Bitcoin, ETH and DeFi Assets Drop As Markets Close Choppy Day
- BTC’s move below $20,000 wasn’t as critical as it was before but still noteworthy, one analyst said
- Oil prices continued to fall after the euro briefly hit parity with the US dollar, and concern grew about Covid-19 in China
Major cryptoassets continued falling Tuesday amid a choppy market. Bitcoin (BTC) traded at $19,384, down 5.25% in the past 24 hours, while ether (ETH) slid further, down 8.54% to $1,040 as of 4:00 pm ET.
Craig Erlam, senior market analyst at OANDA, however, thought BTC’s fall to $20,000 wasn’t as critical as it was last month, although “certainly noteworthy that it repeatedly looks to dip below [$20,000].”
“A move below $17,500-$18,500 support could accelerate the sell-off, while a break of $19,500 may also signal further pain to come,” Erlam wrote in a note Tuesday.
DeFi leaders carried over their bearish trend from Monday, with Aave’s token down 7.42% to $68.5, while Maker’s token was down 8.4% to $837.23.
Some investors are shrugging off the market downturn. Multicoin Capital announced a new $430 million venture fund, and Solana developers Dylan and Ian Macalinao’s Protagonist launched its first $100 million fund to focus on early-stage crypto companies.
US equities eased back, too. The S&P 500 closed at 3,819, down 0.92%, the DJIA dropped 0.61% and the Nasdaq fell by 1.81%.
Ending a long wait, the euro briefly hit parity with the US dollar, but struggled back to just a penny over $1 Tuesday afternoon. Commodities slid further, with oil taking the lead. Brent crude futures were trading 7.1% lower at $99.04 a barrel as of 3:21 pm ET, as the fear of another Covid-19 lockdown in China grows. OPEC’s monthly report released today forecast slower oil demand growth in 2023.
“We believe that the firm US dollar, which has now almost reached parity with the euro, is weighing on prices,” Commerzbank said in a July 12 note. “The combination of high energy prices and rising interest rates is fuelling concerns about a recession that would have a serious impact on oil demand.”
More firms are rolling out their second-quarter final reports this week. Layer-1 smart contract platform Avalanche reported its Q2 total value locked fell roughly 75% in USD terms from the first quarter. Yet, the amount of AVAX locked in DeFi (decentralized finance) increased, according to Messari analysts.
Meanwhile, investors are closely watching the June US Consumer Price Index (CPI) report, scheduled for release tomorrow.
Top Stories
ECB Issues Three Reports in Effort To Pass Biggest Crypto Law in Europe
- The European Central Bank (ECB) is calling policymakers and member states to pass the Markets in Crypto-Assets (MiCA) law, Europe’s first attempt at comprehensive policy around cryptocurrencies.
- “Recent developments show that stablecoins are anything but stable, as exemplified by the crash of TerraUSD and the temporary de-pegging of Tether,” the ECB report noted.
3AC’s Zhu and Davies To Skip Liquidators’ Court Hearing, Email Shows
- Three Arrows Capital (3AC)’s co-founders Su Zhu and Kyle Davies are not yet ready to oblige the fund’s liquidators after being accused of not cooperating with them meaningfully.
- “Sadly, our good faith to cooperate with the Liquidators was met with baiting. Hope that they did exercise good faith wrt the StarkWare token warrants,” Zhu said in a tweet Tuesday, including screenshots of his lawyer’s emails to Russell Crumpler, a 3AC liquidator.
Q&A: Community Banks Moving Forward With Crypto Plans Despite Downturn, Portfolio Manager Says
- Portfolio manager Steve Russell said he thought many banks with crypto- and blockchain-related plans are currently oversold.
- More banks will get involved in blockchain for mortgage-related activities, Russell expects.
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