Markets

Bitcoin futures enter backwardation for the first time in a year

Risk-averse BTC derivatives traders throw in the towel after futures contracts trade below the spot market price.

Bitcoin’s (BTC) month-to-date chart is very bearish, and the sub-$18,000 level seen over the weekend was the lowest price seen since December 2020. Bulls’ current hope depends on turning $20,000 to support, but derivatives metrics tell a completely different story as professional traders are still extremely skeptical.

BTC-USD 12-hour price at Kraken. Source: TradingView

It’s important to remember that the S&P 500 index dropped 11% in June, and even multi-billion dollar companies like Netflix, PayPal and Caesars Entertainment have corrected with 71%, 61% and 57% losses, respectively.

The U.S. Federal Open Market Committee raised its benchmark interest rate by 75 basis points on June 15, and Federal Reserve Chairman Jerome Powell hinted that more aggressive tightening could be in store as the monetary authority continues to struggle to curb inflation. However, investors and analysts fear this move will increase the recession risk. According to a Bank of America note to clients issued on June 17:

“Our worst fears around the Fed have been confirmed: they fell way behind the curve and are now playing a dangerous game of catch up.”

Furthermore, according to analysts at global investment bank JPMorgan Chase, the record-high total stablecoin market share within crypto is “pointing to oversold conditions and significant upside for crypto markets from here.” According to the analysts, the lower percentage of stablecoins in the total crypto market capitalization is associated with a limited crypto potential.

Currently, crypto investors face mixed sentiment between recession fears and optimism toward the $20,000 support gaining strength, as stablecoins could eventually flow into Bitcoin and other cryptocurrencies. For this reason, analysis of derivatives data is valuable in understanding whether investors are pricing higher odds of a downturn.

The Bitcoin futures premium turns negative for the first time in a year

Retail traders usually avoid quarterly futures due to their price difference from spot markets, but they are professional traders’ preferred instruments because they avoid the perpetual fluctuation of contracts’ funding rate.

These fixed-month contracts usually trade at a slight premium to spot markets because investors demand more money to withhold the settlement. This situation is not exclusive to crypto markets. Consequently, futures should trade at a 5%-to-12% annualized premium in healthy markets.

Bitcoin 3-month futures’ annualized premium. Source: Laevitas

Bitcoin’s futures premium failed to break above the 5% neutral threshold, while the Bitcoin price firmly held the $29,000 support until June 11. Whenever this indicator fades or turns negative, this is an alarming, bearish red flag signaling a situation is known as backwardation.

To exclude externalities specific to the futures instrument, traders must also analyze the Bitcoin options markets. For example, the 25% delta skew shows when Bitcoin market makers and arbitrage desks are overcharging for upside or downside protection.

In bullish markets, options investors give higher odds for a price pump, causing the skew indicator to fall below -12%. On the other hand, a market’s generalized panic induces a 12% or higher positive skew.

Bitcoin 30-day options 25% delta skew: Source: Laevitas

The 30-day delta skew peaked at 36% on June 18, the highest-ever record and typical of extremely bearish markets. Apparently, the 18% Bitcoin price increase since the $17,580 bottom was sufficient enough to reinstall some confidence in derivatives traders. While the 25% skew indicator remains unfavorable for pricing downside risks, at least it no longer sits at the levels which reflect extreme aversion.

Analysts expect “maximum damage” ahead

Some metrics suggest that Bitcoin may have bottomed on June 18, especially since the $20,000 support has gained strength. On the other hand, market analyst Mike Alfred made it clear that, in his opinion, “Bitcoin is not done liquidating large players. They will take it down to a level that will cause the maximum damage to the most overexposed players like Celsius.”

Until traders have a better view of the contagion risk from the Terra ecosystem implosion, the possible insolvency of Celsius and the liquidity issues being faced by Three Arrows Capital, the odds of another Bitcoin price crash are high.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Price analysis 6/20: BTC, ETH, BNB, ADA, XRP, SOL, DOGE, DOT, LEO, AVAX

Bitcoin and select altcoins attempted a relief rally, but most breakouts are being capped-off well below the 20-day moving average.

The crypto markets have been in a strong bear phase for the past several months but JPMorgan Chase analysts expect that to change and they have projected a significant upside from the current levels. The analysts cited the rising share of all stablecoins in the total crypto market for their bullish outlook.

Unperturbed by the current fall, retail traders have been adding Bitcoin (BTC) to their portfolios. The number of wallet addresses holding one Bitcoin surged by 13,091 to a record high of 865,254. Similarly, the number of addresses holding about 0.1 Bitcoin has also witnessed a sharp rise in the past 10 days, according to data from Glassnode.

Daily cryptocurrency market performance. Source: Coin360

Bitcoin’s sharp recovery from the June 18 fall shows strong buying at lower levels and according to Whalemap, this has led to the formation of a new “whale level,” which may act as short-term support.

Could the recovery in Bitcoin and major altcoins continue in the near term? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin plunged below $20,000 on June 18 but made an equally sharp recovery on June 19, indicating aggressive buying at lower levels. If bulls sustain the price above $20,000, it could improve sentiment and attract more buyers.

BTC/USDT daily chart. Source: TradingView

The BTC/USDT pair could first rise to the 38.2% Fibonacci retracement level of $23,024 and then to the 20-day exponential moving average (EM($24,890). The bears are likely to defend this zone with all their might.

If the price turns down from this zone, the sellers will make another attempt to pull the pair below $20,000. A break and close below $17,622 could start the next leg of the downtrend.

Alternatively, if buyers push the price above the 20-day EMA, it will signal a potential change in trend. The pair could then rally to the 50-day simple moving average (SMA) ($29,386) where the bears may mount a strong defense.

