BTC bull trap in play OR are we heading toward $30K?

Sat sam.

Hello friends and thank you for hanging out with us today here on the Market report on Cointelegraph. I am your host Benton and we are joined by resident experts Jordan Finiseth, Marcel Peckman and Sam Borgi. Jordan uses his background in psychology and human behavior to spot emerging trends in crypto. Sam Borgi is a business editor at Cointelegraph where he brings a decade of experience in economic analysis and financial market writing. Marcel Peckman applies his 17 years of experience trading derivatives options and futures to the crypto derivatives markets. Fellas, little bounce, little stability. We're hovering around 20k now for about a week now. It feels good, but are we going to wake up to a rough nightmare? What is going on this week? Jordan, I'm going to start things off with you. How are you feeling? What is happening this week in the markets?

I'm feeling good after coming back from a vacation. I know the markets are kind of stagnant down and lower. We're like a month ago we're like, yeah, tough around 30,000. Woo. We're going to hold here now we're like, yeah, it's up around 20,000 W. We're going to hold here. Like let's hope we don't go to like, yeah, we're holding around 10,000. Woo. Like, don't know. We'll see. I don't think it's going to go that low, but it's not looking very fun out there right now.

And Sam, what's going on this week, man? How are we feeling?

Well, at 20,000, I can't feel good, can I? I'm not quite sure this level holds. If you would have told me six months ago whether we hit 20,000, I would have been very skeptical of that. But now it seems like we have another leg lower before the inevitable bottom. So I guess we'll find out. We'll find out soon enough how that's going to play out.

And Marcel, I know you have some thoughts today that we're going to be diving into. What's going on this week, man?

Yeah, Benton, I, I kind of agree with, with both of them. Like yeah, every time we say yeah, 40, 000 is the ultimate bottom. 30,000, the huge mid bottom 20 many thousand. So how is this gonna end? We, we don't know. The truth is no one knows because there's too many unknown unknowns. And that's precisely what we need for a rally. Because if some by a miracle Apple or Microsoft announces tomorrow 1 billion investment in Bitcoin, the game changes. So that's precisely what we should be continue to invest and buy every month because we don't know what's going to happen.

And if you did know what happens, then I, I, you know, you may not be sitting here listening to the show, but today we want to welcome everyone that's been tuning in from around the globe. I see Katherine Rhodes is back from la. Glad to have you here. Ahmed, Vikram, Adrian, Always glad to have the crowd watching today's show. I know we got excitement, news articles that we're going to dive into. A lot of interesting stuff. We had hacks out there. We have a few experts kind of talking about some bull, some bull whip effects happening in the market. We're going to dive into macro things. But first things first. I know we have a market roundup video and if you haven't liked and subscribed Coin Telegraph, go ahead and do so now. YouTube. Tuesdays at 12pm Eastern, the market report is giving you the news nuggets from around the Twitter sphere and around the crypto sphere so that you can stay up to date and know what you need to be doing here in these type, types of markets. So first things first. Danila, let's go ahead and jump into our weekly roundup video this week. All right, folks, those were some of the biggest headlines in the Twitter series this week. Quick shout out to friend of the show, Luciana, always a pleasure to have you here. We appreciate everyone for tuning in again around the globe. If you're just hopping on today's show, action packed lineup today. Bunch of headlines we got to dive into. We're gonna get you the market analysis you've been waiting for. But first, Adrian, we have memes today. We got memes. Let's, let's get in some memes first. If not, we're going to get into our market news. We got, we got some memes. All right, memes are coming in hot here. Here we go. All right, what is the first meme that we have of today? Eat at 11,000 two days ago or 1100 ETH at 1100 today?

Well.

Got the Pepe. The Pepe memes love them. Gotta love the Pepe.

I love the Pepe.

All right, Monday, fix it. Now, this is why we don't love you. You told us to buy Ethereum at 4000. Now it's a thousand Classic. That's a great one. Telling all the family members to get into crypto. Now. It never does. That's an accurate depiction right now.

Oh, boy.

Tell us your favorite meme, folks, while you're watching this today at home. Tell us your favorite meme. How come such a lovely lady is sitting here all alone? Do you want to know more about my new NFT collection? Yeah.

Telegram and Twitter bots. Yeah, there are always some nice ladies from Italy or whatever.

Yeah, classic. All right, well done, Adrian. Thanks for scrounging up the old memes from across the Twitter sphere this week. We're gonna be giving away one $50 voucher towards the Cointelegraph store today, so make sure you drop your handle in the chat. And you could get swag. The CT swag. It's all over the place. In our store, we got hoodies, hats, coffee mug, shirts. You name it, it's going to be in there. First, let's get into our market news this week. I know we got a lot to dive into. The Celsius fallout is still happening. We have tether. FUD community is going to react to Gary Gensler's interview yesterday on cnbc. So let's go ahead and jump into our market news for. All right, guys, first on deck here is the crypto community confused as Celsius continues with weekly rewards. If you're a Celsius user and you're seeing these rewards get distributed to you, yet you can't withdraw them, is that just putting salt in the wound? I want to start with Jordan. I want to hear your take of the whole Celsius fallout so far and where you think this could potentially head next.

