Curve protocol was exploited on Sunday evenin putting at risk between $50 and $100 million of user funds locked in various stablepools (alETH/msETH/pETH) using Vyper 0.2.15. The reason is thought to be a malfunctioning reentrancy lock The exploit resulted in a sharp drop in the Total Value Locked (TVL) across multiple DeFi protocols mainly Curve which registered a 48 percent decline on a weekly basis. AAVE and Convex were also severely affected as users decided to temporarily step away from using their services.
As for CRV itself, it revisited its range low versus USDT last night European time before bouncing back up from the support area. As discussed few weeks ago, it is usually when swing buyers are entering.
The formed low was once swept then touched briefly before the price reversed aggressively. It is also visible how the Volume Profile indicator’s most actively traded zone on the 1-week chart is right around the demand area. Buyers are prevailing there. The RSI indicator is entering the oversold area. Looking from the other perspective though, we can clearly see a Lower High after Lower High being built on the screen and right below the 21-EMA on the Weekly timeframe. BTC’s disappointing performance recently does not favor an altcoin market rally.
BTC and ETH dissapoint
Bitcoin bulls finally gave up the fight to regain positions in the former $29,500 – $31,500 range and we can see the price slipping towards either the daily chart uptrend diagonal or the formed support/resistance area formed around the $27,000- 27,200 mark. The area was acting as a magnet for the BTC price in the March-June period.
Zooming out to the Weekly timeframe chart, the most probably zone of support for bulls might be situated somewhere between $25,000 (former weekly highs) and $20,000. The long-term diagonal support line is crucial in defending the bulls’ dreams for an UP ONLY season.
The monthly close and the price action on the 1M timeframe does not tell us much. What is clear is that there is a narrow range being formed above the fast EMA while BTC is still not giving up the formed $27,000 low.
The clear fact, though, is that overall liquidity in the market is low and every significant event is hitting particularly bad the altcoin market while BTC remains relatively stable.
ETH
ETH once again hit the lower boundary of the Ascending Triangle on the Daily timeframe chart, but for the moment is not showing signs of strength. The trading range is narrowing and the spikes are getting smaller which usually suggests a big impulse move in the short-term. For the moment, however, it is difficult to predict the direction.
Things look slightly better on the higher timeframe where the price is still supported by the fast EMA and is above the local most actively traded zone as per VPVR. Below, $1,670 is a significant support level historically speaking.
Oil major BP has reported a drop of nearly 70% YoY in the second quarter of 2023
At the same time, the British energy major posted a second-quarter underlying replacement cost profit of $2.6 billion
On Tuesday, Oil major BP announced that it was expecting a nearly 70 % drop in its Q2 profits year on year due to the weakening of fossil fuel prices, a trend observed across the industry.
Oil major BP announces 70% drop in profits in Q2 2023 YoY
Analysts now expect Oil major BP to report a second-quarter profit of around $3.5 billion per a report by Refinitiv. At the same time, the British energy major posted a Q2 underlying replacement cost profit (used as a proxy for net profit) of $2.6 billion.
The company’s report comes short of the Q2 profits of 2023, which had been recorded to be $4.96 billion, and the $8.5 billion in profits for the same company from Q2 2022. The company explained that the orbits were impacted by significantly lower realized refining margins, a higher level of turnaround and maintenance activities, and lower oil prices in the markets.
Nonetheless, the company has boosted its dividend by 10% to 7.27 cents per ordinary share for Q2 and said it would repurchase $1.5 billion of its shares spread over Q3 2023. This report is not a unicorn; other companies have struggled to match the bumper profits recorded in the same period in 2022.
Shell and Totalenergies reported a steep drop in Q2 2023 YoY profits last Thursday. In the US, Exxon Mobil also had a slump of 56% YoY in Q2 2023 profits. Keep watching Fintech Express for more updates on oil markets and other fintech-related developments.
Over the past 30 days, Decentralized Finance has managed to maintain the Total Value Locked in it, recording a slight dip of 0.8%
Ethereum still dominates DeFi Total Value Locked, taking over 71% of the whole, while the TRON network follows closely with 6.4%
Ethereum has outperformed TRON and BNB Chain in DeFi Total Value Locked, taking a 71% market share, while the two follow closely with 6.4% and 5.6%, respectively. In total, the whole market had a slight dip of 0.8%.
DeFi Total Valued Locked dips 0.8% in the past 30 days
Despite unfavorable global macro-economics and the crypto market battling an extended bear market, DeFi Total Value Vocked (TVL) has managed to maintain stable levels.
According to data captured from the on-chain analytics platform, Coinrank, Ethereum was dominant, leading with 71% ($63.8B) of the whole TVL, while the TRON network followed closely with 6.4% ($5.7 B). BNB Chain came third with 5.6% ($5.06 B) of the market share.
Other notable performers were Arbitrum, with 3.49 billion dollars, and Avalanche, with 1.72 billion dollars in TVL. Polygon also followed closely with 1.4 billion dollars in TVL.
This market performance came when regulatory uncertainties continued in the US and other parts of the world less strongly than in June. In the month, the crypto space scored major boosts as Ripple partially won against the US SEC, making primary markets for crypto assets not under securities laws.
At the same time, TradFi organizations like BlackRock filed with the US SEC for spot Bitcoin ETF. As such, the pressure for investors to seek alternatives from CEXs was much lower. Keep watching Fintech Express for more market updates and other Fintech-related developments.
The cryptocurrency market continues to be in no man’s land after the sudden selloff early this week with BTC hovering below the short-term daily range since Monday.
