The correlation between the US stock market and bitcoin has again been clear over the last seven days, so it is practically the S&P 500 that is best analyzed to fully understand and predict BTC’s behavior. .
As can be seen, the stock index has risen after hitting a low for the year, with bitcoin following suit over the past few days. However, we remain in a clear bear market, as the price strongly rejected the moving average over 30 days yesterday. Bitcoin reacted similarly and immediately lost all its gains for the week. In the end, we are at the same time as last week, when bitcoin is fighting for the all-important $ 20,000 range.
The S&P 500 index and the rejection of the 30-day moving average yesterday.
Creeping inflation around the world remains the biggest source of concern in markets. Spain has just announced a record increase over 37 years with a 10% increase over a year. Wells Fargo said in a note Tuesday that a fall in stock prices is likely to “take time to repair.” In the US, the S&P 500 has fallen by more than 20% since its peak in December 2021 – putting it on a technical bear market. “At this time, we prefer patience before committing new money to equities,” the Wells team writes. “Since the Federal Reserve has just begun its tightening cycle, we have shifted our investment preferences away from economically sensitive assets in favor of more quality-focused and more defensive assets.”
Hedge funds Three arrows capital, based in Singapore, was founded ten years ago. Until recently, the latter was estimated to have about $ 10 billion under management. However, the echoes of massive losses within the framework of the saga of TERRA and LUNA have not stopped multiplying in recent weeks. Monday the broker cryptocurrency Travel digitally, he who allegedly borrowed 3AC $ 350 million in USDC stablecoin and 15,250 bitcoins – for a total of more than $ 673 million in current prices – demanded full repayment. This request has not been complied with, giving rise to fears that the fund is now insolvent.
The ax officially fell today. In fact, according to information collected by sky newsordered a court in the British Virgin Islands liquidation of the company Three arrows capital. Liquidation refers to the formal closure of a business due to its inability to repay its debt and other financial obligations. The company’s assets are then owned by various creditors with outstanding loans. It is not yet clear which companies will have their requirements met and when. The numerous margin calls on the fund’s positions have certainly contributed to the downward pressure in recent weeks. Has the injury completely happened, or are there many positions left to settle? History does not say it yet.
It is when the tide goes out that we see who is swimming naked. We learned on Tuesday that an account on CoinFLEX – owned by a “person with high integrity and significant assets” – suffered a loss of $ 47 million after being allowed to reach negative equity without being liquidated. The platform – another – now appears insolvent and has stopped withdrawals, at least temporarily. It quickly became clear that this person is Roger Ver, the one who was once called bitcoins Jesus. Ver said via Twitter that he “did not default on any debt to any counterparty”, claiming that it was the company that owed him “a significant amount.” CoinFLEX CEO Mark Lamb refuted that the company had a written contract with Ver that required him to personally guarantee any negative equity in his CoinFLEX account and to increase his margin on a regular basis. […] It is unfortunate that Roger Ver has to resort to such tactics to divert himself from his responsibilities and obligations. “
It is probably the investors who will ultimately be cheated in the story. The platform plans to address its lack of liquidity by issuing a new token, Recovery value USD (rvUSD), with the aim of allowing payouts again tomorrow. One can strongly doubt the chances of success of the strategy. In return, Bitcoin Cash is the forked of bitcoin led by Ver in 2017, today reaches a bottom relationship with BTC. The project looks almost dead. Ver’s decisions will certainly go down in history, for all the wrong reasons. To say that the latter is one of the longest-standing investors in bitcoin. It would have been so simple just to enjoy his resulting riches!
Are G7 countries inadvertently defending bitcoin in their decisions this week? Admittedly, the mistakes of gold are becoming clearer than ever after a new step to ban Russian gold imports. According to Bitcoin supporter and investor Anthony Pompliano, the move to block Russian gold exports is just another step in the ongoing “currency formation of currencies.” “This is another important step in the decades-old trend of attempts to arm currencies from developed countries, leading to a deterioration in confidence in the same currencies,” he wrote. Pompliano in his Monday newsletter. It is believed that this G7 decision may make it more difficult to buy physical gold in Western markets, which could lead to a price difference between paper gold and physical gold. “Even a bitcoin [maximaliste] as I can see this potential shock for the gold markets and I can not resist the urge to ride the wave. I have kept some physical gold coins in hopes of selling them for bitcoins when the panic sets in, ”said Cash App engineer Danny Diekroeger.
Gary Gensler, chairman of the Securities and Exchange Commission (SEC), on Monday confirmed the SEC’s view that bitcoin is a commodity, but refrained from extending that label to other cryptocurrencies. The regulatory framework around cryptocurrencies and digital assets has centered on interpreting which ones act as securities, such as stocks, and which ones act as commodities, such as gold. The former SEC administration considered both Bitcoin and Ethereum to be commodities, but Gensler only mentioned Bitcoin in his recent comments and previously avoided answering questions regarding Ethereum specifically.
While decentralized cryptocurrencies are struggling in the markets, it does not slow down plans for a digital central bank currency in the United States. US Federal Reserve Chairman Jerome Powell said Congress would eventually receive guidance from the Fed on how to implement a central bank’s digital currency (CBDC). In a speech to the House Financial Services Committee, Powell said, “I think this is something we really need to explore as a country,” adding that the prospect of issuing a CBDC “should not be a party-political issue.” “We are doing an enormous amount of work,” he said, noting that once the guidance is finalized, it will be up to Congress to draft bills approving their implementation in the U.S. financial system.
It is when the clouds are dark that the period of maximum possibilities often occurs. It is a pity that the latter first appears obvious in hindsight! As analyst Will Clemente puts it, “Bitcoin is incredibly cheap right now. It has only traded so far below its 200-day trend and total cost base for 3% of its entire existence.”
Additional data from Glassnode shows that the 200-week moving average, equilibrium price and delta price of bitcoin in its bear market bottom pattern are consistent with the Mayer multiple metric mentioned by Clemente.
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Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and does not constitute investment advice or trading instructions..
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