On June 13, cryptocurrency prices plunged deeper into bear market territory after Bitcoin (BTC) sliced through its current trading range and briefly touched $22,600, its lowest level se since December 2020.
According to BTC historical data, the market has now reached valuation metrics that show the price is severely oversold and perhaps near a bottom. Bitcoin has now fallen below its realized price, which represents the average price of every coin in supply based on the time it was last spent on-chain.
While the pain that this most recent capitulation has wrought across the ecosystem can’t be understated, the one glimmer of hope it offers weary crypto traders is that the worst of the decline could have occurred. The coming days will confirm this theory and proof would be institutions and retail traders stepping in to buy the dip.
"Shrimps and whales" accumulate
On-chain data shows that not all traders feel devastated about Bitcoin at yearly lows. Shrimp wallets, wallets that hold less than 1 BTC, and whale wallets with more than 10,000 BTC have been in accumulation mode since the old Terra (LUNA), now known as Luna Classic (LUNC), collapsed in early May.
According to data from blockchain intelligence provider Glassnode, shrimp wallets “have seen a net balance growth of +20,863 since the May 9th Luna crash,” and a total increase of 96,300 BTC since November's all-time high (ATH).
Whale wallets have likewise been busy during this period of time as “this cohort has a monthly position change peak of ~140k BTC/month” and has added a total of +306,358 BTC since its all-time high in November.
Support is limited in the mid-$20,000 range
Part of the reason for the rapid sell-off on June 13 was the lack of demand in the $20,000 to $27,000 range as shown on the following entity-adjusted unspent realized price distribution chart.
While there is a heavy amount of demand near the $30,000 and $40,000 price ranges, some of the lowest volumes were found between $20,000 and $27,000, which left little support as the price of BTC crashed in the early hours on June 13.
Relief may be in sight, however, as the saying goes “it's always darkest before the dawn” and this could apply to the current state of the crypto market based on several metrics.
According to the RVT ratio, which compares the realized capitalization against the daily volume settled on-chain, “the network valuation is now 80 times larger than the daily value settled,” which indicates a low amount of on-chain activity.
“In past bear cycles, an underutilized network has provided confluence with bear market bottoms.”
The RVT ratio is currently at its highest level since 2010, which may suggest that the market has reached the point of max pain and could see improvements soon, but the possibility of further weakness can not be ruled out.
The overall cryptocurrency market cap now stands at $980 billion and Bitcoin’s dominance rate is 46.3%.
Crypto staking and lending platform Celsius may be dealing with its rumored liquidity crisis by unstaking $247 million worth of Wrapped Bitcoin (wBTC) from Aave and sending it to the FTX exchange.
Celsius users have criticized the platform for how they believe the project has mismanaged its funds following the collapse of the Anchor Protocol on the now-named Terra Classic blockchain. The project could be addressing those concerns with the recent moves to stabilize liquidity.
Some think that if Celsius fails, it would sell its significant stack of staked ETH (stETH), which would cause it to depeg further from ETH. stETH is a token provided by the Lido decentralized finance (DeFi) lending platform that is given as proof that a user has staked ETH. It is currently trading about 4.4% lower than ETH.
Unusual token movements began at about 6:00 pm EST on Sunday from Celsius’s main DeFi wallet when it started removing wBTC from the Aave staking and lending platform, which Celsius used to earn interest on its deposits.
Celsius withdrew 50,000 Ether and 7,000 WBTC collateral from its Aave position in core DeFi wallet 0x8ace. 6,000 WBTC and 20,000 Ether (so far) have been sent to #FTX...
After receiving $169 mil $USDC from FTX... pic.twitter.com/xquMoIcyuZ
— Dirty Bubble Media: ⏰ (@MikeBurgersburg) June 13, 2022
So far, 9,500 wBTC tokens, worth about $247 million at the time of writing, have been redeemed from Aave. Following a series of transactions, all of those tokens have been sent to the FTX exchange for an unknown reason.
In addition to wBTC, it appears that 54,749 ETH, worth about $74.5 million at the time of writing, have been sent to FTX.
While such activity bodes very poorly for the transparency of Celsius until it explains the moves, the firm may be trying to ensure its liquidity is stable by replacing many of the volatile funds like WBTC and ETH it withdrew from Aave with stablecoins.
Since Sunday, Celsius has staked 204 million USD Coin (USDC) stablecoins on Aave. It also has deposited 10 million USDC plus about 8.2 million Dai (DAI) stablecoins to Compound, another DeFi staking and lending platform.
The total 222 million stablecoins re-staked by Celsius is almost equal to the value of wBTC tokens it removed, but still does not come close to matching the combined value of WBTC and ETH.
The Celsius team’s plans with the crypto that have been moved are still not clear. There is a real possibility that it could sell the assets it sent to FTX, but another likely option is that it intends to stake the tokens they are sending to the exchange to earn yields.
As of the time of writing, Celsius has sent 9,500 wBTC, 54,749 ETH and 375,343 FTX Token (FTT) all worth $10 million. Moreover, it has 2,455 Polygon (MATIC), or $1,158, 260,000 Uniswap (UNI), or $1 million, 2 million Pax Dollars (USDP) and 300,000 TrueUSD (TUSD) stablecoins to FTX. However, token movements were still taking place by 11:00 pm EST.
.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2 June 13, 2022
Presently, Celsius users might be biting their nails in anxiousness because the platform paused withdrawals in order to “put Celsius in a better position to honor, over time, its withdrawal obligations,” according to an announcement from the project on Monday:
“We are working with a singular focus: to protect and preserve assets to meet our obligations to customers.”
Cointelegraph reported in May that Celsius CEO Alex Mashinsky deflected blame for the problems facing the platform, including rumors of insolvency, to shadowy opportunists on Wall Street.
Crypto investors are largely unimpressed with the new round of FUD coming from Celsius. The total crypto market cap has dropped 7.6% to $1.07 trillion over the past 24 hours. CEL, Celsius’s own token, has dropped more than 60% over the past 12 hours to $0.15. All prices listed in the article came from price tracker CoinGecko.
It appears there is no respite anywhere in the crypto realm in the face of Monday's extraordinary market sell-off. Based on data from NFT Price Floor, the floor prices for Bored Ape Yacht Club (BAYC) and CryptoPunks, two of the most popular nonfungible token, or NFT, collections on the market, have fallen to 74 ETH ($92,223) and 48 ETH ($69,473), respectively.
In comparison, pieces in the BAYC collection had an all-time high floor price of 153.70 ETH, while the same metric amounted to 123 ETH for CryptoPunks. The data aggregator tracks 380 collections with a total market cap of $5.58 billion at the time of publication.
The sell-off among NFTs was partly exacerbated by a warning just a day prior, where Gordon Goner, co-founder of Yuga Labs — the firm owning both BAYC and CryptoPunks collections — issued a warning regarding an "imminent" attack on social media accounts operating under the firm's umbrella.
The incoming attack allegedly has the support of an insider from Twitter who would help bypass the security of the accounts. Yuga Labs' social accounts had been compromised three times already this year, some of which involved sophisticated phishing attacks that drained millions of dollars worth of users' NFTs.
Meanwhile, according to DappRadar, the number of users on OpenSea.io, the largest NFT marketplace by volume, has fallen 14% in the past month. Simultaneously, monthly trading volume fell 65% to $500 million. Interestingly, the number of transactions increased month over month by 6.4%, possibly due to the sheer number of users seeking to sell their NFT collections at a better price.
This Daily Dose was brought to you by Cointelegraph.