On-chain data shows the Bitcoin supply in profit has plunged following the latest crash in the asset’s price towards the $65,000 level.
Bitcoin Supply In Profit Is Now Down To Around 90%
As analyst James Van Straten pointed out in a post on X, around 10% of the BTC supply is now in a state of loss. The on-chain indicator of interest here is the “Percent Supply in Profit,” which tracks the percentage of the total circulating Bitcoin supply holding an unrealized gain.
This metric works by going through the blockchain history of each coin in circulation to see the price at which it was last transferred. Assuming that this previous transaction involved a change of hands, the price at its moment would serve as the cost basis for the coin.
The coins with a cost basis that is less than the current spot price of the cryptocurrency would naturally be considered to be holding a profit, and as such, they would be counted under the supply in profit.
The Percent Supply in Profit adds up all such coins and calculates what part of the total supply they make up for. The opposite metric, the Percent Supply in Loss, adds up the coins not satisfying this condition.
Since the total circulating supply must add up to 100%, the Percent Supply in Loss can be deduced from the Percent Supply in Profit by subtracting its value from 100.
Now, here is a chart that shows the trend in the Percent Supply in Profit for Bitcoin over the last few months:
Looks like the value of the metric has taken a plunge in recent days | Source: @jvs_btc on X
As displayed in the above graph, the Bitcoin Percent Supply in Profit has seen a sharp drop recently as the cryptocurrency price has gone through a significant drawdown.
The indicator’s value has dropped to around the 90% mark, which means that about 10% of the supply is currently carrying a loss. The chart shows that the last time the metric touched these levels was back on 22 March. Interestingly, the asset also found its bottom around then.
Earlier, the Percent Supply In Profit had pushed towards the 100% mark, which was a natural consequence of the price setting a new all-time high (ATH), since at fresh highs, all of the supply must be out of the red.
Generally, the investors in profit are more likely to sell their coins, so if many come into gains, the possibility of a mass selloff rises. Due to this reason, high levels of the Percent Supply In Profit have often led to tops.
Similarly, bottoms become more likely when investor profitability levels drop relatively low. The current value of 90% is still quite high, but this isn’t unusual during bull runs, as there is strong demand and ATHs are being explored.
The fact that the profitability has cooled off compared to earlier levels may be constructive for the rally’s chances to see a continuation, just like it did last month.
BTC Price
At the time of writing, Bitcoin has been trading at around the $65,700 level, down more than 5% over the past week.
The price of the asset seems to have been tumbling down over the past couple of days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Glassnode.com, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
An analyst has revealed a simple strategy for buying and selling Bitcoin using the historical pattern followed by two BTC on-chain indicators.
These Bitcoin On-Chain Indicators Have Followed A Specific Pattern Historically
In a post on X, CryptoQuant author Axel Adler Jr. discussed a simple strategy for timing buying and selling moves for Bitcoin. The strategy is based on the trend witnessed historically in two BTC on-chain metrics: the Net Unrealized Loss (NUL) and Net Unrealized Profit (NUP).
As their names suggest, these indicators keep track of the total amount of unrealized loss and unrealized profit that the investors are currently carrying.
These metrics work by going through the transaction history of each coin in circulation to see what price it was last transacted at. Assuming that the last transfer of each coin was the last time it changed hands, the price at its instant would act as its current cost basis.
If the previous price for any coin was less than the current spot price of the cryptocurrency, then that coin is currently carrying a profit. The NUP subtracts the two to calculate the exact unrealized gain for the coin.
Similarly, the NUL does the same for coins that have their cost basis above the latest value of the asset. These indicators then sum up this value for the entire supply and divide the sum by the current market cap.
Now, first, here is a chart shared by the analyst for the NUL that reveals a pattern that the metric has been following throughout the history of Bitcoin:
The value of the metric seems to have been heading down in recent days | Source: @AxelAdlerJr on X
The Bitcoin NUL appears to have historically broken above the 0.5 level when the asset’s price has traded around bear market lows. According to Axel, the indicator in this territory would be the moment to buy more.
Recently, the metric has been floating around the zero mark, meaning that there has been any unrealized loss being held by the investors. This makes sense, as the cryptocurrency has set new all-time highs (ATHs). Naturally, 100% of the supply goes into profit when an ATH is set.
