Crypto Weekly: 27 June – 3 July 2022
Amidst the current global downturn, financial institutions and major crypto exchanges are raising funds from investors to buy up promising but in-danger cryptocurrency projects.
Leading global financial institution Goldman Sachs is reportedly looking to raise $2 billion from investors to buy up distressed assets from crypto lender Celsius Network. As reported last week, Celsius has recently suspended withdrawals and transfers, and the threat of bankruptcy looms overhead for the lending platform. If Celsius cannot avoid a bankruptcy filing, the proposed deal would allow Goldman Sachs investors to buy up Celsius’ assets at a steep discount.
Cryptocurrency platform BlockFi has secured a $250 million revolving credit facility from FTX that will bolster the firm’s balance sheet and platform strength amidst fear that BlockFi is facing a liquidity crisis. Meanwhile, Wall Street Journal reported that FTX has entered negotiations to acquire a stake in BlockFi.
According to Binance CEO CZ, Binance is looking at over 50 to 100 deal proposals from projects of various sizes that have been affected by the ongoing market turmoil. CZ also pointed out that Binance has one of the biggest cash reserves in the industry, which is the main reason the exchange is being approached for funding by projects looking for a bailout during the Crypto Winter.
Credit ratings agency Moody’s has downgraded the Corporate Family Rating (CFR) and guaranteed senior unsecured notes of crypto exchange Coinbase, stating that both ratings have been placed under review for further downgrade. Per Moody’s, Coinbases CFR has been downgraded from Ba2 to Ba3, which is considered below non-investment grade. Coinbases’s Senior unsecured notes, a type of debt a company holds not backed by any assets, has similarly been downgraded from Ba1 to Ba2. In its rationale for the downgrades, Moody’s highlighted that Coinbase’s revenue model “is tied to trading volumes, transaction activity per user and overall crypto asset prices.” Furthermore stating that the steep price decline in crypto over the past months has caused customer trading activity to wane, which in turn caused weaker revenue and cash flow for Coinbase.
Jerome Powell, Chairman of the FED, told Congress that they are keeping an eye on crypto closely amid high volatility in the market. Additionally, he also highlighted a need for a better regulatory framework for crypto.
Christine Lagarde, European Central Bank President, has called for greater regulation for staking and lending of crypto and highlighted the need for a clear regulatory framework around decentralized finance, arguing that without more robust regulations, crypto and Defi pose a risk to financial stability.
Despite losing market share to competing stablecoin USDC, Tether, the company behind USDT, is planning to launch a new stablecoin pegged to the British pound sterling.
Elon Musk declared on his Twitter account that he “will keep supporting Dogecoin” following news of the Tesla CEO’s bid approval. Additionally, Musk claims that it makes sense to implement a Doge-tipping feature on Twitter and advanced the idea that premium services on Twitter Blue could be paid for in DOGE.
Solana deubted Saga, its flagship Web3 mobile phone that will be available for delivery in Q1 of 2023. Additionally, Solana has unveiled its “Solana Mobile Stack (SMS)” that will serve as a software development kit for native Web3 applications, specifically designed to provide developers the tools for developing mobile apps and blockchain-related applications on mobile devices.
Finally, football legend Cristiano Ronaldo has announced a new non-fungible token (NFT) partnership with Binance. The first collection will drop later this year which will feature designs created in collaboration with the legend himself and will be available exclusively on Binance’s NFT marketplace.
Weekly Technical Analysis: 27 June – 3 July 2022
Bitcoin (BTC)
BTC recovered after dropping close to the $17,500 mark and has yet to make a new higher low while maintaining its sideways trend , hovering within a small range. BTC should not reach as low as the $19,500 level in the short run and if it managed to break through its first resistance at $23,000, we could potentially see a price recovery with the next resistance level waiting at $25,000.
Ethereum (ETH)
Ethereum is trending sideways and will not revert to an uptrend until it breaks through the $1,500 resistance level. The trading strategy should focus on the $800 support level; if this support can remain intact, then this can be used as a buying point or wait until a breakthrough of the major resistance level, then Follow Buy. It is advised to cut losses if ETH falls and starts making lower lows.
Compound (COMP)
COMP is up by + 60.5% over the past week, considered a fast recovery compared to other tokens. However, this does not confirm its uptrend unless COMP can break through the 2,300 THB resistance level. If COMP cannot surpass this resistance level but support remains intact, and prices remain above the 1,500 THB level, recovery is possible.
Polygon (MATIC)
MATIC is up +55.2% over the past week, with a high possibility of a recovery if prices manage to stay above the 16 THB support level with a resistance level at 26 THB. If it can surpass this resistance level, this could signal an uptrend. However, investors are advised to be ready to cut losses if MATIC falls below 16 THB.
Trading and Investment Considerations For The Week
Since plummeting to an 18-month low of $17,500, Bitcoin’s trend remains unclear. However, some altcoins have begun to rally and outperformed Bitcoin this past week, with some up by +20-30% due to increased trading speculation.
BTC’s correction, in conjunction with the Bitcoin Dominance Index’s sharp fall since mid-June from the major market-wide correction, has fueled further speculative trading activity over altcoins. Nonetheless, the current market conditions are still not suitable for long-term trading, and investors are advised to focus on short-term trading in the meantime.
There are no scheduled major events in the next two weeks that are anticipated to affect the market. The next release regarding June’s inflation data is scheduled for July 13 and could potentially impact the direction of the cryptocurrency market. It is expected that altcoins will provide higher returns than Bitcoin before the release of inflation figures.
If there is no unexpected negative news like additional crypto liquidity crises, and macroeconomic factors can continue to improve with declining inflation figures and oil prices starting to go down, perhaps we have already passed the bottom of the market.
*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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