WIKIFX REPORT: Crypto news: Weak start of the week for Bitcoin

Cryptocurrencies failed to maintain bullish momentum over the weekend, which raises concerns around how they will fare later in the week. Are digital assets in for another wave of sell-offs？

• The Fed's decision on interest rates, the quarterly results of tech giants Microsoft, Alphabet, Apple, Amazon and Meta Platforms, and news on U.S. Q2 GDP. All of these data will flow out this week and bring heightened volatility to the markets. Investor anxiety since the beginning of the year has not favored cryptocurrencies, which are retreating as risk appetite declines;

• News of the possible insolvency of one of the largest cryptocurrency exchanges KuCoin, which has more than 10 million customers and offers trading in nearly 700 digital instruments, hit the market. The exchange's owner Johnny Lyu dismissed the information, suggesting that KuCoin had come under unwarranted attack, and the credibility of an anonymous Twitter source was questioned by the community;

• In a recent interview on Forbes, the head of the FTX exchange, cryptocurrency billionaire Sam Bankman-Fried pointed out that some cryptocurrency exchanges are still hiding the fact of their insolvency, which raises concerns around the next wave of bankruptcies. The exchange created by the popular SBF plans to comply with all regulations and is taking steps to regulate the sector to increase security and reduce fraud. The FTX exchange intends to take over the reserves of the insolvent Voyager platform and save customers from bankruptcy by helping to improve the image of the recently controversial crypto sector.

• The FTX exchange, which has its own token with the twin name, raised nearly $420 million in funding from institutions in October 2021. Investors who decided to support the Sam Bankman-Fried-led exchange include the world's largest asset management fund, BlackRock, and Sequoia Capital.

The chart shows the scale of capitulation and losses suffered by cryptocurrency investors in 2022, they are the largest in the entire history of cryptocurrencies. In the space of 30 days alone, the sector experienced the panic caused by the collapse of Luna ($27.7 billion liquidation) and the June 17 panic associated with the price entering below the 2017 minima ($35.5 billion liquidation). The cryptocurrency market has experienced a massive surrender wave each time in the past before the start of a new cycle, during which Bitcoin rebounded. Source: Glassnode

The MVRV indicator aims to measure the aggregate unrealized gain and loss in the Bitcoin network. It is measured by the ratio of the market price to the so-called realized price (the average purchase price of BTC on the blockchain). Exceeding levels of realized price by Bitcoin's market price could be a catalyst for further increases and interest in investing in Bitcoin. Last week we saw the market price surpass the realized price, but today it is retreating again, signaling that Bitcoin may not have been ready to start a rally yet. In the current cycle, however, Bitcoin still seems to be attracting more investor interest. Currently, the MVRV indicator is hovering around 0.95, while in previous cycles it has even fallen to levels of 0.85 (a calculated average of previous besses). At the same time, dips below 1 have always signaled the late phase of a bull market, which was a suitable time for accumulation. It is worth noting, however, that in the past, periods during which trading below the realized price lasted longer. Source: Glassnode

The chart shows the so-called halving cycles, i.e., which on Bitcoin happen cyclically every 4 years or so and are closely related to its limited supply. The last halving took place in 2020, exactly 805 days ago. Bitcoin's price has historically tended to start rising about 1 year before halving and rise for about 1.5 years afterwards. The nearest halving falls roughly in the first half of 2024, which means that de facto increases 'under halving' may not come until spring 2023. Going by this, the price of Bitcoin may still have time to hammer new lows, on the other hand, looking at past price reactions, we can say that in the long term, Bitcoin currently already seems to be cheap. Source: HalvingTracker

Bitcoin chart, W1 interval. The major cryptocurrency has returned to trading below a key resistance level at 22,600 USD, where the 200-session moving average on the weekly interval runs. The 'king of cryptocurrencies' failed to close the week clearly above the running average, and now the price is slipping below 22,000 USD, which raises concerns around a larger decline and tilts the scales in favor of the bears. Source: xStation5

Ethereum chart, W1 interval. Bitcoin's main rival has fared noticeably better recently and is still trading above its 200-session average, which runs around 1,200 USD. Supply has already knocked down the ETH price several times when it tried to enter above 1,600 USD, which indicates a decline in bullish momentum. At the same time, the price of Ethereum has been looking noticeably better than Bitcoin recently, as we can see from the SMA 200. Ethereum's limiting dominance of Bitcoin makes speculation grow about a possible 'flippening', i.e. Ethereum dethroning Bitcoin. Source: xStation5

FTX chart, H4 interval. The declines of the FTX exchange token were stopped twice in the second half of June, at 20 USD. Currently, the token is oscillating around levels at 28 USD, which coincides with the 23.6 Fibonacci retracement. If the cryptocurrencies unexpectedly rebound the rally towards 30 USD will take a turn for the worse. If Bitcoin and Ethereum continue their declines, the next support seems to be the levels at 61.8 retracement, near 25 USD. Source: xStation 5