Good Morning. Here's what happened:
Prices: Bitcoin traded higher but was on the verge of posting its ninth consecutive weekly loss. Prices for Terra's new LUNA tokens plunged almost immediately after their launch.
Insights: Stepn has drawn the ire of Chinese regulators.
Tech's take: BTC volatility could increase, especially if there is another price drop.
PricesBitcoin
(BTC): $29,243
Ether (ETH): $1,805
Biggest Winners
| Asset | Ticker | Income | DACS Sector |
|---|---|---|---|
| Stellar | XLM | +7.0% | Smart contracts platform |
| Algorand | ALGO | +4.0% | Platform for smart contracts |
| Chainlink | LINK | +3.6% | Data processing |
Biggest Losers
There are no losers today in CoinDesk 20.Bitcoin heads for ninth weekly record loss
Bitcoin was poised to end the week in the red, which would extend the largest cryptocurrency's losing streak to a record nine weeks. Until recently, Bitcoin had never gone more than six straight weeks without a positive return in its trading history dating back to the early 2010s.
So the mood is rather gloomy, and that's with light trading on a holiday weekend in the US. In May alone, bitcoin has fallen from about $37,600 to about $29,400.
"If it is able to break through $30,000, it could have a run," Joe DiPasquale, CEO of crypto fund manager BitBull Capital, told CoinDesk in an email. "But if it continues to be pushed down by bearish sentiment, it could fall to its next support line around $25K."
Price plunge clouds Terra's "LUNA 2.0" airdrop
What was heralded as a "revival" by the hard-hit Terra project looked more like a re-run over the weekend as new LUNA tokens were issued and promptly plummeted in value.
A key element of Terra's plan was to deliver new LUNA tokens to holders of the project's now heavily devalued UST stablecoins, as well as holders of the older, existing LUNA tokens. The older tokens have now been converted to "LUNA classic" under the trading ticker LUNC; at press time, the market cap for these legacy tokens was about $700 million, up from about $40 billion less than two months ago.
However, it is not entirely clear what the LUNC tokens will be used for, as most Terra developers are now expected to shift their activities to the newly launched replacement chain - that is, if they are not poached by other blockchains.
The new LUNA tokens initially traded for around $17 on May 28, but fell soon after, changing hands for around $5.28 late Sunday, according to the website CoinGecko.
On Twitter, some commenters complained that they were confused, while others vowed to immediately sell all Terra-related tokens.
Markets
(Friday prices.)
S&P 500: 4,158 +2.4%
DJIA: 33,212 +1.7%
Nasdaq: 12,131 +3.3%
Gold: $1,853 +0.03%InsightsStepnhas
drawn the ire of Chinese regulators
What do Apple, Tesla, Didi and Stepn have in common? They've had run-ins with Chinese regulators over their handling of data.
Stepn, which calls itself a move-and-earn game, announced Friday that it was banning players with a Chinese IP address from using the app's GPS feature. In the game, players earn crypto by walking, jogging or running, which requires the use of the phone's GPS receiver to track distance. Without this capability, the game and app are now useless.
China's Personal Information Protection Law (PIPL) regulates how companies handle and process Chinese citizens' data and has been compared in structure to the European Union's General Data Protection Regulation (GDPR). It complements China's Data Security Law (DSL), which regulates the export of data, particularly data deemed sensitive, including location information.
Under the DSL and PIPL, the export of sensitive data is not prohibited, but by default it should be stored locally in China. If there is a need to export this data, it would have to undergo a security assessment by the Cyberspace Administration of China (CAC), which regulates Web-based businesses, and it would likely have to be anonymized.
Stepn says it has never done business in China and is headquartered in Australia. But like the GDPR, China's data regulations are extraterritorial. Companies can be penalized if they process data that originates in China, even if the company is based overseas. This is especially important for companies that have Chinese nationals on their team, as they could face problems if they re-enter China.
Of all the companies affected by compliance measures related to this law, Stepn is the smallest. Apple and Tesla have both built data centers in China to comply with these regulations.
Ridesharing app Didi found itself in a difficult position in terms of compliance with these regulations.
Didi is no longer traded on the New York Stock Exchange after Chinese regulators raised concerns about how much data could potentially be made available to other countries. Eventually, authorities blocked the app from Chinese app stores and banned new users from signing up. Didi reached a compromise with regulators by promising a listing in Hong Kong after being removed from U.S. exchanges, but the company is still waiting for regulators to give it the green light so it can move on to business as usual.
Chinese regulators' outsized interest in Stepn stems not only from the fact that crypto is involved, but also from the problems caused by Strava, another fitness app.
