FX.co ★ Bitcoin price is rising, but the situation on the crypto market remains stalemate

Bitcoin started Monday morning with a sideways movement. At the time of writing, the coin is trading at $21,437. According to digital asset tracking website CoinMarketCap, over the past 24 hours, the lowest price of bitcoin reached $20,965, and the highest price was $21,783.

BTC began moving towards confident positive dynamics on June 18, however, it is still trading below key price resistance levels. The major digital asset made a bullish trendline breakout last Saturday, but has only gained marginally since then.

The next important key level for bitcoin is $23,000. A successful breakthrough of this mark will open the way for the cryptocurrency to the next important resistance area at $30,000. This mark has acted as support for bitcoin since the beginning of 2021.

Recall that since November last year, when the coin updated its historical record, soaring above $69,000, the cryptocurrency has already lost about 70% in price.

Altcoin market

The main competitor of bitcoin, the altcoin Ethereum, started the trading session with an increase and by the time of writing it had reached $1,219.

It took the course to increase ETH the previous week and easily took the psychologically significant barrier of $1,000, and the rise of the coin according to the results of the seven-day period turned out to be even more pronounced than that of BTC.

By the way, despite the bright successes of the second cryptocurrency, extreme market conditions significantly increased the outflow of users from the Ethereum network. So, since the beginning of this year, activity in it has fallen by 28%.

As for cryptocurrencies from the top 10 by capitalization, over the past 24 hours, the sharpest drop was recorded by Solana (-3.29%), and the main favorite here was the Dogecoin coin (+10.73%).

At the end of the week, all virtual assets from the top ten, with the exception of stablecoins USD Coin, Tether and Binance USD, reported strong growth. At the same time, Solana (+28.3%), Ethereum (+23.8%) and BNB (+21.7%) showed the best results.

According to the world's largest virtual asset data aggregator CoinGecko, over the past week, in the top 100 most capitalized digital assets, Polygon (+50.2%) topped the list of leaders, while Radix (-4.7%).

According to the aggregate platform CoinCodex, over the past week, the largest price increase among moderate-cap digital assets was shown by the CEEK VR metaverse token, the value of which soared by 98%.

The most tangible price decrease here was reported by the native token of the blockchain platform Everscale, whose quotes sank by 11.5%.

According to the statistics of the popular Internet platform CoinGecko, which fixes prices for virtual assets, at the moment the total capitalization of the crypto market is $1.01 trillion, and the BTC dominance index has dipped to 40.06%.

According to the results of the weekly report of the digital asset manager company CoinShares, over the past seven days, the outflow of capital from cryptocurrency funds has reached $39 million. The figure was 59% higher.

Factors of pressure on the crypto market

Key evidence of the serious vulnerability of digital assets was the recent announcement made by some cryptocurrency companies. It concerned the dismissal of thousands of employees amid large-scale disposal of investors from risky assets.

So, recently the companies Celsius, Crypto, Coinbase, Gemini, CoinFLEX, BlockFi and others began to rapidly reduce costs due to the active decrease in trading volumes by participants in the crypto market.

Last week, the CEO of the Singapore crypto.com exchange, Kris Marszalek, announced a staff reduction of 5% (260 people).

The American cryptocurrency exchange Gemini spoke about the imminent dismissal of 10% of the staff.As part of the staff optimization of the BlockFi crypto-lending platform, it is planned to reduce staff by about 20% (about 850 employees).

Following Crypto, BlockFi, and Gemini, exchanges such as Bybit, Vauld, and Bitpanda also announced staff cuts.

The Coinbase platform went even further, whose CEO, Brian Armstrong, spoke about plans to lay off a fifth of his staff (about 18%) due to high volatility in the virtual asset market.

At the same time, the Celsius Network cryptocurrency exchange turned out to be on the verge of insolvency. In mid-June, the American lender announced the suspension of the possibility of withdrawing, exchanging and transferring funds between accounts "due to extreme market conditions." Following this statement, the project token instantly collapsed by 50%.

