Bitcoin price falls under $33K, but on-chain data hints at BTC accumulation

Signs of BTC accumulation begin to emerge as the network’s hashrate rises and exchange outflows increase in July.

As the pressures placed on the market by China’s cryptocurrency crackdown begin to subside and the Bitcoin (BTC) hashrate starts to show signs of recovery, traders are now focused on how the price will be affected by this week’s unlocking of more than $550 million worth of Grayscale’s GBTC shares.

Data from Cointelegraph Markets Pro and TradingView shows that the early morning downtrend in BTC on July 12 continued into the afternoon as the price of BTC dropped below the $33,000 support level after bears took control of the market.

BTC/USDT 4-hour chart. Source: TradingView

Grayscale attracted further attention on Monday after various media reported that the firm has publicly filed three Form 10 registration statements with the United States Securities and Exchange Commission (SEC).

This brings the number of publicly reported trusts managed by Grayscale to five, with the trusts for Bitcoin Cash (BCH), Ethereum Classic (ETC) and Litecoin (LTC) joining the previously filed trusts for Bitcoin and Ether (ETH).

Bitcoin hashrate shows signs of recovery

China’s crackdown on Bitcoin mining resulted in a 55% decline in the network hashrate as BTC mines were shut down across the country and operations moved overseas.

According to a recent report from Glassnode, roughly 29% of the lost hashpower has now come back online as a result of Chinese miners successfully relocating hardware while “previously obsolete hardware has been dusted off and found a new lease on life.”

Bitcoin mean hash rate. Source: Glassnode

After nearly a month of selling from miners, the Miner Net Position Change metric now shows that they are back in accumulation mode indicating that “the sell-side pressure coming from offline miners is more than offset by accumulation by the operational miners.”

Further evidence for a decrease in selling can be found in the exchange flow data for BTC, which has seen a larger amount of BTC withdrawn from exchanges than deposited over the past two weeks.

Bitcoin all exchanges netflow. Source: CryptoQuant

As a result of the increased outflows, the amount of Bitcoin reserves held across all exchanges fell by more than 16,100 BTC between June 28 and July 11.

Bitcoin all exchange reserves. Source: CryptoQuant

From a macro perspective, many interpret this as a bullish development for Bitcoin as token holders appear to be withdrawing BTC to put into long-term storage as the market awaits the next significant move higher.

Related: Bitcoin dips below $33K as shorts spike, trader warns of ‘violent’ BTC price squeeze

Altcoins fall under pressure

Altcoins as a whole fell under pressure on Monday as the pullback in BTC led to weakness across the market.

Daily cryptocurrency market performance. Source: Coin360

As the sell-off intensified into the afternoon the price of Ether (ETH) fell to the $2,000 support level after traders rushed for the exits.

While the majority of the market was in the red for the day, there were several projects that managed to rise above the noise and post gains on July 12, with Metal (MTL) putting up a gain of 18% while Revain (REV), Stratis (STRAX) and Injective Protocol (INJ) gained 12%

The overall cryptocurrency market cap now stands at $1.354 trillion and Bitcoin’s dominance rate is 45.5%.

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.

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Bears back off, but Bitcoin price still wavers below $35K

Bitcoin price briefly surged above $35,000 to spark a relief rally in altcoins but a number of bearish factors still surround BTC.

Although bulls made a show of force in the morning trading hours, Bitcoin (BTC) price is still pinned under the $35,000 resistance and unable to flip the 20-day moving average to support or secure a daily close above the level. 

Data from Cointelegraph Markets Pro and TradingView since rallying to $35,400 on June 28, Bitcoin has traded in a range between $33,850 and $35,000 as the fallout from China’s crackdown on BTC mining continues to reverberate across the market.

BTC/USDT 4-hour chart. Source: TradingView

In addition to turning the Bitcoin mining ecosystem on its head, China’s government also turned the screw on local cryptocurrency exchanges, resulting in the closure of BTCChina. China has also effectively banned crypto derivatives trading for Huobi exchange users.

Bitfinex BTC flows come into focus while the selling continues

According to data from Glassnode, the downside price action over the past week “appears to have created a panic” for both long and short term holders “as demonstrated by the volatility in LTH-SOPR, and deep capitulation in STH-SOPR.”

Bitcoin short- and long-term holder SOPR. Source: Glassnode

Glassnode said:

“STHs have realized losses only slightly less than in the March 2020 capitulation event. LTHs were willing to spend coins with an average cost basis fluctuating between $9.2k and $16.3k this week, suggesting a high degree of uncertainty.”

