Cryptos can’t extend rally, but fear eases somewhat

Cryptos have been unable to extend yesterday’s relief rally, with the overall market falling 4.3 per cent from yesterday to US$1.62 trillion.

Bitcoin was trading at US$36536 at 11.10am AEST, down 2.4 per cent from 24 hours ago, while Ethereum was changing hands at US$2,442, down 5.9 per cent.

All but three of the top 100 cryptos were down, with the Dfinity’s Internet Computer the worst laggard, falling 23.1 per cent. ICP tokens traded for over US$400 before the May 19 crash. Theta Fuel, Wednesday’s top coin, was Friday’s second-worst performer, dropping 18.5 per cent. Bitcoin Gold was third, down 17.1 per cent.

The only top 100 gainers were Amp (up 16.2 per cent), Chiliz (up 9.4 per cent) and WazirX (up 4.7 per cent).

Amp, an Ethereum token used to collateralise payments on the Flexa network, was gaining after being listed about 12 hours ago on US exchange Coinbase Pro.

Chiliz, a platform for fan engagement tokens, was up after a coin for Argentina’s national football team began trading. Holders of the $ARG token will be able to participate in team decisions through voting, access exclusive promotions and discounts and earn rewards.

WazirX, a utility token used to pay for services on an Indian crypto exchange of the same name, was gaining amid reports that India might loosen its restrictions on cryptocurrencies.

The New Indian Express, citing “top sources tracking the industry,” reported that regulators would likely soon classify crypto as an alternative asset class, following El Salvador adopting Bitcoin as legal tender this week.

The International Monetary Fund meanwhile was voicing concerns about El Salvador’s move.

“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis,” said Gerry Rice, an IMF spokesman, told reporters during a scheduled briefing, according to Reuters.

“We are following developments closely, and we’ll continue our consultations with the authorities.”

Sentiment returning?

Overall Bitcoin was trading around US$6,000 below its 200-day moving average and 44 per cent from its all-time high.

The crypto fear & greed index was at a 21, indicating “extreme fear,” but up from a 13 a few days ago.

At least on Crypto Twitter there was some sign that traders were feeling more positive about the state of the market, buoyed by adoption in El Salvador and its “volcano powered bitcoin”.

$BTC 4h time frame – pennant could have just had a retest of the up-sloping trendline

We do however have another trendline that has held as support pic.twitter.com/Ae6Z546c1f

— Bitcoin Charts (@charts_bitcoin) June 11, 2021

Still expecting a scenario like this to happen on #Bitcoin. pic.twitter.com/fKf2nSQMLr

— Michaël van de Poppe (@CryptoMichNL) June 10, 2021