2024-01-05 19:34:12
Chaos erupted in the crypto market on Wednesday, causing the immediate liquidation of nearly $500 million worth of positions. The liquidations occurred when Bitcoin BTC Price dropped 10% from the $45,000 range to $40,750 in no time. Similarly, Ethereum ETH Price fell from $2,300 to $2,100, losing 10% of its value.
Could insiders have been aware of the impending crypto market crash?
The week’s most important cryptocurrency news in one place
Bitcoin turned 15 this week. January 3rd is Bitcoin’s birthday. This is the day when Bitcoin’s pseudonymous founder, Satoshi Nakamoto, mined the genesis, i.e. the first block.
Michael Saylor, the director of MicroStrategy, announced to the US Securities and Exchange Commission (SEC) that he will sell 315,000 shares, which he received from the company in April 2014. It will sell a total of $216 million worth of stock over the next 4 months. We also know from a previous announcement that he will use the money from this to buy Bitcoin once more.
Orbit Bridge stopped, 82 million stolen by online attackers. The stolen coins were laundered through the Tornado Cash cryptomixer. The Orbit Chain team has warned that any X account that claims to pay out the stolen funds to the affected parties is a fraud. Users are requested to only interact with the official protocol account.
A Binance and OKX would remove Monero from trading pairs. THE Binance in his view, other privacy coins may suffer a similar fate, along with some high-volatility and risky cryptocurrencies.
Right time, right place
A whale may have made a $78 million profit by selling Bitcoins well-timed. A cryptocurrency whale transferred a significant amount of Bitcoin to the Binance crypto exchange hours before the market crash, as on-chain data shows. THE Lookonchain According to data provided by According to transaction data, Lookonchain identified that the profit from the transaction brought the whale $78 million, a 126% increase.
Circle’s USDC coin, a dollar-pegged stablecoin, fell below its usual $1 level three times on Wednesday following a major market-wide sell-off.
Plus or minus 10% for Bitcoin is slowly happening on a daily basis
After a strong start at the beginning of the year, the BTC price BTC Price plummeted in a matter of minutes on Wednesday.
Bitcoin started the year impressively, as it jumped more than three thousand on the second day of the year and reached the highest price level since April 2022, almost 46,000 dollars.
However, the surge came to an abrupt end. There are a few possible reasons behind sudden death.
- Earlier on Wednesday, news emerged that the SEC may, contrary to expectations, reject all current ETF applications. The alleged reason would be very prosaic: they lack basic guidance on how ETFs can avoid market manipulation. However, this is just a rumor for now. Bloomberg’s chief ETF expert dismissed the rumours, saying they saw no signs of such developments.
- Another possible reason behind the fall is the miners’ profit realization. Because they need to cover costs as well as make a profit, miners often benefit from rapid price increases. They then sell some of their Bitcoin stock. Major mining companies have dumped a lot of Bitcoin on exchanges in recent days amid the $46,000 price surge. Thus, the sale was expected to a certain extent.
- Since Bitcoin is a relatively new financial instrument operating on the free market, its exchange rate is often quite volatile. There are no days off, weekends, or holidays in trading, which attracts speculators and those looking to get rich quick. And this often leads to an extra rapid increase in the exchange rate, followed by a correction, as we probably saw just now.
Although the bitcoin price dipped below $42,000 two days ago, the cryptocurrency has since recovered. And on Friday, trading rose above $44,000.
Meanwhile, Bitcoin’s market capitalization has already grown to over $860 billion. Its dominance over altcoins also jumped to 51.6% in the post-correction rally. The indicator dropped below 50% a few days ago, which drove some capital into the altcoin market.
The Bitcoin ETF is around our necks – will crypto investment never be the same?
In the coming days, the official approval or rejection of spot bitcoin ETFs (or possibly postponement of the decision) is expected. A spot bitcoin ETF would hold bitcoin assets directly. In contrast, the ProShares Bitcoin Strategy ETF (BITO), the first bitcoin-linked ETF in the United States, invests in bitcoin futures contracts. Spot bitcoin ETFs are expected to create new and greater opportunities for institutions to invest in cryptocurrencies and other digital assets.
“We are at the beginning of the crypto sector’s first institutional bull market – and the momentum of spot ETFs is a key part of the trend,” said Diogo Monica, president and co-founder of Anchorage Digital.
Anchora helps institutional investors buy, store and manage digital assets.
There are currently thirteen instant exchange-traded bitcoin fund submissions awaiting approval from the Securities and Exchange Commission (SEC). The window for the SEC to approve ETF filings is from January 5th to January 10th. These dates are the same as the ETF filings filed by Cathie Woods’ ARK Invest – but the SEC may decide to accept multiple filings at once despite their later deadlines. However, there is a decision to be made regarding the ARK ETF.
The data show that the increase in institutional demand has already started. According to Deribit, there has been a remarkable upswing in institutional trading activity since the end of October. According to Nasdaq’s 2022 survey of 500 financial advisors, 72% of firms would be more likely to invest client assets in cryptocurrencies if spot ETF products were available in the United States.
The spot bitcoin ETF simplifies the entry of traditional market participants who are slower to join the ecosystem. Trillions in institutional capital are currently sitting on the sidelines.
Relationship between ETF approval and Bitcoin exchange rate
Despite the institutional potential, analysts are divided on how the approval of the ETF will affect the price of bitcoin.
The SEC-regulated spot Bitcoin ETF is the first of its kind in the digital asset ecosystem, so the industry is closely monitoring prices. The volume and speed of ETF capital inflows will likely be a key factor in the short- and long-term evolution of bitcoin’s price.
VanEck estimates the bitcoin spot market will generate $310 million in inflows following approval of the spot bitcoin ETF in its early days. An additional capital inflow of $750 million is predicted within one quarter. The in the first two years and up to 40.4 billion dollars of fresh capital are expected to enter the Bitcoin market, with which the cryptocurrency can take a significant market share from the gold market.
It appears that this kind of capital inflow into the newly approved spot bitcoin ETFs might boost the price of bitcoin in the long term.
Even so, the price of bitcoin may fall in response to the first wave of approvals. Thanks to the investors’ short-term profit realization.
But this only works in the short term. Cathie Wood, founder of ARK Invest, believes institutions were hesitant to get involved in the crypto sector until now before the SEC approved the spot bitcoin ETF.
“All we need is for trillions of dollars of institutional assets to allocate 0.1 or 0.2% to an ETF. That is enough to move the price significantly.” Wood said.
The graph points in the direction of $57,000
Crypto analyst Ali Martinez has identified an ascending parallel channel as the guiding pattern behind the Bitcoin price action since September 2023. According to his analysis, the price of Bitcoin has shown a consistent pattern in line with this pattern so far.
The technical formation of the parallel rising channel suggests that the price of BTC is moving within the framework of a channel characterized by an upper and lower limit, as can be seen in the figure.
BTC may experience further price movement within the defined limits if the ascending parallel channel pattern persists.
The price is expected to move towards the ceiling, which is currently hovering around $48,000. However, the price of Bitcoin is expected to meet resistance at this level and approach the lower limit, which might stab all the way to $34,000.
After the retracement, a rebound towards the upper limit is expected, which may bring the price of Bitcoin to around $57,000 in the near future.
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