Značka: federal reserve

Can Cardano's July hard fork prevent ADA price from plunging 60%?

Cardano (ADA) has started painting a bearish continuation pattern on its longer-timeframe charts, raising its likelihood of undergoing a major price crash by August.ADA price in danger of a 60% plungeDubbed the “bear pennant,” the pattern forms when the price consolidates inside a range defined by a falling trendline resistance and rising trendline support after a strong move downside. Additionally, the consolidation moves accompany a decrease in trading volumes. Bear pennants typically resolve after the price breaks below their trendline support and, as a rule, could fall by as much as the height of the previous big downtrend, called a “flagpole,” as illustrated in the chart below. ADA/USD three-day price chart featuring “bear pennant'”setup. Source: TradingViewAs a result, a decisive breakdown below ADA’s bear pennant structure could mean extended declines to the level at length equal to the flagpole. In other words, the target for Cardano’s price will be $0.20, down over 60% from June 28’s price.In the meantime, ADA shows signs of consolidating inside the pennant’s range with its imminent bias looking skewed toward bulls. This opens the door for ADA/USD to rebound from the pennant’s rising trendline support near $0.46 to rally toward its falling trendline resistance around $0.60 by July. Cardano’s Vasil hard forkDespite the interim bearish outlook, Cardano could get a boost from its upcoming “Vasil” hard fork.The upgrade, originally scheduled for June end, will now go live sometime in July and aims to improve the Cardano network’s speed and scalability. Related: Institutional crypto asset products saw record weekly outflows of $423MIn addition, Vasil is expected to make Cardano more developer-friendly, which proponents argue could even attract projects from rivaling layer-one blockchains, leading to a higher demand for ADA.ADA’s price has a history of rising in the days leading up to Cardano hard forks, which should boost its chances at a rally alongside favorable technicals, as shown below.ADA/USD three-day price chart featuring ‘bear pennant’ setup. Source: TradingViewWhat’s more, ADA also has a history of plunging hard after its hard forks in a sell-the-news fashion. Thus, Cardano could be setting up to resume its downtrend after Vasil goes live in July, which would fall in line with the bear pennant discussed above.ADA/USD and Nasdaq’s weekly correlation coefficient. Source: TradingViewAt the same time, Cardano’s price remains almost in lockstep with U.S. equities amid the Federal Reserve’s interest rate hiking, which should continue to put downward pressure on its price in the short to medium term. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Dogecoin price could rally 20% in July with this bullish reversal pattern

Dogecoin (DOGE) looks ready to extend its rebound move despite the current crypto bear market.79% chances DOGE will extend its rebound moveDOGE’s price appears to have been painting a “bump-and-run-reversal (BARR) bottom” since May 11, a technical pattern that points to extended trend reversals in a bear market. It consists of three successful phases: Lead-In, Bump, and Run.The “Lead-In phase” sees the price consolidating inside a narrow, sideways range, showing an interim bias conflict among investors. That follows the “Bump phase,” wherein the price drops and recovers sharply, leading to a price breakout, defined by the “Run phase.”DOGE/USD daily price chart featuring ‘BARR bottom’ pattern. Source: TradingViewDogecoin appears to be in the Bump Phase while eyeing a breakout above the BARR bottom’s falling trendline resistance. Suppose DOGE breaks above the said price ceiling. Then, as a rule of technical analysis, it would eye a run-up toward the BARR’s origin level.That puts DOGE’s price en route to $0.0941, up over 20% from today’s price. Notably, the upside target also coincides with the token’s 50-week exponential moving average (50-week EMA; the blue line in the chart below). DOGE/USD weekly price chart featuring 50-week EMA. Source: TradingViewBARR bottom has met its profit target 79% of all time, according to a report by veteran investor Thomas Bulkowski. Interestingly, the pattern’s breakout stage typically yields an average 55% rise, meaning DOGE’s potential to hit $0.123 remains on the cards.DOGE price is bottoming out?Dogecoin’s run-up to $0.0941 might not have it escape its bearish trend owing to a flurry of technical and fundamental factors. From the technical perspective, DOGE’s price risks run into a “bull trap” as it trends upward (it has already rallied almost 60% in the last nine days). Notably, the coin’s downside bias emerges due to a “rising wedge” pattern on its lower-timeframe charts.In detail, DOGE has been in an uptrend inside a range defined by two ascending, contracting trendlines, thus making a rising wedge. As a rule, this technical setup leads to a bearish reversal, confirmed when the price breaks below the wedge’s trendline.As it does, the price could fall by as much as the maximum distance between the wedge’s upper and lower trendline.DOGE/USD four-hour price chart featuring ‘rising wedge’ setup. Source: TradingViewDOGE’s rising wedge’s potential breakout points fall within the $0.07-$0.08 range. So, the token could fall toward the $0.05-$0.06 area if the wedge breakdown pans out as intended, down 15%-25% from current price levels.Related: 2022 bear market has been the worst on record — GlassnodeFundamentals, including the Federal Reserve’s rate hikes and reduction of its $9 trillion balance sheet, support the technical downside outlook for the short to medium terms.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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How low can Ethereum price drop versus Bitcoin amid the DeFi contagion?

