On-Chain Data Reveals Key Support Level to Observe; Beanstalk Farm Exploited

Chart of the Day

Over the weekend, BTC dived further below the $40k psychological support. In doing so, the number one cryptocurrency by market cap has now retraced all the way back to its year-to-date trading channel within the $38k to $45k range. Most of the progress it made at the end of Q1 of 2022 has also now been eradicated. The broader crypto market is trading in lockstep with major U.S. equity indices, with its correlation to traditional markets strengthening amid the continued downward corrections.

After suffering two consecutive days of losses, BTC is currently struggling to stay atop the $39k level after shedding 3.3% of its market value in the last 24 hours. As of the time of writing, BTC is facing strong resistance from the $40k to $40.5k zone and the 100 hourly simple moving average. A failure to clear said level may result in further downside corrections that will see BTC test the support level near the $38.5k mark. On the on-chain front, on-chain volume data reveal that a new support level is forming in the $39k to $40k range. This is an extremely key level to watch to determine the market's next direction. 

In a similar vein, ETH is now trading below the key $3,000 support level after posting a 4.1% loss 24 hours ago. Many major altcoins are also mostly submerged in a sea of red, with most leading L1 tokens having experienced 4% to 6% plunges on average within a similar timeframe. 

Back to (the) Futures

Over the weekend, and in spite of light trading volumes within the spot market, selling pressure has resurfaced within the perpetual market amid growing pessimism amongst leveraged traders. The number of perpetual contracts with negative funding rates has also increased in tandem. In the options market, the term structure continues to steepen week-over-week, whilst the medium and long-term implied volatility (IV) has remained relatively immune to weakening spot prices. 

Talk of the Town

Beanstalk Farm, a credit-focused stablecoin protocol on the Ethereum network, suffered a weekend exploit that led to a loss of a staggering $182 million in various crypto assets. Blockchain security firm PeckShield was the first to flag the attack on Twitter, revealing within their post that the hacker had already funnelled at least $80 million through a crypto mixer protocol (as at the time of their post). PeckSheld also divulged that the rest of the lost funds (which amounts to around $100 million in value) have been sent to various protocols, including Beanstalk Farm, to fund flash loans and swaps. According to the findings of Beanstalk's internal investigations, the attacker had amassed a large amount of Beanstalk's governance token via a flash loan on Aave, and through that — was able to quickly pass a malicious proposal that enabled the draining of all protocol funds into a private wallet. As of the time of writing, Beanstalk has yet to reveal any plans for reimbursement with regard to users' funds.