Well, it might be a move to just kind of limit the amount of freaking out that people do. Like, if that's still coming in, they're kind of like, giving the. The signal that we're all, we're still solvent, we're okay, everything's fine. This is just a brief pause. Things will get back to normal in a little while. But, like, yeah, we got bankruptcy talks and all this stuff. I don't know. Like, this is whole. This is all making me really think about, like, even just the greater financial system in the repo, whole. The whole repo thing going on with the government. Like, we don't have. The crypto, obviously doesn't have the funding to stay solvent when these kinds of things happen. But this was a happening in the larger economy with big banks and institutions all the way back at the beginning of COVID So I think we're just kind of seeing the whole collapse of a lot of the economic system as we knew it. It's going to have to be restructured. And unfortunately for us crypto folks, it's really Hitting us hard and the whole Bitcoin is an inflation hedge thing ain't really working for us right now. Hopefully that reverses in a little while. But yeah, these different large entities collapsing, it's kind of a symptom of the bigger problem with our whole economy in my opinion.

Something I want to quickly highlight here in this article is that according to Celsius website which is currently undergoing revamped liquidity issues, the company is still advertising percentage yields apys of up to 18.6% on crypto deposits which many have argued is unsustainable. Is this like, is this an a dilemma? I'm going to kick this over to Sam. Why are they still marketing this stuff if, if they could potentially be insolvent?

I have no idea, I have no idea what's going on there. But it really reminds me of, of why I never got got involved in any of the Celsius or the blockfi. And I'm not, I'm not criticizing those who have, I'm just saying that we're investing in an exponential market that can gain thousands of percent over, over the span of a few years, yet we want to go for that 5% yield by giving up our assets in the process. So for me the risk reward never really made much sense. But you know, the, I think a lot of this really stems back to the Terra ecosystem collapse and everyone who was exposed to that, even Three Arrows Capital had some massive exposure to Terra and I think you're starting to see the ripple effects and with Celsius potentially going under again, that's going to have wider consequences. And I was concerned about BlockFi before we heard the news of a potential loan. And now you have Morgan Creek Digital, I think wanting to pursue a takeover there or at least want to revise the terms of, of what FTX offered them. So it's a complete mess and I think that it's going to get probably a somewhat worse moving forward as the fallout continues. I wouldn't touch these, I wouldn't touch these protocols with a 10 foot pole. Not your keys, not your Bitcoin hold spot and you can weather the storm but when you're exposed like this it's very difficult.

And Marcel, are you using these, staking the C5 protocols at all? And I don't know, maybe can you can explain some of these risks to some of the users you know that are watching today, viewers that are watching today.

I think the number one message here is when you send cryptocurrencies to whoever a company, an exchange, a lending provider, a bank, even if it's a bank. So you're essentially giving away this cryptocurrency and getting in return. IOU means a debt instrument. Okay, I have your coins here, so I own you. I shall repay in whatever period or whenever you ask for redemption. The coin plus some yield. So whenever you log in at Binance, whenever you log in at Celsius or whatever company, a centralized company, what you're seeing there, the balance that you're seeing there is an iou. It's a debt. You don't have access to those cryptocurrencies. You cannot withdraw them. You cannot go on the blockchain and check if the balance is still there, because you gave away your coins in promise of a potential future return. So you should avoid that at all costs, no matter how reputable the company is, even if it's a bank. Because the main goal, the main benefits from cryptocurrencies is for you to do your own custody, for you to be your own bank, so you don't have to rely on the risk management of other people. So that's my whole message here.

That's a very, very important takeaway. Jordan, go ahead and jump in here.

Yeah, I was just going to point out there's been a big change in the whole crypto ecosystem the last four or five years. When I first got in especially you had trace Mar out there. Not your keys, not your crypto, pull your coins off the exchanges. Every year they're trying to do this and it's slowly just kind of fade away. And it kind of seems more like we've moved towards traditional finance. Like all these firms, whether it's 3ac or Luna, they're doing like fractionalized reserve lending in this crap, which is causing these contagion or the systemic risk to the whole environment. We, we're back under a trillion dollars now. We're a really small market. So any big blow up is going to really affect everything like it is currently. And it kind of seems like they're doing this to get a better hold of the crypto market. Like the institutions are pushing people out and they're basically getting people's cryptos for free because you put them on Celsius and then they go bankrupt and then a company comes in and buys them for cents on the dollar. So it just seems like a whole lot of the traditional finance system is getting thrown in here and we're crypto people are just letting it happen. Like don't, don't give up your cryptos, folks.

