Bitcoin and Crypto Market Updates (June 5th)

 BIG BIG WEEK AHEAD!

Crypto has been nothing shy of DULL the last few weeks but that should change this week.

We have two major market catalysts this week – CPI on TUESDAY and FOMC on Wednesday. These two events should give the overall market some direction, crypto, legacy, commodities and the dollar should all see big moves.

There are really 4 main components going into this week that I’m focussed on:

• LARGE-CAP STOCKS

• INDEXES

• FOMC EXPECTATIONS

• SENTIMENT

For me when you look at these 4 areas on balance you can quite quickly summarise that risks are to the downside. That doesn’t mean we can’t see a rally this week it just means the RR here is extremely poor and I’d rather be looking taking bets to the short side.

SENTIMENT

I want to show this first to give you the backdrop. As you can see here we are seeing EXTREME retail optimism… while smart money is extremely pessimistic. In other words ‘’The stage is set’’ ‘’Mission accomplished’’ ‘’Steady lads’’

LARGE-CAP STOCKS

So this is the index im using to track the big names. Be aware that these names carry over a 25% weighting on the market. So 80/90% of this entire equity market move is concentrated in these names. We’re right at the 78.6 fib retracement (high probability level for a reversal). Last week, we printed a spinning top candle indicating some indecision… or big money selling off into retail?

INDEXES/BTC

And this is where some openness to more upside comes in as I have mixed views on the direction of certain indexes.

Take IWM for example – I could still see more upside here to complete this ABCDE move than the larger ABC move down to the 120/130 target zone.

Then I look at SPX – right at the 61.8 fib level… kinda struggling a bit here so a possible top.

NQ – Super tricky as it looks like we could get more upside into the zone.

Then I look at BTC – Right at the major support zone and holding… weekly momentum is however starting to roll over. So some mixed messages here.

So as you can see, it's quite a tricky landscape when it comes to the indexes. We could see more upside but overall this is the business end of the rally where dumb money gets all confident and we see that final hoorah into major reversal zones and we tank.

FOMC EXPECTATIONS

So take into account all of the above and now consider that the market is 74% confident the FED PAUSES here. Hmmm. It’s a tough call but I just don’t see the sense in a pause here and the fact we have CPI the day before makes things really interesting.

Here’s a really cool graphic showing possible outcomes for the CPI + FOMC. Take this into account this week.

Binance to halt USD deposits and withdrawals after SEC attack

Binance.US, facing a lawsuit from the SEC, has temporarily halted all customer fiat withdrawals, transitioning to an all-crypto exchange. The decision came as banking partners indicated their intent to pause USD fiat channels. The exchange urged users to withdraw USD funds by June 13, 2023 and stated that all operations are currently functioning with 1:1 reserves for customers. USD trading pairs will be suspended, and any USD balances may be converted to stablecoins. Binance.US criticized the SEC's lawsuit as baseless, aggressive, and unjustified. The exchange's native token, BNB, has experienced a decline in value.

Crypto.com suspends US institutional trading

Crypto.com has announced the suspension of its institutional exchange service for US customers due to limited demand caused by the current market landscape. The decision comes amid ongoing lawsuits against other major exchanges like Binance and Coinbase. The Singapore-based exchange stated that the closure will not affect its retail trading app and emphasized its commitment to its CFTC-regulated crypto derivatives product, UpDown Options. While the institutional trading platform may reopen in the future, specific conditions for reopening were not disclosed. Earlier this month, Crypto.com received a license for digital payment token services in Singapore.

Banks partnering with ChainLink

Swift, the global financial messaging system, has announced a collaboration with major banks and Chainlink, a Web3 infrastructure provider, to trial connecting private and public blockchains. Swift aims to explore the interoperability of blockchains among financial institutions, building upon its previous tests on private blockchains for tokenised assets. The collaboration includes prominent financial institutions such as BNP Paribas, BNY Mellon, Citi, Euroclear, SDX, and DTCC. Chainlink's Cross-Chain Interoperability Protocol (CCIP) will facilitate the expansion, and its co-founder, Sergey Nazarov, believes that the trend of asset tokenization could "10x the blockchain industry size."

