The Musk Curse – Chung’s Weekly Digest (7/25)

Tesla shed $936 million of its $BTC holdings despite its CEO’s prior assurance that there were no plans to sell its $BTC.

Irresponsible Behavior

Bitcoin ($BTC) fell on the news of Tesla’s decision to sell its Bitcoin reserves to improve its cash flow. Tesla is one of the largest corporate holders of Bitcoin and its decisions in the past have shown to be directly correlated to the price movement of $BTC. 

Source: Bitcoin is showing some signs of strength as it consolidates above $21K.

Elon Musk, the Chief Executive Officer (CEO) of Tesla, has been incredibly vocal about his views on cryptocurrencies. Tesla’s decision to allow $BTC to be used for buying Tesla vehicles led to a surge in the price of crypto assets as the move was seen as a vote of confidence for $BTC and what it represents. The automobile maker however reversed its decision two months later and this led to a more than 10% decline in $BTC’s price. 

The tweets made by Elon Musk are dangerous because the richest man in the world is capable of affecting the market. This time around, Tesla’s Bitcoin sale was uncovered in its Q2 quarterly update despite the CEO giving the assurance that Tesla would not be unloading its $BTC stash in May last year. 

Crypto assets are generally showing signs of bottoming out as the news of Tesla’s Bitcoin unloading did not cause widespread panic. The sell-off was very much contained. 

Source: Technical analyst TechDev suggests that the indicators are hinting that the market has corrected.

Bitcoin and other crypto assets have staged a relief rally but whether that is sustainable will depend on whether it can consolidate above $22K. If Bitcoin dips below $20K, there is a strong possibility that the current rally is a mere fake-out. 

Weekly Recap

Ronaldinho joins New World as their global ambassador

FEG token rallies after roadmap release.

Crypto.com gets permission to operate in Italy.

Binance aims to onboard promising Indian blockchain tech companies.

Binance announces scholarship program.

BNB Chain now has a channel on Reddit.

Thetan Arena records increased daily users.

Polygon launches layer-two solutions compatible with Ethereum.

The UK government publishes stablecoin adoption rules

BACC Finance announces a compensation plan for victims.

ENS joke turns into a 100 $ETH loss.

Cronos partners with Moralis to launch a metaverse gaming hackathon.

Shiba Inu partners with Hollywood studio on metaverse.

Vitalik announces Ethereum’s roadmap after the Merge.

Leading metaverse platforms combine to create DAO. 

BSC News NFT unlocks benefits on top BNB Chain projects. 

Market Sentiment

Source

The overall sentiment on Bitcoin has improved after its recent price rally. The main crypto asset by market cap however failed to break above $24K. The improving sentiment in the crypto market is also the result of Ethereum’s ($ETH) performance in the past week. 

Source: The recent bullishness on Ethereum has sparked speculations that it might just repeat 2016-2017’s rally.

However, there are reasons to be skeptical of the hype that is building up on $ETH for the following reasons: 

$ETH’s price action is largely correlated to $BTC. If $BTC tumbles, it will take the whole crypto market with it.

$ETH’s price action is because it has been in ‘oversold’ territory and this rally could be just a relief bounce.

report by Finder published on July 19 says:

“ETH is currently worth $1,339 but the panel predicts it’ll sink further before rebounding to close out 2022, with the panel expecting lows of $675. That’s not to say they don’t see it bouncing back, with the panel also seeing ETH top out at $2,673.”

Source: Bitcoin has failed to break past the descending channel and will likely trade range-bound for the week.

Coins to Watch

Ethereum ($ETH) – Anticipation is building around Ethereum 2.0 and rightly so because of a major milestone scheduled to take place soon. The Merge will make the Ethereum network more scalable, secure, and sustainable. 

The upgrade has been subjected to many delays and the long-awaited Merge will likely take place on Sept. 19.

Source: The Merge is merely the start of the 5 key phases where Ethereum will eventually be able to process up to 100K transactions per second (tps).

Ethereum might stage a mini rally despite the unfavorable market condition as market participants are getting ready to capitalize on the building euphoria. 

Finder predicts that by 2030, $ETH might be worth $14,412.

Optimism ($OP) – Optimism is a rollup that helps Ethereum scale. It is a layer-two network that utilizes the security of the Ethereum network while reducing cost and latency.

Most projects that utilize the EVM are on the Ethereum network. Rollup solutions such as Optimism, Arbitrum, and ZK will be the future of the Ethereum network. 

Ethereum as a layer-one solution is merely a consensus layer. Execution will be relayed to layer-two solutions such as Optimism. 

$OP is a new token and has yet to unleash its full potential. A strong surge in $OP’s price is expected once Ethereum gains momentum. 

More projects will be using the distributed ledger technology and smart contract enabled platforms will soon be a norm. 

New layer-one solutions that are faster and cheaper than Ethereum are posing a threat but the first mover advantage gives Ethereum a head start. 

Source : bsc.news

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