You could not have said that better. And these like C5 products, they're no different than a bank. Like back when we had bank runs in the United States where you couldn't withdraw your deposits and the FDIC was, you know, created to ensure those deposits. It's the same thing, it's just a newer, you know, version of it. And like I think this is kind of what we're doing. It's an evolution. You gotta have it fail in order to kind of like rebuild the infrastructure inside the ecosystem. So we will see what the fallout brings. You know, Celsius has, I guess has speculated that they're looking at hiring, you know, bankruptcy lawyers. So we're going to see what happens. The next thing I want to get into today though is the Tether Stable Coin FUD here. It's back, it's all over the place. You got short sellers circling the wagons and people are talking about it. I didn't know. I want to go ahead and just pull up this article real quick from cointelegraph. Tether CTO refutes Stablecoin FUD as short seller circle. Yeah, people are looking to short Tether is USDT the last stablecoin out there that could survive something. Usdc, I want to start out with Marcel here with what is your take around this Tether FUD in potentially short selling on on USDT.

Okay Ben, so saying that $15 billion with withdrawn from Tether in the past month. It doesn't say that. Okay, so we're 100 sure they have there is enough backing for the remaining 60 beaten. They've never given us an audit, not an attestation by a top 10 firm as they promised five years ago. So if you're still waiting on that on a confirmation that they have the enough money from a top turn from. Dude, I have bad news for you. It's not going to happen. So having said that, keep in mind that Tether is an important if not essential mechanism for the derivatives exchange and the exchanges in Asia that don't have access to fiat money, especially the dollar. So the incentives to keep the system working are huge. And currently Tether is the oil that runs this engine. So I don't think it's going away.

And something I want to quickly note, and I'm going to kick this over to Sam, is that the CTO had confirmed Tether has already reduced its commercial paper exposure from 45 billion down to 8.54 billion this month, intending to clear out its commercial paper backing in coming months. Sam, what does this Tell you what Tether's kind of doing behind the scenes and what could potentially be risk associated with this, or are they trying to batten down the hatches and make sure everything's safe?

Yeah. If you take a look at Tether's attestation and the breakdown of its assets, a lot of people have raised concern about the percentage of its assets held in commercial paper, which is considered, you know, riskier. So what they're doing is they said, okay, if you think that's a risk, we're going to reduce our exposure to commercial paper and in fact, it's going to go down to zero eventually. So it seems like Tether is working behind the scenes to maybe consolidate their, their backing in a perhaps less risky, you know, asset. And that'll assuage a lot of the, you know, the fudsters. But, you know, you really haven't gone down the crypto rabbit hole unless you've gone down the Tether fud. And the tether FUD goes back to, goes back years. So for me, I don't see any immediate risk. But you never want to say that in the crypto industry. Right. We just saw a whole bunch of blue chip companies go down, you know, Celsius, Three Arrows Capital and the terror ecosystem. These aren't just some fringe projects. These were crypto blue chips.

In it. So, Jordan, it sounds like there could potentially, and I'm speculating here that that head hedge funds could be the ones that are trying to short usdt. Sam just said, we've seen the FUD happen for years and years and years and years with Tether. Is this just another FUD attack in a big nothing burger? In your opinion, what are your thoughts on this kind of whole situation with, with Tether right now?

Yeah, I'm kind of approaching it more like that. Again, like early. I remember I freaked out back in like 2018, like, tether's gonna fall. I'm like, oh, crap show you sell. Yeah, Since I was 11, you sit on the sideline, like, wait, a year later you're like, wait, tether's still here. So like as, as Marcel was mentioning, it's. So it's such a systemically intertwined crypto. Like, that's just saying, like, if the dollar loses its reserve currency, the whole world's gonna be like in a shit show for a while. If, if Tether goes down, the whole crypto industry is going to be in a real big show for a while. Is it going to happen? I don't think so. Just because it would Cause way too much havoc and like they're actually trying to build something. If we get crypto prices collapsing down like a Bitcoin of 5,000, nobody's going to want to come back to crypto for like a decade. And I don't think they want that to happen. So I don't think tether's gonna fail. They're adding new other. Like they're supporting the British pound now and other things that could just some might be. Oh, they're just, they're grasping at straws or trying to make it look like they're solving. Well, I think that it's fine. This is just more fud. If you ever, if you've been around when the market's down, they pile on the fud. Like somebody's really trying to get good deals. They pile on pilot on, pilot on. That's just what's going on right now. Just don't sell your cryptos, folks. Stay steady, hold firm. They're trying to shake you out. Don't let them do it.

