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Ethereum Addresses In Loss Hits 2 Year High Amid Crypto Market Downtrend

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Ethereum Addresses In Loss Hits 2 Year High Amid Crypto Market Downtrend

Quick take:

  • Over 34 million addresses that hold ETH are in loss positions.
  • The second-largest crypto is down over 10% in the last week.
  • Other altcoins across the market are also down as the markets hit a lull.
  • Ethereum’s transition to PoS could still happen in August despite the reorg attack on the Beacon chain.
  • Technical analyst predicts another 50% – 70% dip in altcoin prices as BTC dominance grows.

The number of wallets holding ETH in loss hit a two-year high on Friday (May 27, 2022) following another lackluster week for the cryptocurrency market. Data from Glassnode shows that over 34.1 million addresses now hold Ethereum below the levels they bought at. 

Ethereum Addresses In Loss Hits 2 Year High Amid Crypto Market Downtrend 9
Ethereum Wallet Addresses (Source: Glassnode)

Since around December 2021, the general cryptocurrency market hit a slump and slowly slipped into a downtrend. ETH has fallen far below its November 2021 ATH of $4,891. As of press time, the world’s second-largest crypto trades around $1,810. The token has indeed dipped massively and is down over 10% this week, per data from CoinMarketCap.

Furthermore, a recent report from Santiment revealed that network activity on Ethereum also reduced and transactions on the network recorded significantly low gas fees.

Ethereum Addresses In Loss Hits 2 Year High Amid Crypto Market Downtrend 10
Ethereum Daily Chart (Source: CoinMarketCap)

The news comes ahead of ETH’s anticipated transition to a Proof-of-Stake consensus. The update dubbed The Merge is expected to happen in August despite a reorganization attack on Ethereum’s sister chain – Beacon. 

However, core ETH developer Preston Van Loon remains optimistic that the event won’t affect progress.

Ethereum and Other Alts Could Dip Another 50% Due To Rising BTC Dominance

As expected following the latest bloodbath in the crypto market, ETH’s market cap lost a few billion and dropped down to $218 billion from around $350 billion at the start of May. Notably, the total crypto market also dipped to $1.27 trillion.

Ethereum Addresses In Loss Hits 2 Year High Amid Crypto Market Downtrend 11
Ethereum Market Cap (Source: CoinMarketCap)

On-chain data shows that the situation triggered a rise in Bitcoin’s dominance over the market as the leading coin now accounts for almost half of the whole crypto market. As of press time, BTC dominance had grown to around 44%.

The situation supposedly forms the main thesis behind technical analyst Jason Pizzino’s prediction that BTC could drain liquidity from the market and trigger another 50% – 70% dump in altcoin prices.

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Ethereum

Sky Mavis to Reimburse Axie Infinity Hack Victims and Restart the Ronin Bridge as Early as June 28th

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Sky Mavis to Reimburse Axie Infinity Hack Victims and Restart the Ronin Bridge as Early as June 28th

Summary:

  • Sky Mavis, the parent company of Axie Infinity, expects to reimburse hack victims on June 28th.
  • The Ronin Network bridge is also expected to reopen on the same day.

The parent company and developer of the Axie Infinity Video Game, Sky Mavis, has said in a statement that it expects to reimburse all affected gamers for its March 2020 hack by June 28th. In addition, the Ronin Network bridge is also scheduled to reopen on the same date.

The team at the Ronin Network has also updated via the tweet below on the reopening of the bridge, explaining that its engineers had been hard at work preparing for it to restart.

Our engineering team has been hard at work preparing for the Bridge to re-open. Things are progressing nicely and we have some more information to share with you today: pic.twitter.com/fgFV62G3vd

— Ronin (@Ronin_Network) June 23, 2022

Reopening the Ronin Bridge Will Require a Hard-fork.

They also added that for the bridge to reopen, the Ronin network required a hardfork, as explained below.

We plan on re-opening the Ronin Bridge on June 28th, with all user funds returned.

Re-opening will require on a Ronin hard-fork which requires all validators to update their software.

Validators have been informed regarding next steps to upgrade their validating node.

Axie Infinity (AXS) Could Have Found a Short-term Bottom on the 1 Day Chart.

Concerning price action, the daily AXS/USDT chart below hints at a potential short-term bottom for the digital asset at the recent low of $11.85 set last week as Bitcoin fell to a local low of $17,600.

Sky Mavis to Reimburse Axie Infinity Hack Victims and Restart the Ronin Bridge as Early as June 28th 19

Also, from the chart, it can be observed that AXS is attempting to recapture the 50-day (white) moving average as support. The daily trade volume is also green and confirmed by the MACD’s histograms.

