During the early European session, the global cryptocurrency market capitalization fell 1.39% to $957.46 billion.
With a 24-hour volume of $3.11 billion, DeFi accounted for 5.55% of the entire cryptocurrency market. This represents 92.59% of the total 24-hour volume in the cryptocurrency market, or $51.82 billion.
Investors in the United States factored in the surprisingly positive non-farm payroll and unemployment figures during the European session. As a result of this news, the leading cryptocurrency, Bitcoin, tumbled 3.13% for the day.
While the second most valuable cryptocurrency, Ethereum, ended up falling 2.92% to trade at $1,334.
US Non-farm Payroll & Unemployment Rate
US Non-farm Payroll: According to the US Bureau of Labor Statistics, total non-farm payroll employment increased by 263K in September, while economists predicted a gain of 248K jobs from the previous month. Even though the 263K figure is the lowest monthly increase since April 2021, it is still higher than the 250K figure that was expected by the market.
With increased interest rates and costs, the economy began to slow in the eighth month of the year, resulting in a reduction from the average of 439K in the first eight months to the current reading of 220K in September.
Unemployment Rate: On the other hand, the US labor market conditions in the world’s largest economy are closer to the best. The unemployment rate in the United States fell to 3.5% in September 2022, matching July’s 29-month low and coming in below market predictions of 3.75%.
In September, the number of people without jobs fell by 261K to 5.75 million, while the number of people with jobs rose by 204K to 158.9 million. Participation in the labor force decreased slightly from 62.4% to 62.3%.
What Impact Could Positive Labor Market Data Have on the Cryptocurrency Market?
This latest set of data comes as the US central bank, the Federal Reserve, has been working for months to reduce inflation, which is currently hovering near its highest annual rate in more than 40 years. It is widely anticipated that the central bank will continue its rate-hiking program, which has already resulted in five rate increases this year totaling 3%, through at least the end of the year.
Fed officials, including Chairman Jerome Powell, have stated they anticipate the rate hikes will continue to pressure the markets. In September, members of the Federal Open Market Committee said that they anticipate the unemployment rate will climb to 4.4% in 2023 and remain at that level for the foreseeable future before declining to 4%.
To keep up the momentum of its rate hikes, the Fed is largely expected to implement another 0.75 percentage point increase in rates in November.
The markets have priced in an 82% chance of a three-quarter point shift in response to the employment data, and they anticipate another half-point increase in December, bringing the federal funds rate to a range of 4.25%–4.5%.
Hence, it negatively impacts the cryptocurrency market and may drive a downward trend in the Bitcoin price.
Bitcoin Price Prediction & Technical Outlook
The current Bitcoin price is $19,619.66, and the 24-hour trading volume is $31 billion. Bitcoin has fallen by 3.13% in the last 24 hours.
Bitcoin Price – Source: Coinmarketcap
In my previous Bitcoin update, I mentioned that the BTC/USD pair had formed a descending triangle pattern, extending significant resistance near $20,478.
During the early Asian session, Bitcoin failed to break above the trendline resistance and fell below the 50-day moving average, providing immediate support near the psychological level of $20,000.
Bitcoin Price Chart – Source: Tradingview
Bitcoin is forming a “three black crows” candlestick pattern on the daily timeframe, indicating the beginning of a downtrend. Therefore, Bitcoin may continue to fall toward an immediate support level of $18,970, and a break below this level may extend selling until $18,415.
Ethereum Price Prediction & Technical Outlook
The current price of Ethereum is $1,334.28, with a 24-hour trading volume of $10.24 billion. In the last 24 hours, Ethereum has dropped 2.92%.
Ethereum Price – Source: Coinmarketcap
The ETH/USD pair is trading exactly in line with our Asian session report, remaining in the same narrow trading range of $1,300 to $1,400. ETH has failed to break out of the range amid a stronger-than-expected US employment report.
On the daily timeframe, an ascending triangle remains intact, extending resistance near $1,400 and providing immediate support near $1,300.
Ethereum Price Chart – Source: Tradingview
Leading technical indicators such as the RSI and MACD are now showing divergence, with the RSI signaling selling while remaining below 50 and the MACD indicating a buying trend. The 50-day moving average, on the other hand, indicates a selling bias in Ethereum.
