Bears return from short-lived relief bounce

​​$BTC 24 Hour High $31,292 / Low $29,053 |   $BTC -4.4% Past 24 hours; -12.1% Past 7 day

Good morning. After a short-lived relief bounce, crypto bears dominate the markets again as $BTC dipped below $30,000. The implied volatility remains elevated for $BTC and $ETH. Due to the looming economic slowdown headwinds and the TerraUSD (UST) fiasco, the risk appetite is on the decline. Crypto’s correlation to the Tradfi markets remains very high –  not only the U.S. 10-year bond yields are moving lower in the second week, but the DXY is also taking a breather. It’s premature to conclude whether we’re experiencing a short-term reversal or if both indicators have indeed topped out. 

$BTC traded sideways in low volume in the past 24 hours, showing that the market is likely settling down in a new range (high $20,000s to low $30,000s). If the daily RSI can successfully break through the weekly RSI, this could be the first indicator for a short-term bullish trend reversal. The daily MACD indicator has also started to return to the positive territory, so investors should watch the imminent buy signal. 

$ETH is trading at $2,034 and has chopped sideways over the past 24 hours, with clear resistance forming at $2,160. The No. 2 digital asset appears to be much weaker than $BTC. Should we see continued weakness on a more macro scale, investors should stay cautious as $ETH has further room to slide towards the 200W SMA and the 0.618 Fibonacci retracement level for the entire bull run from March 2020 at $1,060. The ETH/BTC pair has, however, hit an oversold level for the first time since January. We may see short-term strength in $ETH over $BTC in the next two weeks if the Tradfi markets settle down and find some bullish relief. 

After the stablecoin TerraUSD (UST) crash, the Luna Foundation Guard (LFG)’s reserves dropped from 80K BTC to just 313 BTC in an attempt to stabilize UST. Terra Founder Do Kwon proposed demolishing the algorithmic UST and copying the blockchain’s code to create a new network called Terra and to hand out new tokens to former UST advocates like key app developers and those who still carry UST. However, some early UST investors from key global exchanges voiced that Kwon’s proposal of copying its blockchain is worthless.

Learn more from today’s Trader View video.

Digital Assets Market

  • Total crypto market capitalization stands at $1.34T, -4.2% from yesterday
  • $BTC is -4.6% at time of writing; 24H liquidations and funding rates: 65.60M, +0.00644% average
  • $ETH is -5.7% at time of writing; 24H liquidations and funding rates: 58.70M, +0.01975% average 
  • Stablecoins market dominance: USDT 47.14%; USDC 32.43%; BUSD 11.19%; DAI 3.75%,UST 0.66%

Alts and DeFi watch:

  • DeFi TVL: $110.81B (-1.02% over last 24 hours)
  • $SOL -8.2% in the last 24 hours, -28.4% in the past week
  • $SHIB -7.7% in the last 24 hours, -34.8% in the past week
  • $SAND -8.3% in the last 24 hours, -34.1% in the past week
  • $ENJ -8.0% in the last 24 hours, -26.4% in the past week

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OSL Trader View is contributed by Hans-Stefan Vonhaenisch, Tiffany Wee & Ethan Fu.

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