Daily News | Bitcoin Faces Decline Despite Positive Job Report as Global Equities Rally Raises Liquidity Concerns

Crypto Daily Digest: Bitcoin’s Slide, Atomic Wallet Breach, and Republican Bill Spark Discussion

Bitcoin experienced a slight decline over the weekend despite concerns over the U.S. debt ceiling and a strong jobs report. The cryptocurrency traded at around $27,150, down approximately 0.6%, following fluctuations related to inflation. Other major cryptocurrencies, such as Ether, also exhibited similar movements with a slight decrease of 0.89%. Conversely, smaller DeFi protocols like Lido, Synapse, and PancakeSwap saw significant gains. In the U.S. stock market, the Nasdaq Composite and S&P 500 showed positive reactions to the jobs report, rising by 1.4% and 1% respectively. The U.S. central bank faces a challenging decision on interest rates in June, taking into account the strong job market and upcoming economic releases.

In a separate incident, Atomic Wallet users have reportedly lost over $35 million worth of crypto assets since June 2, with the largest losses totaling $17 million. The cause of the attack is under investigation, but reports indicate that users have suffered token losses, erased transaction histories, and complete theft of crypto portfolios. An independent investigation by ZachXBT, an on-chain sleuth, discovered that the largest victim lost $7.95 million in Tether (USDT), and the total losses are expected to exceed $50 million. Atomic Wallet, a noncustodial-decentralized wallet with a user base of over 5 million worldwide, is actively working with exchanges and blockchain analytics firms to trace and block the stolen funds. This incident adds to the growing list of crypto hacks, emphasizing the need for improved security measures within the cryptocurrency industry.

Meanwhile, U.S. Republican chairs of the House Financial Services Committee and House Agriculture Committee have introduced a draft bill proposing a regulatory framework for digital assets. The bill suggests a transition path for tokens that begin as securities to be regulated as commodities. It aims to facilitate discussions among Republicans, Democrats, regulators, the private sector, and the Senate. Tokens classified as investment contracts would remain under the jurisdiction of the Securities and Exchange Commission (SEC), while those qualifying as commodities would be overseen by the Commodity Futures Trading Commission (CFTC). The bill considers factors such as decentralization of blockchain networks in determining an asset’s classification. The SEC would have the authority to approve or object to a token issuer’s certification of decentralization. SEC Chair Gary Gensler has previously expressed that most digital assets are securities and has questioned the need for additional regulations, while the crypto industry has called for clearer rules. The draft bill also covers platform registration, dually-registered exchanges, and mandates studies on nonfungible tokens (NFTs) and decentralized finance (DeFi).

Bitcoin (BTC) $27,118 (-0.01%) - Neutral Outlook

Overview:

• Closest hourly support zone: 26990 - 26895
• Closest hourly resistance zone: 27150 - 27262
• Key Level: 27538 (4H Uptrust Action Area)

Hourly Resistance zones

1. 27150 - 27262
2. 27343 - 27408
3. 27538 - 27690

Hourly Support zones

1. 26990 - 26895
2. 26780 - 26612
3. 26500 - 26382

Macro: Global Equities Rally Raises Liquidity Concerns, Treasury Notes Pose Market Risks

Global equities reached a one-year high, driving the Asian stock market higher on Monday. The positive sentiment was fueled by the S&P 500 nearing a bull market and a surge in oil prices following Saudi Arabia’s commitment to reducing production. Equity futures for Japan, Australia, and Hong Kong all rose by more than 1%, indicating a positive start for the region’s shares.

While S&P 500 futures remained stable in Asia, Nasdaq 100 futures experienced a slight dip, and the dollar showed a modest strengthening. The Federal Reserve’s decision on interest rates was influenced by a mixed jobs report, which revealed signs of a labor market slowdown despite an increase in hiring. This data supported the argument put forth by Federal Reserve Chair Jerome Powell and other officials that they should take more time to assess incoming data before considering rate hikes.

As stocks soared, Wall Street’s fear gauge, the VIX, dropped to levels not seen since before the pandemic, reflecting a more optimistic market sentiment.

Despite the overall positive momentum, the market still faces challenges. One such challenge is the potential impact of the significant issuance of Treasury notes, amounting to approximately $1 trillion, as the US Department replenishes its general account following a debt-limit deal. This influx of Treasury notes could result in a drain of liquidity from financial markets, posing a risk to market stability.