Further insight into the current market conditions offered by CryptoQuant highlighted Bitcoin inflows and outflows at Bitfinex as a possible gauge for market developments.

According to CryptoQuant’s analysis, the market has seen a “relatively high derivative to spot BTC flow,” a change that usually “implies a turning point” in the market.

CryptoQuant highlighted that the recent increase seen in the Bitcoin all exchange inflow mean (MA7) “indicates that the large deposits that caused the decline are coming to an end,” an observation that was further supported by Bitcoin outflows from Bitfinex, “which was considered the main culprit of the recent downtrend.”

The increasingly risky situation the bears now find themselves in was highlighted by crypto Twitter analyst, William Clemente III, who posted the following tweet pointing to 11 straight days of negative funding.

Bitcoin rally brings relief to the altcoins

Most altcoins saw a turnaround in prices as Bitcoin showed signs of life above $34,000, including a 15.7% gain in Ether (ETH) price that briefly lifted the top altcoin back above $2,100.

Daily cryptocurrency market performance. Source: Coin360

The best performance of the day was posted by Populous (PPT), which surged 100% to an intraday high at $2.67, while IoTeX (IOTX), Kusama (KSM) and Compound (COMP) all registered 33%.

The overall cryptocurrency market cap now stands at $1.402 trillion and Bitcoin’s dominance rate is 46.1%.

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.

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Analyst says DeFi and stablecoins held up well as crypto markets imploded

DeFi showed tremendous strength during last week’s sell-off as DEX activity and stablecoin stability prove the sector may be ready for mass adoption.

The decentralized finance (DeFi) sector faced its first real challenge during last week’s market sell-off that saw more than $1 trillion wiped from the global cryptocurrency market cap as traders feverishly ran for the safety of stablecoins amid tumbling prices. 

Despite rapidly declining token prices, the nascent DeFi sector held its own as decentralized exchanges experienced a record $11.7 billion in trading volume on May 19. Uniswap (UNI) led with $5.7 billion in volume, followed by SushiSwap (SUSHI) which saw $2.8 billion in 24-hour trading volume.

Daily DEX volume. Source: Dune Analytics

According to the recent DeFi Uncovered report from Glassnode, blue-chip DeFi tokens including, UNI, SUSHI, Maker (MKR), Aave (AAVE) and Compound (COMP) have largely mirrored the decline of Ether (ETH) over the past two weeks, “showing relatively high beta to ETH but not exceeding the decline from ATH by more than 15% from the decline of ETH.”

New users increase despite declining TVL

The pullback in prices, combined with users removing liquidity and rotating into stablecoins led to a 42% decline in the total value locked on smart contracts, which also closely tracked the falling price of Ether.

Total value locked in smart contracts vs. ETH/USD. Source: Glassnode

TVL is intrinsically tied to the underlying value of the deposited tokens and given that Ether is one of the main tokens locked across DeFi platforms, the falling TVL has less to do with users removing funds and is mostly related to the pullback in prices.

Throughout last week’s downturn, the percentage of the Ethereum supply locked in smart contracts remained above 23% while the supply on exchanges “jumped from 11.13% to 11.75%.”

Despite falling prices, new users continue to enter the DeFi ecosystem and the total number of unique 30-day traders on the top DEXs surpassed the 1 million mark for the first time amid last week’s sell-off.

Unique DEX traders. Source: Glassnode

Uniswap is the clear leader with 815,000 unique users between April 24 to May 23, while 1inch (1INCH) came second with 78,200 users and SUSHI ranked third with 10,900 users.

Stablecoins hold their pegs

Much of the strength seen in DeFi during the sell-off can be attributed to the healthy stablecoin market and the ability for major stablecoins like USD Coin (USDC), Tether (USDT) and Dai (DAI) to maintain their dollar peg “for the majority of the crash with volume-weighted average prices (VWAP) staying at $1.00 the majority of the time.”

DAI price vs. USDT price vs. USDC price. Source: Glassnode

The performance of DAI was seen as “especially positive for DeFi” according to Glassnode, as its circulating supply was able to adjust accordingly in response to collateral requirements and protocol stability. The report also highlighted that reclaimed collateral and DAI were removed from the supply as redemptions were claimed by collateral holders.

Posey said:

“This behavior allows collateral to stay healthy, liquidations remain at a healthy level, and DAI to maintain its peg.”

