Crypto Market Stabilizes, Is the Crisis Over?
This article comes fromBloombergBloomberg
Odaily Translator | Nian Yin Si Tang
, original author: Michael P. Regan & Vildana Hajric
Odaily Translator | Nian Yin Si Tang
In 2022, the cryptocurrency market is literally staged a financial soap opera. The drama continued this week as cryptocurrency lender Celsius Network filed for bankruptcy protection. However, it has cooled noticeably in one important place: the actual prices of the major cryptocurrencies themselves.
Bitcoin rallied nearly 8% in the last three days of the week, while ethereum surged 20%. Neither of the two major cryptocurrencies has hit new lows in this bear market for nearly a month. Bitcoin has maintained the closely watched $20,000 mark, while Ethereum continues to hover around $1,000.
The relative stability in the chart fueled hopes that the crisis may be over after the Terra crash, which saw hedge fund Three Arrows Capital and brokerage Voyager Digital declare bankruptcy. James Check, chief analyst at Glassnode, said that while much of the leverage in the crypto world is not recorded on the blockchain and thus immune to scrutiny, what is currently visible is encouraging.
“I think the vast majority of forced selling has happened,” Check said in an interview. “Essentially, the market seems to be relatively stable.”
But Check also warned that there are now two important potential sellers left in the market, one of which is Bitcoin miners, whose mining machine value has plummeted with the price of the token - if Celsius Mining, the mining subsidiary of Celsius, begins to unload That pressure could intensify as it seeks to raise funds for some of its 80,850 drilling rigs.
According to CoinDesk, affected by the bankruptcy of Celsius, the price of bitcoin mining machines plummeted to a near two-year low. Bids for Bitmain’s Antminer S19 and S19 Pro are around $20-23/TH, according to an application-specific integrated circuit (ASIC) trading desk, while prices for these models have hit $40/TH in recent months, at one point last year. Up to $119/TH.
The price of 20-23 USD/TH has reached the lowest value since the Bitcoin price bottomed out in 2020. In addition to Bitmain’s S19, S19j, and S19 Pro miners, Micro BTC’s Whatsminer M30s, M30s+, and M30s++ models, among others, are also dropping in price.
Celsius Mining auctioned off its newly purchased thousands of mining machines in June, with the first batch of 6,000 sold at $28/TH and the second batch of 5,000 changing hands at $22/TH, according to a person familiar with the matter. . According to Hashrate Index data, the average price of mining machine transactions in the month was 50-60 USD/TH.
And another part of the selling pressure comes from traders, who will indiscriminately sell all kinds of risk assets if the stock market crashes again.
In that regard, this week did bring some potentially good news for Bitcoin investors. For starters, the S&P 500 is still about 5% above last month's bear market low. The 40-day correlation between bitcoin and the Nasdaq 100 Index has fallen to its lowest level since January, suggesting the two are less susceptible to synchronized moves in either direction.
James Malcolm, head of foreign exchange and cryptocurrency research at UBS (UBS), said that the market needs a new catalyst to push the currency price decisively in some way. Still, in a good sign that the market may be normalizing, secondary tokens like Matic and Aave are showing strong performance.
“What we’re seeing in crypto right now is that individual narratives are a little bit more important,” he said. “Some of it is about new products, some of it is about technology upgrades, and some of it is about commercial partnerships. So we seem to be slipping.” to a more traditional market."
