We have launched Cryptogram, an India-focused free weekly newsletter on blockchain tech, global crypto markets, and Web 3.0 technologies which promise to change our future. If you would like to subscribe to this newsletter, click here. You can read our past editions here.
Decentralized finance (DeFi) startup Celsius announced on Monday morning that they have paused all withdrawals, swaps, transfers on their network. It is quite normal for networks to get scheduled for maintenance or upgradation except it was not in this case. Customers had deposited more than $10 billion in assets while Celsius wallets accounted for only $1.5 billion. Crypto markets, which were already on a selling spree due to fears of a global recession, went on a complete tear post concerns over Celsiusâ€™ ability to remain solvent anymore.
Bitcoin (BTC) was the prime casualty losing more than 20% intraday. Altcoins also bled although Kadena (KDA), Fantom (FTM) and Theta Network (THETA) were able to book some profits against the US dollar.
In todayâ€™s article, we will take a look at BTCâ€™s current set-up that can offer some perspective on a macro level along with a brief outlook on the altcoin market.
BTC at life support
Not long ago, BTC was going sideways with swings up to $32,000 and back to $28,500 region. While the short-term outlook was looking bleak, some even called for a $40,000 rally. BTC went on to test the $26,700 wick in the first week of June and when everyone was expecting a bounce, news of the Celsius liquidity crisis broke triggering traders to sell to cover their positions.
Now, BTC has lost more than 25% in a span of 7 days causing widespread panic among the new investors. It is now trading just above the 200-weekly moving average (WMA), perhaps the most crucial psychological level which can alter the course of crypto assets in the short term. The 200 WMA is at $22,350 and BTC is lingering near $22,500. But for people who have been in crypto since its inception, had just one thing to comment about BTCâ€™s behavior: business as usual. If we take a look below at the price drawdowns of BTC from its price trend, it checks out in a fashionable way. In fact, 69% decline is still less than some of the brutal pullbacks (> 80%) in history.
Top altcoins suffer, few others bounce
Among the top 20 crypto assets by market capitalization, Ethereum (ETH) and Avalanche (AVAX) suffered the most by losing more than 30% in the past 7 days while the rest of the lot managed to contain losses around 20%. ETH, which was assumed to show strength, almost broke down to the $1,000 mark. Kadena (KDA), Fantom (FTM), Theta Network (THETA) and Gala (GALA) were the only assets in the top 100 list to register moderate single day gains. Though these bounces (in terms of USD) could offer momentary rejoices, it is important to keep in mind that these crypto assets have already bled a lot in the past and will continue to bleed against BTC in the future.
Short-term outlook for BTC
If you are one of those investors who wanted to get in during the market frenzy in 2021 but couldnâ€™t, now is probabilistically the best time to allocate cash into BTC given that many experienced market participants have been waiting for years to enter at these prices again. Fundamentals of BTC continue to remain strong with mining hash rates reaching all-time highs despite the downtrend. The time is right for DCAâ€™ing though be prepared for some additional drop before markets seem healthy again.
Use promocode TNM51 at www.giottus.com/profile#promo after registration to get Rs.51 worth free Bitcoin.
Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.