The one stablecoin that struggled to maintain its peg was TerraUSD (UST), which lost its peg on May 18 as the value of its collateral from LUNA fell below that of the stablecoin it collateralized. This led to “unhealthy behavior in its lending market Anchor (ANC),” causing a higher than average number of liquidations on the protocol’s native lending platform.

Overall, stablecoins performed their intended function and pegs held steady across the ecosystem with the on-chain stablecoin transfer volume reaching a record $52 billion during the height of the sell-off.

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.

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Gemini reports ‘degraded performance’ in key systems as ETH falls under $4,000

The crypto exchange added that “all customer accounts and funds remain completely secure.”

Major U.S.-based cryptocurrency exchange Gemini has experienced two service disruptions today and is now reporting degraded performance in its mobile app, web interface, and application programming interface.

According to an update on the Gemini status page, the crypto exchange began investigating reports of potential service disruptions at 13:24 EST today. Though the exchange said it had restored all of its services only minutes later, Gemini reported another service disruption a few hours later, saying its systems were “experiencing degraded performance” due to an undetermined cause.

At time of publication, deposits and withdrawals of all tokens Gemini supports were unaffected by the service disruption. However, users of the firm’s mobile app, its interest-earning program Gemini Earn, wire transfers, and others may be experiencing issues. As of 17:06 EST, Gemini reported it had implemented a fix and was monitoring the results. 

Disruptions and outages at crypto exchanges can sometimes be attributed to volatility from certain cryptocurrencies as traders attempt to buy tokens or sell their holdings. Gemini’s first service disruption occurred shortly after Ether (ETH) reached an all-time high price of more than $4,200 today. 

However, major cryptocurrencies including Bitcoin (BTC), ETH, XRP, and others experienced a similar price drop at approximately 4:00 PM EST, with ETH falling more than 14% to reach $3,650, BTC falling under $54,000 for the first time since May 4, and XRP went as low as $1.25. Though the price of Dogecoin (DOGE) — now the fourth largest cryptocurrency by market cap — did fall at the same time, the token price had already been decreasing for the last 24 hours.

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Solana (SOL) hits new highs as DApps, DeFi and stablecoins join the network

Solana price is pushing toward new highs as an increasing number of DApps, DeFi projects and stablecoins build platforms on the network.

The arrival of institutional investors and the rise of decentralized finance (DeFi) has been an incredible boon for the entire cryptocurrency sector but it has also highlighted a number of persistent limitations that many blockchain networks encounter when faced with surges in activity and the need to scale.  

High fees and slower transaction times on the Ethereum (ETH) network have left the door open for new layer-1 solutions to emerge, and Solana (SOL) is one such project that has been gaining traction lately.

Data from Cointelegraph Markets and TradingView shows that the price of SOL has increased 195% over the past month, rallying from a low of $12.19 on March 26 to a new all-time high of $36.10 on April 19th on a record $1.4 billion in trading volume.

SOL/USDT 4-hour chart. Source: TradingView

Similar to how Ethereum rose to prominence in 2017, Solana’s strong performance in the past month was sparked by the launch of multiple projects on the SOL blockchain with everything from legitimate DeFi protocols to pump and dump airdrops that brought speculators to Solana’s exchange.

Fast transactions and low fees entice developers

One of the biggest draws for the Solana network is its claim of being able to process 65,500 transactions per second (TPS), which is significantly faster than Ethereum’s current average of 18.3.

The network’s ability to handle a larger load has also made the platform a cross-chain destination for projects like Civic (CVC) and the popular stablecoins USD Coin (USDC) and Tether (USDT).

DeFi platforms like Raydium and Serum have launched on Solana and there is a growing list of projects in the process of transitioning to the network.

Prospects for the network received another boost in early April when the Solana-based Sollet wallet released its Chrome extension that offers the Solana ecosystem functionality that mirrors the way MetaMask works for Ethereum.

Simple yield opportunities attract DeFi users

The Solana protocol utilizes a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain, which makes it easy for token holders to earn a yield on their SOL tokens while also participating in the network.

The number of cryptocurrency wallets supporting SOL is also a sign that the project is garnering more attention. To date, Exodus, Ledger and Blockfolio are some of the more prominent wallets that offer support for the token.

A recent integration with the Phantom wallet has also brought fresh energy to the project as it will enable the creation of a robust NFT ecosystem on Solana. This brings one of the hottest sectors of the crypto market to the network. 

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.

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