Some Analysts Believe USD 17,500 Might Be the Bottom of this Bitcoin Bearish Market

Alexander Salazar
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Some Analysts Believe USD 17,500 Might Be the Bottom of this Bitcoin Bearish Market

The price recovered after falling from the USD 20,000 line where it had been for five consecutive days. Some analysts believe this could be the bottom of the Bitcoin bearish season.

After dropping below USD 17,000, the price of Bitcoin (BTC) recovered the support above USD 20,000. That proves that the strength of supply and demand amid the bearish market did not let it fall below that figure.

Some specialists predicted this is the bottom of the Bitcoin price to reverse its current bearish trend and begin to rise. However, others have warned for months that it will reach a lower low.

Many users wonder whether the bottom of Bitcoin was USD 17,000 or if it will continue to drop. Many agreed that the fall was not over after someone opened the discussion in the legendary bitcointalk.org forum.

Some weeks ago, the question was whether USD 30,000 would be the bottom, but the price dropped further. The fall to USD 17,000 caught many by surprise as they did not think it would test that value. Therefore, they believe the price could reach USD 15,000 in the short term.

They predict that the bottom of BTC has not yet arrived as the price has not broken the 200-week SMA. Since this is the first time this has happened in the history of Bitcoin, one analyst argued the long-term bullish sign has weakened.

A crypto market follower said that he feels bearish, like in 2014 when Mt. Gox collapsed after the price dropped below USD 20,000. He thinks it could even go down to USD 10,000 due to the stupid way many people have behaved.

The Bitcoin Drop from the USD 20,000 Support Raises Bearish Sentiment

The debate participants stated there is more bearish sentiment for Bitcoin in the short term after breaking psychological support at USD 20,000. The Fear and Greed index indicated that the market is at its worst level of fear, thus confirming that.

The drop to USD 17,000 meant that many investors left the market with a loss, as they sold thousands of bitcoins below USD 20,000. One user said this would lead to a year-long bearish market but hopes to be wrong.

Those purchasing Bitcoin when it was worth more and sold over the last few days have lost money. If they have not dumped their holdings, they are at an unrealized loss, waiting for a price recovery.

Only those buying Bitcoin before December 2020, like Minimal Trader, can make profits. He recently said that he has no losses since he has held BTC since 2017.

Another investor initially believed that the bottom of Bitcoin would be USD 30,000, but its price fell further. Then he thought it would be USD 20,000, but it also fell from that level. He pointed out that nobody knows the low that the price of the cryptocurrency will reach.

According to economist Peter Schiff, USD 20,000 looks like the new USD 30,000 support level of BTC. Considering that no one should feel excited about small rises, he said there is no sign of capitulation, usually forming a bearish market bottom.

A user stated that investors must be ready for any unexpected event in the Bitcoin market. He concluded that they must ensure they can afford to lose the money traded.

By Alexander Salazar

A Solana Whale put the Solend Protocol in Danger, but Now It Moves USD 25 Million to Fix the Flaw

Jenson Nunez
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A Solana Whale put the Solend Protocol in Danger, but Now It Moves USD 25 Million to Fix the Flaw

A Solana whale generated problematic movements after putting the Solend DeFi protocol and the entire Solana space at risk.

A Solana Whale (SOL) created a controversial scene in the crypto space after putting decentralized finance (DeFi) protocol Solend at risk of critical insolvency. The whale also put the Solana space in danger, when it was approaching an exponentially chaotic multi-million dollar chain sale.

The situation started a few days ago, when an anonymous user of Solend, a Solana-focused crypto lending protocol, took out a $108 million loan on the USDC stable coin.

Settlement Risks

According to data from The Block, the loan got guaranteed for 5.7 million SOL, which registered USD 215 million and represented 95% of SOL’s housed funds in Solend’s main loan pool. It also accounted for 88% of USDC loans from that protocol.

However, with the price of SOL lingering below $25 amid a broader meltdown in the market, fears arose regarding a possible user margin call that would put Solend in danger. If the SOL token approached $22.30, the protocol would automatically liquidate up to 20% of the whale collateral.

According to the report, Solend’s team explained that an on-chain sell-off of that size would be dangerous. If the chain settlement goes ahead, Solend would be gathering bad debts due to an in-chain drop in SOL’s value.