Ethereum’s native token Ether (ETH) has declined by more than 35% against Bitcoin (BTC) since December 2021 with a potential to decline further in the coming months.ETH/BTC weekly price chart. Source: TradingViewETH/BTC dynamicsThe ETH/BTC pair’s bullish trends typically suggest an increasing risk appetite among crypto traders, where speculation is more focused on Ether’s future valuations versus keeping their capital long-term in BTC. Conversely, a bearish ETH/BTC cycle is typically accompanied by a plunge in altcoins and Ethereum’s decline in market share. As a result, traders seek safety in BTC, showcasing their risk-off sentiment within the crypto industry.Ethereum TVL wipe-outInterest in the Ethereum blockchain soared during the pandemic as developers started turning to it to create a wave of so-called decentralized finance projects, including peer-to-peer exchange and lending platforms.That resulted in a boom in the total value locked (TVL) inside the Ethereum blockchain ecosystem, rising from $465 million in March 2020 to as high as $159 billion in November 2021, up more than 34,000%, according to data from DeFi Llama.Ethereum TVL performance since 2019. Source: DeFi LlamaInterestingly, ETH/BTC surged 345% to 0.08, a 2021 peak, in the same period, given an increase in demand for transactions on the Ethereum blockchain. However, the pair has since dropped over 35% and was trading for 0.057 BTC on June 26.ETH/BTC’s drop coincides with a massive plunge in Ethereum TVL, from $159 billion in November 2021 to $48.81 billion in June 2022, led by a contagion fears in the DeFi industry.Also, institutions have withdrawn $458 million this year from Ethereum-based investment funds as of June 17, suggesting that interest in Ethereum’s DeFi boom has been waning.Bitcoin struggling but stronger than EtherBitcoin has faced smaller downsides compared to Ether in the ongoing bear market.BTC’s price has dropped nearly 70% to around $21,500 since November 2021, versus Ether’s 75% drop in the same period. Also, unlike Ethereum, Bitcoin-focused investment funds have seen inflows of $480 million year-to-date, showing that BTC’s drop has done little to curb its demand among institutional investors.Investment flows into/out of crypto funds by assets. Source: CoinSharesETH/BTC downside targetsCapital flows, coupled with an increasing distrust in the DeFi sector, could keep benefiting Bitcoin over Ethereum in 2022, resulting in more downside for ETH/BTC.Related: Swan Bitcoin CEO against crypto lenders: Users are way under-compensated for the riskFrom a technical perspective, the pair has been holding above a support confluence defined by a rising trendline, a Fibonacci retracement level at 0.048 BTC, and its 200-week exponential moving average (200-week EMA; the blue wave in the chart below) near 0.049 BTC.ETH/BTC weekly price chart. Source: TradingViewIn a rebound, ETH/BTC could test the 0.5 Fib line next near 0.062. Conversely, a decisive break below the support confluence could mean a decline toward the 0.786 Fib line at 0.027 in 2022, down more than 50% from today’s price.The ETH/BTC breakdown might coincide with an extended ETH/USD market decline, primarily due to the Federal Reserve’s quantitative tightenig that has recently pressured crypto prices lower against the U.S. dollar. $ETH historical Bear Markets correction depth:• -72% • -94%• -82% (and counting)Read more about #ETH Market Cycles here:https://t.co/5hIo7SC1n6#Crypto #Ethereum pic.twitter.com/7Ol0q3xM9G— Rekt Capital (@rektcapital) June 25, 2022Conversely, weaker economic data could prompt the Fed to cool down on its tightening spree. This could limit Ether and the other crypto assets’ downside bias in the dollar market, per Informa Global Markets.The firm noted:“Macroeconomic conditions need to improve and the Fed’s aggressive approach to monetary policy has to subside before crypto markets see a bottom.”But given Ethereum has never reclaimed its all-time high against Bitcoin since June 2017 despite a strong adoption rate, the ETH/BTC pair could remain under pressure with the 0.027-target in sight.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Ethereum price breaks out as 'bad news is good news' for stocks

Ethereum’s native token, Ether (ETH), gained alongside riskier assets as investors assessed weak U.S. economic data and its potential to cool down rate hike fears.Ether mirrors risk-on recoveryETH’s price climbed up to 8.31% on June 24 to $1,225, six days after falling below $880, its lowest level since January 2021. Overall, the upside retracement brought bulls 40% in gains, raising anticipation about an extended recovery in the future while alleviating fears of a “clean fakeout.”For instance, independent market analyst “PostyXBT” projected ETH’s price to close above $1,300 by the end of June. In contrast, analyst “Wolf” feared that bears would attempt to “push price back to $1,047,” albeit anticipating a run-up toward $1,250 if ETH holds above its diagonal trendline support, as shown below.$ETH 4h. If the trend change is real, then we will soon find out. Bulls must hold this diagonal and see this type of scenario.Bears, instead will try to push price back to 1047 pic.twitter.com/PRG9fD4iRz— Wolf (@IamCryptoWolf) June 21, 2022Ether has come under pressure from the Federal Reserve’s hawkish policy in 2022. But those fears appear to be subsiding after the latest U.S. composite purchasing managers report, which shows the manufacturing activity fell to a five-month-low.”Growth is coming down, maybe even sooner than expected,” Esty Dwek, chief investment officer at FlowBank, told the Wall Street Journal, adding: “That should allow the Fed to soften at some point.”ETH/USD daily chart versus Nasdaq and S&P 500. Source: TradingViewStill, Greg Peters, co-chief investment officer at PGIM Fixed Income, warned that the current rally in the risk-on markets might not last. He is unconvinced that “the central banks will stop tightening if economies slow.”Classic bullish reversal setup in playEther’s rebound on June 24 also had it break above a falling resistance trendline that constitutes an “inverse head-and-shoulders” pattern (IH&S).In detail, Ether has formed the IH&S pattern after forming three troughs below a common support level, called the neckline. Also, the middle trough comes out to be deeper than the other two, which are more or less of the same height.Related: ‘Foolish’ to deny Bitcoin price can go under $10K — AnalysisTraditional analysts see IH&S as a bullish reversal setup, i.e., they resolve after the price breaks above their neckline support. As a rule, the price could rise by as much as the IH&S’s maximum height after the breakout.ETH/USD four-hour price chart featuring IH&S setup. Source: TradingViewAs a result, Ether eyes an extended upside retracement toward $1,560 after breaking above its IH&S neckline, up nearly 33% from the current price. Interestingly, the IH&S profit target coincides with ETH’s 200-4H exponential moving average (200-4H EMA; the blue wave) near $1,537.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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XRP price rally stalls near key level that last time triggered a 65% crash

