Bitcoin’s recent surge above $30,000 has sparked renewed interest among traders, potentially leading to increased buying activity in other cryptocurrencies such as Ether (ETH), Arbitrum (ARB), VeChain (VET), and Stacks (STX).
Bitcoin reached a new 52-week high on June 23, indicating a strong bullish trend.
Traders have held onto a significant portion of the gains made during the week, suggesting a reluctance to book profits.
With a 16% increase this week, Bitcoin has outperformed the S&P 500 Index, which experienced a 1.39% decline.
Ether, the second-largest cryptocurrency, is also displaying signs of a potential bullish move. Data from Glassnode reveals a sharp decline in Ether balances on exchanges over the past 30 days, hitting a new low of 12.6%.
A similar dip in Ether exchange balances occurred in November 2022, preceding a substantial rally of 33%.
However, caution is advised this time as the decline in exchange balances may be attributed to actions taken by the U.S. Securities and Exchange Commission against major platforms like Binance and Coinbase.
The cryptocurrency market’s recovery extends beyond Bitcoin and Ether, as several altcoins have experienced significant increases from their recent lows.
This suggests a reduction in bearish sentiment and a growing interest among buyers at lower price levels.
The question remains whether the return of buyers will initiate a new bullish phase in cryptocurrencies or if higher price levels will attract selling from bears.
To gain insights into potential short-term price movements, let’s analyze the charts of the top five cryptocurrencies.
Bitcoin:
Bitcoin has been trading near the $31,000 level for the past four days, indicating a strong defense by bears. However, the presence of bulls is evident, with the 20-day exponential moving average and the relative strength index (RSI) in the overbought zone, favoring the buyers.
If the price sustains above $31,000, the BTC/USDT pair could embark on its next upward move, surpassing the resistance at $32,400 and potentially soaring to $40,000.
Conversely, a break below $29,500 may lead to a slide towards the 20-day EMA, a critical support level, and further down to the 50-day simple moving average.
Ether:
Ether has faced selling pressure near the $1,928 level for three consecutive days, but the bulls have not relinquished their position. The moving averages are on the verge of a bullish crossover, and the RSI remains in positive territory, suggesting bullish control.
If buyers successfully overcome the $1,928 resistance, the ETH/USDT pair could surge towards the $2,148 to $2,200 range. However, a swift downturn below the moving averages could trigger selling from aggressive bulls, resulting in a correction towards strong support at $1,700.
Arbitrum:
Arbitrum witnessed a rally after surpassing the breakdown level of $1, indicating rejection of recent downside movement. Although the bears are attempting to hinder the recovery at the 50-day SMA, the bulls have successfully defended the 20-day EMA, setting the stage for a potential breakout.
A break above $1.18 could mark the beginning of a new upward trend, with targets at $1.28 and $1.54. On the contrary, a downturn below the $1 to $0.90 support zone may negate this bullish view.
VeChain:
VeChain experienced a reversal from the resistance line on June 23, but struggles to sustain prices below the 50-day SMA, indicating buying interest during dips.
Bulls will likely attempt to drive the price above the resistance line, signifying the end of the downtrend and a potential climb towards $0.026.
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Uncertainty surrounding digital assets is trapping financial institutions in a “supervisory void,” which could have dire implications as interest rates rise, warns Federal Reserve Governor Michelle Bowman.
Bowman, a member of the Board of Governors of the U.S. Federal Reserve System, expressed her concerns about the lack of a clear regulatory framework for emerging technologies in the United States.
Speaking at the Salzburg Global Seminar on bank regulation and supervision, she called for global regulators to address the supervision of novel banking activities, particularly banking as a service and digital assets.
According to Bowman, financial institutions find themselves in an uncertain position with regards to these technologies.
“While there have been some efforts to provide guidance, there remains substantial uncertainty about the permissibility of and supervisory expectations for these activities […].
This leaves banks in the perilous position of relying on general but non-binding statements by policymakers only to be criticized at some point in the future,” explained Bowman, whose term at the Fed ends in 2034.
In addition, Bowman highlighted the risks associated with the current regulatory landscape. Without a clear regulatory framework, regulators may impose new requirements on businesses even after significant investments have been made.
She emphasized that effective supervision and regulation require engagement with both novel and traditional activities.
Bowman’s call for regulatory clarity aligns with numerous other voices advocating for a coherent framework for digital assets.
Ratings agency Moody’s recently cautioned that without support from U.S. lawmakers for legislation focused on digital assets, investors and companies may seek out other crypto-friendly jurisdictions.