According to Coindesk, protocol developers feared the multi-million dollar liquidation would flood Solana’s decentralized exchanges with pressure and even crash the network.

A Break for Solend

In search of solutions, the Solend team thought about seizing control of the wallet under the user’s control and manually liquidating it in an over-the-counter (OTC) deal. However, this proposal got rejected after the community dismissed the strategies due to disruption and deviation from decentralization.

On the other hand, the problems might get closer to being solved after the anonymous whale started moving funds on Tuesday. As highlighted by Solend’s Twitter, the whale moved at least $25 million of its debt to Mango Markets, another Solana-based network.

The team explained that the move happened due to Solend’s strategies to convince the user, identified as 3oSE by his wallet address, to extend his lending position through a second network.

According to The Block, with the whale moving a piece of its position to Mango Markets, Solend has been spared the full violence of a possible obliged liquidation. However, the crisis continues, as the Solend team highlights, bringing limited exposure to Solend but the trading position, and its possible liquidation, remains enacted.

By: Jenson Nuñez

Ethereum Analyst Warns of a “Clean Fakeout” Despite 30% ETH Price Rebound

Audy Castañeda
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Ethereum Analyst Warns of a “Clean Fakeout” Despite 30% ETH Price Rebound

One of Ether’s on-chain indicators signals that the token has entered its bottoming phase.

Ethereum’s native token Ether (ETH) saw a strong relief rally after falling to $880, its lowest level in eighteen months, on June 18.

Ether price broke above $1,150 on June 19, marking gains of more than 30% in just two days. However, at the start of the new weekly session on June 20, the ETH/USD pair hinted at erasing its weekend gains, with its price falling nearly 9% from a high of $1,150.

ETH Price Recovers 30% in Two Days

PostyXBT, an independent market analyst, told his 79,800 followers to beware of the recent ETH price rally, noting that the move “would be a clean fakeout.” An excerpt from his statement reads: “Looks like an opportunity to go long towards $1,250, but BTC has yet to regain its similarity level.”

The statements come at a time when Ether, along with other major cryptocurrencies including Bitcoin (BTC), Solana (SOL), and Cardano (ADA), have entered a bear market.

The ETH/USD pair is currently trading 77% below its all-time high of $4,951, but some tokens are down 90% from their 2021 highs.

Concerns about the Federal Reserve’s tighter monetary policy to control inflation have fueled these sales, hurting parts of traditional stock markets. Specifically, the US central bank plans to raise benchmark rates until 2023, which may leave investors with less liquidity to buy riskier assets like BTC and ETH.

In addition, forced sales and liquidity problems led by the so-called decentralized finance, or DeFi, sector have added downward pressure on the cryptocurrency market, thus limiting the prospects for Ether to continue its recovery going forward.

Analyst “Capo of Crypto” claims that ETH has not yet bottomed and its price could fall further towards the $700-$800 range.

Signs that the ETH Price has bottomed?

Meanwhile, a metric that tracks the differences between Ether’s market value and realized value suggests that the ETH/USD pair is about to bottom.

The “MVRV-Z Score”, as it is called, assesses when Ether is overvalued or undervalued relative to its “fair” or realized price. Therefore, when the market value has exceeded the realized price, it has historically marked a top of the Bull Run.

Conversely, the market value falling below the realized price has indicated a bear market bottom (the green area in the chart below). Ether’s MVRV-Z Score entered the same buy zone in early June and is now consolidating within it.

This, however, does not necessarily mean a change in trend, based on the MVRV-to-price ratio witnessed during the 2018 bear market.

In particular, Ether’s MVRV-Z Score slipped into the green zone on August 12, 2018, when the price hovered around $319. But the Ethereum token bottomed out much later on December 14, 2018. 2018, when it almost reached USD 85.

In other words, Ether has entered a bottoming stage, at best, if the on-chain fractal remains valid for the remainder of 2022.

By Audy Castaneda

Bitcoin Wallets Holding One BTC or More Increased by 13,000 in the Last Seven Days

Audy Castañeda
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Bitcoin Wallets Holding One BTC or More Increased by 13,000 in the Last Seven Days

Small wallet addresses, containing 0.1 Bitcoin or more, continue to accumulate Bitcoin at a rapidly increasing rate.

