Opportunity in Chaos – Chung’s Weekly Digest (6/27)

The crypto market does not look like it is poised for a break to the upside after various crypto-based entities reveal liquidity issues.

Abuse of Trust 

Bitcoin ($BTC) is staying above the important $20k support, preventing the crypto market from sliding further, but all eyes are on the Federal Reserve (Fed) as they balance the fragile US economy that is on the brink of a recession. https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=eyJ0ZndfdHdlZXRfZWRpdF9iYWNrZW5kIjp7ImJ1Y2tldCI6Im9mZiIsInZlcnNpb24iOm51bGx9LCJ0ZndfcmVmc3JjX3Nlc3Npb24iOnsiYnVja2V0Ijoib2ZmIiwidmVyc2lvbiI6bnVsbH0sInRmd190d2VldF9yZXN1bHRfbWlncmF0aW9uXzEzOTc5Ijp7ImJ1Y2tldCI6InR3ZWV0X3Jlc3VsdCIsInZlcnNpb24iOm51bGx9LCJ0Zndfc2Vuc2l0aXZlX21lZGlhX2ludGVyc3RpdGlhbF8xMzk2MyI6eyJidWNrZXQiOiJpbnRlcnN0aXRpYWwiLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X2V4cGVyaW1lbnRzX2Nvb2tpZV9leHBpcmF0aW9uIjp7ImJ1Y2tldCI6MTIwOTYwMCwidmVyc2lvbiI6bnVsbH0sInRmd191c2VyX2ZvbGxvd19pbnRlbnRfMTQ0MDYiOnsiYnVja2V0IjoiZm9sbG93IiwidmVyc2lvbiI6bnVsbH0sInRmd190d2VldF9lZGl0X2Zyb250ZW5kIjp7ImJ1Y2tldCI6Im9mZiIsInZlcnNpb24iOm51bGx9fQ%3D%3D&frame=false&hideCard=false&hideThread=false&id=1538508982574272512&lang=en&origin=https%3A%2F%2Fwww.bsc.news%2Fpost%2Fopportunity-in-chaos-chungs-weekly-digest-6-27&sessionId=b77e11ab8b5a41514997fed2cb9d7acf65015822&theme=light&widgetsVersion=b45a03c79d4c1%3A1654150928467&width=550px

The Fed is making a dangerous move by adjusting the US monetary policy based on Consumer Price Index (CPI), a weak indicator based on a knee-jerk response. 

Source: The Fed is trying to solve a self-created problem as inflation is a natural progression when the printer goes on overdrive

Apart from the macro economy, the crypto market is faced with bigger issues that can be summarized as follows:-

It is generally regarded that crypto assets are high-risk assets and are unsuitable for investment in volatile markets.

Large crypto institutions are engaged in dubious activities with depositors’ assets.

Lack of disclosures on the health of these large crypto platforms to the public

The US’s refusal to roll out a comprehensive crypto regulatory framework 

The decentralized economy suffers from a transitional dilemma. Without centralized entities, there is a lack of accountability. But, excessive risk-taking by centralized entities like Celsius and BlockFi, exposes users’ funds to unnecessary risk.

The team in Celsius is reassuring its depositors that they are not insolvent but are facing liquidity issues. This is deeply concerning because one of the most important assurances to depositors is the availability of funds to draw down when required. Failure to do so is akin to transferring risk to their depositors. In this case, even a high yield is insufficient to compensate for the risk exposure.platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-1&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1540808005771333632&lang=en&origin=https%3A%2F%2Fwww.bsc.news%2Fpost%2Fopportunity-in-chaos-chungs-weekly-digest-6-27&sessionId=b77e11ab8b5a41514997fed2cb9d7acf65015822&theme=light&widgetsVersion=b45a03c79d4c1%3A1654150928467&width=550px

Depositors could face liquidation for failing to top-up collateral despite having the funds to do so. This is bad risk management at the expense of its community. The facade of a safe haven for depositors is a farce. 

Source: The recent bounce was sparked by an inverse head and shoulders pattern, but should the price of $BTC dip below $19.8k, there will be more downside 

Weekly Recap

Nas Academy partners with Axie Infinity. 

Socious celebrates its fourth anniversary

Crypto.com has launched a dedicated wallet for the South African market. 

PysOptions introduces PsyFinance V2.

Crown Finance rugs its community and disappears.

Crypto.com NFT parted ways with its lead director. 

Cube Chain’s native coin surges in its first month.  

Ronaldo partners with Binance in an exclusive multi-year partnership

Crypto.com gets the nod from Singapore’s regulator. 

Cronos launches a knowledge-sharing contributor program.

Cube Chain, a new layer-1, is ready for lift-off. 

Street football comes to Web3 with Urbanball. 

Binance NFT celebrates its first anniversary with exciting activities. 

Landshare launches new tokenized asset sale

PancakeSwap launches a new emission reduction proposal.

The market is still reeling from the aftershocks of Terra‘s collapse. Many institutions such as Celsius, Binance, and Three Arrows Capital are some of the victims of the meltdown. Binance’s limited exposure to $LUNA and $UST is probably a result of proper risk management, which could have been disastrous if Binance had done otherwise. 

Depositors lured by the high yields on Celsius are now faced with the risk of losing their deposits. This raises a very pertinent issue: Are centralized platforms safe and transparent?platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-2&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1541251192231104512&lang=en&origin=https%3A%2F%2Fwww.bsc.news%2Fpost%2Fopportunity-in-chaos-chungs-weekly-digest-6-27&sessionId=b77e11ab8b5a41514997fed2cb9d7acf65015822&theme=light&widgetsVersion=b45a03c79d4c1%3A1654150928467&width=550px

Miners are also offloading their Bitcoins in a defensive move in the event the price dips further. The bottom line is to ensure that operating costs can be covered. 

Source: This metric suggests that capitulation has taken place, and the weak hands have suffered massive losses 

Market sentiment is still low, and retail investors will be unlikely participants at this stage. There may be a buy signal that everyone is looking for if a strong upsurge follows another significant dip.platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-3&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1538635203152859136&lang=en&origin=https%3A%2F%2Fwww.bsc.news%2Fpost%2Fopportunity-in-chaos-chungs-weekly-digest-6-27&sessionId=b77e11ab8b5a41514997fed2cb9d7acf65015822&theme=light&widgetsVersion=b45a03c79d4c1%3A1654150928467&width=550px

This tweet by Changpeng Zhao (CZ), the CEO of Binance, also suggests that investors might be looking at offloading their Bitcoin holdings in the immediate future. Huge inflows into the exchange are indications of the intention to offload.  

Coins to Watch

Polygon ($MATIC) – This is a promising token built for the Ethereum ($ETH) ecosystem that helps solve Ethereum’s problems with scalability and costs. 

After the collapse of the Terra ecosystem, Ethereum’s ethos of a fully decentralized ecosystem holds more value and will indirectly benefit $MATIC. 

$MATIC has tumbled more than 80% from its all-time high and will likely revisit this target once the market recovers. 

BNB ($BNB) – This coin is more than just an exchange coin. It powers the BNB Chain and has real-world value tied to it. 

If Binance continues to grow in size as more jurisdictions grant Binance their regulatory nod, $BNB will have more utility. 

Binance is a platform that gives $BNB its traction and acts as an anchor that cements its value. 

Avalanche ($AVAX) – One of the top layer-1 protocols institutions have widely adopted is likely to reach new heights in the coming years. 

There will always be room for good projects that offer themselves as Ethereum’s competitor.   

Avalanche fits the bill, but it must prove to its community that it is capable of meeting its own roadmap.

Source : bsc.news

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