Great, great advice. Love the advice, Jordan. So I want to pivot to the chat real quick. If you guys have questions, ask them in the chat. For our panelists here, we got the experts in house and they got the answers for you. So I want to highlight a question that Vikram had. How do stablecoins earn money? What's their revenue model? The dollar pegged stable coins. Does anyone want to jump in and maybe explain what are typical revenue models for some of these stable coins? Go ahead, Marcel.

So I'm gonna give you the answer that those companies hand out to us. What they say is that they put this money in T bills or corporate bonds or very safe DEB instruments. So the yield that they get goes to the company, even if it's 2% per year. So they do really not risky investments and they get yield on that. And they don't have to redistribute this yield or this wealth to the holders. So that's their. Supposedly their business.

Yeah. Never really fully transparent with these things yet they're so closely tied together with assets like Bitcoin and Ethereum. So it does seem like they have to go hand in hand with each other. I want to pivot us over into some recent news. I don't know if you guys caught this on CNBC yesterday, Jim Kramer did an interview with Gary Gensler and I want to pull up this article because what he said might be pretty interesting for those watching today. So Gendler said he saw many crypto assets having attributes of the security, adding that Bitcoin is the only crypto he is comfortable publicly labeling as a commodity. Is this big news for bitcoin? We've heard Gary Gensler talk about this previously. Sam, I want to hear your takes being the macro expert on what does this mean for Bitcoin and is this serious? And what did you take away from his interview with Jim Cramer yesterday?

I saw it more as a nothing burger, and I'm surprised that the community was so gung ho about it. He didn't really give anything new. He just said that based on what my predecessors said. You know, bitcoin is a commodity. You know, it's the only one that I would say doesn't fall into the securities bracket potentially, but we already knew that, right? So I don't really see anything new. I'm actually kind of surprised that the, the reaction to it. If you provide any, any kind of new information, I would have, you know, paid more attention to it. But he didn't just reaffirmed what his predecessor said, that Bitcoin, you know, has the characteristics of being fully decentralized, which makes it more along the lines of the commodity as opposed to a security. So I don't really see any, any changes in implications on Bitcoin when it comes to that.

And I guess the next thing you know with this is that this is like not new news. And, and like you said, Sam, like, this is not like a huge revolution. So, Marcel, what is your take? What's the next step for the sec, in your opinion? Where do you think they're going to kind of like go? Is Bitcoin spot ETFs going to become a thing now that Gary Gensler's talking about how it could potentially be a commodity? What's your thoughts?

So there are two separate things there. The first one is that, yes, the SEC already said they don't have the team or the knowledge to be the, the regulation body that handles cryptocurrencies. So most of that will be shifted to a cftc. And the CFTC will simply say, well, okay, I think Bitcoin, Ethereum, this and that are commodities, those are allowed to trade, etc. Etc. So not much change. Nobody wants to have this hassle of having to go through 200 coins and see what, how was the ICO if there's a team involved, how centralized, it's impossible task and nobody wants to do it and nobody will do it. But what CFTC wants to do is get the biggest ones that already have interest from institutional investors and say, okay, These are commodities. This we can do futures. Now to the second part. As for the etf, I don't think the spot ETF will be approved right now. I don't know exactly what are the incentives pushing the SEC towards one side or the other side. But considering what they've said for the past five years for denying the spot etf, which, which was basically there's a lot of volume going through non regulated exchanges, especially in stablecoins, unregulated stable coins such as tether. So we don't know who's moving the price and that is potentially dangerous for retail. Nothing has changed in that sense. So I don't think they're going to approve the spot ATF anytime soon.

Jordan, one thing that Gary Gensler did not talk about yesterday was eth. Why do you think he did not speak on that? In. In. I guess I'm curious to hear what you think. What could potentially become of eth? Is that going to be a commodity one day in your opinion?

I think that one probably has a little bit more of a like question about is it commodity security? And there's lots of different applications. But like this whole conversation is just making me realize why I've been so bored. This is like the summer shitty secret, like whether it's a bitcoin, etf, tether, fuzz, all this crap. It's like I'm this, I remember this in 2017, 2018. Like all this really says is the government's freaking dragging their goddamn feet. I think what they're doing is trying to get to the point where they can release their CBDCs because they were so behind the ball. They're like, let's not do anything and try and get control of this by releasing CBDs in the future. So like are they going to do anything? I think they're just going to keep dragging their feet like they have been for four years. Nothing ever gets done anymore, it seems like. I don't know.

Did you say cbdc? Sorry, I thought I was, I was about to throw.

Yeah, like, and no government's gonna like full on, come in and accept crypto. They're waiting so they can get their CBDCs out so they can actually kind of have some competition in the field. Maybe. I don't know. But hopefully people don't fall for that. It's just like a bait and switch with Fiat cbdc.

You know, they're prepping that slave coin.

