Crypto traders are in search of a The Final Bottom
Over the past week, the crypto market has been in a sideways movement. The cryptocurrency market began the period at $1.291 trillion. Then, in the middle of the week, there was a drop to a local bottom of $1.194 trillion. By the end of the period there was restoration to the level of $1.271 trillion. Thus, by the end of the week, total change of capitalization index amounted to -1.54%.
Bitcoin has been trading in the 28 600 to 31 500 range for almost a month now. The asset started the week at 30 680, rising after a short period to a local peak of 32 097. Then, by the middle of the week, the price found a local bottom at 29 437. This was followed by a recovery to 31 410. Thus, by the end of the period, bitcoin gained 2.38%.
Ethereum price movement had almost a similar pattern, starting at 1900, rising to a local peak of 1994 and then falling to a local bottom of 1750 by the middle of the week. After that, we could see a recovery to 1905 level by the end of the period. Thus, we can state that Ethereum price remained almost unchanged during the week.
US regulators are investigating whether Binance Holdings Ltd. violated securities regulations by selling tokens in its early days five years ago. The Securities and Exchange Commission is probing the history of the company and its BNB token, which is now the world’s fifth most capitalised token. Investigators are looking into whether the ICO in 2017 amounted to a sale of securities that should be registered. Binance has come under intense scrutiny from various US regulators in recent months.
New venture capital firm Canonical Crypto has officially launched its first $20 million fund, joining a series of cryptocurrency funds raised in recent weeks. Canonical Crypto’s backers include Mark Andreessen and Chris Dixon of Andreessen Horowitz (a16z), Shan Aggarwal of Coinbase Ventures, Amy Wu of FTX Ventures, Hasib Qureshi of Dragonfly Capital and others. Before founding Canonical in September last year, Anand Layer (CEO) was a visiting partner at Pear Ventures, where he focused on cryptocurrency investments. To date, Canonical has invested in more than 10 startups, including Solana-based data infrastructure project Vybe Network, web3 Notifi communication infrastructure platform and web3 developer tool maker Thirdweb.
Osmosis, the blockchain that operates a major decentralised exchange in the Cosmos ecosystem, has been halted. A critical bug in its liquidity pools led to a $5 million hack, and the network’s core development team and validators halted the blockchain. The vulnerability was first spotted by a user who warned that if someone added funds to the Osmosis pool and removed them, the position would somehow increase by 50%. Due to the blockchain shutdown, Osmosis DEX and its wallet remain unusable for the time being. The team is now working to fix the vulnerability before the network is restarted.
PayPal has introduced new features for users of its cryptocurrency app. The changes will allow users to transfer cryptocurrency between PayPal and other wallets. From now on, users can send supported tokens — btc, eth, bitcoin cash and litecoin — to external addresses, including addresses associated with exchange accounts and hardware wallets. They can also use PayPal to send cryptocurrency to other users of the app. This is similar to how Revolut improved its own crypto app last May.
After a spike in volatility at the start of the trading week (Monday’s Asian session), bidders are in search of a price bottom and possible entry points. From a macro strategic perspective, the main pressure on the price in the current period comes from miners selling (about 10 000 BTC last month, according to Glassnode analytical service) and possible exits from long-term and short-term cryptocurrency holders.
According to the on-chain metrics, the average purchase price between all non-exchange addresses is currently 23 600 USD. The current spot price is very close to the yield boundary. Historically, this situation is usually a sign of a possible bearish price movement cycle ending.
In addition, the unrealised profit indicator in the most acute stage of a market decline is usually short at the lows. Currently, small margins of return remain before the last stage of capitulation within the bearish cycle, which can also be seen as a sign of reaching a local price bottom.
Cryptocurrency options market
The main trading activity in the market was related to the purchase of put options, although this direction is no longer as strong as when the price declined sharply at the beginning of May. The most traded levels are close to each other — 32 000 and 34 000 for call options and 25 000 and 30 000 for put options.
Within block trades there is a clear difference between expectations for Bitcoin and Ethereum. In the case of BTC, the main interest is focused on the different interpretation of the price movement in the coming month (June) and trading is concentrated around the 30 000 strike (for both option types). In the case of ETH, the skewed trading activity is much more evident, with September call options with strike dates much higher than the current spot prices of 3 000, 4 000 and 5 000 (in the call spread strategy). This could also indicate a greater upside of Ethereum against Bitcoin and a reassessment of the asset’s fundamental value by the market in anticipation of the Proof-of-stake transition.