Over the past week, the number of Bitcoin wallet addresses holding one BTC or more increased by 13,091. The total number of “whole coiners” increased to 865,254.

The number of full coins spiked during the downside price action, according to analysis by Glassnode.

Christian Ander, the founder of Swedish Bitcoin exchange BT.CX, told Cointelegraph that “it’s good for the ecosystem that it’s growing from scratch because it wants the economy to be bottom-up.” Anderson continued stating that, “people strongly believe in the future of the Bitcoin network and the value of the currency.”

BTC Updates

In the last 10 days, since the May 10 market crash to $30,000, more than 14,000 “whole coiners” wallets (with one BTC or more) have joined the network. Since there will only be 21 million Bitcoin minted, these wallet addresses will hold one twenty-one millionth of all Bitcoin.

At a price of around $20,000 per Bitcoin, the sharp increase in the number of whole coiners would suggest that retailers – or “commoners” as they are affectionately known – are buying Bitcoin as fast as their income allows. The number of addresses adding 0.1 BTC ($2,000) or more has also started a parabolic run in the last 10 days.

In contrast, the number of wallets holding more than 100 BTC has dropped by 136 over the same period. By inference, “whale” wallets (large BTC addresses) could be shedding some of their holdings.

A Bit of History

When Satoshi Nakamoto minted the first Bitcoin on January 9, 2009, the Gini coefficient was 1, that is, income inequality in the network was the highest in history. The Gini coefficient, developed by the statistician Corrado Gini, represents income or wealth inequality within a social group. In Bitcoin, it can be assigned to wallet addresses.

As soon as Hal Finney, the first Bitcoin believer, started mining and receiving Bitcoin, the Gini coefficient dropped below 1. Since then it has tended to go lower and lower, indicating that the distribution of wealth in the Bitcoin network Bitcoin is becoming fairer.

It is worth remembering that when the first BTC was sent, there wasn’t even a cash value attached to the crypto asset, whose Blockchain has amassed more than 701 million transactions as of January 8. One of the most famous early use cases – exchanging 10,000 BTC for two pizzas in 2010 – helped pave the way for the crypto asset to become accepted in many bars, restaurants, and even as legal tender across a country such as El Salvador.

Currently, according to experts, while the data does not negate that BTC could see a further price decline, it also suggests that the worst of the pullback has already occurred and the current extreme lows are unlikely to persist in the long term.

By Audy Castaneda

Celsius Recovery Plan Proposed Amid Community-Led Short-Squeeze Attempt

Audy Castañeda
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Celsius Recovery Plan Proposed Amid Community-Led Short-Squeeze Attempt

BnkToTheFuture co-founder Simon Dixon has proposed a recovery plan similar to the solution offered to Bitfinex after its August 2016 bitcoin hack.

Celsius’s lead investor, BnkToTheFuture, and its co-founder, Simon Dixon, have offered to help the network by deploying a “financial innovation” similar to the one used in 2016 to save cryptocurrency exchange Bitfinex from liquidation.

Although Dixon’s statement on Saturday did not include specific details of the recovery plan offered to Celsius’s board of directors and CEO Alex Mashinsky, Dixon said it would be similar to the one offered to Bitfinex following its hack in August 2016, which he said was solved in nine months:

“I think traditional finance will not have a timely solution for Celsius as we have seen in the past with Mt. Gox, which is still unsolved 10 years later. I think this can only be solved with a solution using financial innovation like we did with Bitfinex, which was solved in 9 months and worked very well for depositors,” he claimed.

Dixon noted that as a Celsius shareholder and lender, and due to the “short-term systemic impact on those who own bitcoin,” he was “eager to support Celsius with a turnaround plan.”

“My position is to offer solutions, as we have the experience, the licenses, and the technology to do so,” he said.

Bitfinex Solution

Dixon’s plans for Celsius are inspired by his company’s solutions in August 2016, after Bitfinex announced that it had lost approximately 120,000 Bitcoin (BTC) in a cybersecurity breach, resulting in a loss of about $72 million client funds at that time.

Instead of initiating liquidation proceedings, Bitfinex came up with an innovative recovery plan, which included “refund promises” in the form of BFX tokens for customers, representing the value of money lost in the attack.

These tokens were tradable on the open market or could be held later for a future $1 per token refund, allowing customers to speculate on the company’s recovery.