ETH/USDT

Ether (ETH) plummeted below the psychological level of $1,000 on June 18, which suggests that the downtrend remains intact. A minor positive is that the bulls purchased the dip as seen from the long tail on the day’s candlestick.

ETH/USDT daily chart. Source: TradingView

The buyers sustained the momentum on June 19 and pushed the price back above $1,000. The ETH/USDT pair could rise to $1,250 and later to the 20-day EMA ($1,429). This remains the critical resistance to watch out for.

If the price turns down from the current level or the 20-day EMA, it will suggest that the bears are active at higher levels. The sellers will then try to pull the pair to the June 18 intraday low of $881. A break and close below this level could signal the resumption of the downtrend.

BNB/USDT

BNB broke and closed below the strong support at $211 on June 18 but the bears could not build upon this advantage. This suggests that lower levels continue to attract buyers.

BNB/USDT daily chart. Source: TradingView

The bulls pushed the price back above the breakdown level of $211 on June 19. If buyers sustain this level, it will suggest that the breakdown on June 18 may have been a bear trap.

If bears rush to cover their positions, it could cause a short squeeze and push the BNB/USDT pair toward the 20-day EMA ($251). If bulls overcome this barrier, the pair could rise to the 50-day SMA ($297).

Contrary to this assumption, if the price turns down from the current level and breaks below $211, it will suggest that bears are selling on minor rallies. The bears will then try to sink the pair below $183 and resume the downtrend.

ADA/USDT

The bulls once again successfully defended the $0.44 to $0.40 zone on June 18. That started a recovery in Cardano (ADA), which has reached the 20-day EMA ($0.52).

ADA/USDT daily chart. Source: TradingView

If bulls drive the price above the moving averages, the ADA/USDT pair could rise to the overhead resistance zone between $0.70 and $0.74. The bears are likely to defend this zone with all their might.

If the price turns down from it, the pair could remain stuck in a wide range between $0.40 and $0.74 for a few days. The next trending move could begin after bulls push the price above $0.74 or bears pull the pair below $0.40.

XRP/USDT

Ripple (XRP) slipped below $0.29 on June 18 but the bears could not capitalize on the advantage. This suggests that selling dries up at lower levels.

XRP/USDT daily chart. Source: TradingView

The bulls may attempt to push the price to the overhead resistance zone between the 20-day EMA ($0.35) and the breakdown level of $0.38. The bears are likely to defend this zone aggressively but if bulls bulldoze their way through, the XRP/USDT pair could rally to the overhead resistance at $0.46.

This positive view could invalidate if the price turns down from the current level or the overhead zone. The bears will then make another attempt to sink and sustain the price below $0.29.

SOL/USDT

Solana (SOL) remains in a downtrend but the bulls are attempting to start a recovery. The price has reached the 20-day EMA ($36), which is an important level to keep an eye on.

SOL/USDT daily chart. Source: TradingView

The positive divergence on the relative strength index (RSI) indicates that the bearish momentum may be weakening. If buyers propel the price above the 20-day EMA, the SOL/USDT pair could rally to the 50-day SMA ($49). This level may again act as a resistance but if bulls clear this hurdle, the next stop could be $60.

On the contrary, if the price turns down from the current level, it will suggest that bears continue to defend the 20-day EMA with vigor. The bears will have to pull the pair below $25 to signal the start of the next leg of the downtrend.

DOGE/USDT

The bears pulled Dogecoin (DOGE) below the psychological support at $0.05 on June 18 but they could not sustain the lower levels. This suggests that bulls are buying on dips.

DOGE/USDT daily chart. Source: TradingView

Buyers will try to push the price to the 20-day EMA ($0.07) which could act as a stiff barrier. If the price turns down from this level, it will suggest that bears remain in command. The sellers will then make one more attempt to sink and sustain the price below $0.05. If they succeed, the DOGE/USDT pair could drop to $0.04.

Conversely, a break and close above the 20-day EMA will be the first indication that the bulls are on a comeback. The pair could then rise to the 50-day SMA ($0.09), which may again act as a stiff resistance.

Related: Ethereum analyst warns of ‘clean fakeout’ despite 30% ETH price rebound

DOT/USDT

The bears tried to sink Polkadot (DOT) below the support at $6.36 on June 18 but the bulls held their ground. Strong buying at lower levels pushed the price back above the breakdown level of $7.30 on June 19.

DOT/USDT daily chart. Source: TradingView

The bulls will attempt to push the price above the 20-day EMA ($8.33). If they succeed, it will suggest the start of a sustained recovery. The DOT/USDT pair could then rise to the 50-day SMA ($10.06) and later to the overhead resistance at $12.44. The positive divergence on the RSI is also pointing toward a possible relief rally.

Contrary to this assumption, if the price turns down from the 20-day EMA, the bears will again try to sink the pair below $6.36 and resume the downtrend. The next support on the downside is $4.23.

LEO/USD

UNUS SED LEO (LEO) dipped below the support line of the descending channel on June 18 but the long tail on the day’s candlestick suggests aggressive buying at lower levels.

LEO/USD daily chart. Source: TradingView

The bulls sustained their momentum and pushed the price above the moving averages on June 20. If the LEO/USD pair maintains above the moving averages, the next stop could be the resistance line of the channel. The buyers will have to push the price above this level to indicate the start of a new up-move.

Contrary to this assumption, if the price turns down from the resistance line, it will suggest that bears are defending the level aggressively. That could keep the pair stuck inside the channel for a few more days.

AVAX/USDT

Avalanche (AVAX) slipped below the support at $14.50 on June 18 but the bears could not sustain the lower levels. The bulls are attempting a rebound on June 20 which could reach the 20-day EMA ($20).

