Weekly Crypto Analysis: Top 9 Things to Know, LUNA 2.0 and Bitcoin Outlook

2022/06/06 12:07:30

Despite a dip in the global stock market, the leading cryptocurrencies are exhibiting a slight bullish momentum, bypassing the risk-off sentiment. Cryptocurrency's weekend holding pattern diverged slightly from equity indices, which fell 2.4% on Friday, with the tech-focused Nasdaq falling 1.6%. In recent months, digital assets and stocks have become increasingly correlated.

Over the past day, the global crypto market cap increased from $1.20 trillion to $1.28 trillion. Still, crypto trading sentiment is bearish, as evidenced by the Fear & Greed Index's drop last week. On a more upbeat note, a better-than-expected US jobs report underpins the greenback, keeping most cryptocurrency pairs under pressure.

Let's go deeper and take a look at the most recent crypto market news and Bitcoin's technical outlook.

Crypto Market Overview

Bitcoin's dominance continues to improve, having surged from 45.95% last week to 46.47% today. The leading cryptocurrency pair, BTC/USD, is trading at $31,237.99, while Ethereum, the second-largest cryptocurrency by market capitalization, has risen to $1,878.31, up 4.88% in the last 24 hours.

When it comes to altcoins, LUNA 2.0 is still in the spotlight, but it's mostly struggling to keep up with the uptrend. The top performers from the previous week were Waves (WAVES), Helium (HNT), and Cardano (ADA). WAVES increased by more than 94% to trade at $8.87, while the HNT coin rocketed by 28.82% in the last seven days, holding at $9.80. Finally, the Cardano (ADA) increased by 21.41% to trade at $0.6244.

Cryptocurrency Market Heatmap | Source: Coin360

Last week's worst performers were STEPN (GMT), XDC Network (XDC), and Convex Finance (CVX). GMT is down more than 16% to $1.02, XDC is down 13.07% to $0.038, and CVX is down 11.53% in the last seven days.

Top Altcoin Gainers and Losers

Top Altcoin Gainers:

Waves (WAVES) ➠ 94.37%

Helium (HNT)➠ 28.82%

Cardano (ADA) ➠ 8.11%

Top Altcoin Losers:

STEPN (GMT) ➠ 16.44%

XDC Network (XDC) ➠ 21.12%

Convex Finance (CVX) ➠ 11.52%

News Highlights

Here are some of the events that made the previous week's crypto news section stand out:

Terra’s Luna 2.0 Token Struggles to Keep Bears Away

The LUNA 2.0 has experienced extreme volatility since the Terra chain forked and the subsequent launch of Terra's Luna 2.0. For instance, following its listing on the cryptocurrency exchange KuCoin last week, the price of a LUNA token increased by 39.41%. After the LUNA/USDT went up, a sharp drop sent the token's price below the $10 price index.

The LUNA token appears to be off to a rocky start, having dropped by more than 50% since it was first listed seven days ago. So let's compare the performance of this token to that of the now-defunct Terra Classic (LUNC) over the last seven days.

Terra's Luna 2.0 token, which was listed last week in the hopes of reviving the failed LUNC token, has struggled to keep the bears at bay. According to Coinmarketcap data, the token debuted on cryptocurrency exchanges with an index price of $17.8. The token hit both ends of the price spectrum, with an ATH of $19.54 and an ATL of $3.63 on the day of its launch.

Currently, the price of a Luna token is $5.09, representing a 6.46% drop in the last 24 hours. CoinMarketCap currently ranks #2805, with a live market cap of not available. There is no circulating supply and a maximum supply of 1,000,000,000 LUNA coins.

Check out our detailed article on What is Terra 2.0 and the differences between LUNA 1.0 and 2.0.

Can CBDCs Kill Cryptocurrencies? - RBI Official Remarks

Central bank officials are becoming increasingly concerned as cryptocurrencies gain prominence and adoption. At a webinar put on by the International Monetary Fund (IMF), RBI Deputy Governor T. Rabi Sankar talked about how central bank digital currencies (CBDCs) might affect cryptocurrencies like Bitcoin and Ether.

Before releasing the government's consultation paper on cryptocurrencies, Reserve Bank Deputy Governor T Rabi Sankar stated, "...we believe that CBDCs could actually be able to kill whatever little case that could be for private cryptocurrencies,"

Sankar was also aimed at the stablecoins tied to a specific currency. The Reserve Bank of India (RBI) has been very against cryptocurrencies like Bitcoin, saying that there is no real value behind them. The RBI has said this publicly, even though the government hasn't made its position clear.

This could have triggered a bearish bias in the cryptocurrency market, but recent news from Japan regarding Stablecoin legislation overshadowed the RSI official's remarks.

Japan Passes the Stablecoin Law, Crypto Investors Feel Confident

Cryptocurrencies are on a roll, and the recent news of Japan's stable coin law may have played a role. For instance, Japan has passed a landmark law clarifying the legal status of stablecoins, propelling the country ahead in an international race to build safety nets all around tokens whose pegs to mainstream currencies underlie the broader cryptocurrency market.

Japan's move, part of a five-year effort to protect digital asset investment in cryptocurrencies, comes in the aftermath of TerraUSD's shocking collapse last month, which sparked a debate about whether the tokens should be regulated, banned, or left alone.