XRP’s ongoing upside retracement risks exhaustion as its price tests a resistance level with a history of triggering a 65% price crash.XRP price rebounds 30% XRP’s price gained nearly 30%, rising to $0.36 on June 24, four days after rebounding from $0.28, its lowest level since January 2021. The token’s retracement rally could extend to $0.41 next, according to its “cup-and-handle” pattern shown in the chart below.XRP/USD four-hour price chart featuring “cup and handle” pattern. Source: TradingViewInterestingly, the indicator’s profit target is the same as XRP’s 50-day exponential moving average (50-day EMA; the red wave).XRP/USD daily price chart featuring 50-day EMA upside target. Source: TradingViewMajor resistance hurdleThe cup-and-handle bullish reversal setup tends to meet its profit target at a 61% success rate, according to veteran analyst Thomas Bulkowski. But it appears XRP’s case falls in the 39% failure spectrum because of a conflicting technical signal presented by its 200-4H exponential moving average (EMA). XRP’s 200-4H EMA (the blue wave in the chart below) has previously served as a strong distribution signal. Notably, in April 2022, the token attempted to break above the said wave resistance multiple times, only to face rejections on each try; it fell 65% to $0.28 later.XRP/USD four-hour price chart featuring 200-4H EMA resistance. Source: TradingViewThe ongoing cup-and-handle breakout has stalled midway after XRP retested the 200-4H EMA as resistance on June 23. Now, the token awaits further bias confirmation while risking a price decline similar to what transpired after April.XRP’s overbought relative strength index (RSI), now above 70, also raises the possibility of an interim price correction.XRP LTF breakdown underwayThe downside scenario on XRP’s shorter-timeframe chart comes in line with giant bearish setups on its longer-timeframe chart. As Cointelegraph covered earlier, XRP has entered a breakdown stage after exiting its “descending triangle” structure in early May. As a rule of technical analysis, its triangle breakdown should have it fall by as much as the structure’s maximum height, which puts its downside target near $1.86.XRP/USD weekly price chart featuring ‘descending triangle’ setup. Source: TradingViewIn other words, another 50% price drop for XRP could happen by the end of July this year. 50,000,000 #XRP (16,249,045 USD) transferred from Ripple to unknown wallethttps://t.co/FalGAzxNxg— Whale Alert (@whale_alert) June 23, 2022Macro risks led by the Federal Reserve’s hawkish policy further strengthen XRP’s bearish bias. The XRP/USD pair has typically traded lower in tandem with riskier assets in 2022, with a correlation coefficient with the Nasdaq Composite sitting at 0.90 as of June 24.XRP/USD weekly correlation with Nasdaq. Source: TradingViewA score of 1 means that the two assets moves in perfect sync.Related: Almost $100M exits US crypto funds in anticipation of hawkish monetary policyConversely, anticipations that Ripple would win the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) for “allegedly” selling unregistered securities could negate the bearish setups. I’ve stated for over a year that many @Ripple and #XRP supporters underestimate the negative impact the SEC lawsuit has had. B/c Ripple has done well outside the U.S. and is hiring, etc., people say otherwise. But XRP must be deemed a non-security in the US to fulfill its promise https://t.co/oBmiTQOWfJ— John E Deaton (203K Followers Beware Imposters) (@JohnEDeaton1) June 22, 2022

That being said, XRP could rebound toward $0.91 by the end of this year if the ongoing retracement continues any further. Interestingly, the token has bounced after testing long-term ascending trendline support, as shown below.XRP/USD weekly price chart. Source: TradingViewThe bounce has also followed XRP’s weekly relative strength index (RSI) decline below 30 — an oversold threshold, which signals a potential buying opportunity. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Polygon price jumps 60% in four days amid 'pretty big' MATIC accumulation