It's brutal. Well, the last, last headline that we have here is the hack. I don't know if you guys heard Hundred million dollar hack from Harmony. Harmony hacker sends stolen funds to Tornado Cash mixer. He stole about a hundred million from the Horizon Bridge. And this seems to be kind of a recurring theme. It's obviously been part of crypto. This whole hacking narrative has played out time and time. You saw it with Ronin, you've seen it with the original Ethereum. It's just happened. This is part of the ecosystem. What are we to make of these hacks and could these potentially start to pile up in the house of cards Completely falls over. Marcel, what's your takes on a lot of these hacks and how it's affecting the ecosystem?

Well, but decentralized finance, there's too many risks for the regular investor, even for the professional investor. So there's like the, beside the smart contracts that can have failures, there's the MEV which is bribing the miner so you can have your transactions sent out first. So there are too many risks that can cause what happened to Harmony. So having said that, I think that if, if you are a regular retail investor and you want to use defi application to get some yield, you should spread out between different blockchains and between different decentralized applications. There's just too many risks. But as for the whoever stole the hacker of the hundred million, I'm not really sure he can convert it to fiat money without getting caught.

That brings up a good point because Jordan, I want to hear your expertise on. For those who don't know what Tornado Cash is, this hacker had sent about 20 million over to Tornado Cash so that he could then mix that together. Jordan, can you break down what is Tornado Cash and then kind of piggyback on what Marcel said. Why can this hacker potentially not convert it to fiat? At the end of the day, I've.

Actually never used Tornado Cash, but it's just a mixer where you send it and they kind of send the mix eth around so it's harder to determine where the eth came from. But again, we're getting into smart contracts technology. Eventually they're going to be able to determine every transaction from point A to point B to all the way to point zone, what, what wallets they've been in, where the money came from. So we were talking about this before. It's going to be really hard, especially as time progresses and the security gets even better. The hacks are always going to happen just because that, that comes along with code and the inability to really audit it really well and but people are going to have a hard time kind of cashing out these cryptos in the future just because there's so many firms starting to rise that are monitoring different wallets that have been identified as part of a hacker network and whatnot. So like being, especially trying to convert out from cryptos into fiat currencies is probably going to become eventually like impossible for most people. And even just trying to transfer your crypto or change it for other places or other, on even decentralized exchanges, they can kind of freeze exchanges or blacklist wallets now. So as time progresses, it's going to get even more and more difficult for these hackers to be able to cash out their funds. But it's always going to kind of part of be a system just because smart contracts encoding will always, most likely always have mistakes because that's just the nature of reality.

Here's an idea though. What if the hacker just send it to a crypto debit card and then not necessarily converts it to fiat.

I'm sure I don't know those two centralized entities. And that's all, that's a pain point. That's a point of pressure. That's where the regulators can come and be like, stop, because that's like it. Yeah, that's true. You're getting into the, the traditional system and they, they got that locked down.

Sam, how would you navigate these, these hacks? And are bridges always going to be the most exposed areas when it comes to these types of hacks?

Yeah, for me it's just another day in crypto. Right. $100 million a year, $100 million there, $500 million. I think we've went to the tens of billions of dollars. If you take a look at, over the past year, year and a half, you know, as we were talking about earlier, I'm not quite sure how these hackers are able to actually make use of the funds unless they're looking at some kind of ransom. But, but then, I mean, on the blockchain, moving things around is not the best for, you know, privacy and illicit behavior. So I'm not quite sure how they make use of it, but apparently they are. You know, that's why you're starting to see, you know, with D5 especially the emergence of a new type of risk. And the bridge is one of them. So I just stay away from that entire ecosystem. To be completely honest. I hold spot and if I like a project, I'll look into it. But these bridges, these different, you know, wormholes are all very, very risky. And as Jordan mentioned, you know, the, the Nature of code and blockchain and technology in general is that these vulnerabilities will always be there. But with such a patchy work and such a nascent industry, it seems like exposure to these types of events is. Is a lot more prevalent.

Exactly right. You got to know your risk when it comes to a lot of these things. So great thoughts from all of our experts here. You heard it first. Go ahead and ask your questions if you have them in the chat today. We're going to be looking at that while we go through a couple of our other segments today. Next though, we have our quick crypto tips for this week. We're going to talk about trading plans. So Danilo, let's go ahead and jump having and setting up your trading plan. All right. Well, you wouldn't launch into a crypto investing without a plan, right? Well, if you do this, it's time to stop. Your success as an investor comes from proper trade planning. And your crypto trading plan is your anchor. As you invest, it enables you to stay detached from emotions that could set in. We all know those euphoric or depressive emotions that we felt over the last six months. A good trading plan should cover your overall investment objectives, the cryptocurrencies you want to trade, and the market conditions for trading such currencies. Through this, you'll be able to control your risk to a reasonable extent and have a more prepared approach to the market. Such approaches include your entry and exit time and price, trade volume, and even assessing your profit taking areas. So trade plan empowers the focus trader by providing several benefits from risk reduction to easing away fear and guarding yourself against greed. A good crypto trading plan may not guarantee success, but it certainly makes a significant contribution toward it. One last tip is that set your profit targets when you are making trades. Do not get greedy. That is big. The one of the biggest tips I have for you today. And thank you for listening to the crypto tips segment. Drop your Twitter handle in the chat so that you could win $50 to our CT store and you can get all the swag you want for the 50 bucks. What is that? You need a mouse pad? You need a coffee cup? We got you CT store. All right. Marcel is going to be diving in to some heavy topics about Bitcoin and Ethereum this week and he's going to be talking about contagion. Not the movie, but the contagion inside the ecosystem of crypto. So Marcel, let's go ahead and have you take it away. Danilo, fire it up.

