Canadian crypto mining firm Bitfarms sold roughly $62 million worth of Bitcoin (BTC) in June, using the proceeds from the sale to reduce its debt.

In a Tuesday announcement, Bitfarms said it had sold 3,000 Bitcoin in the last seven days, roughly 47% of the crypto mining firm’s roughly 6,349 BTC holdings. According to the company, it will use the funds from the BTC sales — $62 million — to “rebalance its indebtedness by reducing its BTC-backed credit facility with Galaxy Digital.” The sold crypto seemingly included 1,500 BTC Bitfarms used to reduce its credit facility from $100 million to $66 million in June, bringing its debt down to $38 million at the time of publication.

According to Bitfarms chief financial officer Jeff Lucas, the mining firm is “no longer HODLing” all the Bitcoin it produces daily — roughly 14 BTC — instead choosing to “take action to enhance liquidity and to de-leverage and strengthen” the company’s balance sheet. Bitfarms said it also closed a $37-million deal with NYDIG to finance equipment, bringing the firm’s liquidity to roughly $100 million.

“While we remain bullish on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow our business in anticipation of improved mining economics,” said Lucas. “We believe that selling a portion of our BTC holdings and daily production as a source of liquidity is the best and least expensive method in the current market environment.”

Bitfarms held a reported 4,300 BTC as of January, worth roughly $177 million when the crypto asset was at a price of more than $41,000. Founder and CEO Emiliano Grodzki said at the time the company’s strategy was “to accumulate the most Bitcoin for the lowest cost and in the fastest amount of time.”

The move from Bitfarms came amid extreme price volatility among major cryptocurrencies including BTC and Ether (ETH). On Saturday, the price of Bitcoin dropped under $18,000 for the first time since December 2020 but has since returned to more than $21,000 at the time of publication. The ETH price experienced a similar drop to under $1,000 on Saturday — an 18-month low — before rising to more than $1,200 on Tuesday.

The price of CEL, the native token of Celsius Network, has almost quadrupled since June 19 in what appears to be a frenzy stirred up by day traders.

CEL price short squeeze

CEL's price rose from $0.67 on June 19 to $1.59 on June 21, a 180% spike compared to the crypto market's 12.37% rise in the same period.

Notably, the rally started after PlanC, an independent market analyst, announced a $20 million bounty for anyone who could prove that the Celsius Network suffered a coordinated attack at the hands of a third party, which prompted the crypto lending firm to suspend withdrawals last week.

CEL/USD daily price chart. Source: TradingView

The announcement led to a frenzy on Twitter, with many accounts placing the hashtag #CelShortSqueeze in their bio and thus reflecting their intentions to target investors who bet that CEL's price would fall.

The hashtag was trending higher in the United States on Twitter. Meanwhile, internet queries for the keyword, "CEL short squeeze" also reached a perfect score of 100 between June 12 and J 18, according to data tracked by Google Trends. 

Internet queries for 'CEL Short Squeeze.' Source: Google Trends

The "trending" hashtag and keyword hint that day traders bought CEL tokens en masse, thus pushing its price upward.

Thus, investors who were "short," i.e., those who borrowed and sold the token in anticipation of buying it back at a lower price, insteadhad to purchase it back at a higher price to "cover" their bearish positions.

As a result, the so-called "short squeeze" proved successful, resulting in a massive CEL rally.

The event served as a reminder of the popular GameStock stock frenzy in January 2021, wherein an army of Redditors profited by damaging the short positions of Melvin Capitalcausing billions of dollars of losses.

Insolvency risks sustain

Celsius Network, which held over $20 billion worth of digital assets under management last year, now risks becoming an insolvent organization. The reason is its inability to pay excessively high yields to clients (as much as 18%) on their crypto deposits.

In May, Celsius had only $12 billion worth of assets, almost half of what it held at the beginning of 2022, according to its website. The firm stopped disclosing its assets under management afterward.

CEL, a native currency inside the Celsius ecosystem for earning interest income and paying back debts, remains under downside pressure as it trades almost 84% below its peak level of $8 in April 2021.

The CEL/USD pair now eyes a retest of $1.95 as its range resistance level, according to the Fibonacci retracement graph shown below. 

CEL/USD weekly price chart. Source: TradingView

While a successful break above the level could have CEL test $3.11 as its next upside target, a pullback, on the other hand, could drive the price lower toward $0.34, the current range support, down 73% from June 21's price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Professional services giant Deloitte is getting increasingly serious about Bitcoin (BTC) amid the ongoing market downturn, setting up a major initiative to promote BTC adoption.

Deloitte has partnered with the Bitcoin-focused financial services firm, New York Digital Investment Group (NYDIG), to help companies of all sizes implement digital assets.