Polygon (MATIC) took a break from its prevailing bearish course, posting one of sharpest rebound in the crypto market this week.Notably, MATIC’s price has risen to $0.50 this June 23, four days after hitting $0.317, its lowest level since April 2021. This amounts to roughly a 60% gain, surpassing the performances of even Bitcoin (BTC) and Ether (ETH) in the same timeframe. MATIC/USD daily price chart. Source: TradingViewNevertheless, MATIC is still down significantly from its December 2021 high of $2.92, coinciding with the overall crypto bear market and a hawkish Fed putting pressure on risk-on assets. MATIC “in a pretty big accumulation”Meanwhile, some of its richest investors have been accumulating MATIC tokens despite the general downtrend, on-chain data suggests.Notably, the so-called MATIC sharks and whales have been in accumulation, according to data provided by Santiment. That includes the tiers of Polygon token holders ranging from 10,000 to 10 million coins, which have “collectively added 8.7% more to their bags” since May 9. $MATIC sharks and whales have been in a pretty big accumulation trend for about six weeks. The tiers of holders ranging from 10k to 10m coins held have collectively added 8.7% more to their bags in this timespan. https://t.co/oasCn72rxt pic.twitter.com/lm4au2fWkn— Santiment (@santimentfeed) June 22, 2022Interestingly, MATIC’s price has fallen by 50% in the same period, underscoring that many whales are confident about its long-term recovery. Inverse head and shouldersFrom a technical point of view, MATIC/USD appears to be heading toward a new multi-week high.In detail, the Polygon token has been breaking out of its “inverse head and shoulders,” or IH&S pattern, since June 22. IH&S is a bullish reversal setup that forms after the price forms three troughs in a row while hanging upside down by a common support line called the “neckline.” Also, an IH&S’s middle trough (the head) is deeper than the other two, called right and left shoulders, respectively. Ultimately, the setup resolves after the price breaks above the neckline, and, as a rule of technical analysis, rises by as much as the distance between the head and the neckline.MATIC/USD four-hour price chart. Source: TradingViewAs a result of its IH&S pattern, MATIC’s price could rally toward $0.60 in June or early July, up about 20% from today.Caution for MATIC bullsWhale buying is not necessarily a bullish signal, and the IH&S pattern has a failure rate of 16.5%. So, a further price rally could also prompt whales to flip MATIC for a quick profit, given the tight conditions elsewhere in the cryptocurrency and traditional markets that could result in false recovery signals.Related: ‘Bitcoin dead’ Google searches hit new all-time highAdditionally, the MATIC balance across all the crypto exchanges has jumped from 1.21 billion to 1.37 billion between May 1 and June 23, according to data from CryptoQuant, indicating additional potential sell-pressure in the near term. Polygon exchange reserves. Source: CryptoQuantThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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On the brink of recession: Can Bitcoin survive its first global economic crisis?

Bitcoin (BTC) was a response to the 2008 global recession. It introduced a new way to transact without depending on trust of third-parties, such as banks, particularly failing banks that were nevertheless bailed out by government at the expense of the public. “The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust,” Satoshi Nakamoto wrote in 2009. Bitcoin’s genesis block sums up the intent with the following embedded message: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.But while Bitcoin keeps mining blocks unfazed, and its gold-like properties have attracted investors seeking “digital gold,” its current 75% comedown from $69,000 highs in November 2021 demonstrates that its not immune to global economic forces.Simultaneously, the entire crypto market lost $2.25 trillion in the same period, hinting at large-scale demand destruction in the industry.Bitcoin’s crash appeared during the period of rising inflation and the global central banks’ hawkish response to it. Notably, the Federal Reserve hiked its benchmark rates by 75 basis points (bps) on June 15 to curb inflation that reached 8.4% in May.BTC/USD daily price chart. Source: TradingViewFurthermore, the crash left BTC trending even more in-sync with the tech-heavy Nasdaq Composite’s performance. The U.S. stock market index fell over 30% between November 2021 and June 2022.More rate hikes aheadFed Chairman Jerome Powell noted in his Congressional testimony that their rate hikes would continue to bring down inflation, albeit adding that “the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.”The statement followed Reuters’ poll of economists that agreed that the Fed would raise benchmark rates by another 75 bps in July and will follow it up with a 0.5% increase in September. That adds more downside potential to an already-declining crypto market, noted Informa Global Markets, a London-based financial intelligence firm, saying that it would not bottom out until the Fed subsides its “aggressive approach to monetary policy.”But a U-turn on hawkish policies seems unlikely in the near term given the central bank’s 2% inflation target. Interestingly, the gap between the Fed’s fund rates and the consumer price index (CPI) is now the largest on record.Fed funds rate versus inflation. Source: EcoinometricsBitcoin faces first potential recessionNearly 70% of economists believe that the U.S. economy will slip into a recession next year due to a hawkish Fed, according to a survey of 49 respondents conducted by the Financial Times.To recap, a country enters a recession when its economy faces negative gross domestic product (GDP), coupled with rising unemployment levels, declining retail sales, and lower manufacturing output for an extended period of time. Notably, about 38% expect the recession to begin in the first half of 2023, while 30% anticipate the same to happen during the Q3-Q4 session. Moreover, a separate survey conducted by Bloomberg in May shows a 30% possibility of recession next year.The next recession in the U.S. will begin in 2023. Source: Financial TimesPowell also noted in his June 22 press conference that recession is “certainly a possibility” due to “events of the last few months around the world,” i.e., the Ukraine-Russia war that has caused a food and oil crisis around the globe.The predictions risk putting Bitcoin before a full-blown economic crisis. And the fact it has not behaved anything like a safe-haven asset during the period of rising inflation increases the probability that it would keep declining alongside the Wall Street indexes, primarily tech stocks.Meanwhile, the collapse of Terra, a $40-billion “algorithmic stablecoin” project, and it leading to insolvency issues in Three Arrow Capital, the largest crypto hedge fund, has also destroyed demand across the crypto sector.  For instance, Ether, the second-largest cryptocurrency after Bitcoin, dropped by more than 80% to $880 lows during the ongoing bear cycle. Similarly, other top-ranking digital assets, including Cardano (ADA), Solana (SOL), and Avalanche (AVAX), plunged in the range of 85% to over 90% from their 2021 peaks.”The crypto house is on fire, and everyone is just, you know, rushing to the exits because there’s just completely lost confidence in the space,” said Edward Moya, a senior markets analyst at OANDA, an online forex brokerage.BTC bear markets are nothing newIncoming bearish predictions for Bitcoin envision the price to break below its $20,000-support level, with Leigh Drogen, general partner and CIO at Starkiller Capital, a digital assets quantitative hedge fund, anticipating that the coin will reach $10,000, down 85% from its peak level.However, there is little evidence for Bitcoin’s total demise, especially after the coin’s confrontation with six bear markets (based on its 20%-plus corrections) in the past, each leading to a rally above the previous record high.BravenewCoin Liquid Index featuring Bitcoin’s bear market since 2011. Source: TradingViewNick, an analyst at data resource Ecoinometrics, sees Bitcoin behaving like a stock market index, still in the “middle of an adoption curve.” Bitcoin is likely to drop further in a higher interest rate environment—similar to how the U.S. benchmark S&P 500 has dipped multiple times in the last 100 years, only to recover strongly.Excerpts:”Between 1929 and 2022 the S&P500 is up 200x. That’s something like a 6% annualized rate of return […] Some of those asymmetric bets are obvious and pretty safe, like buying Bitcoin now.”S&P 500 drawdowns throughout its history. Source: EcoinometricsMost altcoins will dieUnfortunately, the same cannot be said about all the coins in the crypto market. Many of these so-called alternative cryptocurrencies, or “altcoins,” have dropped to their deaths this year. With some low-cap coins, in particular, logging over 99% price declines.Altcoins that heave faced nearly 100% losses in 2022. Source: MessariNevertheless, projects with healthy adoption rates and real users could come out on top in the wake of a potential global economic crisis. The top candidate to date is Ethereum, the leading smart contract platform, which dominates the layer-one blockchain ecosystem with over $46 billion locked across its DeFi applications.Ethereum leads the smart contract sector. Source: DeFi Llama Other chains, including Binance Smart Chain (BSC), Solana, Cardano, and Avalanche, could also attract users as alternatives, ensuring demand for their underlying tokens. Meanwhile, older altcoins such as Dogecoin (DOGE), also have higher survival chances, particularly with speculation about possible Twitter integration in the pipeline.Overall, a macro-led bear market will most likely hurt all digital assets across the board in the coming months. But coins with lower market cap, dismissive liquidity, and higher volatility will be at higher risk of collapse, Alexander Tkachenko, founder and CEO at VNX, a digital gold dealer, told Cointelegraph. He added: “If Bitcoin and other cryptocurrencies want to get back to their full power, they need to become self-sufficient alternatives to fiat currencies, especially the U.S. dollar.”The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin price rises to $20.7K as Fed's Powell says more rate hikes 'appropriate'

