Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
While BTC fell to new lows yesterday, LUNA has seen a 47.63% crash over the past 24 hours and its stablecoin UST has fallen below its 1 USD peg to $0.921507 per token. Furthermore, the Luna Foundation Guard’s (LFG) public BTC and ETH wallets and Gnosis safe address have been drained. In the same period, over $830 million has been liquidated from the wider crypto market. The two largest stablecoins, however, have fared better than their counterparts — USDC was up 0.02% and USDT 0.01% in the last 24 hours.
Binance has suspended LUNA and UST withdrawals due to “network slowness and congestion”. Traders reported this morning (Asia time) that the LUNA and UST orderbook seemed frozen, with tweets claiming they could not sell UST for anything under 70 cents. The exchange has said it will reopen withdrawals for both tokens once it deems “the network to be stable and the volume of pending withdrawals has reduced”. Kraken and CoinList have also suspended withdrawals, while FTX is still processing UST withdrawals.
Amid a major crypto market sell-off, El Salvador has bought the BTC dip. President Nayib Bukele announced that his country purchased 500 more BTC “at an average USD price of $30,744”, bringing its current total holdings to 2,301 BTC. While El Salvador’s BTC holdings are estimated to have lost over $30 million in value, Bukele remains bullish and expects the price of BTC to reach $100,000 this year. El Salvador also plans to issue BTC bonds, though it has not set a launch date due to market conditions and the ongoing Russia-Ukraine war.
As major NFT collections are seeing declines in prices, the floor price of Yuga Labs’ Otherdeed for Otherside NFT has fallen below its mint price to 2.45 ETH (worth around $5,713). This decline started on 4 May, when the price was around 3.5 ETH (worth almost $10,000 at the time). Yuga Labs’ Bored Ape Yacht Club (BAYC) collection has been similarly hit in the past week, falling 15% to 91 ETH — a nearly $100,000 decline. Another major collection in the same boat is Azuki, whose floor price has decreased by more than 50% from 30.5 ETH to 15 ETH in the last seven days. Despite this, all three remain among the top 10 collections on OpenSea.
Azuki’s diminished floor price came after its pseudonymous founder Zagabond revealed his history of abandoning projects. In a blog post, he detailed his involvement with Cryptopunks, Tendies and Cryptozunks, all of which were abandoned by their founding team. He also attributed Azuki’s success to lessons learned from the other projects’ failures. This drew backlash from the NFT community, with many convinced the blog post was a pre-emptive measure against on-chain sleuthing that would have made soon made this information public.
Instagram has indicated its interest in turning NFTs into a revenue stream for creators catering to its billion-plus user base, though it has not determined a leverage method. The NFT pilot will initially allow only a small number of creators to share their digital art on Instagram, with no sales, trading or fees involved. In a job posting, the platform requested help to “define the strategy and roadmap for new blockchain-enabled creator monetization experiences” and said the product manager’s mission would be to help Instagram figure out how creators could use blockchain tech to “build connections with their fans that are meaningful, monetizable and recognized anywhere”.
Show me the money
With the crypto economy having lost 48.70% in value over the past six months (from $3.08 trillion to today’s $1.58 trillion), market outlook has become extremely bearish. Still, several crypto advocates theorize that the bear market will not be too harsh this time around, while considering the rare scenario in which BTC price could reverse and see a triple top formation.
The reason for this theory is based on the BTC price peaks of $64,000 in May 2021 and $69,000 in Nov 2021 — both much lower than previous bull run gains and comprising what is known as a ‘double top’. As such, the theory that the current market downturn will be a softer bear run brings to mind the rare possibility of a triple top scenario.
If this happens, BTC’s fiat value will tap the same resistance it touched during the previous downturn, and reverse to its May and Nov 2021 highs. The upcoming bottom would then be in around the $31,000 mark before another reversal occurs, but for this to happen, BTC must see a complete reversal from the same resistance levels, and the third top could be equal to, just above or just below the $69,000 mark.