Bulls hesitate to buy the dip after Bitcoin price falls close to $35K

Bitcoin’s drop to $35,130 has bulls hesitant to buy the current dip but on-chain data shows long-term holders continue to accumulate.

On June 18, Bitcoin (BTC) and traditional markets faced another day of downward pressure comments from the United States Federal Reserve about the possibility of raising interest rates sooner than expected has led to a spike in the price of the U.S. dollar at the expense of risk assets and treasury notes. 

The Fed doesn’t deserve all the bla, however, as concerns about a further downturn for BTC have been building for weeks with much of the discussion focused on the approaching death-cross and what it means for the future of Bitcoin.

Today’s selling pulled Bitcoin price below the crucial $36,000 support, leading traders to forecast $32,500 as the next stop before Bitcoin revisits the swing low at $30,000.

BTC/USDT 4-hour chart. Source: TradingView

These technical factors combined with negative headlines in the news such as Chinese authorities shutting down cryptocurrency miners or the most recent “rug pull” on the Iron Finance protocol that saw cryptocurrency proponent and billionaire investor Mark Cuban lose money have traders feeling apprehensive about the current dip in Bitcoin price.

Crypto Fear and greed index. Source: Alternative.me

As a result of these concerns, the crypto Fear & Greed Index has dropped to 25, registering extreme fear and continuing the trend of the past month.

Inflows to exchanges spiked before the sell-off

Data from the on-chain data analysis firm CryptoQuant shows that BTC netflows to exchanges provided some warning to observant traders ahead of this week’s drop from $41,000 to $36,000. A spike in BTC inflows to exchanges occurred on June 15 when BTC price hit $41,300 and then proceeded to decline by 15% over the next three days.

All exchanges netflow of Bitcoin. Source: CryptoQuant

One observant analyst has pointed out that whale activity on the Gemini cryptocurrency exchange, in particular, has a noticeable correlation with some of the larger sell-offs experienced by the cryptocurrency market in 2021.

With the Bitcoin netflow to exchanges balancing out over the past couple of days with inflows only slightly outpacing outflows, market participants now wait to see which way the price moves next as the dreaded death cross approaches.

Related: Traders search for bearish signals after Bitcoin futures enter backwardation

Smart money continues to accumulate

While investor fears are rising and some traders who bought between the March and May highs are selling at a loss, the total supply of Bitcoin held by long-term holders continues to increase after reaching a low in the middle of May. 

Total Bitcoin supply held by long-term holders. Source: Glassnode

According to crypto Twitter analyst William Clemente III, recent on-chain data indicates that BTC is oversold and “now sits on historically important inflection points for major on-chain indicators.” 

Clemente suggested that long-term holders “continue to scoop up discounted BTC,” which has helped offset selling by short-term holders and he pointed to the fact that “accumulation is growing stronger.”

Overall, the short-term future for BTC remains risky as previous instances of a death-cross have been followed by a retracement that is similar “to the retrace that preceded the crossover,” according to cryptocurrency analyst and trader Rekt Capital.

Bitcoin retracement after 2019 death-cross. Source: Twitter

On the other hand, the longer-term data hints at a more optimistic future because whale wallets and long-term holders continue to increase their Bitcoin balances.

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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FTX’s Sam Bankman-Fried: Institutions are ‘desperate’ for crypto

Is SBF going to lobby the government on behalf of crypto? How badly do institutions want in on the blockchain game? When’s a moat an impediment to growth, and not a protective shield?

As FTX and Alameda Research increasingly enter the public eye, one side effect is that the decabillionaire is himself a growing public figure. Especially after a significant donation to Joe Biden’s campaign for the US presidency, some observers hoped that SBF would come to serve as a kind of professional lobbyist on behalf of the crypto ecosystem. 

While he says he’s open to discussing his views, he’s not trying to work the edges or sell anyone a used car:

So I’m super happy to serve as a resource for anyone in government or else who wants and I think happy talk about what the industry is like […] look, they have so many people who come to them with agendas right here. You know, to the extent I have an agenda, I just want it to flow from my actual thoughts and beliefs. So that’s all I have to talk about is my thoughts and beliefs rather than try and create a fact pattern that happens to fit where I want it to go or something like that.”