Bitcoin (BTC) checked losses while United States equities drifted down on June 22 as the Federal Reserve kept quiet on monetary policy.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewPowell keeps quiet on Fed movesData from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering near $20,500 at the June 22 Wall Street open.The pair had wicked below the $20,000 mark overnight before recovering, still down from the previous day’s $21,700 highs.Markets braced for last-minute surprises from testimony to Congress by Fed Chair Jerome Powell on the day, this ultimately providing no fresh insight into the central bank’s approach to taming rampant inflation.”We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy,” a copy of Powell’s testimony released before his appearance read. “We will make our decisions meeting by meeting, and we will continue to communicate our thinking as clearly as possible.”Both the S&P 500 and Nasdaq Composite Index opened slightly down after brisk progress on the day prior, providing similarly non-volatile conditions for crypto markets.As Cointelegraph reported, the consensus among analysts nonetheless continues to point to further retests of lower levels, with $16,000 particularly popular in the case of Bitcoin.”Declining volume with a completed impulse wave. Looking for an ABC pullback too long. I had put in a long, but closed due to the structure completion here,” popular Twitter account Crypto Tony explained about the overnight market setup.His concerns about low volume on an upward impulse move were shared by fellow trader and analyst Rekt Capital, who urged Twitter followers not to place too much faith in the strength of the rally.”The volume on this recent BTC rebound is very low and seller-dominated,” he wrote. “This is not the kind of volume $BTC experiences at Bear Market bottoms.” Effective Fed funds rate chart. Source: Federal ReserveReport finds silver linings in crypto cloudLooking on the bright side, meanwhile, trading firm QCP Capital revealed that it saw bearish conditions ebbing after Bitcoin’s reclaim of $20,000 at the weekend.Related: Bitcoin miners sold their entire May harvest: Report”On Saturday, support levels broke with BTC collapsing to 17,567 and ETH to 879. For BTC, this is a 75% drawdown from all-time highs (82% for ETH). The crypto credit crisis in full swing,” it wrote in its latest market circular issued to Telegram channel subscribers. “However, we were pleasantly surprised by the strong bounce off the lows on Sunday and into this week, taking BTC back above 20,000 and ETH above 1,100.”Continuing, it explained that funding rates on derivatives markets were now more stable and that sell-side pressure into the weekend lows was “more miners reducing inventory.”On the topic of macro, QCP highlighted falling oil prices as a positive move against inflationary pressures.”With that said, we remain on guard. Quarter-end fund redemptions are likely to put some pressure on prices along with the possibility of more crypto insolvencies being unearthed,” it added.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Is there a way for the crypto sector to avoid Bitcoin’s halving-related bear markets?