According to a joint announcement on Monday, NYDIG and Deloitte are launching a strategic alliance to create a centralized approach for clients seeking advice to adopt Bitcoin products and services.

The companies will work together to enable blockchain and digital asset-based services across multiple areas involving Bitcoin-related products, including banking, loyalty and rewards programs, employee benefits and others.

According to the announcement, global financial institutions and banks have been facing an increasing demand to provide trusted exposure to Bitcoin. The alliance between Deloitte and NYDIG aims to help accelerate adoption while ensuring compliance, Deloitte's digital assets banking regulatory practice lead Richard Rosenthal said, adding:

"The future of financial services will center around the use of digital assets, and we are focused on advising our clients on ways to engage in a regulated and compliant way.”

The news comes months after NYDIG launched a benefits program allowing employees to convert a portion of their paychecks into Bitcoin in February 2022. The company previously raised $1 billion in equity investment in late 2021, bringing NYDIG’s valuation to roughly $7 billion.

One of the “Big Four” accounting firms, Deloitte has been growing more interested in cryptocurrencies like Bitcoin in recent years, actively exploring the role of Bitcoin and other digital assets in the global economy.

In June, Deloitte published a survey that found that 75% of retailers in the United States planned to accept crypto or stablecoin payments within the next two years. Deloitte published another study in March highlighting the potential of Bitcoin as a base to create a cheaper and faster ecosystem for electronic fiat or central bank digital currencies.

Bitcoin's (BTC) month-to-date chart is very bearish, and the sub-$18,000 level seen over the weekend was the lowest price seen since December 2020. Bulls' current hope depends on turning $20,000 to support, but derivatives metrics tell a completely different story as professional traders are still extremely skeptical.

BTC-USD 12-hour price at Kraken. Source: TradingView

It’s important to remember that the S&P 500 index dropped 11% in June, and even multi-billion dollar companies like Netflix, PayPal and Caesars Entertainment have corrected with 71%, 61% and 57% losses, respectively.

The U.S. Federal Open Market Committee raised its benchmark interest rate by 75 basis points on June 15, and Federal Reserve Chairman Jerome Powell hinted that more aggressive tightening could be in store as the monetary authority continues to struggle to curb inflation. However, investors and analysts fear this move will increase the recession risk. According to a Bank of America note to clients issued on June 17:

“Our worst fears around the Fed have been confirmed: they fell way behind the curve and are now playing a dangerous game of catch up.”

Furthermore, according to analysts at global investment bank JPMorgan Chase, the record-high total stablecoin market share within crypto is “pointing to oversold conditions and significant upside for crypto markets from here.” According to the analysts, the lower percentage of stablecoins in the total crypto market capitalization is associated with a limited crypto potential.

Currently, crypto investors face mixed sentiment between recession fears and optimism toward the $20,000 support gaining strength, as stablecoins could eventually flow into Bitcoin and other cryptocurrencies. For this reason, analysis of derivatives data is valuable in understanding whether investors are pricing higher odds of a downturn.

The Bitcoin futures premium turns negative for the first time in a year

Retail traders usually avoid quarterly futures due to their price difference from spot markets, but they are professional traders' preferred instruments because they avoid the perpetual fluctuation of contracts' funding rate.

These fixed-month contracts usually trade at a slight premium to spot markets because investors demand more money to withhold the settlement. This situation is not exclusive to crypto markets. Consequently, futures should trade at a 5%-to-12% annualized premium in healthy markets.

Bitcoin 3-month futures’ annualized premium. Source: Laevitas

Bitcoin's futures premium failed to break above the 5% neutral threshold, while the Bitcoin price firmly held the $29,000 support until June 11. Whenever this indicator fades or turns negative, this is an alarming, bearish red flag signaling a situation is known as backwardation.

To exclude externalities specific to the futures instrument, traders must also analyze the Bitcoin options markets. For example, the 25% delta skew shows when Bitcoin market makers and arbitrage desks are overcharging for upside or downside protection.

In bullish markets, options investors give higher odds for a price pump, causing the skew indicator to fall below -12%. On the other hand, a market's generalized panic induces a 12% or higher positive skew.

Bitcoin 30-day options 25% delta skew: Source: Laevitas

The 30-day delta skew peaked at 36% on June 18, the highest-ever record and typical of extremely bearish markets. Apparently, the 18% Bitcoin price increase since the $17,580 bottom was sufficient enough to reinstall some confidence in derivatives traders. While the 25% skew indicator remains unfavorable for pricing downside risks, at least it no longer sits at the levels which reflect extreme aversion.

