Crypto Market Update
Despite slightly higher than expected jobless claims (238k vs. 235k exp.) and weak housing starts data, rates are rising today, with the US10Y ticking up to 4.27%. The DXY is also rising as investors are pricing a higher likelihood of the Bank of England cutting rates in August after holding them steady today. The S&P 500 and Nasdaq 100 opened at new all-time highs and are now showing mild losses. BTC -1.22% is trading slightly negative today, paring early gains and holding at just under $65k. ETH -1.30% is showing slight weakness, trading slightly above $3,500, while altcoins are mixed. Microstrategy announced another Bitcoin purchase, accumulating 11,931 BTC at an average cost of approximately $65,883. The purchase brings Microstrategy’s total cost to $8.33 billion at an average of $36,798 per BTC.
LayerZero Token Launches
Cross-chain infrastructure protocol LayerZero opened claims for its native token, ZRO 1.38% , this morning. LayerZero implemented a new caveat to airdrop claims, having users contribute $0.10 per ZRO to Protocol Guild in order to claim. LayerZero Foundation estimates the mechanism will raise $18.5 million for the Ethereum development non-profit, and LayerZero said they will match up to $10 million in donations. The “proof-of-donation” mechanism has not been well met by the community, with some taking the stance that airdrops should be a reward for interacting with the protocol and not a pay-to-claim function. LayerZero previously completed a Series B funding round in April 2023, valuing the company at $3 billion. ZRO is currently trading at approximately $3.45, implying an FDV of $3.45 billion, meaning investors in the Series B round are underperforming Bitcoin since then, in addition to having tokens locked and vested.
SEC Closes Investigation into Ethereum 2.0
On Tuesday night, Consensys announced that the SEC had notified them that it is closing its investigation into Ethereum 2.0. The SEC had alleged that sales of Ethereum constituted securities transactions. Consensys requested a letter clarifying Ether’s classification as a security, given the SEC’s recent approval of spot Ether ETFs, identifying the asset as a commodity. Although the SEC dropped its case against Consensys, Consensys is still pursuing its lawsuit against the SEC. Consensys noted that the investigation closure is a significant win for crypto, but they are seeking further clarity for the industry, attempting to get a court decision stating that applications built on Ethereum are not securities brokers, and therefore do not fall under the SEC’s purview. Crypto companies have had success against the SEC in court, and Consensys hopes to continue the winning streak and provide clear rules for decentralized applications.
Technical Strategy
Following a very steep decline from $2.20 down to $0.40 in recent weeks, Shadow has begun to show some initial evidence of trying to stabilize. Hourly charts show the act of rallying multiple times to near $0.61 before failing but pullbacks have begun to bottom at higher lows over the last few days. Its pullback Thursday from $0.60 down to $0.55 looks appealing given the minor uptrend still not giving way from earlier this week. Moreover, SHDW -1.30% appears like an attractive risk/reward at current levels given very well defined risk levels near $0.50 and upside at $0.61. Any daily close back above $0.61 should allow for a rally up to at least $1.10 with a good likelihood of $1.31 being tested before some consolidation into July. At present, SHDW is certainly worth keeping a sharp eye on, given the stabilization following its recent steep decline. Important support under $0.50 lies near $0.40 and cannot be violated without postponing its advance.
Daily Important Metrics
All metrics as of 2024-06-20 12:00:27 All Funding rates are in bps Crypto Prices
All prices as of 2024-06-20 13:40:59 Exchange Traded Products (ETPs)
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