"The worst quarter ever" for stocks - 5 things to know about Bitcoin this week

“The worst quarter ever” for stocks – 5 things to know about Bitcoin this week – Mail Bonus

Bitcoin (BTC) starts a new week that is still struggling for $ 20,000 support as the market takes a week of heavy losses.

What was once considered impossible just a few weeks ago has now become a reality as $ 20,000 – the highest price from 2017 to 2020 – returns to give investors a cruel feeling for deja vu.

Bitcoin fell to $ 17,600 over the weekend and tensions are high ahead of the opening of Wall Street on June 20.

Although BTC’s loss in value has been statistically significant here before – and even lower – concerns about the network’s stability at the current level are growing, with particular focus on miners.

Add to that the consensus that macroeconomic markets have probably not bottomed out, and it becomes understandable why attitudes around Bitcoin and cryptocurrencies are at a record low.

Cointelegraph looks at some of Hodler’s top interests when it comes to Bitcoin pricing in the coming days.

Bitcoin saves $ 20,000 per week

At $ 20,580, the last weekly closing of Bitcoin could have been worse – the largest cryptocurrency managed to maintain a key support level at least on a weekly timeframe.

The wake below, however, raised $ 2,400 and repeated performance could increase the pain for those who bet $ 20,000 and create significant prices.

Overnight, the BTC / USD peaked at $ 20,629 on Bitstamp before returning to merge just below the $ 20,000 mark, indicating that the situation remains uncertain in a lower time frame.

While some call for a sudden recovery, the overall mood among commentators is still one of the more cautious optimism.

“Over the weekend, while the fiat rails are closed, $ BTC dropped to a minimum of $ 17,600 down to almost 20% from Friday in good volume. Smell like a forced seller started running stations, “Arthur Hayes, former CEO of the BitMEX derivatives trading platform, argued in a Twitter thread on June 2.

Hayes claimed that the recovery came as soon as these forced sales ended, but that there could be more pressure on the sales side.

“Is it over yet … Idk,” says another post:

“But for the skilled knife hunters, there could be even more opportunities to buy coins from those who have to make every offer, the same price.

The role of cryptocurrency hedge funds and related investment instruments in increasing the weakness of BTC prices has been a key issue in the debate since the May Terra collapse. With Celsius, Three Arrows Capital and others who are now joining the chaotic forced liquidation caused by a multi-year minimum may be what is needed to stabilize the market in the long run.

“Bitcoin has not eliminated big players,” invests Mike Alfred argued June 18:

“They will take it down to the level that will cause maximum damage to over-exposed players like Celsius and then suddenly it will jump and rise higher when these companies are completely eliminated. A story as old as time. “

Elsewhere, $ 16,000 is still a popular target, which in itself equates to only a 76% drop from the highest levels of Bitcoin in November 2021. As the Cointelegraph reported, estimates are now up to $ 11,000 – 84.5%.

“$ 31,000-32,000 were broken and used as resistance. The same thing is happening with $ 20k-21k. Main goal: $ 16,000-17,000, especially $ 16,000-16,250, “Crypto’s popular Twitter account Il Capo added together.

That in addition described $ 16,000 as a “strong magnet”.

BTC / USD 1-week candlestick (bit stamp). Source: TradingView

Shares and bonds have “nowhere to hide”

A sluggish outlook for equities before Wall Street opens gives a low outlook for the BTC rise on June 20.

As analyst and commentator Josh Rager points out, the correlation between Bitcoin and equities is still valid.

The stars appear to be aligned for shorter periods. Globally, equities are setting the “worst quarter ever,” according to data from June 18, as cryptocurrencies give investors a taste of reality for months to come.

As such, it seems that the only market player that can reverse the trend is the Central Bank, and especially the Central Bank.

The tightening of monetary policy, some now argue, may not last long, as its negative effects will force the Fed to start increasing the supply of the US dollar again. This, in turn, would see cash flow return to risk assets.

This is a view that the Fed itself shares even if the United States goes into recession – something with a high chance of happening, depending on the interpretation of the Fed’s recent comments.

Referring to the humble environment of very low interest rates, Governor Christopher J. Waller said in a speech on June 18:

“I hope we never have two more years like 2020 and 2021, but because of the low interest rate environment we are facing now, I think even in a typical recession there is a good chance that we will consider strategic decisions in government. a future similar to what we did in the last two years. ”

In the meantime, however, the policy calls for increased interest rate hikes, which are a direct trigger for increased risk-taking losses when the Fed announced this earlier this month.

Miners in no mood for capitulation

Who is selling BTC at the lowest levels since November 2020?

Data on the chain have been monitoring groups of investors pushing for selling pressure – some forced, some willingly and voluntarily.

Miners, who may already be underwater when it comes to finding blocks, have gone from buyers to sellers, stopping years of accumulation.

“Miners have spent about $ 9k BTC from their state treasury this week and still have about $ 50k BTC,” chain analysis firm Glassnode confirmed on June 19.

However, it is difficult to calculate the production costs of miners and different setups face very different mining conditions and costs. As such, many can still be profitable even at current prices.

At the same time, data from BTC.com carries unexpected news. Bitcoin’s network difficulties are not about to diminish to reflect the migration of miners. Instead, it should rise this week.

Difficulties allow the Bitcoin network to adapt to changing economic conditions and is the backbone of the extremely successful proof-of-work algorithm. If miners quit due to lack of profitability, difficulties are automatically reduced to reduce costs and make mining more attractive.

So far, however, miners are still on board.

Likewise, the frequency of a hash, even if it exceeds record highs, remains above the estimated 200 emission rate per second (EH / s). Mining hardware dedicated to mining is therefore at a similar level as before.

Overview of the basics of the Bitcoin network (screenshot). Source: BTC.com

Seller or hodler, Bitcoiners see “massive” losses

Overall, however, both large and small hodlers who could not drive out of the storm faced “massive” losses when they sold, says Glassnode.

“If we assess the damage, we can see that almost all wallets, from shrimp to whales, now have a huge unrealized loss, worse than in March 2020,” the researchers pointed out next to a picture showing how far BTC’s holdings had fallen against the cost base:

“The consolidated wallet group has $ 1-100 BTC and has an unrealized loss equivalent to 30% of market value.

A clear chart of Bitcoin net unrealized gains / losses (NUPL). Source: Glassnode / Twitter

The figures suggest a state of panic among even seasoned investors, probably a surprising phenomenon given Bitcoin’s history of volatility.

Take a look at the HODL Waves indicator, which classifies currencies according to how long ago they last moved, captures while they sell and those who buy the dip.

Between 13 June and 19 June, the share of total BTC supply, which last moved between the day and the week before, rose from 1.65% to almost 6%.

Bitcoin HODL Waves chart (screenshot). Source: Unchained Capital

The feeling reaches almost an all-time low

It was already “comparable to a funeral” in December 2021, but cryptocurrency market sentiment has gone beyond itself.

Related: Top 5 cryptocurrencies to watch this week: BTC, SOL, LTC, LINK, BSV

According to the regulatory resource Crypto Fear & Greed Index, the average investor is now more scared than ever in the industry’s history.

On June 19, the index, which uses a basket of factors to calculate overall attitudes, dropped to an almost record low, only 6/100 – deep within its “great fear” category.

The weekend only slightly improved the situation, as the index added three points to sit still at highs that have historically marked a slump in the bear market for Bitcoin.

Only in August 2019 did Fear & Greed receive a lower rating.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.