The current bear market calls for the skills of ‘Tsujigiri.’ Well, if you are an investor or a trader thinking ‘Life’s but a walking shadow,’ then acquaint thyself with celebrated American investor Jim Rogers’ belief –
“Bottoms in the investment world don’t end with four-year lows, they end with 10-15 year lows.”
Now, this quote might feel like a minor myocardial infarction. However, know that Bitcoin holders needn’t really worry as positive sentiments are in the king coin’s territory. It’s important to note here that sentiments rule the trading world.
And, you ask, how can someone measure that. Well, the ‘social dominance’ on-chain metric can reveal a lot about traders’ stress per unit of profit and the overall sentiment across the market.
Bowling in the deep
Interestingly enough, for most of the last two years, the market has seen BTC’s social dominance value well below 20% as the altcoin craze was in full swing. But, surprisingly, Bitcoin’s social dominance is above 25% this week.
It is indicative of the fact that the crypto-crowd is having a “healthy” outlook on Bitcoin in general. Moreover, it clearly goes on to reflect that over one-quarter of all discussions in crypto-forums have been related to the king coin, rather than altcoins or stablecoins.
At this point, it wouldn’t be a fool’s question to ask how positional traders can benefit from this metric’s reading. One doesn’t need to ‘go figure!’ Taking a look at weighted sentiment should suffice.
The negative sentiment post 6 June has recovered. It currently is at the -0.069 mark. Its chances of moving to the positive zone look nil at the moment. Positional traders willing to go short can capitalize on this opportunity.
However, traders seeking validation from whales would be happy to know – according to a data platform Tokenview – Bitcoin’s third-largest whale increased its holdings of 565 BTC on 23 June. The address currently holds a total of 129,936.54 BTC, with a total value of about $2.6 billion. This, when the overall market is treating the $20k+ level as psychological support currently.
Here’s a painful reminder – The king coin hit its most recent local bottom at $17.8k on 18 June. You can blame inflation, the FOMC-related rate hikes, COVID-19, or the Russia-Ukraine conflict.
That being said, the reading of the MVRV (30-D), however, induces a slight hope. At press time, the MVRV had recovered from its recent low of 18 June to halt at -13.17%. Even though the metric still states that BTC is undervalued on average. Here, it’s worth noting that this metric is aiming at a recovery.
Considering addresses that bought between $17,392.68 and $23,662.11, there are 1.28M addresses in the profit. However, only 826.63k addresses are ‘out of the money.’ This is surely not a disappointing figure.
Keeping all the tiny bullish factors for BTC in the fore, one can expect the ‘Bitcoin catharsis’ to end. But, let’s not forget that it might take a few years for it to happen.
Risk Of ‘Significant Drawdowns’ Pushes Cypherpunk Holdings To Sell Entire Stash Of Bitcoin And Ethereum
On Tuesday, the Canada-based investment firm Cypherpunk Holdings Inc. announced that the company has sold all of its bitcoin and ethereum due to the “risk of further significant drawdowns.” The company has transitioned its treasury to cash after selling 214.72 bitcoin and 205.82 ethereum as Cypherpunk Holdings continues “to see systemic risks propagating” across the crypto economy.
Cypherpunk Holdings Sells All of the Bitcoin and Ethereum on Its Balance Sheet
Crypto winter has done a lot of damage since the bull run’s price highs, as more than $2 trillion has left the digital currency economy since the first week of November 2021. Today, the crypto economy is worth roughly $945 billion and bitcoin (BTC) is coasting along just above the $20K per unit range.
BTC is down more than 70% from the all-time high ($69K) on November 10, 2021, and ethereum (ETH) has lost more than 77% since the ATH ($4,878) recorded on the same day. On June 28, 2022, or eight months later, the publicly listed Canadian investment company Cypherpunk Holdings revealed it had dumped all of its bitcoin and ether holdings.
Cypherpunk Holdings (CSE: HODL) (OTC Pink: CYFRF) was one of the many publicly listed companies that held bitcoin and ethereum on its balance sheet. The update from the company notes that the sale was due to risk and it said the crypto economy may see “significant drawdowns” going forward.
Cypherpunk Holdings sold approximately 214.7203 BTC and 205.8209 ETH and it got around $4,927,000 for the lot of crypto assets. The company said that it currently has just over $14 million worth of “cash and stables” on hand. After the sale, the CEO and president of Cypherpunk Holdings, Jeff Gao, spoke about dumping the digital assets for cash.
“Recently, Cypherpunk liquidated all of its treasury holdings in BTC and ETH for cash and withdrew back to custody,” Gao wrote in an update concerning the company’s cryptocurrency holdings and strategy.
“We continue to see systemic risks propagating throughout the crypto ecosystem and, in our assessment of the risk reward and opportunity costs involved in holding asset tokens, we believe that the most prudent approach is to sit on the sidelines as we wait for the volatility and illiquidity contagion to come to its logical conclusion,” Gao said. “On the balance of probabilities, we see weaker price action opening the way to lower levels to come as reports of the number of chains imposing ‘temporary’ suspension on withdrawals increases.”
The Cypherpunk Holdings executive continued by adding:
Until such a time as our thesis on market conditions change, our treasury will remain in cash. Cypherpunk maintains its long-term bullish outlook on crypto and currently plans to actively seek to capitalize on compelling risk reward opportunities as and when they present.