AVAX/USDT daily chart. Source: TradingView

If the price turns down from the 20-day EMA, it will suggest that bears remain in control and they are selling on rallies. The bears will then make one more attempt to sink the price below $13.71 and resume the downtrend. The next support on the downside is $13.

Conversely, if bulls thrust the price above the 20-day EMA, it will suggest that the bears may be losing their grip. The AVAX/USDT pair could then attempt a rally to the 50-day SMA ($30) where the bears may again pose a challenge.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Top 5 cryptocurrencies to watch this week: BTC, SOL, LTC, LINK, BSV

Bitcoin is flashing some early signs of a relief rally, and SOL, LTC, LINK and BSV could follow if bulls reclaim $20,000 as a support level for BTC.

Bitcoin (BTC) plummeted to $17,622 on June 18. This marked the first time in Bitcoin’s history that it has fallen below its previous cycle high. The United States Federal Reserve’s aggressive monetary tightening, a crisis at crypto lending platform Celsius and liquidity issues at investment fund Three Arrows Capital are creating a sense of panic among traders.

Markets commentator Holger Zschaepitz said that Bitcoin has crashed more than 80% four times in history. That puts the current fall of about 74% within historical standards. Previous bear markets have bottomed out just below the 200-week moving average, according to market analyst Rekt Capital. If history repeats itself, Bitcoin is unlikely to stay at the current depressed levels for a long time.

Crypto market data daily view. Source: Coin360

Coinglass data suggests that Bitcoin’s 39% loss in June of this year is the worst ever since 2013. While several investors expect Bitcoin to bottom out soon, crypto critic Peter Schiff warned that the selling could continue and the largest cryptocurrency may drop to $3,000.

Could bulls arrest the decline in Bitcoin in the short term? If that happens, let’s study the charts of the top-5 cryptocurrencies that may outperform the other coins.

BTC/USDT

Bitcoin plummeted below the crucial support of $20,111 on June 18, indicating the resumption of the downtrend. A minor positive is that the bulls purchased the dip as seen from the long tail on the day’s candlestick.

BTC/USDT daily chart. Source: TradingView

The buyers are attempting to push the price back above the breakdown level of $20,111. If they manage to do that, it will suggest that the drop to $17,622 on June 18 may have been a bear trap. The BTC/Tether (USDT) pair could then rally to $23,362, where the bears may again mount a strong resistance.

The relative strength index (RSI) has been trading in the oversold zone for the past few days which suggests a relief rally in the near term.

This positive view could invalidate if the price turns down from $20,111. That will suggest the bears have flipped the level into resistance and increase the possibility of a break below $17,622. The next support on the downside is $16,000.

BTC/USDT 4-hour chart. Source: TradingView

The positive divergence on the RSI suggests that the bears may be losing their grip. The 4-hour chart shows that the price has recovered to the 20-exponential moving average (EMA).

This is an important level for the bears to watch out for because a break and close above it could push the pair to the overhead resistance zone between the 50-simple moving average (SMA) and $23,362.

Conversely, if the price fails to sustain above the 20-EMA, it will suggest that bears are active at higher levels. The sellers will then again try to pull the pair to $17,622.

SOL/USDT

Solana (SOL) has been in a strong downtrend, but the positive divergence on the RSI suggests that the bearish momentum could be weakening.

SOL/USDT daily chart. Source: TradingView

The bulls will try to push the price above the 20-day EMA of $36. If they succeed, it will suggest that the bulls are on a comeback. The SOL/USDT pair could thereafter rise to the 50-day SMA of $50, where the bears may again mount a strong defense.

On the contrary, if the price turns down from the 20-day EMA, it will suggest that the bears are in no mood to surrender their advantage. The sellers will then again try to sink the price below $25 and start the next leg of the downtrend.

SOL/USDT 4-hour chart. Source: TradingView

The bulls have pushed the price above the moving averages on the 4-hour chart and will attempt to clear the overhead hurdle at the downtrend line. If they do that, it will suggest that the downtrend may have ended in the short term. The buyers will then try to push the price to $42.50 and later to $45.

Conversely, if the price turns down from the current level or the downtrend line and breaks below the moving averages, it will suggest that bears continue to defend the overhead resistance aggressively. That could pull the price to $27.50 and later to $25.

LTC/USDT

The bears attempted to sink Litecoin (LTC) below the strong support at $40 on June 18, but the long tail on the day’s candlestick suggests that the bulls are defending the level aggressively.

LTC/USDT daily chart. Source: TradingView

The relief rally has reached the 20-day EMA of $55, which is an important level to keep an eye on because a break and close above it could suggest a potential change in trend. The LTC/USDT pair could thereafter rise to the 50-day SMA of $68.

Contrary to this assumption, if the price turns down from the 20-day EMA, it will suggest that the trend remains negative and traders are selling on rallies. The bears will then make another attempt to sink the pair below $40 and resume the downtrend.

LTC/USDT 4-hour chart. Source: TradingView

The price has broken out of a symmetrical triangle pattern on the 4-hour chart. Although this setup usually acts as a continuation pattern, sometimes it indicates a possible reversal. The moving averages have completed a bullish crossover, suggesting an advantage to buyers. If buyers sustain the price above the triangle, the pair could rise to the pattern target of $62.

This positive view could invalidate in the short term if the price turns down and re-enters the triangle. Such a move will suggest that the break above the triangle may have been a bull trap.

Related: Elon Musk’s support for Dogecoin grows stronger following $258B lawsuit

LINK/USDT

Chainlink (LINK) is in a downtrend, but it is trying to form a bottom near $5.50. The bears pulled the price below this level on June 13, June 14 and June 18, but they could not sustain the lower levels. This suggests that bulls are buying on dips.