So Contagion is the word of the week in crypto. After all, who could expect Celsius, Voyager, Blockfi and Babel Finance would all face severe insolvency risks after the three arrows capital implosion. So the issue with centralized credit lending firms is the complete lack of transparency. We don't know and will likely never have a clear understanding of what were the risks to Terra Luna, to grail scale, JBTC arbitrage and to uncollateralized loans to a single counterparty. But first, who are those giant trading firms such as Alameda Research, giant Capital Cumberland and are they really necessary? So, otherwise known as market makers, those high frequency traders are the backbone of exchanges. So do you really think that Binance, OKX and Coinbase have millions of clients buying and selling 400 coins every day, every time, at all times? No, no, of course that's not true. And even in traditional markets such as stock markets and bonds, there are official market makers. So those are hired by the issuer itself, meaning the stock or the bond or the bank behind the ipo. So apart from lower trading fees, those entities have access to loans credits in the forms of the bond and stock. So it's much easier for them to trade high volumes. But in short, market makers are hired to boost the trading volume no matter how it gets done. So let me share you a screen with you, just a sec. Okay Danilo, so whenever you hear, 70% of trading volume comes from institutionals like Binance CEO said, Binance US CEO said, or 99% of all Bitcoin volume and transaction comes from institutions. So what they're really saying is that the market makers are doing the volume. So yes, there could be some regular Companies such as MicroStrategy eventually buying or selling Bitcoin, but they do not compose the majority of the trading volume. Thank you Danilo. Now back to the contagion risk. Is there a considerable risk that other market making firms can go down if the markets continue to tank? Yes, there is a risk, but it's unlikely because too much money was already drained from the market. So those firms are either requiring additional collateral, so more margin deposited, or simply divesting, taking money away from crypto markets. And to prove that point, we're going to check out the chart with the amount of stablecoins issued. Danilo, can you share my screen please? So that's the sum of all the stablecoins that exist, including tether, USDC, DAI, whatever. So the peak before the Luna collapse was 180 billion and it's now at $148 billion. So it's a 33 billion dollar decrease. So even if we exclude the Terra UST, there's another 15 billion that has gone missing, mostly on debtor. So those firms withdraw money that they could salvage. Thank you, Danilo. So contagion risk. Sure it exists, but leverage players have already been wiped out. They got liquidated, they lost money. You're out of the market. So whoever survived this 74, 74 price crash from the all time high of 60, $69,000 to the bottom of $17,000, will likely handle some additional turbos. So I don't think it's a risk right now.

So are you saying that we could potentially go lower than this 20k mark that we're at right now?

Yes. There's a risk of the traditional market, traditional economies going down because of a crisis or a lack of confidence in the US dollar itself. So yes, we could revisit 14k, 15k. It's possible, but it won't because of the contagion risk. It's because we are highly correlated to risk assets right now, but not because of contagion.

Seems like we should have been having this contagion conversation a couple months ago, like when Tara first fell. Like, it seems like the contagion's already spread. And it's also kind of highlighted that we weren't all that decentralized. Look how many funds were invested in 3ac. That's not decentralization. I don't know. There's a lot of issues that we need to work out and not not adopt so many traditional finance things in the crypto because it's causing problems. Same kind of problems that we're seeing in the wider economy.

Exactly, right?

Yeah, yeah, yeah. Part of it. It's because of the market makers itself. The exchanges can only exist if those market makers are there providing liquidity. So once you remove one or two of the biggest market makers, it's going to take two months or six months for other ones to step in and re establish liquidity and the market gets enough confidence to go back to its levels.

Fascinating times. Any questions for Marcel? All right, we're going to take a look at the chat. Looks like we did have one question from Moon Sahib and he wants to know, is it time to buy? And how would you approach this question?

Well, Moon, if you need the money in the next six months, don't do it. If you're gonna have to withdraw no matter what in three to six months, don't do it. If you can handle the pain for at least 12 months, at least a year without looking at the screen at the price, it's time to buy. That's my opinion.