Similar to the pattern in the NUL, the NUP has been above the 0.7 level during major tops in the past, suggesting that it may be a good opportunity to sell when the indicator is in this zone.
Looks like the value of the indicator has been climbing up recently | Source: @AxelAdlerJr on X
As is visible in the chart, the NUP has been marching up with the recent rally in Bitcoin. Still, so far, the indicator hasn’t broken above the seemingly important 0.7 level, implying that the market may not yet be in an overheated place where selling would be ideal, at least according to this strategy.
The graphs of the two indicators, though, show that neither of them flagged the exact tops or bottoms in the asset. It’s especially prominent in the data of the NUP, where the metric signaled “sell” during tops that were merely halfway through the bull run.
That said, buying during the points flagged by the NUL and then selling at the overheated NUP values would have historically been profitable. In that sense, this would indeed be a “simple” strategy for the asset.
It remains to be seen, though, whether these patterns will continue to hold in the current Bitcoin cycle as well.
BTC Price
At the time of writing, Bitcoin is trading at around $69,400, down 2% over the past 24 hours.
The price of the asset appears to have been moving sideways recently | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Bitcoin has been trading around $70,000 after a major retracement that dragged the leading crypto asset below $63,000 briefly. Despite a few flat trading sessions, data reveals that a pump could be in the offing that could further trigger a new wave of buying pressure.
CryptoQuant’s latest analysis reveals a remarkable surge in USDC deposits, surpassing $1.4 billion on Coinbase.
$1.4 Billion USDC Inflow
Stablecoins serve as a bridge between traditional finance and the digital assets market, facilitating seamless transactions. An influx of USDC into the market can signify an increased willingness to purchase because it is pegged to the US dollar, providing stability and liquidity within the crypto ecosystem.
When there’s a surge in USDC entering the market, it typically means that investors or traders are converting their fiat currency (such as US dollars) into USDC to participate in trading. This influx of USDC can indicate confidence in the market and a readiness to deploy capital into various assets, including Bitcoin.
It is also important to note that a similar deposit occurred only once before, on January 9th, 2023, which preceded a notable price surge from a cycle low of $16,800, representing a crucial bottom.
Such a significant deposit could signal a similar turning point, potentially impacting the current market cycle positively, according to the CryptoQuant analyst ‘maartunn’ in his latest update.
“Several hours ago, the largest influx of USDC ever recorded occurred, with over $1.4 billion of USDC deposited on Coinbase. This sizable deposit signals potentially significant buying pressure, as these stablecoins can be utilized to purchase bitcoin.”
Increased Demand for Exposure to Bitcoin
Further validating the bullish momentum is the continued inflows into spot Bitcoin ETFs after flipping positive from five consecutive days of outflows earlier this month.
Additionally, the foray of new participants, such as Hashdex, into the already crowded space to offer such funds to investors, both big and small, depicts a continued demand.
Earlier CryptoQuant report also revealed the sharp rise in monthly demand for Bitcoin from 40,000 to over 213,000 BTC in 2024. As demand surged, the supply of the crypto asset, on the other hand, decreased to 2.7 million, marking the lowest liquidity levels.
Besides the increase in ETF holdings, large-scale investors, known as whales, also greatly influenced this trend.
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Following a week of net outflows, the spot Bitcoin ETF market has rebounded with impressive net inflows this week, highlighting a growing investor confidence in Bitcoin and its associated financial products. This week’s market activities have shown a remarkable reversal from the previous 5-day net outflow streak, with Tuesday witnessing a substantial net inflow of $480 million, followed by $243.5 million on Wednesday.
Yesterday’s resurgence in investor interest was notably boosted by Blackrock’s massive inflow of $323.8 million, effectively offsetting Grayscale GBTC’s $299.8 million outflows. Moreover, Ark Invest’s ARKB reported its best day yet, with $200 million in inflows, despite Fidelity experiencing its worst day with a mere $1.5 million in outflows. Nevertheless, Fidelity managed to bounce back with significant inflows of $261 million and $279 million on Monday and Tuesday, respectively.
Yesterday’s ETF flows were positive for $243.5 million.