To address this issue, lawmakers from the House Financial Services Committee and House Agriculture Committee have put forth a draft discussion, offering a potential pathway for certain crypto assets to be categorized as digital commodities.
The proposed bill would prevent the U.S. Securities and Exchange Commission from rejecting the registration of digital asset trading platforms as regulated alternative trading systems, enabling these firms to offer “digital commodities and payment stablecoins.”
Bowman concluded by issuing a warning that the failure to establish a clear approach for financial institutions regarding novel technologies “could have significant consequences for banks navigating higher interest rates.”
With the interest rate landscape evolving, it becomes increasingly important for institutions to have regulatory certainty as they navigate the realm of digital assets.
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Bloomberg senior ETF analyst Eric Balchunas reported that on June 26, the ProShares Bitcoin Strategy ETF witnessed its largest weekly inflow in a year, totaling $65.3 million and pushing its assets past the $1 billion mark.
BITO, which is a Bitcoin futures fund and the first BTC-linked ETF in the United States, has become a favorite among institutional investors.
Balchunas noted that the fund has closely mirrored Bitcoin’s performance, trailing spot prices by just 1.05% annually. Additionally, BITO carries a fee of 0.95%.
According to ProShares, the BITO fund has recorded a gain of 59.6% since the beginning of 2023.
The interest in Bitcoin derivatives has seen a surge across the market following BlackRock’s application for its own Bitcoin ETF on June 15. Deribit, a crypto options exchange, reported a significant increase in Bitcoin futures open interest, which currently stands at $319 million as of June 25, representing a rise of approximately 30% compared to the previous week.
The resurgence in ETF trading and the subsequent boost in BTC prices have also brought positive news for Grayscale, the world’s largest crypto asset manager.
The Grayscale Bitcoin Trust (GBTC), which had been trading at a substantial discount to spot BTC prices for months, is now moving closer to narrowing the gap.
At present, the Grayscale premium, or discount, stands at -31.2%, a significant improvement from its low of -49% in December, according to Coinglass.
Although it remains uncertain whether the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF, a race has commenced with a new wave of filings following BlackRock’s application. WisdomTree has filed with the SEC for a spot Bitcoin ETF for the third time, and Invesco has also renewed its application for a similar product.
ETF Store President Nate Geraci has identified a list of ETF issuers that he believes are likely to file or refile for a spot Bitcoin ETF based on their past filings.
Geraci mentioned First Trust, VanEck, Global X, Fidelity, and the potential “dark horse,” Schwab, as issuers to keep an eye on.
The competition to launch a spot Bitcoin ETF is heating up, indicating a growing interest from investors and institutions in gaining exposure to Bitcoin through regulated investment vehicles.
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The CEO of Hong Kong’s Securities and Futures Commission (SFC), Julia Leung Fung-yee, recently emphasized the importance of incorporating virtual assets into the regulatory system, highlighting that crypto trading is a vital part of the virtual asset ecosystem.
Leung’s remarks came in the wake of the collapse of FTX, a crypto exchange, in November 2022. Leung explained that the introduction of a new licensing system for virtual asset providers would ensure the protection of investors while also considering the risks faced by financial institutions.
She believes that integrating virtual asset providers into the regulatory framework is the only way to foster innovation and enhance market trust following the bankruptcy of FTX.
Hong Kong leveraged the FTX incident to mitigate regulatory risks associated with centralized exchanges.
In December 2022, less than a month after the crisis unfolded, the legislative council of Hong Kong included virtual asset service providers under the same legislation that governs traditional financial institutions.
The new regulations introduce stringent Anti-Money Laundering guidelines and investor protection laws for digital asset exchanges seeking to operate in Hong Kong.
Furthermore, a new licensing scheme has been established to grant retail investors access to trade virtual assets.
Previously, digital asset trading was restricted to professional investors and traders with at least $1 million in bankable assets.
Leung views Hong Kong’s cryptocurrency licensing system as a testament to China’s “one country, two systems” policy.
Mainland China banned cryptocurrencies in 2021, whereas Hong Kong chose a different approach by fostering a welcoming environment for the crypto industry.
In the past year, more than 150 Web3 firms have set up operations in Hong Kong’s Cyberport, a digital hub established by the local government to promote innovation.
This influx of companies followed the government’s allocation of 50 million yuan ($7 million) to expedite the development of Web3.
Leung’s remarks highlight Hong Kong’s commitment to adapting its regulatory framework to the evolving virtual asset landscape.
By embracing cryptocurrencies and implementing appropriate regulations, Hong Kong aims to strike a balance between innovation and investor protection, positioning itself as a hub for the growing crypto industry.
