Eurgh…another gloomy week of news and charts.
More talk of war, inflation, new viruses (monkeypox) and an upcoming food crisis. Of course, all of this culminates in a global recession. So let's dive in.
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What's going on?
Well, the S&P 500 completed its seventh consecutive week of declines. The Dow Jones has declined for eight weeks in a row (that's not happened since 1923). Bitcoin is also facing the prospect of 9 consecutive, red weekly candles.
Big picture: we're seeing the realization that the era of unprecedented, ultra-loose monetary policy is coming to an end. In other words, the money printer is no longer going brrr.
So what does this mean for crypto?
Let's look at Bitcoin, specifically what the charts are saying.
Historic price action after Bitcoin experiences a Death Cross pattern (50 EMA crossing the 200 EMA, which last happened back in Jan), suggests further downside.
We're around -57% from peak BTC back in November 2021. Historically, though, the death cross precedes more downside. This historically take months to play out.
If Bitcoin were to retrace these historic patterns, it's likely we see it go down to the $20-24k range.
Looking at a Bitcoin monthly chart, we can also see that the price crosses the 60-day EMA on each cycle bottom. Again, we're not there yet. This chart shared by Raoul Pal also suggests a bottom of around $20-22k:
So there's likely more downside yet, but we're probably through most of the pain.
Weekly Projects to Watch
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Top risers by Dev Rank
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- XRP ($XRP) ⬆️ 10%
- TRON ($TRX) ⬆️ 7%
- Arweave ($AR) ⬆️ 6%
- Medibloc ($MED) ⬆️ 6%
Top small cap risers by overall rank
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- MarteXcoin ($MXT) ⬆️ 77%
- Faceter ($FACE) ⬆️ 60%
- Swarm Network ($SWM) ⬆️ 59%
- Kujira ($KUJI) ⬆️ 53%
Top News This Week
The Aftermath of Terra (LUNA)
On May 15, 2022, Terra (LUNA)’s trading volume ended up surging by 200% as the market adjusted to the death spiral. This occurred even despite the risks involved, due to the fact that Terra's instance volatility was seen as an attractive market for short-term investors. LUNA, momentarily, ended up gaining 600% in terms of its value. In fact, things got so out of hand that LUNA became the first coin to go down to zero, then 100x, all within the span of a week.
Then on May 16, we saw an announcement on how the Polygon team started working with Terra projects as a means of helping them migrate to the Polygon Network. Ryan Wyatt, who is the CEO of Polygon Studios, tweeted that they will help different Terra projects migrate.
The co-founder of Ethereum (ETH), Vitalik Buterin, also said that Terra (LUNA) should protect the smallholders and not the whales. Specifically, Buterin called for relief for the average UST smallholder that got lured in by promises of high stablecoin yields.
Binance’s CEO, Changpeng Zhao, tweeted on May 15, confirming that the exchange did not hold any UST, except for what the exchange gets as trading fees.
Across all of this chaos surrounding Terra (LUNA), Do Kwon was receiving a lot of backlash. In fact, an intruder ended up visiting his home. Following the intrusion, Do Kwon requested police protection due to the fact that strangers started coming in uninvited.
On May 17, Do Kwon released another LUNA revival plan. Specifically, he made a proposal to fork the Terra chain into a new chain without the algorithmic stablecoin. This proposal was, however, rejected by the community.
Terra’s legal team also resigned in the wake of the UST and LUNA collapse. General counsel Marc Goldich, chief corporate counsel Lawrence Florio, and regulatory counsel Noah Axler all left the company. Then on May 20, 2022, the founder of Avalanche (AVAX), Emin Gün Sirer, said that Terra (LUNA) is even worse than the Mt. Gox incident.
For reference, Mt. Gox was the biggest crypto exchange in its prime that went bankrupt in February of 2014 after a massive hack that caused a massive drop in the value of Bitcoin (BTC).
Numerous Developments Within the NFT Space From Spotify, Limewire, and Robinhood
Spotify is experimenting with the addition of non-fungible tokens (NFTs) onto the platform as a means of benefiting artists. According to Music Ally, there are Android users in the U.S. who have received a survey asking them to participate in a test that lets them preview NFTs on the page of artists.
Universal Music Group, a music label behind Taylor Swift, U2, Kendrick Lamar, and BTS, has announced that they would let artists drop NFTs on the new Web3 version of LimeWire. While this does not necessarily mean that they will, it does mean that they have the green light to do so if they choose to.
Robinhood also announced that it would launch an NFT-compatible cryptocurrency wallet that has zero fees for users of decentralized finance (DeFi) services, alongside providing them with other swap functionalities.
FTX U.S. Makes Moves Towards Stock Trading
The U.S. affiliate of the cryptocurrency exchange FTX has announced plans where they will roll out zero-commission stock trading.
This means that they will offer no-fee brokerage accounts, as well as commission-free trading and market and company data. However, for the time being, this service is only limited to a small number of users in the U.S.
Russia Will Eventually Legalize Cryptocurrencies as a Means of Payments
Industry and Trade Minister Denis Manturov said that Russia would, sooner or later, legalize cryptocurrencies as a means of payment. Manturov was asked at a forum if he believed cryptocurrencies would become legal as a form of payment, and here is what he had to say:
"The question is, when this happens, how it will be regulated, now that the central bank and government are actively working on it. But everyone tends to understand that ... sooner or later this will be implemented, in some format or other."
Ethereum Approached a Major Upgrade With the Popsten Public Testnet
Ethereum's core development team ended up reaching a new milestone due to the release of the Ropsten public testnet. This testnet will now undergo an upgrade to its revised Proof-of-Stake (PoS) consensus algorithm, which will occur in anticipation of its implementation of the Ethereum mainnet.
This upgrade is scheduled for June 8, when the code for its configuration appeared in a pull request made by the Ethereum DevOps engineer Parathi Jayanathi (parithosh).
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The Stack Team