Yeah. This is not financial advice but to me this is a decent spot to start doing some dollar cost averaging. Dca just because it's, it's a. Nobody can pick the bottom. Well one person gets the bottom obviously, but that's a really tricky game. It causes a lot of stress. If you want to, you want to take the least stress approach a accept that like we could go down lower except buy assets that you think have a really good long term viability and then just kind of set it on autopilot and don't think about it too much, don't focus on the price. Just kind of, yeah, put that on all up high like I said, because that's how, that's how you make money in crypto. You, you buy in, in the crypto winners and you, you sell during the crypto tops which like nobody did last year. But it's, that's just part of the learning curve, man. It's a tough game.

A lot of long term bag holders.

Time to sell every like is this a good time to buy? But we never had the conversation is this a good time to sell? Because we're always so damn bullish at the top. So like, like you, like you you said earlier Benton trading plan, before you even buy an asset, pick a sell point and stick to it. That way the emotions can kind of stay out of it.

Exactly. Right now I do have a burning question though with you know, title of the show today is, you know, bitcoin bull trap in play or are we heading to 30k? I want to kick this to Sam first. What, what would a bull trap look like right now and what is your take, you know, short term here over the next six months where we could potentially head.

Well, I don't even think we've seen the condition for a bull trap in the sense that what we hit 21,000. I mean I think a bull trap would have required us to maybe retest 25, get everyone excited again before we nuke back down lower. I do expect prices to go lower. I do expect another leg down right now. I think 16 to 17000 is a possibility. It could go lower than that. But again, in terms of picking the bottom, I don't know what that's going to be. If you think that bitcoin is a long term investment, then buying at these levels is probably a good idea despite the fact that it can go lower. So I don't really see any kind of bullish indicators anytime soon. So if we have a spike toward 25,000, which I thought was a distinct possibility, that'll probably set us up for one more leg lower. But I guess, I guess we'll find out. Right now the only thing we've gotten is $21,000, which that's not even enough to entice, you know, even, even the onchain guys who are always bullish, seemingly. So that's, that's my take on it.

And I, I want to pull up a quick chart. So, Danilo, if you wouldn't mind just pulling up a chart for me here on the screen share, I want to quickly note here, this is. We've had a 55 drawdown from the top here. This was back in April 2021. Then we had 52% drawdown from November 21st to January 22nd. Then from this local high in March this year, we've then drawn down another nearly 62%. This trend line here, if this is going to hold up, I, I think this blue line is probably what we're going to see. We're going to see chop. Maybe we bounce up to a 25k. But it tells me, I think we're probably going to get rejected and go lower. I put this, this horizontal right here, around 14k for me. That's the mark I'm kind of keeping an eye on. I think we consolidate and chop. Then there's one last drop down and I'm kind of monitoring that 14k ish level. But I want to hear, Jordan, your take on how you're kind of looking at things, what levels you're looking at. How are you approaching trades right now, if at all, are you just sitting on the sidelines?

I'm not doing too much trading more, trying to accumulate some certain tokens on a dip, like chainlink or something. But I think I wrote an article yesterday and some, some analysts were pointing to $15,000 if we go to like, the historical norm and the 85 pullbacks from the top. That would put us at like a 10k Bitcoin, which is terrifying, right? Like, is that gonna happen? I don't know. And like, we can't, can't focus on the crypto bubble. Like, crypto, we find ourselves in the crypto bubble and we forget that, like, there's this whole other world out there where there's like wars and, and inflation and interest rates that are also like, unknowns. So, like, yeah, we could get a pop up in the crypto market, some really good news and then all of a sudden something happens in the greater economy that just tanks every market. There's no way crypto can, can kind of fight against that. So like I said, that's why dollar cost averaging is the least stress. Like you accept that you, you're going to be purchasing assets that might go down, but in the long term they're going to go up and then don't think about it because in the short term there ain't no telling what's going to happen in the wider world or in the crypto world. So just kind of put your head down and choose a plan and stick with it and go outside. Enjoy the sun when you can.

Marcel, I got a question from the chat here, says Marcel mentioned that price is influenced by institutions, but what about the whole planet, traders and users? What percent do they consist of? Is that a ballpark figure? You might be able to kind of like, you know, point this one person sharply in the right direction. What are your thoughts here?

Okay, so what, why is, what I mentioned is that the institutionals, the market makers and those large entities such as three arrows gen capital and Alameda research, they have like 99% of the volume. But that doesn't mean they are the price makers. Yes, they can, I don't know, sell $50 million at market and crash the price 10%. But then other buyers will step in and say, well, 20k, 70k is too low, we're gonna be making buys here and this guy don't, don't have unlimited ammunition. So yes, they are price makers for the short term, but in the long term, so if you, if you select daily candles or weekly candles, we shouldn't, you shouldn't have to stress out about market makers. But if you are trading 15 minute candles, 5 minute candles, they're gonna eat you up, they're gonna steal your lunch because they have deep pockets and can withstand pain for much longer than you can. So your trading and should be excellent. Have a strategy, do some dca and if you reach certain level, you don't have to sell 100% of your share. But you can say, well, I'm going to reduce 50% of my position and sit back for a couple of months and stop doing dca. So what Jordan said is the best strategy during stress and volatile markets.

