Crypto market sees severe drop and potential impact of SEC lawsuits

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Last week, the cryptocurrency market saw a drop of 2.56% from a Market cap of $1.129 trillion to $1.1 trillion. Last week had some strong movements to each side of the crypto market, but largely, the pressure was downward. Crypto markets struggled more than the US indices as SEC has launched lawsuits against Binance and Coinbase. While BTC and ETH showed strength after the blows, the upside move was very short-lived, as the lawsuits can have grave effects on the upcoming regulations for the asset class. Next week will also be filled with extreme volatility as a number of data prints are set to release along with the federal funds rate hike.

bitcoin price analysis

Price Analysis:

Bitcoin has been trading inside the structure of a falling channel for a few days. On May 28, the bulls pushed Bitcoin above $27,812, but the long wick shows that the bears sold the rise. The price went down and fell below $26,500, which was the nearest support. The number of people selling increased, and the BTC/USDT pair fell into a key support area between $25,750 and $25,400. Buyers should do everything they can to protect $24,719 because if it goes down, it could lead to cascading long liquidations. Then, the pair could fall to $21,357.

The bearish thesis will be proven wrong if the price goes above $27,812 and stays there for a while. This will be the first sign of strength.  Until then, Bitcoin can tap the $24,719 level.


Fundamental Updates

The recent nonfarm employment change data was expected to mark in at 193k, but the actual print of 339k spooked the markets a bit as this can affect the Fed’s upcoming rate hike decision severely. 

June 13th will bring the release of CPI and Core CPI on an m/m basis. CPI has majorly seen equal or better than expected results, with Core CPI showing a very slight deviation. The data prints are expected to have a print of 0.2% and 0.4%, respectively. Any print higher than these, while unlikely, can be bearish for the markets.

On the following day 14th June, the Core PPI and PPI are set to release. Both of these have shown some of the best cooldowns in the last few months and have been positive markers for the market. The expected prints are 0.2% and -0.1%, respectively. If the latest data points continue to stay on target, it’ll be bullish for the markets.

The timeframe is close, but the Federal funds rate meeting is set for the same day along with the summary of economic projections release. These events will be of the utmost significance as the market is closely looking toward Fed’s commentary on the way forward. A no-rate hike condition will be a big breather for the markets. The economic projections will give a deeper look into the way forward from fed members.

Bitcoin returns were -1.46% for this week. The Alpha Blue Chip Focused Strategy returns were 1.88% during the same period (1 JUN – 8 JUN). The Top Cap Digital Assets Strategy and Arbitrage Opportunities and Balanced Strategy returns were -1.64% and -0.03%, respectively.

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