July 2022 Crypto Market Update

This is the first of our market updates where we aim to give you a bit of insight into what everyone else is doing and some snippets from the crypto universe of key news events.  

Easy Crypto customers have shown strong appetite for current crypto prices, with our Buy to Sell ratio (by order count) holding remarkably steady with Buys outnumbering Sells 4:1.

When we look at the value, things get more even with the value of Sell orders being quite a bit larger. This metric can vary considerably week by week, but this is about average for 2022. It’s a little hard for us to say if it’s a return to normal, or if the bottom is close. Only time will tell. 

What everyone else is buying and selling

Interested in what others are doing? This month our average order size increased a little, driven in some part by larger-than-normal sell activity. In fact, the Sell order size this month is tracking at 3x the size of our buys. This could be some of you taking profit, or it could be part of a wider de-risking movement in the market.

Interesting fact for you is that our average order value for stablecoins are considerably higher than all the other assets with USDC being the most popular within our community. 

This month the most popular assets are the layer 1 coins Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP) and Cardano (ADA). This is a slight shift to our all-time trends which include more volatile or speculative assets and probably reflects people responding to the more depressing financial news of late.

Interestingly enough, this is also slightly different from what the rest of the world is doing. Seems we have some local favorites!

What is happening in the crypto world?

As you all know, there is always plenty going on, but here are the big rocks we’ve seen: 

1. Celsius continues to suspend withdrawals and has announced a debt restructuring plan. 

2. Leading Crypto VC, 3 Arrows Capital woes may be continuing – we know they were a big backer of Terra Luna and this event appears to have put them into some considerable financial distress.  Update they appear to have filed for bankruptcy This has impacts on a bunch of lending institutions like Celsius, Blockfi and Genesis Trading.

3. Alameda capital and FTX are backstopping many players out there by extending lines of credit so they can keep operating while we work our way through this tight phase in the market.

In layman’s terms it looks like some of these places can’t sell their assets or have had some big customers not pay. The end result is that they may not have enough cash on hand to pay out other customers who want to withdraw their funds.  So the line of credit helps them do that in the short term. 

4. Glassnode put out a great article on the state of the ETH / DeFi space. A timely piece given the events of the last 3 weeks. TLDR; it’s not pretty, especially for those who have used leverage.  It also hints at a “flippening” of USDT for USDC (crypto speak for USDC becoming the dominant Stablecoin).  

5. The US Federal reserve is aggressively lifting their interest rate in an attempt to curb inflation. They are saying more rate hikes are likely and the chances of a recession are increasing. This isn’t really a surprise given how high inflation has gotten in the US. 

6. Rising interest rates is pretty important for Crypto because Bitcoin in particular is still quite strongly correlated to the US tech stocks (particularly the NASDAQ index).  It appears for now at least, the narrative of Bitcoin being a safe haven asset, distinct from other assets, doesn’t hold up. 

7. The Bitcoin Fear and Greed index is currently sitting at 11 at the time of writing – up slightly from last weeks 7. However the low score still highlights the degree of uncertainty that exists in the market.

8. On the Technical Analysis front – Valkyrie investments reports that Bitcoin has fallen below the 200-week moving average for only the fourth time ever. The 200 Week MA has traditionally been seen as a robust indicator that the market is oversold. The key difference this time around is that this is the first time Crypto has been in a winter at the same time as a wider economic recession. What this means, no one really knows. 

9. On the back of this, you would expect the Alt-coin market to be in big trouble and largely this is correct. As we pointed out in our own volumes, there looks like a shift toward the larger more stable projects.

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