could continue to move down. An immediate support on the downside is near the $28,650 level.

The first major support is near the $28,500 level. A downside break below the $28,500 support might send the price further lower. In the stated case, the price may perhaps revisit the $27,500 support zone.

Hourly MACD – The MACD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.

Major Support Levels – $28,500, followed by $27,500.

Major Resistance Levels – $29,600, $29,750 and $30,600.

2. 3 reasons why Bitcoin is regaining its crypto market dominance
Hint: Many altcoins—not just LUNA—are down over 80% from their all-time highs in 2022.

Bitcoin (BTC) is regaining its lost crypto market dominance even as it trades nearly 60% below its record highs.

Bitcoin dominance at 6-month highs
The Bitcoin Market Dominance (BTC.D) index, a metric that weighs BTC's market capitalization against the rest of the cryptocurrency market, jumped to around 47% on May 27, its highest since October 2021.

The dominance index swelled despite the drop in Bitcoin's market cap in the last six months from $1.3 trillion in November 2021 to nearly $550 billion in May 2022, suggesting that traders were more comfortable selling altcoins. 

Let's look at three likely reasons why traders have been rotating out of the altcoin market to seek safety in Bitcoin.

Ethereum "Merge" narrative is cooling down
Ethereum's native token Ether (ETH), the largest alternative cryptocurrency by market cap, has witnessed consistent declines in its market dominance in the last five months—from 22.38% in December 2021 to 17.86% in May 2022.

3. Here’s why Bitcoin value will continue to rise, according to Deutsche Bank.

The value of the Bitcoin (BTC), the flagship digital asset in the cryptocurrency market continues to be a discussion among financial institutions amid the bearish market conditions.

 
Speaking with CNBC on May 27, senior analyst at Deutsche Bank Research and author of ‘Democratizing Finance,’ Marion Laboure, shared her outlook on cryptocurrencies and pricing behavior in the context of demand exceeding supply as regulation looms in the background.

Regarding the matter of regulation in the crypto space following the recent collapse of the Terra (LUNA) ecosystem, Laboure stated that more regulation is required in the market. On this matter, she stressed that there is a disparity between Bitcoin and other cryptocurrencies, especially the newer ones in the market.

“I think we definitely need regulation as you mentioned financial literacy is pretty low even in advanced economies we need more data as well there is clearly a lack of data regarding cryptocurrencies.”

4. Russia Inches Closer To Crypto Adoption With Latest Move. 

Faced with financial sanctions amid the invasion of Ukraine, Russian authorities are intensifying efforts to bypass the restrictions using cryptocurrencies. Most recently, the country’s central bank proposed to allow stock exchanges to access cryptocurrencies.

Russia’s Crypto Overseas Payments
According to Reuters, the country is considering allowing cryptocurrency’s use for international payments. Ivan Chebeskov, head of the finance ministry’s financial policy department, was quoted as saying by Interfax news agency on Friday,

“The idea of using digital currencies in transactions for international settlements is being actively discussed. Allowing crypto as a means of settlement for international trade would help counter the impact of western sanctions, which has seen Russia’s access to traditional cross-border payment mechanisms ‘limited’.”
Last month, reports suggested that the country’s new draft bill on cryptocurrencies proposed encouraging changes. It proposed that digital currencies can be accepted as means of payment that is not the monetary unit of the Russian Federation.

5. Police Reportedly Looking into Allegations that a Terraform Staffer ‘Embezzled’ Funds. 

South Korean police could reportedly take over from the “Yeouido Grim Reaper” financial crimes investigation unit in the probe of Terraform Labs after “embezzlement” charges were leveled at an unnamed employee.

The firm, which was launched in Singapore, shuttered its South Korean operations shortly before the recent terra (LUNA) “incident” – as it has been termed in South Korea. But, as previously reported, the “Grim Reaper” unit (officially the Financial and Securities Crime Coalition Team) – a team that reports to the Ministry of Justice and the prosecution service – has been assigned to investigate possible wrongdoings or financial irregularities in the lead-up to the crash.

The Fact reported that the Grim Reaper may be asked to step aside, however – as a police investigation may be required.