Analysts expect “maximum damage” ahead

Some metrics suggest that Bitcoin may have bottomed on June 18, especially since the $20,000 support has gained strength. On the other hand, market analyst Mike Alfred made it clear that, in his opinion, “Bitcoin is not done liquidating large players. They will take it down to a level that will cause the maximum damage to the most overexposed players like Celsius.”

Until traders have a better view of the contagion risk from the Terra ecosystem implosion, the possible insolvency of CelsiusThree Arrows Capital, the odds of another Bitcoin price crash are high.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Last week, a WeChat post published by the Shanghai Fengxian Court began circulating in crypto circles with regards to its recent ruling on a car sale in May 2019 made using digital currency. At the time, the buyer, identified only as Mr. Huang, signed a sales contract to purchase a 2019 Audi AL6 for CNY 409,800 ($59.477) in exchange for the consideration of 1,281 Unihash (UNIH) tokens with an undisclosed car dealership in Shanghai. Per the original contract, the seller was to deliver the car to Huang within three months' time.

According to the Shanghai Fengxian Court, Mr. Huang paid 1,281 UNIH on the date of the contract signing but did not receive the car within the specified duration nor afterwards. As a result, Mr. Huang took the seller to court, demanding the delivery of the vehicle and the payment of 0.66% daily interest of the transaction amount in damages for everyday that the car went undelivered beyond the original deadline.

The case took over three years before a verdict was reached this June. Citing regulations in September 2017 that evolved into what is known now as China's cryptocurrency ban, the Shanghai Fengxian Court said that digital assets "cannot and should not be used as a currency for circulation in the markets," and that the use of digital tokens such as UNIH in lieu of fiat money as consideration in everyday contracts was in breach of respective regulation that overrides such contracts themselves. Therefore, the sales contract was ruled to be null and void. The buyer was neither granted damages, delivery of the car, nor a refund of his 1,281 UNIH. 

It's unclear as to how the seller agreed to a conversion rate of 1 UNIH = CNY 320 as stipulated in the original contract in the first place. Unihash was supposedly a digital payment token developed for e-commerce in 2018 and was only available to private investors with no public initial coin offering. Shortly after its launch, allegations quickly surfaced on Chinese social media that labeled the project to be a "scam" and that its token metrics, as well as company history, had allegedly been grossly inflated to solicit investors. 

Currently, the project appears to be abandoned with no link to socials, no market listing, and no further development activity. Moreover, the firm behind UNIH did not accomplish any of its goals listed in its original whitepaper. One such promise made to investors in the document included: "What can be certain is that the Unihash token can appear on several exchanges by Q4 2019." 

The ongoing bear market on cryptocurrency markets is too harmful to industry lenders, but the concept of crypto lending can still survive the bloodbath, according to some industry experts.

Cryptocurrency lending is a type of crypto service that allows borrowers to use their crypto assets as collateral to get loans in fiat currencies like the United States dollar or stablecoins like Tether (USDT). The practice allows users to get money without having to sell their coins and repay the loan at a later date.

According to Josef Tětek, Bitcoin (BTC) analyst at the crypto cold wallet firm Trezor, crypto firms that run their business on a fractional-reserve basis are exposed to greater risks during bear markets.

In traditional banking, the fractional-reserve model is a system where only a fraction of deposits is backed by actual cash. Crypto lending companies are “definitely running a fractional-reserve business” to provide yields to their customers, according to Tětek.

“Exchanges and custodians that run on a fractional-reserve model are playing with fire. This practice may work fine during bull markets when such companies experience net inflows and grow their customer base,” the executive stated.

According to Tětek, sharp declines in cryptocurrency prices are more bearable for crypto businesses that do not provide lending services and do not leverage users’ deposits. This allows them to survive the domino effect of falling prices and companies going under.

“If you throw in leverage — trading with borrowed funds — the losses are often much more painful, especially with sudden price moves,” Tětek noted.

In order to survive the ongoing crypto lending crisis, cryptocurrency lenders need to solve a major issue related to short-term assets and short-term liabilities, the analyst argued, stating:

“Crypto lending as a concept can survive this crisis, but the sector needs to get rid of the maturity mismatch problem: if someone else borrowed my assets and I get a yield as a return, then I have to wait for the borrower to repay before I can withdraw.”

Tětek went on to say that liquidity issues are inevitable for lenders that promise full liquidity on assets that are lent out at the same time.

“Every participant needs to respect the risks involved and the fact that there are no bailouts in the space, so if a borrower fails to repay, a lender has to accept their loss. There is no risk-free yield, and often the yield is not worth the risks,” he added.

The crypto lending industry has been facing one of its biggest historical crises amid cryptocurrency prices dropping to 2020 levels, with the total market cap shrinking by more than $1 trillion since the beginning of the year.