Company Sold 196.74 Bitcoin and 382 Ether Prior to the June 28 Announcement and Amid the Terra LUNA Fallout
Furthermore, Cypherpunk Holdings dumped bitcoin (BTC) before the June 28 announcement, as it told investors on June 13 that it sold 96.74 BTC for $2.9 million and 50 ETH for $100K. Cypherpunk Holdings’ management also decided to unload shares of Animoca Brands, as it sold the company’s last block of 500,000 Animoca shares for “a realized profit of 234%.” Amid the Terra LUNA and UST fallout, on May 11, 2022, Cypherpunk Holdings sold 100 BTC and 332 ETH for just over $4 million.
With Cypherpunk Holdings removed from the Bitcoin Treasuries list, and Microstrategy’s recent purchase of 480 bitcoins, publicly-listed companies hold 268,357 BTC worth 5.382 billion at current bitcoin exchange rates. Exchange-traded products hold 828,641 BTC, countries hold 50,699 BTC, and private companies own 174,381 BTC, according to the Bitcoin Treasuries list on June 29.
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What do you think about Cypherpunk Holdings dumping its bitcoin and ether because it believes “weaker price action” is coming? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.
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TA: Bitcoin is Plunging, But It’s Too Early to Say Bulls Have Given Up
Bitcoin is struggling below the $20,000 zone against the US Dollar. BTC remains at a risk of more losses if the bulls fail to protect the $19,800 support zone.
- Bitcoin is showing bearish signs below the $21,000 and $20,500 levels.
- The price is now trading below the $20,400 level and the 100 hourly simple moving average.
- There is a key bearish trend line forming with resistance near $20,400 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair could decline further if there is a clear move below the $19,800 zone.
Bitcoin Price Remains At Risk
Bitcoin price failed to recover above the $21,000 pivot level. The price remained in a bearish zone and extended its decline below the $20,500 support zone.
There was also a close below the $20,250 level. BTC spiked below the $20,000 level, but the bulls were active near $19,800 level. A low is formed near $19,828 and the price is now consolidating losses. It is now trading below the $20,400 level and the 100 hourly simple moving average.
An immediate resistance on the upside is near the $20,150 level. It is near the 23.6% Fib retracement level of the recent decline from the $21,188 swing high to $19,828 low.
The next key resistance is near the $20,400 zone. There is also a key bearish trend line forming with resistance near $20,400 on the hourly chart of the BTC/USD pair. The trend line is near the 50% Fib retracement level of the recent decline from the $21,188 swing high to $19,828 low.
Source: BTCUSD on TradingView.com
A clear move above the trend line resistance and then $20,500 could start a recovery wave. In the stated case, the price could rise towards the $20,900 level. The next major hurdle for the bulls might be near the $21,200 zone, above which the price may perhaps rise towards the $21,800 level.
More Losses in BTC?
If bitcoin fails to clear the $20,500 resistance zone, it could continue to move down. An immediate support on the downside is near the $20,000 level.
The main support now sits near the $19,800 level, below which the price could accelerate lower. The next major support sits near the $18,800 zone. Any more losses could send the price towards the $18,000 level.
Hourly MACD – The MACD is now losing pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.
Major Support Levels – $20,000, followed by $19,800.
Major Resistance Levels – $20,150, $20,400 and $20,500.
Bitcoin’s [BTC] exchange inflow and outflow are signaling…
Bitcoin’s fall in price on 28 June can be considered quite significant for the king coin. It has effectively ripped out all the bullish surges from the past week and has reduced BTC back to the 3AC crash valuations. One may question- Is this an indication of a severe pullback or a minor setback?
See you on the other side
At the time of writing, BTC was hovering around $20,000 yet again, which is beginning to seem like a familiar situation for investors. This is the first time that BTC dipped to such a low in the last seven days. The cryptocurrency market was showing considerable recovery until the dip of 28 June.
BTC was down 5% in the last 24 hours of 29 June. According to CoinShares data, exchange outflows for Bitcoin specific funds accounted for $453 million in the past week.
This has in turn wiped out all the inflows deposited in the past six months. Also, as per a CryptoQuant update, there has been rampant exchange inflows on Coinbase from different age bands of Bitcoin owners.
The largest contribution is from the six to 12 months group who were responsible for 3.1k BTC holdings. Furthermore, the 12-18 months and the three to five year bands were responsible for holdings of 200 BTC each.
The latest data suggests a surge in the transaction volume on the Bitcoin network. That should have provided some respite for the otherwise stunted investors but that is not the case. As mentioned above, there is growing FUD in the crypto market and BTC is obviously an important cog in the wheel.
As per a Glassnode tweet, Exchange Outflow Volume (7d MA) just reached a 19-month low of $30,517,649.52. This has also become a cause of worry among investors with exchange inventories stacking up.
Notably, a daunting moment for investors was highlighted during Gary Gensler’s latest crypto talk. Gensler, the SEC Chairman told Financial Times, that there is a need for “one rule book” for crypto regulations.
“I’m talking about one rule book on the exchange,” he said.
That being said, investors have been looking for profit-making opportunities which depend on the market scenario. Now, only time will reveal if broader market condition can recover soon.
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