LINK/USDT daily chart. Source: TradingView

The positive divergence on the RSI suggests that the bearish momentum may be weakening. The buyers will try to push the price toward the downtrend line, which is likely to act as a stiff resistance.

If the price turns down from the downtrend line, the bears will again attempt to sink and sustain the LINK/USDT pair below the $5.50 support. If that happens, it will suggest the resumption of the downtrend.

Alternatively, if buyers thrust the price above the downtrend line, it will suggest a potential trend change. The pair could then rise to $10 and later to $12.

LINK/USDT 4-hour chart. Source: TradingView

The rebound in the pair has reached the 50-SMA, which may act as a minor resistance. The 20-EMA is flattening out and the RSI is near the midpoint, suggesting that the bears may be losing their grip.

If buyers push the price above the 50-SMA, the pair could rise to $7.51. A break and close above this resistance will complete a double bottom pattern in the short term. This reversal setup has a pattern target of $9.50.

To invalidate this bullish view, the bears will have to pull and sustain the price below the strong support at $5.50.

BSV/USD

Bitcoin SV (BSV) has formed a broadening pattern and the buyers are attempting to push the price above the resistance of the setup. The RSI is showing a positive divergence, indicating that the bearish momentum is weakening.

BSV/USD daily chart. Source: TradingView

The BSV/USD pair could rally to the resistance line where the bears may try to stall the recovery. If that happens, it will suggest that bears continue to sell on rallies. That could keep the pair stuck inside the broadening formation for some more time.

Conversely, if bulls drive the price above the resistance line, it will suggest that the pair may have bottomed out. The pair could then start a new up-move which could push the pair to $80 and then $87.

BSV/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that the pair has been trading inside a large range between $45 and $66. After a failed attempt by the bears to pull the pair below the range, the bulls will attempt to push the price above the resistance.

If they succeed, the pair could start a new up-move. The pattern target of this setup is $87. Another possibility is that the price turns down from $66. If that happens, it will suggest that the pair may remain range-bound for some more time.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

What decentralization? Solend approves whale wallet takeover to avoid DeFi implosion

There’s more trouble in DeFi as Solend launches a spur-of-the-moment move to crack into a whale’s wallet.

On Sunday, the decentralized finance (DeFi) sector came under scrutiny again after DeFi protocol Solend put together a spur-of-the-moment governance proposal related to one of the whale wallets at risk of liquidation. 

The proposal, dubbed “SLND1 : Mitigate Risk From Whale,” was abruptly launched on Sunday without announcement and the vote closed with a 97% approval rating. The scandal comes on the heels of last week’s sudden layoffs from Coinbase and BlockFi, and the liquidation debacle of Three Arrows Capital. Adding to the melee of unexpected volatility and market sell-offs, the spur-of-the-moment alterations of a supposed decentralized autonomous organization, or DAO, show that crypto is not as “decentralized” as its users may have thought.

Details of the proposal include the whale’s wallet address and deeper information in regard to why this account was causing issues for Solend. Part of the main issue is the large account is facing liquidation which would put a strain on Solend and its users.

According to the proposal, “If SOL drops to $22.30, the whale’s account becomes liquidatable for up to 20% of their borrows ($21M).” The aim of the proposal is to take control of the whale’s account and conduct the liquidation through an over-the-counter (OTC) transaction.

Immediate kickback from Twitter ensued as usual. Arguments include the damage this move could cause to the overall image of DeFi. Taking control of one of Solend’s wallets means the fundamental principles of DeFi fall into question. The move also leaves a stain on Solend’s ability to manage its debt.

As pointed out by Emin Gün Sirer, founder and CEO of Ava Labs, additional ramifications from this move could include cascading liquidations across the decentralized exchange (DEX) book if the price of Solana (SOL) drops too low.

Perhaps, the multiple cracks in the crypto ecosystem are beginning to reveal themselves through rushed, forced and manipulated decisions made in haste. At-whim layoffs and breaking into DeFi wallets is far from the sacred ideas underlining crypto’s culture of decentralization and such moves are likely to bring further criticism and ridicule to the sector.

This is a developing story which will be updated as more information becomes available.

What decentralization? Solana lender Solend approves whale wallet takeover to avoid DeFi implosion

There’s more trouble in DeFi as Solend launches a spur-of-the-moment move to crack into a whale’s wallet.

On Sunday, the decentralized finance (DeFi) sector came under scrutiny again after Solend, a popular DeFi protocol on Solana (SOL), put together a spur-of-the-moment governance proposal related to one of the whale wallets at risk of liquidation. 

The proposal, dubbed “SLND1 : Mitigate Risk From Whale,” was abruptly launched on Sunday without announcement and the vote closed with a 97% approval rating. The scandal comes on the heels of last week’s sudden layoffs from Coinbase and BlockFi, and the liquidation debacle of Three Arrows Capital. Adding to the melee of unexpected volatility and market sell-offs, the spur-of-the-moment alterations of a supposed decentralized autonomous organization, or DAO, show that crypto is not as “decentralized” as its users may have thought.

Details of the proposal include the whale’s wallet address and deeper information in regard to why this account was causing issues for Solend. Part of the main issue is the large account is facing liquidation which would put a strain on Solend and its users.

According to the proposal, “If SOL drops to $22.30, the whale’s account becomes liquidatable for up to 20% of their borrows ($21M).” The aim of the proposal is to take control of the whale’s account and conduct the liquidation through an over-the-counter (OTC) transaction.

