Market update

Sad news this week after Bitcoin died for the 455th time. This time it’s serious however with Google searches for ‘Bitcoin dead’ hitting a new record. It’s certainly been a historic week with BTC dropping well below the 2017 former all-time high, plunging to AU$25,640 (US$17,744) on June 19th (ETH fell to AU$1,293/US$896). The unprecedented drop calls into question various cycle halving theories and invalidates the maxim that “no one who invested in Bitcoin and waited four years has lost money.”  Over the weekend Glassnode reported AU$10.5B/US$7.325B in onchain BTC losses had been “locked in by investors spending coins that were accumulated at higher prices.” Bitcoin finishes the week down 11.5% to trade around AU$29,300 (US$20.4K) while Ethereum is down 10.4% to trade around AU$1,580 (US$1,100). However: Cardano was up 6%, Solana jumped 25% and Polkadot increased 9.8%. Various analysts suggest that relative altcoin strength means much of the BTC and ETH fall was due to forced selling and liquidations. After dipping to 6 out of 100 over the weekend, the Fear and Greed Index is now at 9 or Extreme Fear.

Bitcoin has stabilised by 4% in the past 24 hours, and finishes the week down 31% at US$22,150, or AU$32,060, which is roughly the lowest pricing since December 2020. ETH is down 35% this week and is trading around US$1,220 (AU$1,765). The macro picture looks bleak: May’s inflation rate in the US topped 8.6% and there’s speculation the Fed may hike interest rates by a whopping 0.75%. The S&P 500 is in a bear market, having lost more than 20% this year, and as a riskier asset class crypto has been hit even harder. The effects have been multiplied by the potential for lending platform Celsius to collapse and the possibility the ETH Merge may be delayed again. Everything has lost double digits: Cardano (-27%), XRP (-23%) and Polkadot (-20%). The Crypto Fear and Greed Index is at 7 or Extreme Fear. The overall market cap is at US$932 billion (AU$1.353T). With two weeks to go, this is shaping up as either the worst, or second worst quarter in Bitcoin’s history.

Bitcoin’s longest ever losing streak ended on Sunday with the cryptocurrency finally printing its first weekly green candle in 10 weeks. There’s now hope among traders that we’ve found the bottom and JPMorgan’s suggestion of a 30% upside for Bitcoin following the recent washout is right. However, Josh Olszewicz, head of research at Valkyrie Investments, thinks overall conditions aren’t favourable. “Uncertainty in the global economy due to high inflation and the likelihood we are in a recession, paired with the prevalence of central bankers raising rates, is likely going to force all assets downward at least through the end of the summer,” he said. The Reserve Bank of Australia is also widely expected to raise interest rates today. Bitcoin finished the week at AU$41,700 (US$29.9K) while Ethereum lost 11% to AU$2,450 (US$1,750). Cardano increased 1%, XRP fell 7%, Solana (-16%) and Polkadot was down 13%. The Crypto Fear and Greed Index is at 13, or Extreme Fear, up from 10 last week.

The good news is that the bad news has stopped, but is it a dead cat bounce or a trend reversal? Bitcoin is up 8% from a week ago to trade around AU$44,000 (US$31.7K) at the time of writing. Glassnode’s latest report says Bitcoin true believers have been snapping up BTC at discount prices and swallowed up all of the 80K Bitcoin liquidated by the LUNA Foundation Guard. The Bitcoin Accumulation Trend score is at 0.9% which Glassnode says indicates “investor psychology shifts from uncertainty to value accumulation.” Ethereum finished the week up 1% at AU$2,775 (US$1,990), XRP gained 2%, Cardano was up 11% and Solana lost 6%. The Crypto Fear and Greed Index is at 16 or Extreme Fear.

As the apocryphal Chinese curse goes: ‘May you live in interesting times’. Well, markets have rarely been more interesting with a record eight weeks in the red for Bitcoin which slid another 2.9% this week to trade around AU$41,100 (US$29.2K). In traditional markets the S&P 500 dipped briefly into bear market territory on Friday with a 20% drop from its January high before a small turnaround on Monday. Ethereum fell 2.9% this week and is trading at AU$2790 (US$1984), XRP lost 5%, Cardano (-8%), Solana (-9.6%) and Polkadot (-8%). The Crypto Fear and Greed Index is at 10 or Extreme Fear.

It’s been a historic week for all the wrong reasons, with Bitcoin notching up an unprecedented seventh weekly close in the red. The spectacular collapse of Terra and UST saw around AU$400B wiped off the total market cap of crypto mid-week, with Bitcoin and Ethereum crashing to lows not seen since 2020, Tesla, El Salvador, and MicroStrategy’s Bitcoin holdings all went into the red. After trading as low as AU$38K (US$26.5K) Bitcoin is back at AU$43K (US$30.1K) to cap the loss for the week at – 4%. Ethereum lost 12% to trade at just over AU$2,900 (US$2K). XRP lost 15%, Cardano (-9%), Solana (-16%) and Polkadot (-2%). The Crypto Fear and Greed Index improved, but is still at 14 or Extreme Fear.