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According to Glassnode data, ETH balances on exchanges have plummeted to just 12.6% in the last 30 days, indicating a significant decrease in available tokens for sale.
Typically, this reduced supply on exchanges is viewed as a positive indicator for price movement, suggesting that there is less selling pressure.
The spike in withdrawals from exchanges at the beginning of June, coinciding with the regulatory crackdown on major platforms like Binance and Coinbase, should be considered alongside this data.
While some investors were prompted to withdraw their funds due to concerns over centralized exchanges, the magnitude of the withdrawals mirrors the situation in November 2022 when ETH experienced a sharp 33% surge following a similar dip in exchange balances.
Additionally, the amount of ETH locked in staking contracts has seen a substantial increase since the Shapella upgrade in April. Currently, over 23 million ETH, equivalent to 19.1% of the total supply, is deposited in staking contracts.
Moreover, Glassnode’s data reveals that nearly 30% of ETH’s supply is now locked in smart contracts, including decentralized finance and staking contracts, up from 25.5% at the start of 2023.
This trend further reduces the liquid supply of ETH, which is positive for its price trajectory.
Analyzing the price action, Ether has broken above the 50-day moving average, indicating a bullish breakout.
Currently facing resistance around the $1,906 level, the ETH/USD pair has shown higher lows since November 2022, with the $1,900-$2,000 range acting as both technical and psychological resistance levels.
A successful breakthrough above $2,000 could potentially propel Ether towards the $3,000 mark, aligning with the targets of the bullish ascending channel pattern.
Meanwhile, the ETH/BTC pair is seeking support around the 2023 lows of 0.06255 in Bitcoin terms. A breach below this level could expose bearish targets of 0.05689 BTC.
However, the relative strength index metric suggests oversold readings for the ETH/BTC pair, hinting at a possible pullback.
Traders should remain cautious as the funding rate for the ETH perpetual swap contract has surged to monthly highs.
This serves as a warning for late buyers, as perpetual swap traders must pay funding rates on their open positions depending on demand.
If short orders outweigh long orders, shorting becomes relatively more expensive, leading short traders to compensate long traders.
While a temporary pullback towards the lower boundary of the ascending triangle pattern around $1,680 is plausible, the overall on-chain movements and market indicators favor an upward trajectory in the short to medium term.
Additionally, Bitcoin’s price action and the ability of BTC buyers to sustain the $30,000 level will play a significant role in maintaining Ethereum’s bullish momentum.
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Credible Crypto, a prominent voice in the cryptocurrency community, predicts Bitcoin’s price may soon surpass its previous high of $69,000, citing patterns in past impulse movements.
The prediction, shared via Twitter, suggests Bitcoin (BTC) could reach this peak within the next four months, potentially by October.
This optimism is based on Bitcoin’s strong performance in recent times, and its successful retest of support on monthly timeframes, implying a potential upcoming “parabolic advance.”
According to Credible Crypto, the trend of parabolic advances is characterized by exponentially increasing momentum that peaks at the top, as previously seen in Bitcoin’s movement from $3,000 to $14,000 and $10,000 to $60,000.
The largest monthly candle seen recently was a $10,000 move that took Bitcoin above the $25,000 level.
Following this trend, the analyst expects a similar magnitude in future monthly moves. The gap between the current price and the prior all-time high, which stands at $40,000, could, therefore, be covered within a few monthly candles.
However, this forecast remains speculative, and the actual timing remains uncertain, even though October has been suggested as a likely timeline.
The analyst clarified that while a new all-time high by the year-end is expected, October was merely a guess.
While many are optimistic about Bitcoin’s potential rise, some remain skeptical about the recent price surge attributed to Bitcoin spot price exchange-traded funds (ETFs) applications by firms like BlackRock.
Regulatory hurdles in the US may impede near-term approvals, a concern voiced by trading firm QCP Capital. Meanwhile, BTC trades around $30,000 as of the latest reports, following a brief period of high volatility.
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Bitcoin mining continues to generate controversy due to its environmental impact, and a recent revelation by a Brooklyn bathhouse has sparked mixed reactions among users on social media.
The bathhouse, located in Brooklyn, New York, announced on Instagram and Twitter that it utilizes Bitcoin mining rigs to heat its spa facilities.
In a post made on June 21, the bathhouse explained its process in three steps: the Bitcoin mining rigs generate heat as a byproduct, the heat is then captured by heat exchangers, and finally, it is circulated to heat the venue’s pools.