That said, a bearish breakout of the $1,300 level could push ETH further down to the $1,225 or $1,110 mark.
New Altcoin News
Despite a bearish trend in cryptocurrency, a few altcoins are making headlines. A new protocol, IMPT, is being developed to assist businesses and individuals in tracking and controlling their carbon footprint. IMPT is currently on presale, raising over $1.6 million in only four days.
On the other hand, the meme coin, Tamadoge, which has gained more than 220% from its all-time low of $0.01683, is also in the spotlight. The ultra-rare Tamadoge Pets are now available on OpenSea.
The market is currently in a news-driven environment where the prices of cryptocurrencies have been determined by news agenda rather than fundamentals.
Bitfinex analysts have warned crypto investors to be cautious as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.
In the latest Bitfinex Alpha report, experts deemed the market’s reaction this week critical, especially as supply alleviated over the weekend could return when traditional markets open.
“No Man’s Land”
Since Saturday, bitcoin has risen almost 10% from $57,600 to $63,000, closing last week in the green. The asset has surged above the 125-day range low of $60,200, which it broke through earlier this month after news of the German government’s massive BTC selling hit the market.
Market sentiment began to improve after reports that wallets linked to the German government were almost empty. However, the positive sentiment may not be sustained for long as the BTC the German authorities moved to trading desks and exchanges are yet to be sold.
While the supply from Germany appears to have been factored into bitcoin’s market price, Bitfinex analysts believe the end of selling pressure depends on how the involved trading desks execute their trades in the coming days.
Although the shift in sentiment underscores the market’s capacity to integrate new information and adjust expectations quickly, analysts think the market’s reaction over the first two trading days of the week cannot be overlooked for two reasons.
First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends are usually favorable for markets, especially on Saturdays when supply pressure seems to subside.
“We are now in no man’s land until we get clear resolution above or below this level,” the analysts said.
A News-Driven Environment
Besides the potential resistance level and three-month weekend trading pattern, the market is currently in a news-driven environment, where the prices of cryptocurrencies have been determined by news agendas rather than fundamentals.
Since selling pressure concerns are not yet completely obsolete due to upcoming Mt Gox creditor distributions, Bitfinex analysts expect such headlines to continue to have some impact on price movements. As such, the analysts urged investors to exercise caution in their trading strategies.
BlackRock’s IBIT led with $117.25 million in inflows on July 15, also being the most traded Bitcoin ETF.
The US spot Bitcoin ETFs recorded a daily net inflow of $301 million on July 15th. This extended their winning streak to seven consecutive days amidst a broader market recovery.
None of the ETFs recorded outflows for the day.
Bitcoin ETFs Rake in $16.11B in Net Inflows Since Jan
According to the data compiled by SoSoValue, BlackRock’s IBIT, the top spot Bitcoin ETF by net asset value, recorded the largest net inflows of the day at $117.25 million. IBIT was also the most actively traded Bitcoin ETF on Monday, with a volume of $1.24 billion. Ark Invest and 21Shares’ ARKB came in close behind with net inflows of $117.19 million.
Fidelity’s FBTC experienced net inflows of $36.15 million on Monday, while Bitwise’s BITB saw $15.24 million in inflows. VanEck’s HODL, Invesco and Galaxy Digital’s BTCO, and Franklin Templeton’s EZBC funds also recorded net inflows. Meanwhile, Grayscale’s GBTC and other ETFs, such as Valkyrie’s BRRR, WisdomTree’s BTCW, and Hashdex’s DEFI, registered no flows for the day.
A total of $2.26 billion was traded on Monday. The trading volume for these ETFs was less than in March when it exceeded $8 billion on some days. Meanwhile, these funds have collectively attracted $16.11 billion in net inflow since their January launch.
What’s Next For Bitcoin?
Earlier this month, bitcoin’s price decline was mainly due to fears of massive selling pressure from Mt. Gox and the German government’s BTC sales.