There is good reason to be afraid. Previous down markets have seen declines in excess of 80%. While tightfisted hodling might hold wisdom among many Bitcoin (BTC) maximalists, speculators in altcoins know that diamond handing can mean near (or total) annihilation. Regardless of one’s investment philosophy, in risk-off environments, participation flees the space with haste. The purest among us might see a silver lining as the devastation clears the forest floor of weeds, leaving room for the strongest projects to flourish. Though, doubtlessly, there are many saplings lost who would grow to great heights themselves if they had a chance. Investment and interest in the digital asset space are water and sunlight to the fertile ground of ideas and entrepreneurship. Less severe declines better serve the market; better a garden than a desert.A brief history of crypto bear marketsIn order to solve a problem, we must first understand its catalyst. Bitcoin and the wider digital asset space have survived a number of bear markets since its inception. By some accounts, depending on one’s definition, we are currently in number five.The five Bitcoin bear markets. Source: TradingViewThe first half of 2012 was fraught with regulatory uncertainty culminating in the closure of TradeHill, the second-largest Bitcoin exchange. This was followed by the hacks of both Bitcoinica and Linode, resulting in tens of thousands of Bitcoin lost and dropping the market by some 40%.¹ But, the price rebounded, albeit briefly, finding new heights above $16 until further hacks, regulatory fears and defaults from the Bitcoin Savings and Trust Ponzi Scheme collapsed the price yet again, down 37%.¹ The enthusiasm for the new digital currency did not stay long suppressed, as BTC rose again to find equilibrium at around $120 for the better part of the next year before rocketing to over $1,100 in the last quarter of 2013. And, just as dramatically, the seizure of the Silk Road by the DEA, China’s Central Bank ban and the scandal around the Mt. Gox closure sank the market into a viciously protracted retracement of 415 days. This phase lasted until early 2015, and the price withered to a mere 17% of the previous market highs.¹From there, growth was steady until the middle of 2017, when enthusiasm and market mania launched Bitcoin price into the stratos, peaking in December at nearly $20,000. Eager profit-taking, further hacks and rumors of countries banning the asset, again, crashed the market and BTC languished in the doldrums for over a year. 2019 brought a promising escalation to nearly $14,000 and ranged largely above $10,000 until pandemic fears dropped BTC below $4,000 in March 2020. It was a staggering 1,089 days — nearly three full years — before the crypto market regained its 2017 high.² But, then, as many in the space have memed, the money printer went “brrrrrr.” Global expansionist monetary policy and fears of fiat inflation fed an unprecedented rise in asset values. Bitcoin and the greater crypto market found new heights, topping out at nearly $69,000 per BTC and over $3 trillion in the total asset class market capitalization in late 2021.²The total crypto market cap decline. Source: TradingViewAs of June 20, the pandemic liquidity has dried up. Central banks are hiking rates in response to worrying inflation numbers, and the greater crypto market carries a total investment of a relatively meager $845 billion.² More worrying still, the trend indicates deeper and longer crypto winters, not shorter, befitting a more mature market. Doubtless, this is primarily caused by the inclusion of and speculative mania around the high-risk start-ups that comprise some 50% to 60% of the total digital market cap.² However, altcoins are not entirely to blame. The 2018 crash saw the Bitcoin price drop 65%.⁴ Growth and adoption of crypto’s apex asset have raised regulatory alarms in many countries and questions about the very sovereignty of national currencies have followed. How to mitigate risk in the market?So, it is risk, of course, that drives this undue downward volatility. And, we are in a risk-off environment. Thus, our young and fragile garden wilts first among the deeper-rooted asset classes of convention.Portfolio managers are acutely aware of this and are required to balance a sliver of crypto investment with a larger slice of safe-haven assets. Retail investors and professionals alike often drop their bags entirely at the first sign of a bear, returning to conventional markets or to cash. This reactionary strategy is seen as a necessary evil, often at the expense of incurring short-term capital gains tax, and at risk of missing significant unpredictable reversals, which is preferred to the devastating and protracted declines of crypto winter.Must it be so?How does an asset class so driven by speculative promise de-risk enough to keep interest and investment alive in the worst of times? Bitcoin-heavy crypto portfolios do better, comprising a higher percentage of the least volatile of the major assets. Even so, with a 0.90+ correlation of Bitcoin to the altcoin market, the wake of crypto’s most dominant currency often serves as a churn to smaller assets caught in the same storm. Correlation of BTC to Ether and all altcoins. Source: Arcane ResearchMany flee to stablecoins in dire times, but, as evidenced by the recent Terra disaster, they fundamentally hold more risk than their fiat peg. And, commodity-paired tokens are burdened with the same concerns inherent to any other digital asset: trust — be it in a marketplace or its organizational entity — regulatory uncertainty and technological vulnerabilities. No, merely tokenizing safe-haven assets will not provide the stable yang to the volatile yin of the crypto market. When fear is at a maximum, an inverse price relationship, not merely neutrality, must be achieved to retain investment in crypto and at a return that justifies the adoption of this inherent risk. For those willing and able, inclusion of the inverse Bitcoin exchange-traded funds (ETFs) offered by BetaPro and Proshares does provide a hedge. Much like engaging short positions, however, accessibility hurdles and fees make these solutions all the more unlikely to sustain the average investor through the bear market. Further, increasingly regulated and compliant centralized exchanges are making leveraged accounts and crypto derivatives unreachable to many in the larger retail markets.⁵ Decentralized exchanges (DEXs) suffer from the limitations of anonymity and solutions offered for shorting mechanisms on such have largely required a centralized exchange to work in collaboration. And, more to the point, both solutions functionally do not support value retention in the crypto market directly.Are crypto safe-haven assets enough?The solution to the mass exodus of investment in the crypto bear market must be found in the assets themselves, not in their derivatives. Escaping the inherent risks mentioned above might be, in the medium-term, impossible. But, regulatory clarification is promised and debated around the globe. Centralization and technical risks are finding new mitigations through decentralized autonomous strategies and the engagement of an ever-more discerning crypto-savvy investor. Through many experiments and trials, crypto entrepreneurs will continue to bring real solutions to the forefront. Applications of blockchain technology that find substantial adoption in down-market “defensive” industries such as healthcare, utilities and the purchase or production of consumer staples would provide an alternative to flight. Such development should be encouraged in these uncertain times. Rather, by the wisdom of the market, such uncertain times should encourage this development. However, ingenuity should not be limited to merely tokenizing the feeble solutions of the conventional markets. This is a new world with new rules and possibilities. Programmatically incentivized inverse mechanisms are feasible, after all. Synthetix’s Inverse Synths aspire to do just that, but the protocol sets both a floor and ceiling price, and in such an event, the exchange rate is frozen and only exchangeable on their platform.³ An interesting tool for sure but unlikely to be utilized by the greater crypto market. True solutions will be broadly accessible both geographically and conceptually. Rather than providing merely a dry place to wait out the down-market storm, crypto solutions must provide a return to justify the risk still inherent to our developing asset class. Is there a silver lining to the bear market? Will the survivors of crypto-winter emerge in a market more rewarding for application and adoption than speculation? Healthy pruning may be just what our young garden needs; a protracted drought surely is unnecessary. Down markets are simply a problem and, with the clever application of blockchain technology, hopefully, a soluble one. Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
Trevor is a technology consultant, entrepreneur and principal at Positron Market Instruments LLC. He has consulted for corporate planning teams in the United States, Canada and Europe and believes that blockchain technology holds the promise of a more efficient, just and egalitarian future. ¹A Brief History of Bitcoin Bear Markets | by Mosaic – Medium² Crypto Total Market Cap (Ticker: CRYPTOCAP): Calculated by TradingView³ Travers, Garth (July 19, 2019). “Inverse Synths are Back”⁴ Choudhury, Saheli Roy (January 11, 2018). “South Korea is talking down the idea a cryptocurrency trading ban is imminent”⁵ Newbery, Emma (August 3, 2021). “Why are so many crypto exchanges unavailable in the US?”