Additionally, the daily RSI and MFI hint at renewed buying interest that could see AXS retest $20 or even push high enough towards $25 in the following days.

However, as with all altcoins, the fate of Axie Infinity (AXS) is very much tied to that of Bitcoin. Consequently, a loss of the $20k support by Bitcoin could lead to further losses for AXS, including dipping below the $10 support level.

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Celsius Considers Bankruptcy, Hires More Advisors

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Celsius Considers Bankruptcy, Hires More Advisors

Summary:

  • The crypto lending company of Celsius is reportedly considering filing for bankruptcy.
  • Celsius has therefore hired more advisors to prepare for the potential filing.

The crypto lending company of Celsius is reportedly considering filing for bankruptcy.

According to a report by the Wall Street Journal, Celsius Network LLC has hired restructuring consultants from the advisory firm of Alvarez and Marsal to recommend a way forward on a possible bankruptcy filing.

The Wall Street Journal, citing people familiar with the matter, also pointed out that neither representatives from Celsius nor Alvarez and Marsal had responded to requests for comments.

Last week, Celsius also hired the law firm of Akin Gump Strauss Hauer & Feld LLP to advise on possible solutions for its ongoing financial woes.

Celsius had Stated it Was Working on Stabilizing Operations.

In a June 20th blog post, the Celsius team updated the crypto community on the status of the company, pointing out that their main objective was to stabilize the platform’s liquidity and operations.

The team at Celsius also informed the crypto community that stabilizing the platform would take time and they were pausing all Twitter spaces and AMAs (ask-me-anything) sessions ‘to focus on navigating these unprecedented challenges and seeking to fulfill our responsibilities to our community.’

Celsius Had Stated that it Was Committed to Meeting its Obligations.

To note is that withdrawals, swaps, and transfers on Celsius were halted on June 13th with the team citing current market conditions as the main reason for doing so. They explained:

Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

[Feature image courtesy of Celsius.Network]

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Kyber Network Admits A Portion of Its Treasury Was Held By 3AC, But Not Significant to Affect KNC Operations

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Kyber Network Admits A Portion of Its Treasury Was Held By 3AC, But Not Significant to Affect KNC Operations

Summary:

  • The Kyber Network team has admitted that Three Arrows Capital’s potential insolvency might impact its treasury.
  • A small portion of Kyber Network’s treasury is with Three Arrows Capital but is not significant enough to affect the KNC project’s operations.
  • The team at Kyber Network adds that it has enough funds to operate for many years.

The potential insolvency of the Three Arrows Capital hedge fund continues to expose a web of affected crypto projects.

Yesterday, the team at Kyber Network clarified via Twitter that Three Arrows Capital held a small portion of its treasury. Therefore, as explained in the tweet below, its potential insolvency could have a small impact on Kyber Network.

3/6 3AC’s potential insolvency may have some impact on Kyber treasury as a small portion of Kyber treasury is with 3AC.

— Kyber Network (@KyberNetwork) June 23, 2022

Three Arrows Capital Had Done an OTC Deal with Kyber Treasury to Buy Some KNC.

The Twitter thread by Kyber Network explaining its connection to the potentially insolvent Three Arrows Capital starts by stating that 3AC had done an OTC deal with cyber treasury to purchase KNC. However, the amount purchased was not significant and was transferred from Three Arrows Capital receiving wallet ‘a long time ago.’

The team at Kyber Network believes that 3AC still holds the KNC, but the amount should not be part of the assets belonging to Three Arrows Capital that was liquidated earlier this month.

Kyber Networks Can Sustain Development for Many Years.

The Kyber Network team also added that the events surrounding Three Arrows Capital would not significantly impact the project’s operations as it has enough to sustain development for many years. They said:

However, we are in no way stopped by this incident as Kyber treasury can still sustain Kyber’s development for many years. We were caught off guard since our relationship & our trust in 3AC had been built up for more than 3 years. At the end of the day we are still human.

3AC Incident is A Great Learning Lesson. KNC Will Not be Laying Off Any Employees.

Furthermore, they explained that the Three Arrows Capital incident ‘is a great lesson and wake-up call for [the project]’ and that it will firm up their ‘belief in a trustless Defi ecosystem.’ The Kyber Network team also clarified that they will not be laying off any employees, as explained below.

Nothing is changed in our long term plan, we are not laying off but rather expanding the Kyber team to build the true trustless decentralized exchange in line with our long term vision. New protocol announcement is coming in the next few days.

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