But the assassination attempt on pro-crypto former US President and presumptive Republican candidate Donald Trump at Saturday’s rally seemed to spark a recovery in the world’s largest digital asset, and experts are bullish on the asset’s price trajectory going forward. Bitcoin surged more than 9% over the past week and was currently trading slightly below $64,000.
Veteran trader Peter Brandt discussed bitcoin’s price outlook, suggesting a potential major rally. He referred to a pattern he terms “Hump->Slump->Bump->Dump->Pump” and highlighted that the July 5 double top attempt was a bear trap, confirmed by the July 13 close. He sees a likely continued upward trend but warned that a close below $56,000 would negate this bullish view.
“Bitcoin $BTC could be unfolding its often-repeated Hump…Slump…Bump…Dump…Pump chart construction. Jul 5 attempt at the double top was a bear trap, confirmed by Jul 13 close. Most likely scenario now is that bears are trapped. Close below $56k negates this interpretation”
PeckShield alert reveals LI.FI’s protocol vulnerability is similar to a March 2022 attack, with the same bug recurring.
The decentralized finance (DeFi) platform LI.FI protocol has suffered an exploit amounting to over $8 million.
Cyvers Alerts reported detecting suspicious transactions within the LI.FI cross-chain transaction aggregator.
LI.FI Issues Warning After $8 Million Exploit
LI.FI confirmed the breach in a statement on July 16 via X: “Please do not interact with any http://LI.FI powered applications for now! We’re investigating a potential exploit.” The team clarified that users who did not set infinite approval are not at risk, emphasizing that only those who manually set infinite approvals seem to be affected.
According to Cyvers Alerts, more than $8 million in user funds have been stolen, with the majority being stablecoins. According to on-chain data, the hacker’s wallet holds 1,715 Ether (ETH) valued at $5.8 million and USDC, USDT, and DAI stablecoins.
Cyvers Alerts advised users to revoke relevant authorizations immediately, noting that the attacker is actively converting USDC and USDT into ETH.
Crypto security firm Decurity provided insights into the exploit, stating that it involves the LI.FI bridge. “The root cause is a possibility of an arbitrary call with user-controlled data via depositToGasZipERC20() in GasZipFacet, which was deployed 5 days ago,” Decurity explained on X.
“In general, the risks behind routers, cross-chain swaps, etc. are about token approvals. Raw native assets like (unwrapped) ETH are safe from these kinds of hacks b/c they don’t have approvals as an option. Most users & wallets also no longer do “infinite approvals” which gives a smart contract total control on removing any amount of their tokens. It’s important to understand which tokens you’re approving to which contracts.
This dashboard looks for all transactions of a user that intersects Lifi. Not all of these transactions indicate risk- but you can see how, broadly, integrations & layers of tech (like how Metamask bridge uses Lifi on BSC) can complicate how users do or don’t put their assets at risk. Revoke Cash is the most well known approval manager app.
But it’s also good security practice to simply rotate your address. New addresses start with 0 approvals, so starting fresh by moving your tokens to a fresh address is another good security practice.” – commented Carlos Mercado, Data Scientist at Flipside Crypto.
Recent Exploit Mirrors March 2022 Attack
Further analysis by PeckShield alert revealed that the vulnerability is similar to a previous attack on LI.FI’s protocol that occurred on March 20, 2022. That incident saw a bad actor exploit LI.FI’s smart contract, specifically the swapping feature, before bridging.
The attacker manipulated the system to call token contracts directly within their contract’s context, making users who had given infinite approval vulnerable. This exploit resulted in the theft of approximately 205 ETH from 29 wallets, affecting tokens such as USDC, MATIC, RPL, GNO, USDT, MVI, AUDIO, AAVE, JRT, and DAI.
“The bug is basically the same. Are we learning anything from the past lesson(s)?” PeckShield Alert said in a July 16 X post.
Following the 2022 incident, LI.FI disabled all swap methods in its smart contract and worked on developing a fix to prevent future vulnerabilities. However, the recurrence of a similar exploit raises concerns about the platform’s security measures and whether adequate steps were taken to address the vulnerabilities identified in the previous breach.
LI.FI is a liquidity aggregation protocol that allows users to trade across various blockchains, venues, and bridges.