Immediate kickback from Twitter ensued as usual. Arguments include the damage this move could cause to the overall image of DeFi. Taking control of one of Solend’s wallets means the fundamental principles of DeFi fall into question. The move also leaves a stain on Solend’s ability to manage its debt.

As pointed out by Emin Gün Sirer, founder and CEO of Ava Labs, additional ramifications from this move could include cascading liquidations across the decentralized exchange (DEX) book if the price of Solana (SOL) drops too low.

Perhaps, the multiple cracks in the crypto ecosystem are beginning to reveal themselves through rushed, forced and manipulated decisions made in haste. At-whim layoffs and breaking into DeFi wallets is far from the sacred ideas underlining crypto’s culture of decentralization and such moves are likely to bring further criticism and ridicule to the sector.

This is a developing story which will be updated as more information becomes available.

Bitcoin critics say BTC price is going to $0 this time, but these 3 signals suggest otherwise

Bitcoin haters are ready to read its obituary, but on-chain data and other indicators suggest the current price range could be a good buy zone.

Like clockwork, the onset of a crypto bear market has brought out the “Bitcoin is dead” crowd who gleefully proclaim the end of the largest cryptocurrency by market capitalization.

The past few months have indeed been painful for investors, and the price of Bitcoin (BTC) has fallen to a new 2022 low at $17,600, but the latest calls for the asset’s demise are likely to suffer the same fate as the previous 452 predictions calling for its death.

Bitcoin obituary count. Source: 99Bitcoins

Resolute Bitcoiners have a bag full of tricks and on-chain metrics they use to determine when BTC is in a buy zone, and now is the time to take a closer look at them. Let’s see what time-tested metrics say about Bitcoin’s current price action and whether the 2021 bull market was BTC’s last hurrah. 

Some traders always buy bounces of the 200-week moving average

One metric that has historically functioned as a solid level of support for Bitcoin is its 200-week moving average (MA), as shown in the following chart posted by market analyst Rekt Capital.

BTC/USD vs. 200-week MA weekly chart. Source: Twitter

As shown in the area highlighted by the green circles, the lows established in previous bear markets have happened in areas near the 200-MA, which has effectively performed as a major support level.

Most times, BTC price has had a tendency to briefly wick below this metric and then slowly work its way back above the 200-MA to start a new uptrend.

Currently, BTC price is trading right at its 200-week MA after briefly dipping below the metric during the sell-off on June 14. While a move lower is possible, history suggests that the price will not fall too far below this level for an extended period.

Multiyear price supports should hold

Along with the support provided by the 200-week MA, there are also several notable price levels from Bitcoin’s past that should now function as support should the price continue to slide lower.

BTC/USDT 1-week chart. Source: TradingView

The last time the price of BTC traded below $24,000 was in December 2020, when $21,900 acted as a support level that Bitcoin bounced off of prior to its run-up to $41,000.

Should support at $20,000 fail to hold, the next support levels are found near $19,900 and $16,500, as shown on the chart above.

Related: ‘Too early’ to say Bitcoin price has reclaimed key bear market support — Analysis

MVRV indicates its time to start accumulating

One final metric that suggests BTC may be approaching an optimal accumulation phase is the market-value-to-realized-value ratio (MVRV), which currently sits at 0.969.

Bitcoin market value to realized value ratio. Source: Glassnode

As shown on the chart above, the MVRV score for Bitcoin has spent most of the time over the past four years above a value of 1, excluding two brief periods that coincided with bearish market conditions.

The brief dip that took place in March 2020 saw the MVRV score hit a low of 0.85 and remain below 1 for a period of roughly seven days, while the bear market of 2018 to 2019 saw the metric hit a low of 0.6992 and spent a total of 133 days below a value of 1.

While the data does not deny that BTC could see further price downside, it also suggests that the worst of the pullback has already taken place and that it is unlikely that the current extreme lows will persist for the long term.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

5 indicators traders can use to know when a crypto bear market is ending

Calling a market bottom is impossible, but traders can use these five indicators to get an early signal of when a bear market is close to ending.

The bull market is gone and the reality of a long crypto winter is surely giving traders a bad case of the shivers. Bitcoin’s (BTC) price has fallen to lows not even the bears expected, and some investors are likely scratching their heads and wondering how BTC will come back from this epic decline. 

Prices are dropping daily, and the current question on everyone’s mind is: “when will the market bottom and how long will the bear market last?”

While it’s impossible to predict when the bear market will end, studying previous downtrends provides some insight into when the phase is coming to a close.

Here’s a look at five indicators that traders use to help know when a crypto winter is coming to a close.

The crypto industry begins to recover

One of the classic signs that a crypto winter has set in is widespread layoffs across the crypto ecosystem as companies look to trim expenses to survive the lean times ahead.

News headlines throughout 2018 and 2019 were filled with layoff announcements from major industry players, including technology companies like ConsenSys and Bitmain, as well as crypto exchanges like Huobi and Coinfloor.

The recent rash of layoff announcements such as the 18% reduction in staff for Coinbase and a 10% cut at Gemini are concerning, and given that the current bear market just started, layoffs are likely to crescendo. This means that it’s probably too early to refer to this metric as proof that the bear market is in decline.

A good sign that a crypto spring is approaching is when companies begin to hire again and new projects launch with notable funding announcements. These are indications that funds are beginning to flow back into the ecosystem and the worst of the bear market is in the past.

Watch to see if Bitcoin’s 200 week SMA becomes resistance or support

A technical development that has signaled the end of a bearish period multiple times in Bitcoin’s history is when the price falls below the 200-week simple moving average (SMA) and then climbs back above it.

BTC/USD 1-week chart. Source: Twitter

As shown in the areas highlighted by purple arrows on the chart above, previous instances where the price of BTC dipped below the 200-week SMA, the light blue line, and then climbed back above the metric preceded uptrends in the market.

