BTC Reclaims $20k Support; Circle Claims to Be in the Strongest Financial Position Ever

Chart of the Day

On Monday, the broader crypto market saw a rebound as BTC climbed back to the $20k key psychological threshold. The largest cryptocurrency by market cap is currently trading near $20.2k after pumping 5.9% in the last 24 hours. BTC is facing major resistance levels near the $20.5k to $20.9k range. A clear move above this range will likely bring in more upside momentum to push the price further up.

In a similar vein, ETH is back above the $1,100 handle after rising by nearly 10% in the same period. Most major altcoins have flipped green, with MATIC leading the recovery on a 14% jump in a similar time frame.

In the options market, the gamma exposure of both BTC and ETH bounced back to positive territory after a significant surge, suggesting that both are starting to gain some price support. Options IV dipped, while short-term skewness rose, indicating that short-term bearish sentiment may have eased slightly.

However, the first half of the year has nonetheless ended on a heavy note. The year-to-date crypto sector returns saw significant drawdowns. Exchange tokens, digital assets, and privacy tokens are on average down by approximately 55%. The worst-performing sectors include DeFi, NFT and gaming, and Layer 2 tokens, which plummeted between 75% to 81% amid the market’s liquidity drain and deteriorating macroeconomic conditions. On a side note, according to Dr. Steve Hanke's metrics, at least 17 countries are experiencing a minimum of 30% inflation. The inflation rate of BTC, however, is around 1.7% based on a seven-day moving average.

Talk of the Town

While the impact of 3AC's liquidation ripples across the crypto industry, Circle, the company behind USDC, claims to be in the strongest financial position ever, according to its CEO Jeremy Allaire. The statement, in the form of a Twitter thread, was intended to refute rumors of Circle being on the brink of collapse following the blowup of Celsius and 3AC. In the thread, Allaire was upfront about the state of USDC's liquidity, and shared Circle's most recent audits and attestations. He also addressed the rumors of major risks of default on USDC's reserve by explaining the difference between its reserves and the stablecoins used in lending markets. USDC is now the second-largest stablecoin by market cap, and is only $10 billion away from overtaking the market leader Tether.