Crypto Weekly: 13 – 19 June 2022
Regulators worldwide are investigating cryptocurrency projects, checking to see whether any have violated securities laws, despite projects claiming to be decentralized and have nothing to do with securities in the traditional sense.
According to reports by South Korean news agency Naver, the US SEC has allegedly discovered that Terraform Labs was sending assets worth over one hundred billion won or 80 million US dollars every month as operating expenses split across different wallets. These transactions started a few months before the collapse of LUNA and UST.
Similarly, the US Court of Appeals has ordered Do Kwon to comply with subpoenas issued by the SEC as part of its ongoing investigation into whether any Securities Act violations occurred and whether Terra’s Mirror Protocol was used to sell unregistered securities. The appeals court ruled that the aforementioned subpoena was properly served and that the SEC could serve Terraform as a corporate entity through Kwon. Furthermore, the appeals court found that the district court did have jurisdiction over Terraform Labs and Kwon.
Considering the collapse of Terra Chain and Luna, South Korean regulators are looking to tighten scrutiny and increase supervision over the future listings of tokens by licensed exchanges within the country to protect local investors and avoid future disasters like the LUNA-UST collapse.
According to Bloomberg, The US SEC is investigating whether Binance Coin (BNB) was a security when sold in 2017 as part of the initial coin offering (ICO). Assets may fall under the SEC’s remit if investors buy them to fund a company or project with the intention of profiting from those efforts. That determination is based on a 1946 US Supreme Court decision defining investment contracts.
The whitehat Optimism hacker who stole 20 million Optimism tokens (OP) last week has returned 17 million OP, with the remaining kept as a bounty for the hacker, according to the Optimism Foundation. Optimism had hired market maker Wintermute to distribute OP in the highly anticipated airdrop; however, because Optimism sent the tokens to a Wintermute layer-1 address that hadn’t yet been synced to layer-2, they were all inaccessible until the hacker was able to steal the tokens using the exploit. Data from Etherscan shows the OP was sent back in 17 separate 1-million token transactions.
The Japanese government is planning to implement a new policy promoting the development and expansion of the Web3 landscape in the country, including the use of non-fungible tokens (NFT) and decentralized autonomous organizations (DAOs). The new plans are expected to be unveiled in 2023 and are part of Japan’s efforts to tap into the economic potential of blockchain, digital assets, and the metaverse.
MicroStrategy CEO Michael Saylor appeared on CNBC’s Squawk Box, with the prominent Bitcoin bull stating that Bitcoin is not going to zero and outlining why he believes Bitcoin is going to eventually reach the one million USD price target.
Decentralized oracle protocol Chainlink released their updated Chainlink 2.0 roadmap, which details the improvements and new features coming to the blockchain in the near future. This roadmap shows that the network will allow LINK holders to earn passive income off their coins by staking them on the network. The blockchain also plans to implement a Proof of Reserve (PoR) system by which cryptocurrency holdings can be automatically audited to prevent fraud within the network, further increasing blockchain transparency.
Blockchain-based game Axie Infinity brought in only $988,400 in revenue last week — the first week the play-to-earn (P2E) game has managed less than $1 million since February of 2021. At its peak, the game accrued over $215 million during the week of August 8, 2021; however, data from The Block’s dashboard shows that Axie Infinity has experienced a steady decline since November of 2021, potentially due to imbalances in issuance and burn mechanics for in-game tokens.
Finally, according to a research report published by multi-national IT services giant Accenture, over 52% of Asian investors held digital assets, with another 21% expected to do so by the end of the year, making digital assets the fifth-largest asset class behind equities, bonds, cash, and real estate in Asia. The survey was conducted with approximately 3,200 participants – from mainland China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, and Thailand – who have investable assets ranging from at least $100,000 to over $5 million.
Weekly Technical Analysis: 13 – 19 June 2022
BTC has clearly entered bear market territory. If BTC manages to fall below its previous low at $25,400, there is a possibility that it could fall all the way to its next support level at $22,000, which is a support level using BTC’s 200-week MA. BTC’s RSI is now considered to have entered oversold territory. All things considered, this is not an ideal time to enter a BTC position, and investors are advised to wait for BTC to break through the $30,000 resistance level to confirm a bullish reversal.
ETH has fallen past its major support level at $1440, which was the peak of its previous bull run. There is a possibility that ETH could continue to fall to the next support levels at $1,100 or $800, respectively. ETH’s overall trend is clearly bearish, and investors are advised to wait for the market trend to become clearer with prices remaining above the $2000 level before entering positions for both short-to-long term gains.
VELO is down by over -1.9% over the past week; however, it has seemingly rallied from its lowest price at 0.5 THB, which will serve as its support level moving forward. If the support level cannot remain intact, the outlook indicates that the downtrend is not yet over. Resistance is set at 1.50 THB; successfully breaking through this level could signal an upwards recovery; otherwise, the overall trend is still sideways.
Stargate Finance (STG)
STG is down by -7.2% over the past week, which is less severe compared to the rest of the market. Technical indicators signal that STG is still in a downtrend, with the subsequent support and resistance levels at 14 THB and 19 THB, respectively. Traders are advised to wait for STG to stop creating new lows before entering a position. Overall, the market remains bearish, and traders should focus on short-term strategies.
Trading and Investment Considerations For The Week
The consumer price index (CPI) surged to a new 40-year high of 6.3% in May, beating out April’s figure of 6.1%. Consequently, both the crypto and equities markets faced heavy sell-offs by investors due to fear of tightening monetary policy by the central banks.
Investors are keeping a close eye on the upcoming FOMC meeting on June 15. The most recent announcements from the FED suggested that there wasn’t a need to raise interest rates by more than 0.5%; however, the FED has floated the idea of a 0.75% interest rate hike in the past previously before.
If the FED raises interest rates by 0.5% as expected, the market will likely not experience a significant correction as this increase would align with current expectations. However, if the interest rate is increased by 0.75%, the market could potentially face a major correction, with investors scrambling to respond to the unexpected move.
US Dollar Index (DXY) has risen back to almost its new highs once again. If it can surpass the 105 mark, this will strengthen the US Dollar and likely negatively affect Bitcoin price. However, if DXY continues to weaken and cannot reach new highs, we could potentially see a short-term Bitcoin price recovery.
With the market remaining somewhat stagnant, the investment strategy, for now, is to wait for an apparent sign of the market’s direction before making any long-term investments or entering any significant positions.
*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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