Crypto Market Daily Highlights – June 22 – Powell Sinks DOGE and ETH

Key Insights:

  • After brief relief on Tuesday, volatility spiked on Wednesday, with Fed Chair Powell pulling the crypto strings.
  • Dogecoin (DOGE), Ethereum (ETH), and Solana (SOL) joined bitcoin (BTC) in deep the red. Solana saw a five-day winning streak come to an end.
  • The total market cap reversed gains from Monday and Tuesday, with a $33 billion fall to end the day at $862 billion.

It was yet another choppy session for the crypto market on Wednesday. Recession fears plagued bitcoin (BTC) and the broader crypto market. Apprehension ahead of Fed Chair Powell’s testimony on Capitol Hill added to the market angst.

The NASDAQ Mini 100, WTI crude oil, and the crypto market were in the red going into the afternoon session.

Market sensitivity to Fed Chair Powell’s testimony was evident, not only across the global equity markets, but also across the crypto market.

However, after tracking the NASDAQ 100 through the early part of the Powell testimony, a decoupling was evident later.

On Wednesday, the NASDAQ 100 slipped by 0.15%, while bitcoin slid by 3.6%.

WTI crude slid by 4.03% to $106.19, with the reversal more aligned with the crypto market and reflective of investor jitters over the risk of a US recession.

NASDAQ BTC WTI 230622 5 Minute Chart

Today, the second day of Fed Chair Powell’s testimony on Capitol Hill will draw interest along with key stats from the US.

Economic data from the US include prelim June private sector PMIs and the weekly jobless claims. The numbers will need to be upbeat to support the Fed Chair’s view on labor market conditions and the economy.

Crypto Market Cap Hits Reverse as Powell Talks Recession

A bearish crypto session saw the total crypto market cap fall to a day low of $852 billion before a partial recovery to end the day at $861.5 billion.

On Wednesday, $33 billion came off the table as investors responded to Fed Chair Powell’s testimony.

Total Market Cap 230622 Daily Chart

The pullback reversed modest gains from earlier in the week, with the market cap now down $19 billion for the week and $431 billion for June.

Any market hope of Powell removing downside risks vanished on Wednesday. Initially, the market responded positively to early comments before hitting reverse.

In line with market expectations, Fed Chair Powell discussed the need to continue hiking rates to bring inflation back to target.

According to FX Empire, Powell noted,

“We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.”

For riskier assets, Powell’s reference to the influence of incoming data and the economic outlook on the Fed interest rate path eased immediate concerns of a hard landing.

The support was brief, however, with the Q&A session highlighting the Fed’s threat to the US economy.

Market reaction to the testimony left the top ten cryptos in negative territory.

DOGE (-6.21%), ETH (-6.75%), and SOL (-6.25%) led the way down.

ADA (-4.75%) and BTC (-3.63%) also struggled, while BNB (-2.64%) and XRP (-1.89%) saw relatively modest losses.

From the CoinMarketCap top 100, Waves (WAVES) was the biggest loser, sliding by 15.39%, the downside partially reversing a 43.04% breakout from Tuesday.

Several cryptos bucked the trend, with Polygon (MATIC) and Uniswap (UNI) among the front runners. MATIC and UNI ended the day with gains of 8.49% and 4.32%, respectively.

Stablecoins Hold Steady Despite USDD Peg Issues

On the stablecoin front, USDD avoided a fall to sub-$0.97 before striking a day high of $0.9762.

USDD 7-Day Chart 230622

Since June 13, TRON DAO Reserve has yet to restore the dollar peg. Despite this, a partial recovery from a June 19 of $0.9256 remains good enough for the market.

Transparency has proven to be the key, with initial investor fear of another stablecoin collapse abating.

According to TRON DAO Reserve, the collateral ratio stood at 324.16%.

USDD Collateral Ratio 230622

Looking at the major stablecoins, Binance USD (BUSD) and USD Coin (USDC) were the only coins with the dollar peg firmly in place.

Total Crypto Liquidations Eased Further Back Powell’s Testimony

The downward trend in total crypto liquidations continued into this morning.

24-hour liquidations slipped from a Wednesday $170.27 million to $165.11 million this morning. Last week, total liquidations had hit $1 billion levels.

One-hour liquidations reflected improved market conditions.

According to Coinglass, one-hour liquidations stood at $2.05 million.

Total Crypto Liquidations 230622

A decline in 24-hour total liquidations to sub-$100 million would deliver crypto market support. Persistent headwinds, including the threat of an economic recession, will continue to test support cryptos.

Daily News Highlights

  • obtained Singapore regulatory approval for payment services.
  • Citibank & Swiss company METACO announced plans to develop institutional crypto custody.
  • Israel and Hong Kong reported plans to test new digital currencies.
  • Tether (USDT) announced its fifth stablecoin offering, the GBPT.
  • Cardano (ADA) slumped on news of a delay to the Vasil hard fork.
  • Crypto mining became more accessible as miners sold graphic cards at heavy discounts.

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