BIG PICTURE
Bad news first: This may come as a surprise to no one but the end of June marked Bitcoin’s worst-performing month (and quarter) on record (or at least a decade). Are we looking at crypto’s Lehman Brothers moment? Perhaps... Only minus any taxpayer bailouts.
But SBF’s FTX did step in again to rescue another ailing CeFi lending platform (BlockFi) for $240M, and a revolving $400M line of credit.
And Grayscale (the largest publicly traded bitcoin fund in the world) is suing the SEC for allegedly unfairly rejecting their bid to convert the fund to an ETF. Where do we go from here?
MARKET FUNDAMENTALS
How do we make sense of all this? Bitcoin is *still* the best-performing asset of the decade, and yet we’re down 56% on the quarter (and over 70% from all-time highs).
- The EU’s regulatory framework for Digital Assets (MiCA)’s inhospitable environment for crypto poses a threat to greater adoption, yet any form of clarity is welcome.
- Miners began selling Bitcoin on June 7th, yet this kind of capitulation has often marked bear market bottoms.
- And overextended funds and embattled centralized crypto lenders are filing for Chapter 11 or being bought up for pennies on the dollar by the likes of Sam Bankman-Fried (of FTX and Alameda), yet Bitcoin stalwarts like Microstrategy continue to buy the dip…
Yes, these mixed signals are confusing. And although this macroeconomic environment may be new, Bitcoin’s been through this cycle before: 4 times in fact, like clockwork.
“The SEC is failing to apply consistent treatment to similar investment vehicles and is therefore acting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934,” Donald B. Verrilli Jr. said in a statement on behalf of his client, Grayscale.
- Donald B Verrilli has argued over 50 cases in front of the US Supreme Court.
- The interests of Bitcoiners and free market champions are in capable hands.
“I think we understand better how little we understand about inflation.” Jerome Powell, Chair of the Federal Reserve of the United States, June 2022.
- “The more I know, the more I realize I know nothing” - Socrates, Greatest Philosopher of All Time, 4th Century BC
- Nice.
MARKET UPDATES
REGULATORY:
- EU’s Economic and Monetary Affairs Committee reached an agreement on MiCA Blockworks
- Grayscale Sues the SEC over their Rejected Spot Bitcoin ETF Application Blockworks
INDUSTRY NEWS:
- FTX Reaches a Deal to Purchase BlockFi for up to $240M BlockworksMicrostrategy Buys ‘The Dip’ Drawing Criticism Blockworks
THE TAKEAWAY
While the fundamental thesis for Bitcoin has not changed, this doesn’t make the current drawdown any less unpleasant. But Bitcoin continues (and will continue) to do exactly what it was designed to do: Offer a safe and transparent alternative to easily manipulated government FIAT the world over, for safeguarding our wealth over the long haul. This is that ‘haul’. No one said hodling was easy!
Bitcoin adoption has not slowed. Industry innovation is unwavering. A new block is minted every 10 minutes. And while Miners may be selling some of their precious bitcoin to pay for rising energy costs, they’re not throwing the towel in either. As trite as it may sound today, whether your money is being devalued by 8.6%, 70% or 150% per year, Bitcoin remains the only asset in the world that just makes sense over time.
In the meantime, we should start to see in Q3 some of the deliverables requested of the concerned regulatory bodies under the White House’s Executive Order on Crypto, and a little more regulatory clarity is never a bad thing. Hang in there, you’re in the right place!
BITCOIN TECHNICAL ANALYSIS
After posting a low of C$22,950, Bitcoin showed some signs of recovery and rallied almost 23% to C$28,191.
- But bulls (Yes, we’re still here!) failed to push prices above resistance at C$30k
- Forming a ‘Lower Low Lower High’ pattern (Bearish)
- On the daily time frame, BTC is printing ‘Doji” candles indicating indecisiveness
- Bitcoin has strong support at C$22,500
- Strong resistance at C$30,000
- Once a breakout occurs above C$30,000 (with strong volume), we can expect a rally to C$35,000
- Whereas a close below C$22,500 could lead to further losses.
- Downsloping Moving Averages and Negative RSI: Bears are in control.
KEY LEVELS:
COIN SENTIMENT
An overwhelming number of NDAX users continue to accumulate bitcoin, and sentiment has not been this comparatively bullish in many weeks.
Over half of this week’s transactions on Canada’s favourite Crypto Trading Platform were BUYS.
- BTC sentiment is very strong: Over 4/5ths of orders were BUYS
- AAVE is strong with the force! Well over 2/3rds of orders were BUYS.
- ETH, GRT, NEAR hovered around 2/3rds of Orders as BUYS
- MATIC Skewed slightly Bearish.