The media outlet quoted unnamed “legal community” sources as noting that while the Seoul Southern District Prosecutors’ Office has already launched an investigation into Do Kwon, Terraform’s co-founder, the Cyber Investigation Division of the Seoul Metropolitan Police Agency “received information in the middle of this month that a person believed to be an employee of Terraform Labs had been suspected of embezzling corporate funds.”

Police are reportedly “investigating” the case, with suggestions they may have asked “exchanges” and other financial institutions to temporarily freeze assets while officers continue their investigation.

6. After Armstrong Tweet, India's Crypto Policy Body Says No Contempt of Court Challenge vs. RBI

The Coinbase CEO last month suggested the RBI's "shadow ban" of crypto exchanges violated a Supreme Court ruling.

The policy body that represents the interests of India's crypto industry is not planning to file a legal challenge against the Reserve Bank of India (RBI).
"We have no plans to file a contempt of court challenge," a spokesperson of the Internet and Mobile Association of India (IAMAI) told CoinDesk regarding Coinbase (COIN) CEO Brian Armstrong raising the idea of a legal move against the Reserve Bank of India (RBI).

 *Armstrong's tweet*

The Coinbase CEO sowed the seed of a Supreme Court challenge by tweeting to ask if the RBI's "shadow ban" – in which payment processors cut off local crypto exchanges – was a violation of a 2020 Supreme Court ruling. His tweet came following his company's ill-fated India launch, which led to Coinbase exiting the country days later. Armstrong later pointed to "informal pressure" from the RBI as reason for the exit.

"I would not like to comment on speculative observations made by individuals outside," RBI Governor Shaktikanta Das later said in an interview with CNBC TV 18.
Beginning in 2018, the RBI had effectively banned banks through a notification from supporting or engaging in crypto transactions. The Supreme Court, however, overturned that rule early in 2020.

 *Procedural hurdles*

Procedurally, legal sources say a contempt of court challenge is technically best filed by the original petitioner in the Supreme Court, which in this case would be the IAMAI. If it is not the original petitioner, then an individual entity seeking to file a contempt of court is required to first prove how it is an aggrieved party to the case. This itself is a tricky procedural hurdle.

Sources have indicated divergent views regarding the IAMAI's position. While no difference of opinion exists between major players on the collective decision of the IAMAI to avoid a legal battle against the RBI, there are less-influential players who believe a legal challenge is the best way forward.
At least one person has indicated that, legally, all the ducks are in a row to file a contempt of court challenge – which includes funding and legal process approvals – but, for now, the industry body (IAMAI) is unequivocally against the idea.

7. Top U.S. Crypto Exchanges To Face Lawsuit Over Terra Crash, Says Insider

ATerra insider calling themselves “FatMan” claimed on Thursday that top crypto exchanges including Binance, Gemini, Kraken, and Coinbase could face a lawsuit under the Securities Act for the sale of UST and LUNA in the U.S. In fact, the situation remains critical as UST and LUNA collapse caused investors across the world to lose billions. Despite releasing the Terra 2.0 Revival Plan, Terra founder Do Kwon and Terraform Labs are under government investigations or facing lawsuits in South Korea.

 *Top Crypto Exchanges Could Face Lawsuits in the U.S.* 

Terra insider FatMan announced in a tweet on May 26 that a top law firm in the U.S. is preparing for a mass arbitration lawsuit against Binance, Gemini, Kraken, and Coinbase. The crypto exchanges could be alleged under the Securities Act for selling UST and LUNA to U.S. customers.

Moreover, in a subsequent tweet, the insider clarified that a mass arbitration action is being filed, not a class action. Although, class action lawsuits are also being considered as investors lose trust in Terra.

In fact, the Terra community has criticized the Terra proposal to revive the Terra chain without the UST stablecoin. Moreover, the community is unsure whether the revival plan with increase the price of LUNA and UST tokens with the burn of 1 billion tokens. The price of LUNA and UST currently trading at $0.00016 and $0.094, respectively.

 *Is Citadel Behind the UST Depegging Attack* 

Luna Foundation Guard member Remi Tetot has recently suggested that a top investigative journalist may have found proof that Citadel, the large hedge fund behind the GME short, is responsible for the UST de-pegging attack. The attack seems to have kickstarted the LUNA and UST death spiral.