Weak macroeconomics and the »Luna« event

TL;DR:

  • Our market view (mid-June):
    • Short-term: Negative
    • Long-term: Negative
  • Crypto markets had another bad month in May.
  • The »Luna« event can be described as Lehman Brothers of crypto.

Market overview

During May, general conditions for risky assets were poor. A weak macro environment and the Luna collapse saw Bitcoin down -33% in the first 12 days of the month. Later in May, the equity markets and Bitcoin showcased a weak recovery. Bitcoin closed the month down 16%, while equity markets closed it flat.

Later in May, more or less all expected a short-term recovery and retest of the previous support (or 100 daily EMA), but this was not even close. The positive attempts were quickly neutralized by whales who still deposit vast amounts of coins to exchanges. The on-chain analysis shows that whales are sellers, and retail investors unsuccessfully try to accumulate those coins. This is a very bearish sign, and until whales stop pushing prices down, there is hard to expect that the bottom is in. In early June, whales distributed their coins again and repeated the event from early May.

All investors are focused on Fed communication and projection of interest rates. Inflation seems that is not under control (yet) which means more aggressive actions of the Fed are needed. This is not a favorable environment for risky assets, and until indicators drastically change, there are no objective reasons that risky investments can turn the direction upwards.

Technically, the crypto market trend is negative with no sign of price divergences, although the price of Bitcoin is oversold.

Bitcoin price

Long term view is still negative until the Bitcoin price stays below crucial (weekly) trendlines.

In the short term, the crypto market price trend is again negative in June. Our market view is negative.

Crypto market view (2022-05)

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.