A solid BTC price recovery back above the realized price, which is the aggregate purchase price of all Bitcoin and is represented by the green line in the chart above, can also be used as an added confirmation that the market trend may be turning positive as well.

The RSI is king at calling bottoms

Another technical indicator that can offer insight into when the lows of a bear market may be in is the relative strength index (RSI).

More specifically, previous bear markets have seen the Bitcoin RSI drop into oversold territory and fall below a score of 16 around the time that BTC established a low.

BTC/USDT 1-day chart. Source: TradingView

Based on the two instances highlighted above with orange circles, the confirmation that the low is in doesn’t come until the RSI climbs back above 70 into overbought territory, signaling that an increase in demand has once again returned to the market.

Market value to realized value

The market value to realized value (MVRV) Z-score is a metric that is designed to “identify periods where Bitcoin is extremely over or undervalued relative to its ‘fair value.’”

MVRV Z-score. Source: LookIntoBitcoin

The blue line on the chart above represents the current market value of Bitcoin, the orange line represents the realized price and the red line represents the Z-score which is a “standard deviation test that pulls out the extremes in the data between market value and realized value.”

As seen on the chart, previous bear markets coincided with a Z-score below 0.1, which is highlighted by the green box at the bottom. The start of a new uptrend wasn’t confirmed until the metric climbed back above a score of 0.1.

Based on the historical performance, this metric suggests that there could still be more downside in the near future for Bitcoin, followed by an extended period of sideways price action.

Related: Three Arrows Capital weighs bailout as Kyle Davies breaks silence: Report

2-year moving average multiplier

A final metric that can offer a simplified way for Bitcoin investors to know when the bear market is over is the 2-year moving average multiplier. This metric tracks the 2-year moving average and a 5x multiplication of the 2-year moving average (MA) with Bitcoin’s price.

Bitcoin Investor Tool: 2-Year MA Multiplier. Source: LookIntoBitcoin

Anytime the price of BTC fell below the 2-year MA, the market entered bear market territory. Once the price climbed back above the 2-year MA, an uptrend would ensue.

On the flip side, the price climbing above the 2-year MA x5 line signaled a full-on bull market and presented an opportune time to take profits.

Traders can use this metric as a signal of when it might be a good time for accumulation, as highlighted by the green shaded areas, or they can wait until the price of BTC clears the 2-year as a signal that the bear market is over.

Whichever way a trader chooses to apply the indicators outlined above, it’s important to remember that no indicator is perfect and there is always a risk of more downside.

Want more information about trading and investing in crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Market selling might ease, but traders are on the sidelines until BTC confirms $20K as support

BTC and altcoins could continue to see selling, but a positive is that traders took shelter in stablecoins instead of completely exiting the crypto market.

The total crypto market capitalization fell off a cliff between June 10 and 13 as it broke below $1 trillion for the first time since January 2021. Bitcoin (BTC) fell by 28% within a week and Ether (ETH) faced an agonizing 34.5% correction.

Total crypto market cap, USD billion. Source: TradingView

Presently, the total crypto capitalization is at $890 million, a 24.5% negative performance since June 10. That certainly raises the question of how the two leading crypto assets managed to underperform the remaining coins. The answer lies in the $154 billion worth of stablecoins distorting the broader market performance.

Even though the chart shows support at the $878 billion level, it will take some time until traders take in every recent event that has impacted the market. For example, the U.S. Federal Reserve raised interest rates by 75 basis points on June 15, the largest hike in 28 years. The central bank also initiated a balance sheet cut in June, aiming to reduce its $8.9 trillion positions, including mortgage-backed securities (MBS).

Venture firm Three Arrows Capital (3AC) has reportedly failed to meet margin calls from its lenders, raising high major insolvency red flags across the industry. The firm’s heavy exposure to Grayscale Bitcoin Trust (GBTC) and Lido’s Staked ETH (stETH) was partially responsible for the mass liquidation events. A similar issue forced crypto lending and staking firm Celsius to halt users’ withdrawals on June 13.

Investors’ spirit is effectively broken

The bearish sentiment was clearly reflected in crypto markets as the Fear and Greed Index, a data-driven sentiment gauge, hit 7/100 on June 16. The reading was the lowest since August 2019 and it was last seen outside the “extreme fear” zone on May 7.

Crypto Fear and Greed Index. Source: alternative.me

Below are the winners and losers since June 10. Curiously, Ether was the only top-10 crypto to figure on the list, which is unusual during strong corrections.

Weekly winners and losers among the top 80 coins. Source: Nomics

WAVES lost another 37% after the project’s largest decentralized finance (DeFi) application Vires Finance implemented a daily $1,000 stablecoin withdrawal limit.

Ether dropped 34.5% as developers postponed the switch to a proof-of-stake consensus mechanism for another two months. The “difficulty bomb” will essentially cease mining processing, paving the way for the Merge.

Aave (AAVE) traded down 33.7% after MakerDAO voted to cut off the lending platform Aave’s ability to generate Dai (DAI) for its lending pool without collateral. The community-led decision aims to mitigate the protocol’s exposure to a potential impact from staked Ether (stETH) collateral.

Asian traders flew into stablecoins

The OKX Tether (USDT) premium is a good gauge of China-based retail crypto trader demand. It measures the difference between China-based peer-to-peer (P2P) trades and the United States dollar.

Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, Tether’s market offer is flooded and causes a 4% or higher discount.

Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKX

Contrary to expectations, Tether had been trading with a premium in Asian peer-to-peer markets since June 12. Despite the massive sell-off in crypto prices, investors have been seeking protection in stablecoins instead of exiting to fiat currency. This movement lasted until June 17, as the USDT paired its price versus the official foreign exchange currency rate.