Bitcoin mining involves the creation of valid blocks that record transactions on the blockchain, but it consumes a significant amount of energy, often derived from fossil fuels.
This high energy consumption contributes to carbon emissions, raising concerns about the environmental impact of Bitcoin mining.
A report from January 2022 estimated that the Bitcoin mining network emits 42 megatons of carbon dioxide annually, accounting for 0.08% of the world’s total production. Instagram users who follow the Bathhouse account expressed mixed opinions.
Some users, like Annalarranaga, voiced their concerns about who benefits from cryptocurrency mining and called for transparency.
Another user claimed that bathhouse customers preferred “pure, unadulterated heat” for their salt baths, rather than heat generated as a byproduct of mining.
However, some individuals reveled in the negative responses, while others welcomed the idea of using mining-generated heat to warm the pools.
The latter group saw it as an innovative way to reduce energy consumption. Despite the specific example of carbon-neutral Bitcoin mining provided by the bathhouse, concerns about the environmental impact of Bitcoin mining persist among certain individuals, leading to unfavorable reactions.
Interestingly, repurposing the heat generated by Bitcoin mining to save energy is not a new concept. In Europe, miners have found creative ways to recycle the heat produced during the mining process.
For instance, in Norway, a Bitcoin miner and data center named Kryptovault uses the hot air generated by mining rigs to dry chopped logs.
As the debate surrounding Bitcoin mining’s environmental impact rages on, the use of excess heat for other purposes serves as a potential solution to mitigate energy consumption and reduce carbon emissions.
However, addressing the concerns of those worried about the ecological consequences of Bitcoin mining remains crucial for the wider acceptance and sustainability of cryptocurrency.
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In a scathing speech, Fabio Panetta, an executive board member of the European Central Bank (ECB), expressed his belief that cryptocurrencies offer little more than a platform for gambling among investors. Panetta delivered his remarks during a panel at the Bank for International Settlements Annual Conference on June 23.
Panetta highlighted the decline of cryptocurrencies’ perception as a “robust store of value” since late 2021, when the total market capitalization plummeted by over $1 trillion. He attributed this loss of confidence to the highly volatile nature of crypto assets, suggesting that they are more suited for gambling activities than as a stable investment. He emphasized the need for global lawmakers to recognize this reality and treat cryptocurrencies accordingly.
The ECB official criticized the crypto ecosystem, describing it as “deleterious” and plagued by market failures and negative externalities. Panetta warned that without adequate regulatory measures in place, the industry is likely to face further market disruptions. He cautioned policymakers against supporting an industry that, in his view, has yet to deliver any societal benefits and is primarily seeking integration into the traditional financial system for legitimacy and advantage.
Panetta specifically criticized the security, scalability, and decentralization of crypto transactions, arguing that these characteristics are unattainable. He pointed to the immutability of blockchains as a negative aspect, citing instances where transactions cannot be reversed, such as the collapse of FTX and a recent lawsuit by the United States Securities and Exchange Commission against Binance. According to Panetta, these incidents represent fundamental shortcomings within the crypto ecosystem.
The ECB official reminded crypto enthusiasts that new technology does not eliminate financial risks. He used the analogy of pressing a balloon, suggesting that when pressure is applied on one side, it will eventually burst on the other side. Panetta warned that if a balloon is filled with hot air, it may rise temporarily but will ultimately burst.
It is worth noting that Panetta has previously supported aspects of the ECB’s exploration of a potential digital euro. He has also proposed the banning of crypto assets with excessive environmental impact as part of the ECB’s efforts to address environmental risks.
In conclusion, Fabio Panetta’s speech painted a bleak picture of the future of cryptocurrencies, portraying them as platforms for gambling with limited societal benefits.
He called for regulatory safeguards and criticized the perceived limitations and failures of the crypto ecosystem.
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Etherscan, a prominent Ethereum block explorer and analytics platform, made significant strides in the realm of artificial intelligence (AI) during the past week.
Among the notable developments were the launch of their AI-powered code reader and Polygon’s proposal for a zero-knowledge Ethereum Virtual Machine (zkEVM) upgrade to enhance protocol security.
Etherscan’s Code Reader is a groundbreaking tool introduced on June 19. Utilizing AI technology, it allows users to retrieve and interpret the source code of specific contract addresses.
By inputting a prompt, the Code Reader generates responses using OpenAI’s large language model, providing valuable insights into the contract’s source code files.
The tool’s functionalities encompass gaining a deeper understanding of contract code through AI-generated explanations, obtaining comprehensive lists of smart contract functions related to Ethereum data, and comprehending the contract’s interaction with decentralized applications.