SEC Sues Coinbase and Binance in crypto crackdown

The U.S. Securities and Exchange Commission (SEC) has launched a fresh wave of lawsuits targeting leading crypto platforms, Binance and Coinbase. On June 5, the SEC charged Binance with 13 counts, including unregistered token offerings and sales, as well as failure to register as an exchange or broker-dealer. Similarly, Coinbase was accused of offering securities through popular cryptocurrencies. Following the legal actions, decentralized exchange trading volume skyrocketed by 444%. Notably, SEC enforcement actions in the crypto space surged 183% in the six months following FTX's bankruptcy.

Market tanks as SEC Labels 67 cryptocurrencies securities

Crypto markets nuked after at the weekend following the latest guidance from the SEC, with major cryptocurrencies falling 20%+. The U.S. securities regulator continues to expand its list of cryptocurrencies classified as securities, with approximately 67 now falling under this category. The recent lawsuits against Binance and Coinbase added to this list, with the SEC designating 10 cryptocurrencies in the Binance case and 13 in the Coinbase case as securities. This classification now encompasses over $100 billion worth of the market, representing about 10% of the total crypto market capitalization of $1.09 trillion. The regulatory actions highlight the increasing scrutiny and impact of securities regulations on the cryptocurrency industry.

Halving Events

Cryptocurrency halving events hold a significant role in the world of digital currencies, offering both intrigue and profit potential. Understanding halving events could bring not just an understanding of how some cryptocurrencies work (like Bitcoin for example) but also could bring some opportunity.

What is Cryptocurrency Halving?

At its core, cryptocurrency halving refers to a programmed event that slashes the block reward for miners by half. This deliberate reduction occurs at predefined intervals and is deeply ingrained in the protocol of specific cryptocurrencies. Take Bitcoin, for instance, which undergoes a halving event roughly every four years. The primary objective behind halving is twofold: to regulate the influx of new coins into circulation and establish a predictable issuance schedule.

Unveiling the Impact on Price and Market Dynamics:

The effects of halving events on cryptocurrency prices and market dynamics are worth exploring. As the block reward decreases, scarcity enters the picture, potentially triggering increased demand. This supply-demand shift can pave the way for price surges, particularly if sustained interest from traders and investors persists. Comprehending these dynamics empowers individuals to make informed decisions regarding their investment strategies.

Drawing from Historical Examples:

By examining past halving events, we gain valuable insights into potential price movements. For example; historical data showcases noteworthy price rallies following Bitcoin's previous halvings in 2012, 2016 and 2020. However, it's essential to remember that past performance doesn't guarantee future outcomes, as market conditions can fluctuate, but the halving on BTC has been a bullish event so far and is yet to be proved otherwise, the next one is scheduled for May 2024.

The Next Halving:

Other cryptocurrencies have in their code the same or similar halving mechanisms as Bitcoin, that's the case of Litecoin (LTC). In 50 days (ETA 02-03 August 2023) the block reward for Litecoin miners will be halved, reducing it from 12.5 to 6,25 LTC per block.

Historical data from previous Litecoin halvings demonstrates interesting patterns, and the upcoming event presents an opportune time for traders and investors to evaluate their positions and implement appropriate strategies to capitalize on potential market movements.

As market participants, we should approach the upcoming Litecoin halving, by understanding the impact of the event itself and then study historical trends, current market conditions and the global economy to align investment strategies that might be presented by this event in the dynamic world of cryptocurrencies.

Unlocking Strategies for Capitalizing on Halving Events:

Halving events present a range of strategies for traders and investors to consider, among them::

• Embrace a Buy-and-Hold Approach:

Some individuals opt to accumulate cryptocurrencies before a halving event and maintain a long-term investment position. This strategy relies on the anticipation of price appreciation over time.

• Seize Short-Term Trading Opportunities:

Traders equipped with technical analysis and an understanding of market trends can capitalize on price volatility surrounding halving events by executing well-timed short-term trades.

• Mining Considerations:

For miners, halving events impact profitability. Evaluating mining costs and potential rewards post-halving is crucial for making informed decisions in this aspect.

Conclusion

Halving events have the potential to represent pivotal milestones, capable of shaping price trends and market dynamics as shown o

n BTC. However, exercising due diligence, effectively managing risk, and making informed decisions considering different outcomes are paramount.

The next halving event in crypto is going to impact LTC in 50 days. How are you going to position yourself about it? Let us know in our free Discord!