On Friday, Japan's upper house of parliament passed a bill that defines stablecoins as digital currencies, requires them to be linked to the yen, and protects the right to redeem them at face value.

The legal framework will take effect in 2023, and the FSA is expected to clarify the rules for stable coin issuers in the coming months. However, according to analysts, the legal framework could make it difficult for foreign players to enter the market.

Japan's official recognition of Bitcoin boosted its market value significantly early on, though the FSA's enthusiasm was dampened in late 2017 after customers of the Tokyo-based exchange Coincheck lost $530 million in a digital heist. As a result of this news, the risk-off sentiment is fading, and bulls confidently enter the cryptocurrency market.

NFTs Worth 200 ETH Stolen, Yuga Labs Confirms Server Hack

The latest news regarding the Yuga Labs hack remains in the spotlight, causing a 7.15% drop in the APE coin price in the last seven days. According to Yuga Labs, the Bored Ape Yacht Club (BAYC) Discord servers were hacked on Saturday, with the attacker stealing 200 ETH ($360,000) in NFTs.

The hack occurred after the project's community manager, Boris Vagner, compromised his Discord account, which the attacker then used to post phishing links in the Discord channels of both the official BAYC and its related metaverse project, Otherside.

NFTherder, a Twitter user, first reported the hack, estimating that 145 ETH (approximately $260,000) was stolen along with the NFTs and tracing the stolen funds back to four separate wallets. Yuga Labs later confirmed the exploit in its tweet, stating that it is still actively investigating the incident. It happened 11 hours after NFTHerder tweeted. Despite the blame game, the APE coin recovered 4.78 percent on Monday to trade at $6.39.

US Nonfarm Payroll Underpins Dollar, Eyes on US CPI

Investors appear to be in a tug of war, trying to decide whether to go long on the US dollar, which is strengthening due to a series of positive fundamentals, or to buy cryptocurrency pairs.

The US economy released one of the most important economic events, nonfarm payroll figures, on Friday. The US economy added 390K jobs in May 2022, the fewest since April of last year but above market expectations of 325K.

The most recent reading left the economy with 822K jobs, or 0.5% below its pre-pandemic level, indicating that the labor market is resilient and approaching full employment. Despite solid nonfarm payroll figures, the US unemployment rate fell short of economists' expectations, coming in at 3.6%.

The market develops hawkish trading sentiment in response to solid US labor market data. This means that investors are starting to invest in the US dollar because they believe the US Federal Reserve will raise interest rates soon and the dollar will appreciate, dragging down dollar-denominated cryptocurrencies.

Later this week, the market will be focusing on the US CPI figures, which may help determine future trends in dollar-denominated digital assets.

Crypto Calendar: Events to Watch This Week

➺ 06/06/2022 - Live Stream w/Justin Sun

➺ 07/06/2022 - DCentral Austin

➺ 07/06/2022 - Blockchain Oracle Summit

➺ 07/06/2022 - Austin Meetup

➺ 08/06/2022 - Start of Tail Emission

➺ 08/06/2022 - Ropsten Merge

➺ 08/06/2022 - FIL Austin

➺ 09/06/2022 - Consensus 2022

➺ 09/06/2022 - SF Bay Area Meetup

Fear and Greed Index Signals “Extreme Fear”, Bulls Looming to Buy

Despite the positive sentiment in the cryptocurrency market, the Fear and Greed Index remains at "extreme fear." It indicates that investors are still hesitant to invest in cryptocurrency; however, the recent recovery in the leading cryptocurrencies may help shift the Fear and Greed Index from "extreme fear" to "fear".

Fear & Greed Index | Source: Alternative

LUNA 2.0 (LUNA/USDT) Analysis on KuCoin Chart

The price of LUNA 2.0 is currently $5.26, down from an all-time high of $11.85. On the hourly timeframe, LUNA/USDT has already completed a 50% Fibonacci retracement at $5.20. A drop below $5.20 could expose Terra LUNA to support levels as low as $5.08 and $4.8.

LUNA/USDT Chart on the Daily Timeframe | Source: KuCoin

On the hourly timeframe, the LUNA/USDT has formed a bearish engulfing candle, signaling bears' dominance in the market. However, the upward channel may extend support at $5.20, and closing inside the upward channel can drive an uptrend. On the upside, LUNA's immediate resistance remains at $5.35 and $5.55.

Bitcoin (BTC/USDT) Analysis on KuCoin Chart

Bitcoin is currently worth $31,484 and trades between $32,450 and $30,500. As the BTC bounced off the triple bottom support level of $29,700, the trading bias appears to be shifting from bearish to bullish.

The BTC/USDT has formed a symmetrical triangle pattern on the 4-hour timeframe, indicating investor indecision. Market participants appear to be looking for a strong fundamental to predict Bitcoin's next move.

The BTC/USDT has surpassed the 50-day exponential moving average (EMA) of $30,100 and is on its way to the next resistance level of $32,440. The RSI and MACD have crossed above 50 and 0, indicating a bullish trend, respectively.

A surge in BTC demand and a break above $31,750 exposes digital assets to resistance levels of $32,440.

BTC/USDT Chart on the Daily Timeframe | Source: KuCoin

On the downside, the leading cryptocurrency, Bitcoin, has maintained its psychological support level of $30,000 for the time being. A drop in demand and a bearish break below $30,000 expose Bitcoin to support levels of $29,600 or $28,730.

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