After weeks of disappointment for investors, bitcoin has finally offered some encouraging action in the past week, providing a welcome respite from the last few months’ avalanches. The total capitalization of cryptocurrencies has crossed the $ 1 trillion mark, a threshold that we thought was acquired for the industry a few months ago. Above all, specifically for bitcoin, the price was able to overcome two crucial resistances, those of the price realized to $ 21,900 and the other, all the more important, of the moving average over 200 weeks to $ 22,700.
The price has never stayed below the 200-week moving average for a long time, and each time it breaks up again, it has resulted in the beginning of a new long-term uptrend. The macroeconomic conditions are admittedly very different from previous episodes, but it is nonetheless an encouraging picture that may lead us to hope that the trough is officially behind us.
After a record 73 days, bitcoin also officially left the “severe fear” zone on Tuesday. The “Fear and Greed” crypto index went from “serious fear” to “fearful”, with a score of 30 out of 100. Since then, it has risen slightly and reached the current score of 31. The index notes the current position of the entire cryptocurrency market on a scale from 0-100. The index is primarily based on information regarding search trends, mood on social media, surveys, as well as volatility, volume and bitcoin market dominance.
This bullish breakthrough also comes – not surprisingly – in the midst of a cautious optimism returning to global markets. US stocks closed significantly higher on Tuesday.
This overall uptrend is no doubt helped by Ether, which had a particularly positive week. The upward movement of the Ethereum price can most likely be attributed to the fact that the Ethereum developers have passed one of the last tests before the merger. The transition to a form of consensus proof-of-effort to take place in September. At least that’s the latest official forecast.
Note that Polygon (MATIC) this week launched its new scaling solution to further reduce transaction costs on the Ethereum blockchain. polygon zkEVM is the scaling solution zero knowledge of polygon. Ultimately, it aims to exceed the transaction flow offered by Visa. Polygon explains that the system works effortlessly with all existing smart contracts, developer tools and wallets, while creating less friction for users by eliminating the need for any kind of code change or re-implementation. “The holy grail of Web3 infrastructure should have three main features: scalability, security and Ethereum compatibility,” said Mihailo Bjelic, co-founder of Polygon. The latter describes zkEVM as “a revolutionary technology that is finally achieving this, […] opening a new chapter on mass adoption, “while noting that” until now it has not been practically possible to offer all these properties at once. “
However, not everything has suddenly turned pink in the industry. While we have repeatedly written about the saga of the crypto-lending company Celsius in the last few weeks, the company has now officially requested bankruptcy protection. If we knew the critical situation, the official portrait thus discovered is possibly even worse than expected, with a gap of $ 1.2 billion in the balance sheet. Celsius has $ 4.3 billion in assets and $ 5.5 billion in liabilities, according to the statement filed with the United States Bankruptcy Court for the Southern District of New York. Celsius stated in its asset list that it owns approximately $ 600 million of its original token CEL. However, the company said in the report that the overall market assessment of CEL per. July 12 was approximately $ 170.3 million.
It goes without saying that this is a blatant failure for the Caisse de Dépôt du Québec’s first dive into the world of cryptocurrency, where its $ 150 million investment is apparently doomed to disappear for all practical purposes. In addition to the choice of investment, which was already confusing at the time of publication, one can also strongly question the due diligence process, which has obviously lacked major operational shortcomings. In its press release in the fall of 2021, the CDPQ shared the words of Alexandre Synnett, vice president and chief technology officer of the organization. “Celsius is the world’s leading cryptocurrency lender and has a strong management team that puts transparency and customer protection at the heart of its business. Could we then read. But an increasingly clear story shows us that these were precisely the elements that were missing. What we learn about the surgeries brings us closer to a real ponzi.
Caisse has also shown some condescension in its approach to the industry, as they once rejected direct investment in bitcoin for example, and instead sought diamonds in the rough. However, an investment in Celsius was in fact a bet on centralized financing of cryptocurrencies, yet the industry in general seeks to decentralize financing. In short, we were betting on an old financial model that only made cryptocurrency its transaction tool. What is unfortunate here is that the industry certainly offers more truly innovative investment opportunities. Today, the CDPQ risks being scalded and reluctant with any new collaboration in the crypto universe. This is very bad news, which we can only see is at least partly his own fault.
According to court documents, Three arrows capital (3AC) owes as much as $ 3.5 billion to 27 different companies, including Blockchain.com, Travel digitally and the lender Genesis Global Trading. Of that $ 3.5 billion in total, Genesis borrowed the most from 3AC. It gave the now bankrupt company a $ 2.36 billion loan that was under-secured and had a margin requirement of 80%.
Bitcoin’s correlation with equities, although still positive, reached the bottom for the year. According to Bloomberg statistics, the 40-day correlation between the BTC and the Nasdaq 100 index is currently below 0.50. This is a very different picture from April last year, when its 30-day correlation to the Nasdaq was at its highest level in over a year. The correlation remains positive, indicating that bitcoin and technology stocks continue to develop in tandem. However, if the correlation continues to deteriorate, this can be interpreted as an indication that the crypto has reached its own low and is ready to return.
Incidentally, according to research from the blockchain intelligence firm Glassnode, signs of seller fatigue generate conditions similar to a market bottom for bitcoin. Realized losses or losses on the sale of assets show the extent of investors’ capitulation. More than 80% of the wealth saved in bitcoin is now over three months old, indicating that the sales waves in May and June have exhausted virtually all short-term speculators. This share matches data from the end of the bear market lows in 2012, 2015 and 2018, all of which took place as three-month plus USD wealth rose above 80%.
We gradually re-released all capital over the course of the week. If the positioning is mainly in BTC, the fund is also more than 20% exposed to Ether. We also have some smaller positions in SAND and UNI.
This article was brought to you by Fonds Rivemont. Rivemont’s crypto fund is the first and only actively managed cryptocurrency fund in Canada. RRSP and TFSA justified. Accredited investors can learn more here.
Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and does not constitute investment advice or trading instructions..
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