First Mover Americas: BTC Holds $20K as Altcoins Retrace

Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.

• Price point: Bitcoin holds $20,000 and altcoins retrace from yesterday's rally.
• Market moves: Miners are selling their bitcoin holdings. Could this push the price down further?

Price point

Bitcoin (BTC) is down 5% on the day after reaching a 24-hour high of $21,500 on Tuesday. BTC hit lows of $19,900 Wednesday but has since managed to hold just above the $20,000 mark.

Altcoins, which were up yesterday, have retraced. Solana (SOL) is down 10%, Avalanche’s AVAX is down 8% and Polygon's MATIC is down 8%.

Ethereum, the world’s second largest cryptocurrency by market capitalization, is down by 5.5% over the past 24 hours, around $1,091.

Laurent Kssis, head of Europe at crypto exchange-traded fund firm Hashdex, said that as the market remains turbulent, BTC will likely continue to oscillate within a range of $19,000-$22,000.

“This comes as liquidations are still prevailing and leveraged orders are dominating,” said Kssis.

Over the last four hours, BTC has remained above $20,000.

In traditional markets, stocks in Europe fell with U.S. futures and commodities amid warnings that the Federal Reserve's ongoing campaign to hike interest rates might lead to an economic downturn.

Futures for the S&P 500 declined 1.7% Wednesday and contracts for the Nasdaq 100 contracted 2%. This comes after U.S. stocks rallied on Tuesday off their worst week since March 2020.

Market moves

Miners Are Dumping Their Bitcoin Holdings

Miners have a significant influence over the price of bitcoin. In the first four months of 2022, public mining companies sold 30% of their bitcoin production. Bitcoin’s recent downward price action and the deteriorating profitability of mining has forced miners to start liquidating their bitcoin holdings, according to a report by Arcane Research.

Bitfarms (BITF), a Canada-based bitcoin mining company, sold almost half its bitcoin to reduce debt. BITF sold just under half its bitcoin holdings for about $62 million. The sale of 3,000 BTC cuts the miner's holdings to 3,349.

Public miners only make up around 20% of bitcoin’s hashrate, but studying their behavior can hint at how private miners are behaving, according to Arcane Research.

The miners are some of the biggest whales, holding around 800,000 BTC, according to CoinMetrics, of which public miners own 46,000.

“If they are forced to liquidate a considerable share of these holdings, it could contribute to pushing the bitcoin price further down,” Jaran Mellerud, an analyst at Arcane, wrote in the report.

“When looking at patterns from previous bull/bear markets, this type of behavior from miners is not surprising,” wrote Marcus Sotiriou, Analyst at GlobalBlock, in an email.

In November 2019, miners capitulated on the leg down to $3,000.

“It's typical for miners to be accumulating during bull markets and selling in bear markets, as they need to cover interest payments due to being too highly levered, or they need to pay for power costs,” said Sotiriou.

Data from Glassnode shows that it is not just Bitfarms that has been selling recently. Miners’ balances have declined from the 2019-21 accumulation uptrend.

Latest headlines

• FalconX’s Latest $150M Funding Round Boosts Valuation to $8B GIC and B Capital led FalconX’s Series D funding round.
• Blockchain Payments Firm Roxe to List Via $3.6B SPAC Deal The deal is expected to close by Q1 2023 and the combined company will trade under the symbol "ROXE."
• Bitcoin Miner Iris Energy Increases 2022 Hashrate Estimate to 4.3 EH/s The construction of the miner's Texas site may be delayed as the firm removed completion estimate.
• Tether to Issue Sterling-Pegged Stablecoin, GBPT The new token will be pegged 1:1 to the British pound and will launch in July.
• Bitcoin Slips to Nearly $20K; Citi Sees 50% Chance of Recession Premarket futures for U.S. indices fell, while Asian equities took a hit on Wednesday.
• Citibank Chooses Swiss Firm Metaco for Digital Asset Custody The custody platform integration is with Citi's Securities Services team and will initially focus on tokenized securities.
• Tech Giants Create Metaverse Standards Forum for Software and Terminology Standards Meta, Microsoft, Nvidia, Unity, Sony and 30-other companies are coming together to build the infrastructure for an interoperable metaverse.

Today’s newsletter was edited by Bradley Keoun and produced by Nelson Wang.