One should analyze crypto derivatives metrics to exclude externalities specific to the stablecoin market. For instance, perpetual contracts have an embedded rate that is usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.

Accumulated perpetual futures funding rate on June 17. Source: Coinglass

Those derivative contracts show more significant demand for leverage short (bear) positions across the board. Although Bitcoin and Ether’s numbers were insignificant, the TRX token and Polkadot (DOT) situation raise concerns.

Pokadot’s negative 0.90% weekly rate equals 3.7% per month, meaning those betting on the price decrease are willing to pay a reasonable fee to maintain their leverage positions. This is usually interpreted as a sign of confidence from bears; hence, slightly worrisome.

The market dipped by 70% and there’s still no demand from leverage longs

The big question is how backward-looking is the investors’ fear and lack of appetite for buyers using leverage despite the 70% correction since the November 2021 peak. It is encouraging to know that Asian traders moved their positions to Tether instead of exiting all markets to fiat deposits.

There likely won’t be a clear sign of a bottom formation, but Bitcoin bulls need to hold ground at $20,000 to avoid breaking a 13-year-old pattern of never breaking below the previous four-year cycle all-time high.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Sweeping layoffs, hiring and firing as crypto prices take a massive downturn

Brutal economic conditions coupled with dramatically falling crypto prices have led to massive layoffs within the blockchain industry.

Many in the crypto world have been glued to their screens with eyes dead set on financial conditions this week. That isn’t the case for everyone though, as thousands are suddenly experiencing thewoes of sudden unemployment.

Words of encouragement and sympathy also poured out across Twitter and LinkedIn consoling individuals released from their responsibilities. Some expressed frustration, confusion and anger while others expressed gratitude, renewed vision and reflections.

As recently laid-off talent takes to social media to let the world know, multiple companies have stood up to offer job interviews to those in distress.

Binance has been vocal across social media, offering two thousand jobs to replace the thousands that were recently dissolved. The company’s CEO and president Changpeng Zhao, or CZ, provided additional support to the freshly made available talent pool.

CZ went on to say, “While lots of projects and exchanges are going to struggle through the bear market, many will come back stronger than before. Those that fail honestly, will start new projects and bring critical learnings from this experience. This is how an industry grow[s].”

Ripple (XRP) also offered opportunities via a tweet sent from their CEO, Brad Garlinghouse.

Crypto exchange Kraken stepped in offering somewhat conditional employment opportunities. A thirty-two-page manifesto outlining the company’s culture was released for interested parties looking to join the company.

Several other companies sent out tweets offering fresh employment opportunities as well.

Rob Behnke, CEO of Halborn Security, tweeted with fully remote opportunities in marketing, sales, security engineering and HR.

In recent days, token prices have taken a dive, investment firms and exchanges are facing insolvency, and Bitcoin’s support at $23,000 continues to waiver with some even eyeing $8,000 as the incoming low. Many portfolios are deep red as scores of investors look to hedge their tax losses as a means to aid in numbing their financial pain.

Criticism from Hester Peirce roasted the SEC, while Mark Cuban offered some words of wisdom, “Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.’” Job seekers, investors and crypto enthusiasts can only wait with baited breath for what will occur next. 

Price analysis 6/17: BTC, ETH, BNB, ADA, XRP, SOL, DOGE, DOT, LEO, AVAX

Bitcoin price struggles to hold support at $20,000, and the outcome of this battle between bulls and bears will determine the next directional move.

The sharp fall in cryptocurrencies has pulled the total crypto market capitalization below $900 billion. According to CoinGoLive, 72 out of the top 100 tokens have declined in excess of 90% from their all-time highs. In comparison, the top-10 coins have outperformed during the fall, dropping an average of 79% from their all-time high. 

Bitcoin (BTC) is down more than 70% from its all-time high but the bulls are struggling to arrest the decline. Jurrien Timmer, director of global macro of Fidelity, highlighted that Bitcoin could be “cheaper than it looks” considering the metric of price-to-network ratio, which is similar to the price-to-earnings ratio used in the equities market to value a stock.

Daily cryptocurrency market performance. Source: Coin360

Billionaire investor Mark Cuban said in an interview with Fortune that projects without valid business prospects will vanish as bear markets have a cleansing effect on the market. However, he added that innovation in the crypto sector is likely to continue during the market downturn.

Could Bitcoin and major altcoins hold their respective support levels? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

The bulls are attempting to keep Bitcoin above the psychological support of $20,000 but they are facing strong resistance at $23,362. This suggests that the bears have not given up and that they continue to sell on rallies.

BTC/USDT daily chart. Source: TradingView

The longer the time spent near $20,000, the greater the possibility of a break below it. If bears sink the price below $20,000, the BTC/USDT pair could witness panic selling. That could pull the price to $17,500 and then to $16,000.

The one ray of hope for the buyers is that the relative strength index (RSI) has dipped into deeply oversold levels. This suggests that a relief rally is possible in the short term. If bulls drive the price above $23,362, the pair could rally to the 20-day exponential moving average (EMA) ($26,574).

ETH/USDT

Ether (ETH) is in a firm bear grip. The bulls bought the dip to $1,014 on June 15, as seen from the long tail on the day’s candlestick. However, the recovery was short-lived as the bears pulled the price back below $1,100 on June 16.

ETH/USDT daily chart. Source: TradingView

If bears sink the price below $1,000, the selling pressure could accelerate and the ETH/USDT pair could plummet to $900. Although the downsloping moving averages indicate advantage to bears, the deeply oversold level on the RSI suggests that a relief rally may be around the corner.

