Bitcoin and the broader crypto market remain in sucks-ville. Short-term hodlers who bought between $40,000 and $60,000 continue to feel the pain while long-term hodlers and investors are as happy as a fat kid in a candy store on a buy one get ten free sale.
Institutional interest in the crypto space continues to expand, despite the market remaining in major bear market conditions. So watching what the big dogs are doing can give the individual an early heads-up to where crypto may be going in the future.
A quick look at what the crypto market looks like today:
|USD Coin (USDC)||
|Binance USD (BUSD)||
Solana Is Today’s Big Loser
The Solana ($SOL.X) network has been touted as an Ethereum-killer and was, at one point, the golden child of altcoins. Even today, it still has a die-hard fan base with big money involved. This is odd because it seems like the Solana network is down once a month. But Solana’s stability issues are not what caused a big dip today; it was continued worries on the Solend platform.
Solend is one of many cryptocurrency lending protocols and resides on the Solana network. One of the biggest SOL wallets on Solend was responsible for wiping out 95% of the SOL deposited on Solend’s platform. Long story short, the whale account had a $100+ million loan in Tether ($USDT.X) and US Dollar Coin ($USD.X) with SOL as the collateral. The drop in Solana’s price over the past week and continuing into today threatened to cause a forced liquidation of nearly all of the SOL in Solend.
Thankfully, the whale wallet holder shifted around $25 million of USDC to another Solana-lending provider to reduce the risk Solend faced. Additionally, the Solend community voted and approved a $50 million borrowing cap per account.
How Solana survives one shite show after another is a mystery.
On-Chain Metrics Show Pamp Time Incoming?
Don’t get freaked out by the phase ‘on-chain metrics’. It’s just fancy speak for, ‘this is what’s going on.’
In a nutshell, on-chain metrics record cryptocurrency wallets, like Bitcoin ($BTC.X) or Cardano ($ADA.X). On-chain metrics monitor where crypto is going (to or from an exchange/wallet), how long it has been sitting in a wallet, how much has been bought/sold, etc.
Two of the most important and watched metrics are (more fancy speak) inflows and outflows from cryptocurrency exchanges. Investors and traders in the crypto space interpret inflows to exchanges as bearish because, historically, crypto that moves into an exchange is sold.
Outflows, on the other hand, are often interpreted as bullish. Outflows mean crypto is leaving the exchange – often into wallets that hodl for long periods.
The image above shows the total amount of Bitcoin exchanges has tanked – whales smell blood in the water and are chomping down on the big Bitcoin discounts at and below the $20,000 value area.
In other words, some market participants believe pamp time is likely coming.
Institutional/Governmental Crypto Interest Rises
Some good news today for crypto on the traditional side of money: Citigroup ($C) announced a pilot of their own digital asset custody service. They are partnering with Swiss-based Metaco. We can now add Citigroup to a growing list of financial giants that offer or are developing their own crypto services. Citigroup joins the crypto space with JP Morgan ($JPM), Goldman Sachs ($GS), and Wells Fargo ($WFC).
Today, US Representative Jim Himes (D – CT) released his “Winning the Future of Money: A Proposal for a US Central Bank Digital Currency” – whitepaper for the good and bad of a Central Bank Digital Currency (CBDC).
Also, today Louisiana Governor John Bel Edwards signed a bill allowing financial institutions to hold Bitcoin and other digital assets in custody for customers. That development isn’t necessarily new because back in 2020, the OCC (Office of the Comptroller of the Currency) confirmed that banks could hold crypto in custody. Nevertheless, State adoption is further growth and acceptance of the space.
Laws & Regulations
European Central Bank (ECB) Wants To Spank Crypto Hard
Some regulators and politicians don’t like crypto. They don’t like crypto because they don’t understand it or can’t control it. Then there’s arguably the second most powerful central banking head, ECB President Christine Lagarde, who many regard as one of crypto’s most prominent opponents.
Back in May 2022, she (Lagarde) stated, “My very humble assessment is that it is…based on nothing. There is no underlying asset to act as an anchor of safety.”
Weird because that almost sounds like the definition of the Euro.
The continued fallout from Celsius ($CEL.X) triggered comments from the ECB President regarding, in her opinion, necessary and needed regulation. But that isn’t stopping her and the ECB from pursuing their own CBDC.
That way, the ECB can literally make something out of nothing. Just add some zeros to an unlimited supply of magical fairy dust that makes new money that totally won’t have any impact, like inflation, whatsoever.
Technically Speaking: June 22, 2022
The chart above shows Bitcoin on the left and the Total Crypto Market Cap on the right. Notice the arrows pointing in different directions. The arrow pointing up on Bitcoin’s chart shows volume is rising, but the arrow on the Total Market Cap chart points down, showing volume is dropping.
Altcoin volume is at major lows; for some altcoins, it is at historical lows – but Bitcoin’s volume is rising. In Your Babies First Book on Technical Analysis (not a real book, if you couldn’t tell), you would learn that technical analysts believe that volume precedes price. In other words, if volume rises but prices are flat or continue to slide lower, there is a high probability of price reversing direction.
If stocks and other risk-on markets experience an explosive dead cat bounce, Bitcoin and the broader crypto market will likely follow suit.