🧘‍♂️Let’s Talk About Ethereum

Market Meditations | June 3, 2022

Dear Meditators

The downtrend continues in crypto markets and the same is true of legacy markets.

Technology stocks in particular are facing pressure. With some of the biggest names (Microsoft, Amazon, and Netflix) reporting losses.

Some crypto exchanges are also feeling the heat. Coinbase is pausing new and backfilling roles for the foreseeable future and Gemini will lay off 10% of its workforce!

Is this a crypto winter? Well, one thing is for sure. If it is, our newsletter will provide all the information and insights that are necessary to keep you warm… ☕️

Today’s Meditations: 

  • Ethereum Technical Analysis
  • What People Are Saying About Terra
  • NFT Insider Trading. Cause for Conviction?

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⏰ Top Headlines


?‍♀️ The Trend is Your Friend

ETH/USD

Macro Structure: Downtrend continues across the crypto market. In these conditions, the safest assumption is a continuation. Add to this the fact that trends often overextend in crypto. That is, they tend to go far further than one might expect. This week, we’ve experienced a really nasty retest of the $2k resistance level. We’ve failed to get back above and we can see we are continuing to go down.

Looking Forward: Expect a test of the $1.6k and/or $1.4k levels in the coming weeks. This idea is invalidated if we claim the $2k resistance level. If that scenario materializes, expect to see us travel towards the 100 Day Moving Average.


? Straight Outta Comptroller

The aftermath of Terra’s crash continues to resonate throughout the cryptocurrency world. As feared, some regulators and officials are framing it as a cautionary tale, indicative of widespread risk in the digital assets market.

  • The acting Comptroller of the Currency, Michael Hsu, has taken a position of warning against crypto and stablecoins, saying: Part of the reason that Terra was able to grow so quickly, [was that] it was hyped and there were some attractive yields that were not sustainable put onto it.”
  • Hsu claims the fallout of the UST crash could translate to a risk of contagion in the entire crypto market as other coins and tokens continue bearish action.
  • Cryptocurrency advocates have been calling for regulators to weigh in to provide clarity on a range of topics in the industry for years.
  • The downfall of a major network worth billions of dollars has drawn mainstream attention. 
  • They say there’s no such thing as bad publicity, so maybe having Capitol Hill’s attention will galvanize financial oversight bodies to provide some insight into an emerging industry.

Never neglect the impact government regulation can have, keep up to date with the Fed’s emerging developments here.


⚖️ BUSTED

The NFT market exploded in 2021 when OpenSea rose to fame as the most popular NFT marketplace. Being the most popular NFT platform has its perks, but also comes with a lot of scrutiny and attention. One employee, the former head of product, Nathaniel Chastain found this out the hard way when he was officially charged with wire fraud and money laundering earlier this week.

  • A grand jury in the Southern District of New York issued the indictments after determining the state had enough evidence to charge Chastain.
  • According to the indictment, Chastain is being charged with “wire fraud and money laundering in connection with a scheme to commit insider-trading in NFTs, by using confidential information about what NFTs were going to be featured on OpenSea’s homepage for his personal financial gain.
  • Allegedly, Chastain used secret Ethereum wallets, from June-September of 2021 to buy dozens of NFTs and then feature them on the homepage of OpenSeaAfter being featured, the NFTs would go up in value and Chastain was able to sell them for 2-5 times his purchase price.
  • FBI Assistant Director-in-Charge, Michael J Driscoll, called this “an age-old scheme to commit insider trading.” He went on to say that “the FBI will continue to aggressively pursue actors who choose to manipulate the market in this way.”
  • Each charge carries a maximum of 20 years in prison.

This was not a slam-dunk for prosecutors since NFTs are not considered securities which is what the insider-trading law is typically applied to. If convicted, this will be a precedent-setting case in the NFT market.


? Watch

? Read

  • Read the following Technical Analysis guides for more insight:
  1. Moving Averages 
  2. Fibonacci Retracement  
  3. Volume and Open Interest  

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??‍♂️✍️ Stories in this newsletter were written by D. Beverly, Kyle F., Max P., Nick T., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Ellen B.


Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here. 

Disclosure. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Additionally, the Market Meditator writers hold crypto assets. See our investment disclosures here.