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Ethereum analyst warns of 'clean fakeout' despite 30% ETH price rebound

Ethereum’s native token, Ether (ETH), underwent a sharp relief rally after falling to $880, its lowest level in eighteen months, on June 18.ETH price regains 30% in two daysEther’s price reached above $1,150 this June 19, marking 30%-plus gains in just two days. However, at the beginning of the new weekly session this June 20, the ETH/USD pair hinted at giving up its weekend gains, with its price plunging by almost 9% from the $1,150 high. PostyXBT, an independent market analyst, told his 79,800 followers to be careful about the latest ETH price rally, noting that the move “would make for a clean fakeout.” Excerpts from his statement:”It looks like an opportunity to flip long towards $1,250, but $BTC still hasn’t reclaimed it’s like-for-like level.”ETH/USD 4-hour price chart. Source: PostyXBT/TradingViewNext ETH price bear target: $700-$800The statements appear as Ether, alongside other top cryptocurrencies, including Bitcoin (BTC), Solana (SOL), and Cardano (ADA), have entered a bear market. ETH/USD now trades 77% below its $4,951-record high, but some tokens are down 90% from their 2021 peak levels.Concerns about the Federal Reserve’s hawkish policy to tame inflation has stoked these sell-offs, hurting parts of traditional stock markets in tandem. In detail, the U.S. central bank plans to hike benchmark rates into 2023, which may leave investors with lesser liquidity to buy riskier assets like BTC and ETH.Additionally, forced selling and liquidity troubles led by the so-called decentralized finance, or DeFi, sector have added downside pressure on the crypto market, thus limiting Ether’s prospects of continuing its recovery rally moving forward.Analyst “Capo of Crypto” states that ETH has not bottomed out yet and that its price could fall further toward the $700-$800 range.$ETHMain target reached, bounced from there, but no bottom formation yet.Eyes on $700-800 as new support zone, which would complete the 5th of the 5th wave. https://t.co/ZIWnzMW6bk pic.twitter.com/rT0qnY0Roe— il Capo Of Crypto (@CryptoCapo_) June 20, 2022ETH price bottom signs?Meanwhile, one metric that tracks the differences between Ether’s market value and realized value suggests that ETH/USD is bottoming out.The “MVRV-Z Score,” as it is called, assesses when Ether is overvalued or undervalued relative to its “fair” or realized value. So, when the market value has surpassed realized value, it has historically marked a bull run top.Conversely,  the market value falling below realized value has indicated a bear market bottom (the green zone in the chart below). Ether’s MVRV-Z Score entered the same buying zone in early June and is now consolidating inside it.Ethereum MVRV Z-Score. Source: GlassnodeBut this does not necessarily mean a trend reversal, according to the MVRV-price relation witnessed during the 2018 bear market.Related: 5 indicators traders can use to know when a crypto bear market is endingNotably, Ether’s MVRV Z-Score slipped into the green zone on August 12, 2018, when the price was around $319. But the Ethereum token bottomed out at a much later date, on December 14, 2018, when the price reached near $85.In other words, Ether has entered a bottoming out stage, at best, if the on-chain fractal holds valid in 2022. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Ethereum risks another 60% drop after breaking below $1K to 18-month lows