Around seven months later, BnkToTheFuture reported that the scheme had worked, with victims having recovered between 75% and 100% of their funds through the various measures available:

“In 2016, Bitfinex needed a plan to recover from their hack and the company I co-founded, BnkToTheFuture.com, supported them and executed a recovery that included security, debt, and equity tokens and gave investors a very high return for the high risk they took.”

Dixon did not confirm whether his recovery plan would work the same way with a token; he only said that it would be solved using similar innovative methods.

A Gamestop-Style Short-squeeze is coming up

At the end of the month, BnkToTheFuture joined the solution by working with Bitfinex to allow clients to convert their BFX tokens into company capital.

However, there is also an unofficial community-led recovery plan that appears to be gaining traction on Twitter under the hashtag #CELShortSqueeze.

The move attempts to force this token short sellers to cover their short positions by purposely driving up the price of Celsius token (CEL) by massively buying and withdrawing from various exchanges.

Short selling is an investment strategy in which an investor borrows shares and sells them immediately with the aim of buying them back later at a lower price and pocketing the difference. It allows the investor to benefit from the fall of a stock or an asset.

Short-squeeze occurs when a shorted asset rises in value, forcing short sellers to repurchase the stock they initially sold to prevent their losses from mounting. However, buying back shares when the price is rising can cause more price moves to the upside, which can further squeeze short sellers.

The same strategy was initiated by users of the subreddit r/wallstreetbets in January 2021, which saw stocks of the American video game retailer reach highs of almost $500 per share, around 25 times the valuation at the beginning of the month.

The platform said it aims to maintain an open dialogue with regulators and officials and will continue to find a resolution. Meanwhile, the platform will be pausing its Twitter Spaces and Ask-Me-Anythings (AMAs).

By Audy Castaneda

Chinese Court Invalidates 2019 Car Sale Made with a Token Currently Worth Nothing

Audy Castañeda
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Chinese Court Invalidates 2019 Car Sale Made with a Token Currently Worth Nothing

Apparently, not only was the sales contract invalidated, but the buyer paid for the vehicle with a dodgy digital token in the first place.

Last week, a WeChat post from the Shanghai Fengxian Court began circulating in the cryptocurrency community regarding its recent ruling on a May 2019 car sale made with digital currency. At that time, the buyer, identified only as Mr. Huang, signed a sales contract to purchase a 2019 Audi AL6 for CNY 409,800 ($59,477) in exchange for 1,281 Unihash (UNIH) tokens with an undisclosed car dealer in Shanghai. Under the original contract, the seller was to deliver the car to Huang within three months.

Court Ruling

According to the Shanghai Fengxian Court, Mr. Huang paid UNIH 1,281 on the date of signing the contract but did not receive the car within or after the specified time. Consequently, Mr. Huang took the seller to court, demanding the delivery of the vehicle and the payment of 0.66% daily interest of the transaction amount as damages for all the days that the car was not delivered beyond the original deadline.

The case lasted more than three years until a verdict was reached this June. Citing the September 2017 regulations that evolved into what is now known as the ban on cryptocurrencies in China, the Shanghai Fengxian Court said that digital assets “cannot and should not be used as circulating currency in the markets,” and that the use of digital tokens such as UNIH instead of fiduciary money as consideration in everyday contracts violated the respective regulation that nullifies such contracts in themselves. Therefore, the sales contract was declared null and void. The buyer was not awarded compensation for damages, delivery of the car, or reimbursement of his 1,281 UNIH.

Further Details

It is unclear how the seller accepted a conversion rate of UNIH 1 = CNY 320 as stipulated in the original contract in the first place. Unihash was purportedly a digital payment token developed for e-commerce in 2018 and was only available to private investors without a public initial coin offering. Shortly after its launch, accusations quickly surfaced on Chinese social media that labeled the project a “scam” and that its token metrics, as well as company history, had allegedly been grossly inflated to attract investors.

At present, the project appears to be abandoned, with no link to social media, no listing on the market, and no development activity. Furthermore, the company behind UNIH did not meet any of its goals listed in its original white paper. One such promise made to investors in the document included: “What can be certain is that the Unihash token may appear on various exchanges by Q4 2019.”

By Audy Castaneda

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