Sustained downturn or a change for a quick recovery?

Thought of the week

A lack of liquidity, coupled with slightly negative news and reports, cause prices to fall quickly and sustainably, while the fundamental adaptations act positively and thus contrary to the market. Positivity will reach the markets and strengthen them in the long term, but this will be temporarily overshadowed.

Digital Asset News

The low liquidity is becoming Bitcoin’s undoing and an end to the ongoing selling pressure is not yet in sight. The market-leading cryptocurrency then suffered a whole cascade of liquidations on the derivatives markets, which, to make matters worse, have recently accounted for the vast majority of trading activity.
“In the case of Deribit, it is likely that a large account went completely under, as this would explain the countless short liquidations that were settled on the platform almost simultaneously,” as the crypto analysts at QCP Capital note in their latest market update.

The total value of the liquidations was already almost as high as shortly after the spectacular collapse of crypto exchange FTX, which brought the bitcoin price down to a two-year low of US$15,600 in November 2022.
“This feels like the next warning shot of the drying up liquidity we have seen over the past few weeks,” as The Kobeissi Letter experts also caution. With Bitcoin trading at just shy of $26,000, traders are speculating on what is causing this and where it will go from here.
In this regard, crypto analyst Rekt Capital is currently quite pessimistic, as the double ceiling formation in BTC’s price chart and the lack of clear support from trendlines and moving averages (MAs) give little hope, in his view.  “BTC still formed its higher high at US$31,000 on increasing volume, but since then the price has completed the second half of its double ceiling formation on decreasing volume,” as he sums up the current situation with little confidence.

The US Securities and Exchange Commission (SEC) is very likely to approve several Ethereum futures-based index funds (ETFs) at the same time, the Wall Street Journal reports, citing inside sources.
Since July, the regulator has been inundated with such applications from investment firms, including applications combining Bitcoin (BTC) and Ethereum futures ETFs. So far, the SEC has also not ordered the firms in question to withdraw their applications, which is a first major difference compared to 2021, when several investment firms were ordered to withdraw similar applications. This suggests that the regulator will not block the launch of the funds in the short term yet, WSJ’s sources suggest.
At least 16 applications for ETFs based on Ethereum futures are currently awaiting regulatory approval at the Securities and Exchange Commission.

SpaceX, the aerospace company, has, according to media reports, written down the value of its Bitcoin assets by a total of US$373 million in the last year and the year before last and probably sold part of its holdings.
As reported accordingly by the Wall Street Journal on 17 August, SpaceX downgraded the value of its Bitcoin-denominated assets by a total of US$373 million on its balance sheet in 2021 and 2022, including proportionate sales of the cryptocurrency.
“SpaceX wrote down the value of its Bitcoin by a total of $373 million last year and in 2021 and sold the cryptocurrency,” the WSJ reports in ambiguous wording to that effect.
The news magazine has access to the company’s financial documents, which show that total spending for 2022 is around $5.2 billion, while just under $5.4 billion is reported for asset and working capital purchases and research and development costs in 2021 and 2022.
SpaceX CEO Elon Musk publicly announced in 2021 that the company had acquired an unspecified amount of Bitcoin.
This uncertainty caused the digital asset market to experience major setbacks.

Judge approves SEC appeal in case against Ripple:
The US Securities and Exchange Commission is now allowed to file an appeal by 18 August, to which Ripple can in turn respond by 1 September.
Judge Analisa Torres has granted a motion by the US Securities and Exchange Commission (SEC), giving the agency leave to appeal in its case against Ripple Labs. The SEC had argued in a corresponding motion to Torres on 9 August that her preliminary ruling could otherwise affect several pending court cases.
The decision comes just hours after Ripple Labs opposed a potential appeal in the case. In doing so, Ripple’s lawyers raised three main arguments against the SEC’s motion.
The SEC’s case against Ripple has been ongoing since December 2020, when the Securities and Exchange Commission charged the crypto company and its executives Brad Garlinghouse and Chris Larsen with allegedly selling unregistered securities.
In a recent interview with Bloomberg, however, Garlinghouse is confident of victory in light of the Torres ruling and says the SEC should expect a lengthy appeals process. “The law now says that XRP is not a security. Until the SEC has the opportunity to appeal, which would take years, we are frankly very optimistic,” the Ripple boss said.

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