Another hot topic of conversation is the growing push towards institutional adoption. While Bankman-Fried says that institutions are increasingly “desperate” to get involved, they’re not always entirely sure what that looks like or what, exactly, they’re aiming to do. As a result, the process is one of feeling things out at times. 

“The first thing that we do is we just listen, right? We’re like, look, what’s what’s your goal here? What you actually want to do? And then we can say, all right, cool, here’s how the industry works right now. Ignoring what you said. Here’s this, here’s the lay of the land. […] We want to be a day away from pulling the trigger on a big deal.”

Finally, he weighed in on the layer one battles between Ethereum and Solana. While Ethereum maximalists are quick to point to the developer and ecosystem moat, SBF wonders how unassailable that moat truly is. When it comes to genuine widespread adoption, it’s important to differentiate between blockers that can be overcome, and blockers that — like scalability — are more stubborn. 

“I think that’s one of the fundamental tensions here, is that like this moat is insurmountable if crypto never grows. But if crypto gets 50 times bigger, the moat is two percent of the eventual pie. The other piece of this, right, is why is the moat valuable as a business? A moat is valuable to keep other people out. A moat doesn’t let you grow itself, right? It gets rid of a particular impediment to your growth, which is competitors, but a moat isn’t growth itself […] If your castle literally can’t get any bigger, maybe no one will ever get into it, but it has 2% of the land right now and it won’t get any more.” 

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Alchemix patches ‘Reverse Rug’ exploit, address $6.5 million shortfall

In an unusual twist for the latest DeFi exploit, the users were the ones to walk away in profit.

It’s as miraculous as Aladdin taking off on a magic carpet: in a possible first, some of the users of a decentralized finance protocol were the ones to benefit today from an exploit, turning the concept of a ‘rugpull’ on its head. 

A colloquialism for when liquidity is drained from a project (often an unscrupulous founder or developer draining the funds themselves), depositors and DeFi users are most often the ones holding bad debt and/or worthless tokens — left to hope for compensation plans that can take months or even years to fully vest.

In an exploit today, however, the users are the ones who got to pull at the seams for a change.

This morning, Alchemix announced that the contracts for one of their synthetic assets, alETH, had experienced an “incident.”

In a incident report published later in the day, Alchemix developer “n4n0” said that “an issue with the deployment script of the alETH vault accidentally created additional vaults,” some of which the protocol used to incorrectly calculate outstanding debts, which in turn meant protocol funds were used to “pay off user debts.”

As a result, for a short window of time users were able to withdraw their ETH collateral with their alETH loans still outstanding — a rugpull by the community to the tune of $6.5 million.

Per the incident report, the team paused the mint contract for alETH two and a half hours after the exploit was discovered. The report notes that no users lost funds as a result of the exploit, and that Yearn.Finance — whose yield vaults automatically repay Alchemix’s synthetic loans — suffered no loss as well. Additionally, a “conservative” initial debt ceiling prevented the protocol loss from being more extreme. 

The team, including incident report author n4n0 appear to be taking the loss in stride:

A trio of solutions is being deployed to cover the shortfall, including a temporary increase in protocol fees, a injection of ETH liquidity from Alchemix’s treasury, and a sale of DAI from the treasury for additional ETH. The team says they will be deploying an entirely new vault to address the flaws of the original. 

Further changes may be on the horizon for the alETH asset as well. Alchemix currently has a alETH/ETH pool live on Saddle, a VC-backed fork of Curve Finance, following Curve reportedly turning down creating a pool for the synthetic Ether. However, in the past 48 hours the Curve social media account has been making overtures in an effort to bring Alchemix’s latest synthetic asset back.

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Pandora Finance’s $2.4M raise helps spearhead open finance protocol

“Adoption has never been affected and never been stopped. The right product always gets adopted irrespective of market conditions,” said Pushkar Vohra, CEO of Pandora Finance.