Furthermore, users have the option to modify the source code directly within the user interface before sharing it with the AI.
In parallel, Polygon’s co-founder put forward a proposal for a zkEVM upgrade aimed at bolstering the security of the protocol.
The zkEVM upgrade leverages zero-knowledge proofs to enhance privacy and confidentiality, while simultaneously reducing transaction costs.
This development showcases the continuous efforts of blockchain platforms to improve their underlying technology and provide a more robust and secure environment for users.
Meanwhile, ZachXBT, a blockchain investigator, received substantial support from the crypto community in his ongoing legal battle. Binance CEO Changpeng Zhao joined the cause by donating to ZachXBT’s lawsuit fund, which has now surpassed $1 million.
The community-driven initiative aims to assist ZachXBT in defending himself against a defamation case filed by Jeffrey Huang, also known as MachiBigBrother on Twitter.
This display of solidarity among crypto personalities underscores the interconnectedness and collaborative nature of the industry.
These developments coincide with a bullish momentum across the decentralized finance (DeFi) market, led by Bitcoin’s resurgence.
The top 100 DeFi tokens broke free from a three-week-long bearish phase, experiencing substantial price surges throughout the week.
Most DeFi tokens traded in the green, signaling renewed optimism and investor confidence in the market.
In summary, Etherscan’s introduction of the AI-powered Code Reader, Polygon’s proposal for a zkEVM upgrade, and the support rallied behind ZachXBT’s legal battle have been the highlights of the past week in the DeFi ecosystem.
These advancements contribute to the growth, security, and innovation within the blockchain industry, setting the stage for further breakthroughs in the future.
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Coinbase has taken an unconventional legal approach in anticipation of a potential crackdown by the U.S. Securities and Exchange Commission (SEC).
Prior to the SEC’s lawsuit against Coinbase on June 6, the company had submitted “amicus” briefs in two other crypto-related cases, offering its perspective as a friend of the court.
Amicus briefs, although common at the U.S. Supreme Court, are rarely filed in federal trial courts, accounting for just 0.1% of cases, as reported by law firm Gibson Dunn & Crutcher.
However, the crypto industry has seen an increasing number of amicus briefs in SEC cases, with industry groups supporting defendants.
Although a ruling in favor of another crypto defendant would not be legally binding for Coinbase, it could potentially strengthen the company’s defense.
By filing amicus briefs, Coinbase aims to influence legal discussions and steer them in a direction that aligns with its interests.
This strategy is about setting the groundwork for addressing legal issues that the amicus is concerned about. One of the cases in which Coinbase filed an amicus brief was represented by Gibson Dunn, the same law firm that represents Coinbase itself.
The SEC’s recent focus has shifted from targeting developers who sell unregistered digital tokens to larger players like exchanges, in an effort to regulate the cryptocurrency market.
Coinbase has become the SEC’s prime target in the United States. The regulator filed a lawsuit in Manhattan federal court, alleging that Coinbase operated as an unregistered exchange, broker, and clearinghouse.
The SEC claimed that at least 13 of the cryptocurrencies available on Coinbase, including Solana, Cardano, and Polygon, were securities.
Coinbase initiated its legal defense strategy last year when it became the subject of SEC investigation.
The company enlisted the services of prominent law firms Gibson Dunn and Cahill Gordon & Reindel to handle the two cases. In one instance, Coinbase supported the dismissal of an insider trading case involving a former Coinbase product manager.
The primary argument in Coinbase’s amicus brief, which could foreshadow its defense in its own case, is that the SEC lacks the authority to regulate digital assets that are not securities.
The SEC, on the other hand, maintains that the legal test used to determine securities depends on the economic realities of transactions rather than their labels.
The regulator urges judges to consider how digital assets are marketed and highlights promises made by crypto developers regarding potential profits.
Coinbase also argues in its brief that the SEC has failed to provide clear guidelines to cryptocurrency industry participants, violating their right to due process.
Coinbase’s other amicus brief was filed in support of Ripple Labs, a high-profile battle the SEC engaged in prior to the Coinbase case.
The SEC sued Ripple Labs in 2020, accusing the company and its executives of conducting an unregistered securities offering by selling the cryptocurrency XRP. Coinbase urged the judge to allow the fair notice defense in this case, claiming that denying it would impact future cases.
The outcome of these legal battles will have significant implications for the cryptocurrency industry.
It remains to be seen how the courts will interpret and apply existing regulations to the evolving world of digital assets. A ruling in the Ripple case is expected later this year.
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