Economic data, FOMC
The week ahead is packed with economic data coming from the leading economies. The risk assets markets like stocks and crypto, as always, are looking forward to the Federal Open Market Committee (FOMC) meeting today with the greatest anticipation. The leading analysts expect the Federal funding rate to be further increased by 25 bps to 5.5 percent. The crypto market by default trades in range prior to FOMC meetings then turns volatile in the minutes before and after the event.
A more hawkish stance from the Committee and a hike above 25 basis points will most probably result in a short-term selloff. On July 27 we have Main Refinancing Rate decision from the European Central bank and Unemployment Claims in the United States. The EUR rate is expected to rise by 25bps to 4.25 percent while the US market participants will be looking at a potential jump in the Unemployment Claims to 234k.
Finally, on Friday we expect to hear the Bank of Japan Economic Outlook report + Monetary Policy Statement from the Asian country.
US Markets, SPX, DXY
Looking at the already overextended bullish rally in the US stock market, the majority of the analysts are already pointing to some kind of a pullback, at least in the form of a consolidation that will server as a basis to form a new higher low on the weekly chart. The SPX continues to be in a resistance area above $4,550 and with an extremely overbought Relative Strenght Index (RSI).
As always, the main driver here is the continuing decrease of the US dollar index DXY. The traditional safe haven asset is losing ground, which further pushes the stock market up as investors are searching for returns.
As we previously discussed, the US currency broke below the long-standing $100 support and is now testing it from below. If the mentioned line turns into resistance, it might result in a reversal to the downside and a continuation of the general downtrend.
BTC, ETH
Both BTC and ETH are still trading above their 21-EMAs on the weekly chart. BTC is out of the daily range, but with the potential to make another higher low on the weekly chart. It is without saying that the lower volumes, the fact the market erased almost all gains from the XRP ruling rally and once again failed to surpass the $31.500 resistance brings more negative vibes to the short-to-midterm outlook for the market.
ETH, on the other side, was very much on its way to push its price above the upper boundary of the Ascending Triangle figure, but suffered another rejection as the trading range gets narrower and close to a point break. In general, the ETH fundamentals and its technical setup against BTC favors it over the biggest cryptocurrency in the midterm at least.
Disclaimer: All views expressed below are not to be considered a financial advice
Overview
The crypto market is in a momentary green zone, but traders continue to walk on thin ice despite the recent gains and promising industry developments, among which we can distinguish the Ripple court win over the United States SEC and the potential ETF listings in Europe and the United States.
The European Union continues to be one step ahead of the competition regarding digital asset legislation, while the Middle East countries, Hong Kong and the UK are closely following behind.
Fundamentals, though, are only one side of the coin. The other one, the more important, is the market cycles, represented by charts of all sorts.
ETHBTC
One such chart is the ETH vs BTC or ETHBTC as it is more popular on the major trading platforms:
As seen on the Weekly chart above, the ETHBTC pair, which reflects the relative price of ether vs that of bitcoin, has been locked in the same range since May, 2021.
The initial low of that range was marked early, around 0.057 – that low that was swept in June 2022 in a liquidity grab event right below the established support. It is quite possible that we see the 0.057 level re-visited in the coming weeks or months as the former demand zone will attract the price. Such an event might mark the bottom of the ether coin vs BTC.
The Falling Wedge pattern on the chart is another argument for that thesis. A breakout in the upward direction can serve as a confirmation for switching to a long ETH bias.
All that being said, it doesn’t mean BTC will experience a catastrophic decline. It means, it simply means there is a high chance it underperforms as compared to ETH during a particular period.
DeFi revival to further boost Ethereum
The rise of Layer 2s, the inception of Layer 3s and the growing thesis of modular blockchain structures can only benefit ETH in the long term. Yes, new data availability layers are entering the race, but in the end, Ethereum will always be part of the equation as the base security layer.
data by L2beat.com
DXY weakness – main support line lost
The weakness in the US dollar index can only benefit risk assets, be it stocks or crypto. What makes stocks much more attractive at this stage, though, is that the market doesn’t like uncertainty, and this easily results in lack of liquidity which is reflected on the charts by the much lower than the average trading volumes. The pressure from regulators, and geopolitical and economic turmoil made investors even more cautious.
But going back to DXY, it has been making lower after lower low as the market structure on the Weekly chart continues to be clearly bearish.
The index broke below the lower boundary of the Falling Wedge and lost the important 100 support. If we are to see a bearish re-test of the support line from below is yet to be seen. For now, the March 2022 order block remains the next step for traders.
Decentralized derivatives exchanges are seeing an increase in traffic as regulators continue cracking down on centralized exchanges
On June 27, the DEX to CEX futures trading volume ratio hits a new ATH.
On June 27, the DEX to CEX futures trading volume ratio recorded a new all-time high though DEXs still have fewer futures trading volumes. These developments show growing discontent in the centralized crypto markets like Binance and Coinbase as regulators go harder after them.
Decentralized Exchanges (DEXs) keep getting more attention
Decentralized derivatives exchanges attracted much attention recently as regulators are going after centralized counterparts harder. The US SEC, for instance, is charging both Binance and Coinbase, while Binance has been asked to stop operating in several countries recently.
Amid this, the DEX to CEX futures ratio reached a new ATH. However, DEXs still account for a small portion of futures trading volume. However, it shows a growing trend of investors turning to decentralized platforms as regulators do not have much oversight over them.
This development comes at a time when more attention from investors is heading to the Decentralized Finance sector. On June 26, Fintech Express reported on an analysis of the DeFi markets showing a 15% spike in market capitalization due to the destabilization of the centralized options due to regulatory uncertainties.
A shift to the decentralized finance sector will continue as regulators continue going after centralized protocols. However, nothing is promised as many factors influence the crypto market and thus may vary greatly from time to time. Do your research before engaging in any crypto activity.
Keep watching Fintech Express for more updates on crypto and other fintech-related developments.
