Crypto newsletter: Bitcoin steadies below 200 SMA

Bitcoin rose nearly 4.0% over the past week and currently trades around $21.300 despite overall negative sentiment. Nevertheless, BTC recovery has been more subdued than the stock market, which may be a sign that correlation between both asset classes is weakening. Meanwhile Ethereum jumped over 9.0%, while major altcoins gained between 4.6% (Cardano) and 19.3% (Dogecoin).  According to CoinMarketCap, the total capitalization of the crypto market nears 1.0 trillion, Bitcoin's market dominance decreased to 42.5%, which may be a positive sign for altcoins, while an average daily trading volume is registered at $ 53.78 billion. 

Crypto Fear & Greed Index rebounded slightly over the weekend, however it still remains in “extreme fear territory". Source: Alternative.me

Bitcoin’s 60-day correlation with the S&P index reached its all-time high of 0.74 on May 25, 2022, after which it pulled back to 0.64. Source: CoinMetrics 

Meanwhile the 20-day correlation between Bitcoin and the Nasdaq 100 has fell from 0.88 in May to just 0.30 currently. Source: Bloomberg

Bitcoin:

• MicroStrategy remains bullish on Bitcoin despite the possibility of margin call on a $205 million loan that the firm took in 2022, to buy more Bitcoin. 

• Michael Saylor argues that he has faith in Bitcoin and compares the recent bloodbath to the early days of oil and car industries. 

• “Bear market lows have historically been established with BTC drawdowns of -75% to -84% from the ATH, and taking a duration of 260-days in 2019-20, to 410-days in 2015,” according to on-chain analytics firm Glassnode.

• “With the current drawdown reaching -73.3% below the Nov-2021 ATH, and taking a duration between 227-days and 435-days, this bear market is now firmly within historical norms and magnitude.” “The recent price collapse through to the $20k region was punctuated with the largest daily USD denominated realized loss in history,” Glassnode noted.

“Investors collectively locked in a loss of -$4.234B in a single day, which is a 22.5% increase from the previous record of $3.457B set in mid-2021. Source: Glassnode

• Glassnode also noticed that the BTC price dropped below 0.5 the Mayer Multiple (MM) for the first time since 2015. The MM factors in price changes above and below the 200-day MA to show overbought or oversold conditions. The report states, “Only 84 out of 4160 trading days (2%) have recorded a closing MM value below 0.5:”

Bitcoin price plunged below 0.5 MM, which has not happened since 2015: Glassnode

• Data from Google Trends shows that more users have been googling “Bitcoin” this month than at any point since May 2021 following the recent sell-off. Most people type phrases such as “Bitcoin is dead” which may be a sign that the market is in a “capitulation” phase.

Mainstream interest in Bitcoin is again on the rise, however this time one can notice a bearish attitude. Source: Google Trends

Bitcoin still consolidates beneath the 200 SMA (red line) and as long as price sits below, another downward move towards support at $1800 may be launched. This level coincides with 78.6% Fibonacci retracement of the upward wave started in March 2020. Source: xStation5

Ripple:

• Brad Garlinghouse, CEO of Ripple, has affirmed a move outside the US if the payment giant loses the SEC vs. Ripple lawsuit and even took first steps in this regard. Ripple opened an office in Toronto with over 150 engineers and employees.

• Experts predicted a settlement in the SEC vs. Ripple lawsuit; however, the legal battle has dragged on without an end in sight, and the key rulings awaited could change the direction of the outcome.

• Also, the CEO of Ripple recently criticized the SEC for approving Coinbase’s S-1 IPO. 

Ripple price fell over 65% since the beginning of the year and reached low at 0.2850 - a level not seen since January 2021. Buyers became more active last week, however price struggles to make a decisive break above  major resistance at $0.37 which is marked with previous price reactions and 50 SMA ( green line). If bulls manage to take control then, the upward move may accelerate towards the next resistance zone around $0.55, which coincides with 78.6% Fibonacci retracement of the upward wave launched in March 2020. On the other hand, if sellers manage to halt advances, then major aforementioned support may be at risk. Source: xStation5

Cardano:

• The Input Output Global (IOG) team, developers behind the Cardano network, reported that developers have successfully released Cardano node 1.35.0 and is now one step closer to the Vasil hard fork. 

• The team of Cardano developers are now working on the release of the testnet and the updated proposal will be submitted as soon as 75% of operators are on board.