5 Things to Know in Crypto Today: ETH Closing in on $1,700 Bull Target

Key Points

• Amid a subdued macro tone, Bitcoin is back below $22,000 after running into resistance at its 50DMA near $23,000.
• Ethereum has also pulled back from earlier highs, but made further progress towards $1,700 during Asia Pacific trade.
• The Bitcoin bear market could last another 250 days, Grayscale argued in a note.

Bitcoin Consolidates Runs Into Resistance at 50DMA, Falls Back Under $22,000

Amid a distinctly subdued tone to global macro trade after US equities handed back early session gains to end Monday in the red, Bitcoin has fallen back below $22,000. During Asia Pacific trade, the world’s largest cryptocurrency by market cap came within a whisker of hitting the $23,000 level. However, it ran into resistance in the form of its 50-Day Moving Average just above the $23,000 mark and profit-taking has since driven it lower into the $21,600s.

At current levels, Bitcoin trades lower by just over 3.5% on the day and is down close to 2.0% in the last 24 hours. However, the cryptocurrency is still up about 4.0% this week. Indeed, Monday, when Bitcoin rose nearly 8.0%, was the cryptocurrency’s strongest day since February. It is likely to be a quiet day on the macro front, with the only notable events some commentary from the governors of the Bank of England and Reserve Bank of Australia. Neither are likely to say anything drastic enough to shift global crypto markets.

Crypto traders should note a sub-committee hearing at 1500GMT on Capitol. “US lawmakers will likely dive into the way the US Securities & Exchange Commission is handling the crypto space, which has been considered overly punitive by some,” said FX Empire’s head of crypto analysis Bob Mason. Events later in the week will be in the spotlight; the European Central Bank and Bank of Japan both set policy on Thursday and flash PMI survey results will be released out of Europe and US to give an update on economic health.

Ethereum Continues its March Towards $1,700 Resistance

Ethereum pushed as high as the $1,630 area in early trade on Tuesday, the cryptocurrency getting ever closer to the next upside target marked out by technicians just above $1,700. ETH/USD has since pulled back a little and is trading just under 3.0% lower on Tuesday in the $1,530s, but is still higher by around 6.5% versus 24 hours ago and is up a staggering more than 50% since last week’s lows just above $1,000.

The cryptocurrency certainly seems to be carrying a lot of upside momentum, suggesting a test of $1,700 resistance (the May 2022 and mid-2021 lows) is very likely in the days ahead. Technical buying after a breakout above resistance at $1,280 has been a major factor driving recent gains, but analysts have also noted optimism about Ethereum’s upcoming Merge to Proof-of-Stake. Senior Ethereum developers last week outlined their expectations for the transition to occur in September.

Bitcoin Bear Market has Just Begun and Could Last 250 Days, Says Grayscale

In a recently released note from crypto investment product provider Grayscale, the company argues that, as of 13 June, Bitcoin entered a bear market. This is because the market cap of Bitcoin fell below its Realized Price (i.e. an estimate of what people actually paid for their coins). According to Grayscale, based on the experience of the past three Bitcoin market cycles, “we may see another ~250 days of high-value buying opportunities”.

Non-banks Can Issue Stablecoins, Says Senior US Treasury Official

US President Joe Biden’s Working Group on Financial Markets, which last year recommended that crypto stablecoins belong inside the banking regulatory regime, did not mean to imply that only existing banks can issue stablecoins, a senior US Treasury Department official said on Monday. Speaking at the Financial Services Forum event in Washington, Nellie Liang said that “there’s some flexibility under that framework… It’s meant to be open… It was not meant to limit to current banks”.

This will be welcome news to USD-pegged stablecoin issuers like Circle Internet Financial and Tether, who are pushing for their tokens to become legal tender in the US, which would expand their global usage. Bringing stablecoins into the regulatory regime is a key step in this direction.

Retail Investors Set to Bear Brunt of Celsius Bankruptcy

Lawyers working for beleaguered crypto lending service Celsius Network confirmed during the first day of the company’s bankruptcy hearing on Monday that there is a $1.2 billion hole in its balance sheet. Celsius owes its creditors, most of whom are retail investors, around $5.5 billion, while it only holds about $4.31 billion in assets.

Monday’s hearing revealed that a significant part of Celsius’ plan to close its balance sheet gap relies on betting on the future profitability of its mining subsidiary Celsius Mining. The company’s lawyers argued that Celsius Mining is already mining 14.2 Bitcoins per day and is expected to mine 10,100 Bitcoins this year (worth around $222 million at current prices). The lawyer added that this was expected to rise to over 15,000 in 2023.