Bitazza Crypto Weekly: Entire Crypto World Keeping an Eye on Terra's Plans -

Crypto Weekly: 23 – 29 May 2022

The entire crypto world is keeping a close eye on Terra’s revival plans, which have proposed a hard fork by 27 May amidst the torrent of largely negative news.

For instance, Terra founder Do Kwon reportedly tried to flee South Korea and dissolved Terraform Labs Korea before Terra’s Singapore move just days before the UST and LUNA collapse. According to Kwon, the dissolution of Terraform Labs Korea has been in the works for some time and the rumors of him liquidating Terra and fleeing are a result of unfortunate timing. Despite Kwon’s assurances, many investors remain suspicious of the Terra founder.

Furthermore, Terraform Labs is facing charges of tax evasion and is allegedly liable to pay the South Korean government 100 billion Won (approximately $78.5 million) for failing to pay its corporate tax. Do Kwon has refuted these charges, claiming that the corporate headquarters of Terralabs has been in Singapore since December 2021.

South Korea’s financial regulator, the Financial Services Commission (FSC), and the Financial Supervision Commission (FSS) recently conducted an emergency investigation into the collapse of LUNA and UST. They have requested data from local exchanges to disclose previous LUNA and UST transactions and are seemingly putting measures in place to minimize damage to crypto investors in the future.

USDT issuer Tether has reported that it has reduced its holdings of commercial papers – short-term loans to companies – by 17% to $20.1 billion while increasing US Treasury bills by 13% to $39.2 billion for the company’s USDT reserve. This reduction in reliance on commercial papers to secure their reserve is ostensibly to allay fears regulators have had regarding commercial papers and their exposure to the volatility of money markets. Additionally, Tether has also reported that they now own $286 million in non-US government bonds, meaning that for the first time USDT is partially backed by bonds from countries outside the US.

Multinational tech conglomerate Meta is planning to launch their own digital payments platform under the name “Meta Pay” that will integrate cryptocurrency and blockchain-related products according to recently filed trademark applications. Despite failing to create its own stablecoin in the past, Meta appears committed to exploring more opportunities in the crypto space.

The floor price of popular NFTs Bored Ape Yacht Club (BAYC) has dropped by more than 50% from its peak in dollar-denominated valuation according to data since May 1.

Finally, data from DeFi Llama indicate that the Total Value Locked (TVL) across DeFi protocols has dropped to its lowest levels since June 2021. TVL has declined by more than 50% since the start of the year, with Ethereum’s TVL being affected the most by this decline.

Weekly Technical Analysis: 23 – 29 May 2022

Bitcoin (BTC)

BTC has been moving sideways throughout the week, with no new positives and negatives. However, technical indicators like the RSI are starting to lift new highs and form a bullish divergence, along with BTC having closed 8 bars, which is the most consecutive weekly bars in history. BTC may be able to recover this week if it can successfully challenge resistance at $33,000 and remain above support at $28,000.

Ethereum (ETH)

ETH is trending sideways alongside BTC but has been able to refrain from falling to lower lows. ETH will likely recover alongside Bitcoin if the latter is able to rally. The first support to keep an eye on is at the $1,800 mark, with subsequent critical support at $1,700. ETH will look to target resistance at the $2,400 level. Traders are advised to slow trading and refrain from entering an ETH position as the future direction remains highly uncertain.

Gods Unchained (GODS)

GODS is up by +127% over the past week. However, the overall trend is downwards, meaning traders looking to enter a GODS position should remain cautious. Based on the previous price decline, the 20 baht level is an opportunity to buy and speculate. Traders can sell and lock in short-term profits at the resistance level of 50 baht. If it passes, this will signal that the GODS trend can continue to rise.

Ethereum Name Service (ENS)

ENS is up by +26% over the past week due to the increasing demand for Web3 domain names. Overall the trend is still sideways up and a true uptrend will have to be confirmed by ENS passing the first resistance level at 500 baht, if it passes, 680 baht will be the next resistance level. For the ENS rally to continue, the support level at 240 baht must remain intact.

Trading and Investment Considerations For The Week

Everyone should be keeping a close eye on the scheduled release of the FOMC’s meeting minutes on Friday, May 27. The minutes could possibly reveal how the FOMC plans to move forward regarding interest rates and monetary policy. If the minute’s content suggests a more lax approach, this may allow the market to recover; on the other hand, if the minutes reveal that the FED plans on pushing stricter monetary policy, the market may continue to decline.

According to technical indicators, both the S&P 500 and NASDAQ are down by 20% and 30%, respectively, and have entered a bear market. This downturn will likely put pressure on the crypto market as well.

However, the US stock market has been falling for seven straight weeks, with the crypto market having a similar eight-week correction, marking one of the most prolonged downturns in recent history. We may begin seeing a recovery this week, but it is unlikely to be a full recovery, so now is not the time to start investing heavily.

Overall the crypto market remains bearish. Although some tokens have been able to outperform the market, few have been able to do so consistently. During this period of uncertainty, traders are advised to focus on short-term strategies and prepare to cut losses if the downturn gets worse.

*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.

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