Celsius, a major global crypto lending platform, suspended all withdrawals on its platform on June 13, citing “extreme market conditions” as its native CEL token lost about 50% of its value. Hong Kong-based asset manager and crypto lender Babel Finance also temporarily suspended redemptions and withdrawals from its products on June 17 due to “unusual liquidity pressures.”

Bancor, a decentralized finance (DeFi) protocol often credited as the pioneer of the DeFi space, paused its impairment loss protection (ILP) function on Sunday, citing “hostile” market conditions.

In a blog post on Monday, the DeFi protocol noted that the ILP pause is a temporary measure to protect the protocol and the users. The blog post read:

“The temporary measure to pause IL protection should give the protocol some room to breathe and recover. While we wait for markets to stabilize, we are working to get IL protection reactivated as soon as possible.”

When a user gives liquidity to a liquidity pool, the ratio of their deposited assets changes at a later moment, potentially leaving investors with more of the lower value token, this is known as impermanent loss.

Bancor’s protocol-owned liquidity was used to fund ILP: the protocol staked its native token BNT in pools and used the collected fees to reimburse users for any temporary loss. The process effectively burned excess BNT when generated trading fees are more than the cost of impermanent loss on a given stake.

The ILP function was first introduced in 2020 and was upgraded with more refinements with the launch of Bancor 3 in the second week of May this year. However, the recent market turmoil leading to a 70% decline from the top for most of the cryptocurrencies had an adverse effect on the DeFi market as well, leading to several critical changes made by DeFi protocols.

While Bancor hopes the pause in the IRL would help the protocol take a breather, many in the crypto community were unhappy with the decision. Cobie, host of crypto podcast Uponly Tv, criticized Bancor for pausing the IRL when liquidity providers need it the most.

Hasu, a research collaborator at Web3 investment-focused firm Paradigm, dug a little deeper into the impairment loss protection claims made by Bancor and how it could lead to another “spiral collapse.”

Hasu questioned the strategy behind the ILP compensations and claimed Bancor’s shell game of IL hiding is collapsing.  He added:

“They print new BNT to compensate underwater LPs and call it ‘IL protection’. The cost is transferred to BNT holders via inflation, which causes further IL to all other BNT pairs, and leads to further inflation. A death spiral.”

He went on to add that the failure of the ILP program is visible from the price action of their native token BNT over the past two weeks, where decentralized exchange (DEX) tokens such as SushiSwap (Sushi) and Uniswap (Uni) had dropped by nearly 20% while BNT has registered a 66% decline in the same time frame owing to high inflation caused by ILP compensations.

Bye-bye bear market blues; welcome to the network, Bitcoin (BTC) believers. Over the past week, the number of Bitcoin wallet addresses containing one BTC or more increased by 13,091. The total number of “wholecoiners” surged to 865,254.

The number of whole coiners has rocketed during the downward price action, highlighted by the hockey stick growth on the Glassnode graph:

Since the 10th June the orange line has jumped. Source: Glassnode

Christian Ander, the founder of the Swedish Bitcoin exchange BT.CX told Cointelegraph that "This is good for the ecosystem that it’s growing from the ground up because want the economy to be bottom up.” Ander continued:

“People have a strong belief in the future of the Bitcoin network and the value of the currency.”

Over the past 10 days, since the May 10th market slump to $30,000, over 14,000 whole coiners have joined the network. As there will only ever be 21 million Bitcoin mined, these wallet addresses will own one twentyone millionth of all Bitcoin.

At an approximate price of $20,000 per Bitcoin, the sharp increase in the number of whole coiners would suggest that retail–or “plebs” as they are affectionately known–are buying Bitcoin as fast as their incomes will allow. The number of addresses adding 0.1 BTC ($2,000) or more has also begun a parabolic run over the past 10 days.

In contrast, the number of wallets containing more than 100 BTC has dropped by 136 over the same period. By inference, "whale" wallets (large BTC wallet addresses) could be unloading their bags.

When Satoshi Nakamoto mined the first Bitcoin on 9th January, 2009, the Gini coefficient was 1, i.e income inequality on the network was the highest it has ever been. The Gini coefficient, developed by statistician Corrado Gini, represents income inequality or wealth inequality within a social group. In Bitcoin, it can be mapped onto wallet addresses. 

As soon as Hal Finney, the first Bitcoin believer began mining and receiving Bitcoin, the gini coefficient dropped from 1. It has trended lower and lower ever since, indicating that the wealth distribution on the Bitcoin network is becoming fairer and fairer.

As for Ander, he told Cointelegraph that he "stacked some more SATs yesterday!"