Crypto is staring down the regulatory barrel, and only a handful of assets can be confident that their legal status as a digital commodities is fairly straightforward.
Regardless, this week is primed with potentially market-moving events; place your bets.
In this issue
- Bitcoin analysis
- Whales buying; BTC.D on the rise
- Fear and wonder
- Latest happenings
- Listening material
Bitcoin is facing a charged week filled with external catalysts. This is the time to be stubbornly aggressive, as downside price-action is likely capped. In fact, Bitcoin has held steady despite abrupt sell-offs in alternative cryptocurrencies following the SEC’s sporadic crackdown on the space.
Specifically, short-term volatility this week could in part come from these readings:
- CPI Inflation: Tuesday
- PPI Inflation: Wednesday
- FED Meeting: Wednesday
- Retail Sales Data: Thursday
- Initial Jobless Claims: Thursday
Technically, Bitcoin/Dollar exchanges hands at $26,100 at the time of writing, -3.6% week-on-week.
BTC faces the prospect of selling off into local support at $24,500 in the immediate short term. Provided this bloc holds, a swing failure pattern could be anticipated, in which case $30,000 is in the cards.
If price reclaims $26,500 without sweeping local support, then the propensity for further consolidation remains elevated due to resting liquidity below $25,300.
From my perspective, the most bullish scenario would be a deviation and reclaim of weekly and monthly levels (LWL, LML). If price falls below $24,000, then $22,000 becomes the next area of interest.
Whales buying; BTC.D on the rise
Per data from crypto intelligence firm Santiment, large wallets have bought 57,578 more BTC as the asset’s USD-price fell 10% between April 9th and June 9th. In that timeframe, whales consistently added over 1,000 BTC a day.
Bitcoin dominance (BTC.D) has also surged from 44.21% to 45.9%, per CoinGecko data. Both increasing BTC dominance and whale accumulation are tailwinds for the asset’s fiat price. While BTC/USD is still 62% below all-time-highs, these tailwinds could help catalyse a significant Bitcoin rebound.
Fear and wonder
Pressure is building on the market, which feels weak and ready to roll over. The June 13th ‘resolution’ date for XRP’s lawsuit will certainly make waves given its $27.6 billion market cap. [The Hinman documents have since been released]. Those who are not positioned in assets whose legal status is questionable are probably in a better position than those facing legal complaints. Then again, Gary Gensler‘s days as SEC chairman may be numbered.
The risk of pronounced volatility amidst the confluence of events this week cannot be understated. Should the price drop materialise, it’s unlikely to affect all cryptocurrencies equally. Bitcoin is not a security in the eyes of the SEC, and legal precedents against a number of assets could become abruptly formalised, shuffling market dynamics.
While the SEC hasn’t directly spoken to Litecoin’s status, the asset has been designated a commodity by the CFTC. More importantly, if Litecoin is not a digital commodity, then neither is Bitcoin. In that case, the entire Securities and Exchange Commission will have demonstrated that it is not fit for purpose at best. At worst, it will be clear that the agency is pursuing a strategy of gaslighting market participants in an effort to bring the industry down.
Regardless, buyers should sit tight, ready to aggressively enter into select cryptocurrencies if panic selling materialises in my view.
- SEC’s Gensler Told Hedge Funds that Litecoin and Ethereum are ‘not securities’ in 2018
- Binance.US sees 78% Drop in Market Depth following SEC Crackdown
- Bitcoin Whales Quietly Accumulate BTC in Anticipation of Strong Rebound
- Vitalik Pledges $100 million for Pandemic Prepardedness Amidst Disconcerting Evidence Against mRNA tech
- SEC Files Emergency Motion to Suspend Binance.US’ Assets
- “Papers Please” — WHO Plots to Adopt Digital Health Passport
The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Tuesday. I am not perfect and this is not a science — nor is this newsletter analysis a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.
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