The price of Ethereum’s native token, Ether (ETH), careened below $1,000 on June 18 as the ongoing sell-off in the crypto market continued despite the weekend.Ether reached $975, its lowest level since January 2021, losing 80% of its value from its record high in November 2021. The decline appeared amid concerns about the Federal Reserve’s 75 basis points rate hike, a move that pushed both cryptocurrencies and stocks into a strong bear market.”The Federal Reserve has barely started raising rates, and for the record, they haven’t sold anything on their balance sheet either,” noted Nick, an analyst at data resource Ecoinometrics, warnings that “there is bound to be more downside coming.”ETH/USD weekly price chart. Source: TradingViewEthereum’s implosion continuesInvestors and traders have been anxiously watching Ether’s price in recent days, fearing a decisive breakdown below $1,000 would trigger the forced liquidations of massively leveraged bets. In turn, that would put more downside pressure on Ethereum.The fears appear due to Babel Finance and Celsius Network, a pair of crypto lending platforms that halted withdrawals citing market volatility. They intensified further after Three Arrow Capital, a crypto hedge fund managing $10 billion worth of assets as of May, failed to shore up its collateral to cover pungent bets. This came less than a month after Terra, a $40 billion “algorithmic stablecoin” project, collapsed.These events have coincided with a massive capital withdrawal from Ethereum’s blockchain ecosystem. The total value locked (TLV) unwind occurred in two parts. First, Ethereum’s TVL across DeFi projects fell by $94 billion after the Terra debacle in May and then by another $30 billion by mid-June.Ethereum total value locked in DeFi. Source: Glassnode”The deleveraging event that is underway is observably painful, and is akin to a form of mini-financial crisis,” noted CheckMate and CryptoVizArt, a pair of analysts at Glassnode, an on-chain analytics platform, adding:”However, with this pain comes the opportunity to flush excessive out leverage, and allow for a healthier rebuild on the other side.”How low can ETH price go?Fed’s hawkish policies and the ongoing DeFi market implosion suggest extended bearish moves in the Ether market.From a technical perspective, ETH’s price must regain $1,000 as its psychological support, which, if broken to the downside, could have the token eye the $830 as its next target. The same level served as resistance in February 2018, which preceded a 90% decline to around $80 in December 2018.ETH/USD weekly price chart. Source: TradingViewMeanwhile, as Cointelegraph covered earlier, ETH/USD can fall to as low as $420 if Ether’s correction turns out to be anything like its 2018 bear cycle when the drawdown reached over 90%.Related: 72 of the top 100 coins have fallen 90% or more: Here are the holdoutsInterestingly, the $420-downside target was instrumental as support in April-July 2018 and resistance in August-September 2020.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Stablecoins highlight 'structural fragilities' of crypto — Federal Reserve

The Federal Reserve’s board of governors pointed to stablecoins as a potential risk to financial stability amid a volatile crypto market.In its Monetary Policy Report released on Friday, the board of governors of the Federal Reserve System said “the collapse in the value of certain stablecoins” — likely referring to TerraUSD (UST) becoming unpegged from the United States dollar in May — in addition to “recent strains” in the digital asset market suggested “structural fragilities.” The government department pointed to the President’s Working Group on Financial Markets report from November 2021, in which officials said legislation was “urgently needed” to address financial risks.“Stablecoins that are not backed by safe and sufficiently liquid assets and are not subject to appropriate regulatory standards create risks to investors and potentially to the financial system, including susceptibility to potentially destabilizing runs,” said the Fed report. “These vulnerabilities may be exacerbated by a lack of transparency regarding the riskiness and liquidity of assets backing stablecoins.”The report came in advance of Fed chair Jerome Powell’s testimony before the Senate Banking Committee, scheduled to begin June 22. In written remarks for a research conference sponsored by the Federal Reserve Board on Friday, Powell noted that a central bank digital currency could “potentially help maintain the dollar’s international standing.” Chair Powell delivers opening remarks at the Inaugural Conference on the International Roles of the U.S. Dollar: https://t.co/k5kn3tnTznhttps://t.co/EY89kTts11— Federal Reserve (@federalreserve) June 17, 2022Following the UST crash — in which the stablecoin depegged from the dollar and later contributed to the Terra ecosystem forking — Treasury Secretary Janet Yellen called for a “consistent federal framework” on stablecoins by the end of 2022, pointing to “risks to financial stability.” A congressional research agency later reported that the stablecoin industry was not “adequately regulated” in its rundown of the Terra crash. Related: Fed paper looks at the potential effects of CBDC on monetary policyEssentially operating as the central bank of the United States, policy at the Fed has the potential to significantly impact the crypto space, including the possible rollout of a digital dollar. On Wednesday, the Fed announced it would be raising interest rates by 75 basis points — the largest increase in 28 years — in an effort to fight inflation.

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