The bulls will have to push and sustain the price above $1,268 to start a sustained recovery. Above this level, the pair could rise to the 20-day EMA ($1,547) where the bears may again mount a strong resistance.

BNB/USDT

BNB is consolidating near the crucial support of $211 since June 13. The bulls started a recovery on June 15 but that fizzled out at $237 on June 16.

BNB/USDT daily chart. Source: TradingView

If the price slips below the $211 to $198 support zone, the BNB/USDT pair could start the next leg of the downtrend. The pair could then slide to $186 and later plummet toward the strong support at $150.

On the other hand, if the price rebounds off the $211 support, the buyers will try to propel the pair above $237. If they succeed, the pair could rally to the 20-day EMA ($265). This is an important level to watch out for because a break and close above it will suggest that the pair may have bottomed out.

ADA/USDT

Cardano (ADA) bounced off $0.44 on June 14 and bulls pushed the price to the 20-day EMA ($0.54) on June 15. The bears defended this level aggressively and the price turned down on June 16.

ADA/USDT daily chart. Source: TradingView

The price is stuck between the 20-day EMA and $0.44 but this tight range trading is unlikely to continue for long. If buyers propel the price above the 20-day EMA, the ADA/USDT pair could rally to the 50-day simple moving average (SMA) ($0.59). A break above this level could open the doors for a potential rally to the overhead zone between $0.69 and $0.74.

Alternatively, if the price turns down and plummets below $0.44, it will suggest that bears are back in the game. A break and close below $0.40 could start the next leg of the downward move.

XRP/USDT

Ripple (XRP) bounced off $0.29 on June 14 and reached $0.35 on June 15, which turned out to be stiff resistance. The buyers are again attempting to push the price above $0.35.

XRP/USDT daily chart. Source: TradingView

If they manage to do that, the XRP/USDT pair could rally to the breakdown level of $0.38. This is an important level to keep an eye on because a break and close above it could clear the path for a possible rally to the 50-day SMA ($0.44). The positive divergence on the RSI indicates that the bears may be losing their grip.

Contrary to this assumption, if the price turns down from the current level and slips below $0.29, it will suggest the resumption of the downtrend. The next support on the downside is $0.24.

SOL/USDT

Solana (SOL) attempted a recovery on June 15, which hit a barrier at the breakdown level of $35. The price turned down on June 16 but the bulls are attempting to defend the level at $30.

SOL/USDT daily chart. Source: TradingView

The buyers will make one more attempt to push the price above the overhead zone between $35 and the 20-day EMA ($37). If they succeed, the SOL/USDT pair could rally to the 50-day SMA ($52).

Conversely, if the price turns down from the overhead zone, it will suggest that bears continue to sell at resistance levels. The bears will then try to sink the pair below $26 and resume the downtrend. The next support on the downside is $22 and then $20.

DOGE/USDT

Dogecoin (DOGE) is consolidating in a downtrend. The buyers defended the psychological level at $0.05 and attempted a relief rally on June 15 but they could not sustain the higher levels. This suggests that bears continue to sell on rallies

DOGE/USDT daily chart. Source: TradingView

The buyers are attempting to arrest the decline near $0.06 on June 17. If they succeed, the DOGE/USDT pair could resume its recovery.

A break above the June 15 intraday high could clear the path for a possible rally to the 20-day EMA ($0.07). If bulls overcome this barrier, the DOGE/USDT pair could rally to the 50-day SMA ($0.09).

Contrary to this assumption, if the price turns down and breaks below the critical support at $0.05, it will suggest the start of the next leg of the downtrend. The pair could then decline to $0.04.

Related: Bitcoin whale support lines up as trader says $14K ‘most bearish’ BTC price target

DOT/USDT

Polkadot (DOT) rallied sharply on June 15 and reached the 20-day EMA ($8.62) but the bulls could not overcome this resistance. This indicates that bears are active at higher levels.

DOT/USDT daily chart. Source: TradingView

The price turned down sharply on June 16 and has dropped near the critical support zone between $7.30 and $6.36. The buyers are expected to defend this zone aggressively because a failure to do so could resume the downtrend toward $4.23.

If the price rebounds off the support zone, it will suggest accumulation at lower levels. The buyers will then make one more attempt to push the price above the 20-day EMA. If they manage to do that, the DOT/USDT pair could rally to the 50-day SMA ($10.54).

LEO/USD

UNUS SED LEO (LEO) continues to trade inside the descending channel. The bears pulled the price below the moving averages on June 15 but failed to extend the decline to the support line.

LEO/USD daily chart. Source: TradingView

The buyers are attempting to push the price back toward the moving averages. If the price turns down from this resistance, it could increase the prospects of a retest of the support line of the channel. A break and close below this level could intensify selling.

Conversely, if buyers push the price above the moving averages, the LEO/USD pair could rise to the resistance line. This is an important level for the bears to defend because a break and close above it could suggest the start of a new up-move to $6.25.

AVAX/USDT

Avalanche (AVAX) is consolidating in a downtrend and the bulls are attempting to defend the support at $14.50. The buyers tried to push the price toward the breakdown level of $21.35 on June 16 but the higher levels continue to attract selling.

AVAX/USDT daily chart. Source: TradingView

If the price turns down and breaks below $14.50, it could signal the start of the next leg of the downtrend. The AVAX/USDT pair could then decline to $13.

On the contrary, if bulls successfully defend the $14.50 support, the pair could make another attempt to rise to $21.35. This is an important level to watch out for because the bears will try to flip it into resistance and pull the pair down to $14.50.

The buyers will have to push and sustain the price above the 20-day EMA ($21.94) to signal a potential trend change.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.