Ethereum Collapses 20% To Yearly Lows as Risk Investors Seek Shelter from The Storm

Turmoil continues to ramp up for Cryptocurrencies with intensity to the downside. Stock markets sold off hard after another record high inflation and record low consumer sentiment in the US flowing on to risk instruments. Two-year Treasury yields climbed to the highest since 2008. Ethereum broke through support on Friday and is down over 20% from Friday’s highs after it broke through major support at $1700. The contagion spread quickly to alt coins like XRP, Solana, Cardano and dogecoin. Bitcoin is down 5%.

Crypto was already facing heavy headwinds but that has been picking up in waves with selling in stocks and bonds since liquidity began to dry up with interest rate rises. Liquidity across US markets is now at its worst level since the early days of the pandemic in 2020, according to investors and big US banks.

Ethereum fell to the lows of May 21 just above 0/8, a continuation of the weekly channel break in May 22 via KnovaWave

Greed & Fear 6 12 2022

“Cryptocurrency investors are still trying to figure out what led to May’s spectacular meltdown of a pair of digital tokens that were worth more than $40 billion earlier in the month. Last week, analytics firm Nansen pointed to lending firm Celsius as one of a handful of users that contributed to the collapse of the luna and terraUSD cryptocurrencies. While Celsius disputes the account, the search for information about the cause of the wreckage highlights the opacity of the world of decentralized finance. In DeFi, it isn’t easy to understand who provides money for loans, where the money flows or how easy it is to trigger currency meltdowns. This is one reason regulators are concerned about the impact of DeFi on investors and the broader financial system.” June 4 – Wall Street Journal (Paul Vigna)

Bitcoin Weekly Close

Total long crypto liquidations were above $100 million for a third straight day on Sunday, after $258 million on Friday and $290 million on Saturday, according to data from Coinglass.

The MVIS CryptoCompare Digital Assets 100 index, a market cap-weighted measure tracking the performance of the 100 largest tokens, fell to the lowest level since January 2021.

Source: MVIS

The TradersCommunity News Desk