Soon, one of the main competitors of Celsius - Nexo - announced its readiness to buy a loan portfolio of the cryptocurrency platform. So far, however, Celsius has turned to one of the largest international financial conglomerates, Citigroup, for help in finding possible financing options.

Later, the DeFi-project Change Finance, which plans to attract $2 billion from investors to purchase the portfolio of the cryptocurrency exchange in the event of its bankruptcy, also expressed its desire to buy out part of the assets of the Celsius Network.

However, the Celsius management refused to communicate with potential buyers and said it had hired bankruptcy consultants to resolve the issue.

Recently, the list of companies affected by the fall in the digital asset market was added to the CoinFLEX cryptocurrency derivatives platform. Last week, the company suspended the withdrawal of user funds.

However, there is some positive news among this wave of frightening news. Thus, the largest cryptocurrency exchange Binance announced that it is opening 2,000 new vacancies.

The management of Bitfinex and Tether also spoke about their refusal to lay off employees amid the fall of the market. Moreover, the Bitget exchange plans to double its staff in the near future.

Another important negative signal for the market in recent days was the forced reduction in operations by BTC miners in order to reduce losses. Today, the cost of electricity is constantly rising, and the prices of virtual assets are falling sharply, depriving crypto miners of profit.

Traditionally, large companies have fixed energy costs. In addition, they have the opportunity to prepare in advance for a downturn in the market and provide for themselves a financial airbag. The combination of these factors helps major players survive and adapt to the new reality. Thus, the maximum impact is now being taken by small organizations that are at risk of becoming victims of takeovers.

Against this background, miners are actively engaged in reducing their stocks of cryptocurrencies, with the help of which they cover rising costs, operating expenses and servicing loans.

Crypto analysts believe that in the third quarter of 2022, small mining companies in need of liquidity will continue to put downward pressure on the price of bitcoin.

By the way, the cost of mining 1 BTC from $20,000 at the beginning of the year dropped to $15,000 in June due to the introduction of more energy-efficient equipment.

Earlier, experts from the investment company Arcane Research have already reported that cash flow from digital gold mining has decreased by 80% compared to the peak in November 2021.

Cryptanalyst Predictions

Despite the current growth of the first cryptocurrency and the digital asset market as a whole, experts adhere to the most pessimistic forecasts regarding their future. So, most experts are sure that the crypto market is ahead of an active decline. At the same time, many experts draw parallels between today and the loud fall of cryptocurrencies in the past, when, in a similar state of the market, BTC lost about 80% of its value, and alternative cryptocurrencies lost about 90%.Moreover, today many virtual asset market analysts suggest that not only June, but the entire summer of 2022 will be unsuccessful for bitcoin, and it may even reach a cyclical bottom in August.

Analysts from Arcane Research recently suggested that the downside potential for bitcoin remains at $10,350.Earlier, the CEO of the investment company DoubleLine, Jeff Gundlach, said that bitcoin could soon collapse to the $10,000 mark after a series of recent falls that made investors seriously question the stability of the cryptocurrency markets.

According to Gundlach, the May crash, when the cryptocurrency market lost billions of dollars in several weeks, of the algorithmic stablecoin Terra USD (UST) and the digital token Luna was clear evidence of the serious vulnerability of virtual assets.

At the same time, some crypto experts continue to believe in the bright future of the first cryptocurrency. So, recently a popular analyst and host of a microblog under the nickname Crypto Rover suggested that bitcoin has not yet completed its growth and ahead of it is the fifth, final wave of positive movement.

Earlier, the CEO of software company XOR Strategy, Aurelien Ohayon, said that the BTC has reached a cyclical bottom and will soon bounce off the lows, starting a new growth cycle. If his assumption becomes reality, Ohayon believes BTC could easily reach $30,000 by the end of June.