Fearful Market – Chung’s Weekly Digest (5/23)

The crypto market outlook remains gloomy as interest rate hikes and regulatory clout continues to spook investors.

Crypto Market Turmoil

This week, leaders from the Group of Seven (G7) convened in Germany and discussed expediting global crypto regulation in the aftermath of $LUNA and $UST’s crash. Regulators now have a reason to invoke stricter regulatory controls on projects with their own stablecoin developments. 

The recent turmoil caused by the collapse of two of the top ten largest crypto assets by market cap has dispelled the myth that a project is ‘too big to fail’. It is also a wake-up call for closer scrutiny of the sustainability of decentralized stablecoins. 

The Fed’s decision to raise interest rates is also causing some jitters in the market. Unless inflation slows down and the Consumer Price Index (CPI) drops, the Fed will maintain its hawkish stance.  

Although the crypto market needs a clear regulatory framework, regulators will likely be rushing to provide one. The immediate concern is taking steps to regulate stablecoins. It is also widely speculated that regulators will take enforcement actions against Terraform Labs and its founders for the recent fiasco that has wiped out billions in wealth. 

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Weekly Recap

CroPredict aims at the sports betting industry. 

Binance bolsters its legal division. 

Cronos Name Service (CNS) confirms the crypto transfer feature.

Binance hires a renowned expert for AP intelligence and investigation. 

Infiniti wallet now integrates Cronos Chain. 

Coinbase allows on-chain access via the exchange’s application. 

CZ discloses Binance’s $UST holdings. 

Shanghai residents turn to NFTs to express their frustration. 

Magic Eden eating into OpenSea’s market share.  

Ledger wallet to introduce dApp browser. 

Flow Blockchain impresses with a $725 million fundraise. 

Shopify integrates Crypto.com Pay. 

Cronos Chain opens its door to Terra developers. 

BNB Chain to offer support to projects on the Terra ecosystem. 

Fantom Foundation floats the idea of a native stablecoin fUSD. 

WIBA advocates gender inclusiveness in the blockchain industry. 

Binance NFT launches the first collection in Dubai’s museum. 

Cronos is now the fifth-largest EVM chain. 

Stader Labs is upbeat after deploying on the BNB Chain. 

Ethereum is on the path to the Merge in early June. 

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Market Sentiment

The crypto market can be relieved that major capitulation events have taken place. Bitcoin’s price movement is moving in tight rage, and a breakout may take place in June, which could bring the price to $40k or a reaccumulation at $26k. 

Despite the overall bearish sentiment across all equity markets, some retailers are taking the opportunity to ‘buy the dip’. Retailers are identified as wallets holding less than 10 Bitcoins. 

Bitcoin’s dormancy rate continues to dip, reminiscent of 2017, just before the market goes on a bull run.  

The market is unlikely to reach the stage of euphoria anytime soon. Recovery will likely take place but at a much slower pace. Liquidity has escaped the market, and unless the borrowing costs are lowered, there may be a lack of capital to spur strong price movement. 

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Coins to Watch

Ethereum ($ETH) – Ethereum is the top smart contract platform in the space. It has the first-mover advantage, and the closest rival is nowhere near dethroning Ethereum from the top position. 

The Merge will benefit the chain and maybe the catalyst to spark a price rally. 

The Merge would significantly reduce the emission rate of $ETH, and it might just propel the second-highest capped crypto asset to revisit its previous all-time high. 

BNB ($BNB) – The native coin that fuels the BNB Chain and provides utility for transactions on Binance is weathering the micro bear cycle quite well. 

If crypto assets gain mainstream acceptance, many institutions and retailers will transact on the biggest crypto platform in the world.  

Regulatory headwinds in 2021 will likely abate as Binance is taking proactive steps to embrace regulation. 

BNB Chain is also the platform for many projects that are still building and developing. A more mature ecosystem will generate more demand for $BNB. 

Source : bsc.news