Bear market confirmed as $BTC dips below $28K

​​$BTC 24 Hour High $37,250  / Low $27,669 |   $BTC -3.8% Past 24 hours; -24.5% Past 7 day

Good morning. While the LUNA/UST saga drew to a close, $BTC held up relatively well despite falling through the key support levels. However, the saga may continue to cast a shadow on the crypto markets and stablecoins. The digital assets markets slid further as the equity markets were dragged lower on the worse than expected U.S. CPI numbers.  

Since the July 21 low has been broken in the past 24 hours, $BTC is likely to head towards $26,000, the 50M EMA. It feels like a capitulation is underway, but a V-shaped recovery is not expected to occur. Keep an eye on the volumes traded though they are not close to the levels of previous capitulations just yet. We saw another $1 billion of positions had been liquidated across the markets in 24 hours while Bitcoin’s dominance is creeping up past 43%. As $BTC closed the day just above the bottom of the July 21 lows, we may see a relief bounce today. However, the grind lower likely continues until the Tradfi markets find a true bottom. 

$ETH is trading at $2,125 and retracing towards the next support area at $1,800. Should it fail to hold, $1,530 could be the next support level in sight as the VRPR shows a big cluster of previous trading activity at these levels, coinciding with the summer lows of last year. The No. 2 digital asset is currently finding some initial support at the 0.786 Fibonacci retracement level for the entire bull run since March 2021. Fibonacci levels below show just how far prices could drop in the coming months. The initial target for a bull market bottom is $1,040 by the end of the year. The daily RSI hit the oversold areas, and it’s likely to remain at these levels for some time. 

Apart from the recent crypto crash, it’s worth noting that Germany has ruled that cryptocurrencies can be sold tax-free after a year of ownership, even if they are utilized for staking or lending. The previous governance meant that digital assets used for staking had to be held for up to ten years to receive the tax exemption. The guidance on the income tax treatment on digital assets comes foreseeably as the German government rolled out its partnership agreement with cryptocurrencies and blockchains six months ago, stating that they are vital components of the country for the next four years.

Learn more from today’s Trader View video.

Digital Assets Market

  • Total crypto market capitalization stands at $1.37T, -8.2% from yesterday
  • $BTC is +3.04% at time of writing; 24H liquidations and funding rates: 268.56M, -0.01108% average
  • $ETH is +3.67% at time of writing; 24H liquidations and funding rates: 236.19M, +0.02098% average 
  • Stablecoins market dominance: USDT 47.73%; USDC 28.22%; UST 5.82%; BUSD 9.76%; DAI 3.58%

Alts and DeFi watch:

  • DeFi TVL: $126.95B (-6.47% over last 24 hours)
  • $SOL -22.0% in the last 24 hours, -43.4% in the past week
  • $SHIB -22.8% in the last 24 hours, -41.8% in the past week
  • $SAND -21.5% in the last 24 hours, -43.7% in the past week
  • $ENJ -20.5% in the last 24 hours, -44.2% 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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