Weekly Crypto Market Report - Jun 13 to Jun 19, 2022 - BTC, ETH & more

Market Fundamentals Analysis

Bitcoin has traded lower eight weeks in a row, for the first time in history. Traders who were bearish two months ago feel vindicated, and traders who were bullish are embarrassed to have been so. There are myriad reasons the price has moved lower: pressure from the Fed, melting tech stocks, the LUNA blowup. However, the market is a machine to take inputs and push out a price which reflects them. All of those catalysts are the reasons why Bitcoin has traded lower for the last eight weeks, but they are not necessarily the reasons it will continue lower in the next eight. Crypto is a momentum asset class… except when it isn’t. The market feels bearish right now, and strapping on a long feels worse; but thinking selectively, the generational opportunities have always reared their heads at the exact moment that the market has felt worse.

Currently, in a difficult market, it's always best to own assets that one is OK with owning even if the timing doesn't work, so you want the fundamentals on your side; ETH has strong, deflationary fundamentals with healthy yield coming, perhaps as soon as August, so even if you catch the knife too early, it's one that feels worth hanging onto.  Similarly, BTC captures over 40% of the overall market capitalization, and for a market wide rally to strike, most believe that it will have to be led by BTC. Hence, at current levels, the asset does seem attractive, and certainly worth holding.

Sentiment in the crypto market couldn’t be more bearish. It feels eerily reminiscent of the past few winters – when naysayers were calling Bitcoin vaporware and even its most diehard maximalists had little to offer in the way of optimism. However, the difference between this bear market and the previous few is that everything is imploding right now, whereas in the past you could sell your cursed digital assets to buy much-less-absurd-seeming investments in the middle of a spectacular up-only megatrend.  The price Ether (ETH) went below C$1,200 on June 18 as the  sell-off in the crypto market continued into the weekend. Ether hit a low of C$1,145, lowest since 2021, losing 80% of its value from its record high in November 2021. This has led to liquidations among users, further increasing the downward price pressure on the asset, but a recovery despite that has been impressive.

The resulting investor pressure resulting from spot price performance, has led to more  BTC being sold  at a loss in the three days to June 19 than at any other time, according to figures from on-chain analytics firm Glassnode. Moreover,  concerns focused on the financial buoyancy of Bitcoin miners have also been raised.  BTC. ETH and most major alts hit their crucial support levels over the weekend, and some even broke past them. Since then, there has been a slight recovery, and various assets have now started trending towards their resistance levels, which has led to some respite amongst traders and investors.

The week ahead remains crucial, as markets continue to remain choppy, and the bearish outlook seems to be worsening. Inflows have stalled, and liquidations are rampant. Macroeconomic trends are providing much support either, which has further made things worse. However, fundamentals remain strong, and this is not the first time crypto markets have seen this trend, and optimists believe a recovery is around the corner.

Weekly Snapshot

Market Updates

• El Salvador president addresses bear market concerns with Bitcoin hopium.
• Brutal economic conditions coupled with dramatically falling crypto prices have led to massive layoffs within the blockchain industry.
• US lawmakers urge EPA to consider the potential benefits of crypto mining.
• The largest Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC), is now trading at its biggest ever discount to the spot market.

Bitcoin Technical Analysis

BITCOIN was trading sideways in a range between C$35,800 to C$40,200. The asset finally broke the long held support of C$35k and gave a breakout on the downside of the range, and witnessed a sharp fall. The prices plunged almost by 36% in the last week making the low of C$22,950.  On a daily time frame, BTC has a strong support zone from C$22,500 to C$21,500. If it holds and sustains above the support then we can expect some relief rally upto C$29k to C$30k whereas a break or close below C$21,500 will lead to further downfall and the prices can slide to C$18.5k levels. An RSI below 30 indicates an oversold or undervalued condition. Hence, we may expect some relief rally or consolidation ahead.

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