Excellent insights. So we are not in a bull trap. It appears that, you know, I think the consensus is we're going to be consolidating or, or chopping here, you know, for the Foreseeable future with a potential drop. So I want to get into the Markets Pro because we talked about trading, having a plan. What better way to have a plan than to be on Markets Pro. So we had two coins that you should have been watching this week. So, Danielle, let's go ahead and jump into our Markets Pro segment for this week. Let's do it. All right. Well, the first token that we had watch on our radar this week was brought to us by a newsquake alert. This was the coin trading under the ticker LDO, LIDO and preceding significant price pumps. On June 20, a news quake hit Markets Pro subscribers with an alert that Huobi Global would list this token following announcement. The price soared from 51 cents all the way up to 67 cents. That's an increase of 31.7%. That is a flavor blaster of gains. And you just love to see that when you get the newsquake alerts and you're able to trade an action that you have a plan with markets Pro and you stick to it. When you hear those newsquake alerts go off on your phone, you action that trade and you get in on these types of trades. 30% gains in these types of markets. I don't know who would not take that. So next up, we have the token auto trading under the ticker auto. This one was alerted by the vortex score, which is a comparison between its current market conditions and social conditions in the past. A score of 80 or higher is considered commonly bullish. 30 or lower is historically bearish. So the vortex algorithm picked up an historically bullish pattern for auto several times this week, with the green vortex square flashing ahead of positive price movement. After the first high score, the price rose from $192 to a peak of $264 and an increase of about 37%. A few days later, a second score came when the price was $214.99. Traders who bought at this price level and held until the peak would have seen an increase of 22%. A third score briefly lit up when the price was $233. Traders buying here would have still benefited a 12.99% increase. That is the trifecta, folks. That's what we call that. So the vortex score is a valuable tool. And if you were trading on auto this week, you saw not just three massive pumps, but you saw those vortex scores light up green across the board. And that's why you have to get started with Markets Pro. I keep telling you all, every Week, get your free month, try it out. Get your game plan together and try out Markets Pro. Help us help you. That's the old motto at Markets Pro. We thank you for the Markets Pro segment this week. And don't forget, drop your Twitter handle in the chat. We're giving away $50 to the coin Telegraph store today. Guys, we're going to wrap this thing up today with some closing thoughts and then we will select our winner for today. Jordan, let's hear your closing thoughts for today's show.

Well, it's kind of be similar to what I usually say, like crypto winners suck. Man, this is going to be rough. Try and find your inner peace. Go outside, enjoy some sun. Don't just stare at your block folio or the crypto markets because like there's some bad news that's going on in the wider world. So like we're like the whole world's in for maybe a rough patch. So try and find whatever kind of relaxation and fun you can. And if you got a spare funds that you don't need for your life, you can maybe like start accumulating some cryptos if that's your, if that's your game. But yeah, just, just take a deep breath and relax.

Always such wise advice. Sam, any closing thoughts for today?

Yeah, I think most of us should be, you know, concerned about cash flow, making sure our lifestyles are funded so that we don't have to dip into our spot holdings. That aspect of your life. Keep that held. That's what I would do. I'm not going to be selling my bitcoin at these levels. Kind of ridiculous. Whatever mistakes were made, were made. Whatever market manipulation happened, happened. Whatever correlation we had with equities that we didn't think was going to be so strong happened. Now it's just time to kind of focus on moving forward, focus on cash flow. If you have a steady cash flow in life, you don't have to worry so much about how your equities are, how your assets are performing if you have a decent time horizon. So that's all I could say really about it.

Excellent advice. And Marcel?

Well, Benton, I'll advise the viewers not to be an investor and a trader at the same time. So either you decide, yeah, I'm gonna do some short term traders, or you're gonna say, well, I'm gonna buy those coins and hold them for two or more years. You cannot shift in and out of those strategies. You cannot mix those strategies. Yes, you could have a portfolio for long term, but you're not going to trade those coins. So either you're an investor or a trader. Don't be shifting from one to another every time the markets goes up or down.

You heard it here first, folks. Great advice from all of our experts on the show today. We appreciate everyone for tuning in to this episode of the Market Report. Don't forget to turn on the notification and like and subscribe Cointelegraph here on YouTube. This is the Market Report and we're here 12:00 Eastern on Tuesdays. We appreciate everyone for joining us. And until next time, we will see you next Tuesday.

Sam.