Pandora Finance, a decentralized platform for NFT-backed real-world assets, recently completed a multi-million dollar seed round backed by some of the biggest venture capital firms in the blockchain space. In an exclusive interview with Cointelegraph, CEO Pushkar Vohra outlined his company’s vision — namely, how Pandora Finance aims to create a bridge between the illiquid world of real-world assets and the blockchain.

Vohra believes the gap between these two domains represents one of the biggest adoption challenges for decentralized technologies. “We are uniquely positioned to solve the biggest problem,” he said, adding:

“There are around $300 trillion of real-world assets which are illiquid. Pandora’s vision is to bridge those off-chain assets to the on-chain ecosystem with an effective business model.”

Pandora’s business model revolves around the tokenization of illiquid assets, which would allow them to be traded and owned in a secure, decentralized manner. This process is accomplished through a middleware solution based around nonfungible tokens, or NFTs. Instead of competing with other NFT marketplaces for liquidity, Pandora’s vision is to help those marketplaces grow by providing more liquidity.

Related: NFT market projected to double by October as trading volume surges

There’s still a lot of work to be done before traditional finance — and the trillions of dollars siloed there — can embrace decentralization’s promise of open finance. A lack of innovation and decades-old legacy systems may prevent traditional financial markets from making the transition.

Vohra touted his firm’s piNFT tool as a way to bring liquidity to real-world assets, something he considers to be essential for open finance to flourish:

“We at Pandora are working on fueling open finance adoption more and more with our latest innovation.”

He continued:

“There are many assets that our traditional financial institutions do not recognize. There is centralization around decisions when it comes to classifying the assets and trading them. Pandora will help end-users to expand the horizon of recognizing real-world assets and inducing liquidity in them via piNFT.”

Pandora’s $2.4 million seed raise, which was completed in May, had participation from at least 15 organizations and several other angel investors. Genesis Block, AU21 Capital, Spark Digital and Protocol Ventures were among the participants.

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Algorand (ALGO) price strengthens as institutional investors back the project

Backing from institutional investors and a series of new partnerships could help ALGO break from its current range in the coming week.

Consolidation periods tend to follow strong rallies but they also present a good opportunity to survey the field and evaluate projects that have strong fundamentals.

One project that continues to gain traction in terms of price recovery and network adoption is Algorand (ALGO), a pure proof-of-stake (POS) blockchain network that has secured new partnerships and real-world use case applications, as well as support from multi-million-dollar funds in recent weeks.

Big funds invest in Algorand-based projects

Raising funds is one of the biggest challenges many projects face and in the last month the Algorand network announced that Arrington Capital, a digital asset manager, had pledged $100 million in funding meant to help accelerate additional development across all facets of the smart contract platform.

This development came on the heels of the June 2 announcement that Borderless Capital, a venture capital firm, had created a $25 million fund aimed at supporting Miami-based blockchain startups developing digital payment solutions on the Algorand network.

Related: Exodus Wallet raises almost $60M in crypto in regulated offering

New partnerships lure investors

A scroll through the Algorand Foundation Twitter feed shows a growing list of cryptocurrency projects across a variety of sectors that have joined up as part of the Algorand community to take advantage of the low fee, POS environment.

The nonfungible token (NFT) sector is showing some interest in the network following a partnership with Curate that will allow for the minting of NFTs as well as the release of a bridge by Curvegrid that will allow businesses to build NFT and blockchain technology into their business and consumer mobile applications.

Other recent examples of adoption include a partnership with the Bermuda-based MAPay healthcare payment solution, which will host its payment solution on Algorand blockchain in an effort to improve efficiency and reduce healthcare costs, as well as a partnership with Xfinite and Eros Now to create a blockchain-based content engagement platform for the 224 million registered users of Eros Now.

These new partnerships come after a busy year for the network which also included the integration of USD Coin (USDC) and Tether (USDT), the two largest stablecoins in the cryptocurrency ecosystem. 

The growing list of network partnerships and investments from players in traditional finance suggests that ALGO is well-positioned to see future growth as the blockchain sector sees continued adoption and the crypto market recovers from it recent sharp correction.

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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