Strava, which has no crypto component, is the must-have social network for athletes and fitness freaks. However, researchers found that Strava is sitting on a treasure trove of location information about its users' movements. By collecting data from public performance boards, researchers were able to find social media profiles and create a "pattern of life."
Worse, many military personnel are avid Strava users. Thus, the app's performance charts and heat maps revealed the locations of military bases and the presence of U.S. soldiers in places not previously known.
So maybe the Chinese regulators are right. Fitness tracking apps are notoriously problematic from a privacy perspective, and for Beijing, the crypto aspect only makes matters worse.
Technician's takeBitcoinFaces
Resistance at $33K; Support at $22K-$25K
.Bitcoin (BTC) traded below the $33,000 resistance level last week, although it stabilized within a narrow range. This could indicate an increase in volatility, similar to earlier this month.
BTC has fallen about 3% in the past week and has outperformed most other cryptocurrencies, suggesting less risk appetite among traders. Typically, BTC falls less than alternative cryptocurrencies in down markets due to its lower risk profile.
The Relative Strength Index (RSI) on the weekly chart is more oversold than it has been since March 2020, when a strong crypto rally preceded it. This time, however, the deterioration in long-term momentum suggests limited upside potential for BTC.
Given the negative momentum readings based on weekly and monthly price data, there is a growing risk of further price declines. Should a volatile downward move occur, initial support is seen at $25,000, which is similar to the May 9 price low. Further support is provided by the 200-week moving average, currently at $22,061, which could stabilize price action.
A more meaningful downside target would be the $17,673 level, which represents about 78% of the previous uptrend from March 2020 to November 2021. This price level would also result in a decline of about 73% from peak to trough, which could represent a capitulation. Bitcoin has fallen 83% from its all-time high of $19,890 during the 2018 crypto bear market.
ImportantEventsMemorial Day
holiday weekend
in the
U.S.10 p.m. HKT/SGT(2 p.m. UTC): European Commission Business Climate (May)
10 p.m. HKT/SGT(2 p.m. UTC):
European CommissionConsumer Confidence(May)
CoinDeskTVIn
case you missed it, here is the latest episode of "First Mover" on CoinDesk TV
:Crypto markets don't move much, but Stepn does; co-founder explains the play-to-earn game
Bitcoin is still stuck in a range and Ether remains down after the top cryptocurrencies both lost crucial support levels. Why is sentiment still so weak for the broader crypto markets? Urs Bernegger of SEBA Bank shared his take on the crypto markets on "First Mover." Plus, Stepn co-founder Yawn Rong explained the popular move-to-earn game.
HeadlinesThoughtsFrom
Davos: The crypto industry was out in full force at the World Economic Forum's annual meeting
.Dogecoin jumps on Elon Musk SpaceX tweet: The Tesla CEO said goods for his space exploration startup could soon be purchased with the meme cryptocurrency.
Ether accounts for nearly half of $520M liquidations, though on-chain data is weak: Ether futures traders saw liquidations nearly double those of bitcoin in an unusual move.
Longer ReadingNansenResearch
debunks the myth of a single "attacker" in the collapse of Terra: The stablecoin TerraUSD collapsed for one reason: Large holders did not trust it.
Today's crypto explainer: what's the point of stablecoins? Understanding why they exist
Other voices: This eclipse-like event is why Bitcoin could reach $100,000 by next year, says a forecaster who has made predictive callsSaidand
Heard
"Currently, stablecoins are only used on crypto exchanges, not in mainstream payment systems. But there is no need to make them legal tender for them to be used for normal payments. The UK has a fast, cheap, and comprehensive electronic payment system where banks are the gateways. The vast majority of payments in the UK are made through this system. Newer technologies like PayPal can also be used for many retail purchases." (CoinDesk columnist Frances Coppola) ... "The week of the TerraUSD (UST) collapse was one of the most painful weeks in crypto history - and one we will be reckoning with for a long time to come. It wreaked havoc on the crypto market, causing billions of dollars in lost value. And while Washington, D.C., is rightly debating next steps, a smart, thoughtful conversation about potential regulation is critical." (Blockchain Head of Policy Jake Chervinsky for CoinDesk) ... "The price of regular gasoline has already risen to more than $6 a gallon in California, and it's virtually impossible to find gasoline for under $4 anywhere else. Nationwide, prices have risen nearly 50 cents a gallon in the last month. The war in Ukraine is the most immediate reason for the price increase, as refiners, tankers and traders around the world are avoiding Russian exports, forcing up to three million barrels of oil a day off the market. Energy traders have also driven oil prices higher in anticipation that Western governments will impose even tougher sanctions against Russia and its energy industry. (The New York Times)