Daily News | Stock Rally, Crypto Flux, and Challenges for Stablecoins; ARB Faces Difficulties After Sell-Off
Crypto Daily Digest: Tech and Financial Stocks Rally, But Bitcoin and Stablecoins in Flux as Investors Navigate Regulatory Uncertainty
Good morning, traders! Let’s seize this Thursday relentlessly and make the most of it! 🚀
US stocks had a good day as investors became more willing to take risks, with tech and financial stocks leading the way. The Nasdaq 100 is now in a bull market, while the S&P 500 has surpassed 4,000 with the majority of its components ending higher. The dollar strengthened and US Treasuries were relatively stable as investors waited for core PCE data to understand the Fed’s interest rate path. Despite a report indicating that the FDIC was considering a squeeze on big banks to cover $23 billion in bank failure costs, bank stocks rebounded. However, analysts remain uncertain about how US stocks will respond due to the Fed’s uncertainty.
In Asia, stock markets are expected to rise following the Nasdaq 100’s rebound, indicating that investors are preparing for the Fed to end its interest rate hiking cycle and potentially pivot to looser policy later this year. The Cboe Volatility index dropped to its lowest level in three weeks and Treasuries were flat.
Despite a 4% increase in the past 24 hours, Bitcoin‘s price fluctuations have been influenced by low trading volume and decreasing liquidity, which have made investors uncertain about inflation and macroeconomic issues, causing prices to move unpredictably. Meanwhile, XRP futures are attracting renewed attention due to the ongoing legal battle between Ripple Labs and the SEC, with investors hoping for positive news to boost the broader market.
On the other hand, Stablecoins like Circle’s USD Coin have experienced significant outflows, leading to a drop in market capitalization. Investors are turning to Tether‘s USDT, which has grown in market share due to increased regulatory scrutiny and uncertainties in the banking sector. These changes highlight the challenges faced by Stablecoins, and Binance’s BUSD is also seeing falling prices. Overall, the crypto market is in a state of Flux, driven by various factors affecting different cryptocurrencies.
Topic of the Day: Arbitrum poised for growth after sell-off, but challenges remain
The announcement of an airdrop for the Arbitrum (ARB) token led to a surge in the prices of native tokens of Arbitrum projects like GMX, Magic, Gains Network, and Radiant Network. However, after the actual airdrop occurred, the prices of these tokens began to decline, leading to a sell-off event that impacted the ARB token as well.
Despite the sell-off, the activity across the Arbitrum network continued to surge, with the transaction count increasing by 2.7 times compared to Ethereum on the day of the airdrop. Additionally, the liquidity across various DeFi applications on Arbitrum, such as Aave, Radiant Network, GMX, and Gains Trade, has not declined after the airdrop.
One positive implication of the sell-off is that it has likely reduced the selling pressure on ARB tokens, making the rollup well-positioned for further growth. However, the sell-off has also highlighted some negative implications of the ARB airdrop. Firstly, the size of the airdrop for most Arbitrum eco projects was smaller than expected, making it inadequate to incentivize liquidity among a large user base.
Secondly, the mass selling of ARB tokens by “super airdrop hunters” further exacerbated the selling pressure on the token. Lastly, while there were reports of whale accumulation of ARB tokens, it remains to be seen if smart money wallets will continue to accumulate ARB tokens or start selling them, which could impact the token’s price in the future.
Overall, the Ethereum Layer-2 activity remains strong, and the selling pressure on ARB tokens is likely done with, positioning the Arbitrum eco for further growth. However, the size of the airdrop and the potential for further selling pressure on the token remain areas of concern.
Arbitrum (ARB) $1.2458 (+1.66%) - Neutral Outlook
Overview:
- Closest hourly support zone: 1.2356 - 1.2273
- Closest hourly resistance zone: 1.2625 - 1.2731
- Key Level: 1.3251 (Weekly High)
On the 1H timeframe, ARB recently dropped below the daily level of 1.1730, which was also close to its initial launch price. After this drop, ARB entered a phase of accumulation below this level, which suggests that the drop may have been a bear trap to allow larger traders to absorb most of the supply around those levels. This would pave the way for an upward trend with less resistance. ARB saw a slight retracement to the 38.2% hourly Fibonacci level (1.2055) after reaching a high of 1.2576 yesterday. This is viewed as a secondary test by larger traders to gauge whether there is any more supply.
Moving forward, ARB is likely to retest 1.2961, and depending on the volume and width of the candle, we will be able to tell if larger traders are making a move. It may or may not break above and retest the weekly level of 1.3251. If there is a high volume and a long-body candle, then it is likely that the bulls will target the supply zone of 1.4347 - 1.4605. On the other hand, if ARB rebounds to below the daily level of 1.2731, we may see more accumulation at the current price levels.
Hourly Resistance zones
- 1.2625 - 1.2731
- 1.2933 - 1.3137
- 1.3251 - 1.3500
Hourly Support zones
- 1.2356 - 1.2273
- 1.2177 - 1.2055
- 1.1879 - 1.1703