Blackrock finally woke up again for $323.8 million completely cancelling out $GBTC‘s $299.8 million outflows.
Ark had their best day yet with $200 million. Fidelity had its worst day with $1.5 million.
However, according to Bitwise Chief Investment Officer (CIO) Matt Hougan, this is just the mere beginning of what is to come in the upcoming months. Hougan’s commentary, part of his weekly memo to investment professionals, sheds light on the current market dynamics and the colossal potential that lies ahead. “1% Down; 99% to Go,” Hougan wrote, highlighting the nascent yet promising journey of Bitcoin ETFs.
Lately, the market has been characterized by its volatility, with Bitcoin’s price oscillating between $60,000 and $70,000. Hougan advises a calm and long-term perspective amidst this fluctuation, especially as the sector anticipates the upcoming Bitcoin halving around April 20, the approval of Bitcoin ETFs on national account platforms, and the soon-to-come completion of due diligence by various investment committees.
Despite the current sideways movement of Bitcoin’s price, Hougan remains bullish about its long-term trajectory. “Bitcoin is in a raging bull market,” he asserts, noting a nearly 300% increase over the past 15 months. The launch of spot Bitcoin ETFs in January has marked a significant milestone, opening up the Bitcoin market to investment professionals on an unprecedented scale.
Hougan’s analysis points to a profound shift as global wealth managers, who collectively control over $100 trillion, begin to explore investments in the “digital gold.” He suggests that even a conservative allocation of 1% of their portfolios to Bitcoin could result in approximately $1 trillion of inflows into the space.
This perspective is backed by historical data showing that even a 2.5% allocation to Bitcoin has enhanced the risk-adjusted returns of traditional 60/40 portfolios in every three-year period of Bitcoin’s history.
The recent inflows into Bitcoin ETFs, though impressive, are seen by Hougan as merely the beginning of a much larger movement. “We are all excited about the $12 billion that has flowed into ETFs since January. And it is exciting: Collectively, the most successful ETF launch of all time..But imagine global wealth managers allocate just 1% of their portfolios to bitcoin on average,” Hougan elaborates, emphasizing the scale of potential growth awaiting the cryptocurrency market. He concludes:
Think about the implications. […] A 1% allocation across the board would mean ~$1 trillion of inflows into the space. Against this, $12 billion is barely a down payment. 1% down, 99% to go.
Featured image created with DALL·E, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Government exhibit in the case against former FTX CEO Sam Bankman-Fried.
Source: SDNY
While prosecutors are requesting that FTX founder Sam Bankman-Fried spend 40 to 50 years in prison for his crimes, the defense team is urging the judge to consider a sentence that’s roughly 90% shorter.
Bankman-Fried’s fate will be announced in Manhattan on Thursday morning by Judge Lewis Kaplan, who presided over the monthlong trial in November. Bankman-Fried was found guilty of seven charges tied to the collapse of crypto exchange FTX and the roughly $10 billion of customer deposits that went missing.
The hope for Bankman-Fried’s team is that Kaplan takes into account the increased likelihood that FTX customers will be able to recoup most, if not all, of the money they lost when the exchange spiraled into bankruptcy in 2022.
Lawyers representing the bankruptcy estate of FTX told a judge in Delaware last month that they expect to fully repay customers and creditors with legitimate claims. Bankruptcy attorney Andrew Dietderich, who works with FTX’s new leadership team, said “there is still a great amount of work and risk” ahead in getting all the money back to clients, but that the team has a “strategy to achieve it.”
It was a potentially dramatic change in the narrative surrounding FTX’s collapse 16 months ago. At the time, it was believed that many thousands of customers — reportedly up to a million — collectively lost billions of dollars that would be unrecoverable due to the lightly regulated and unsecured nature of the crypto industry. Those clients faced the real possibility that the vast majority of their money had evaporated, just like in other cases of hedge funds and lenders that failed during the so-called crypto winter of 2022.
Much of the government’s successful case against Bankman-Fried hinged on convincing the jury that the defendant had stolen billions of dollars worth of FTX customer money to make risky bets at Alameda.
For months, as FTX has wound its way through a Delaware bankruptcy court, new CEO John Ray III and his team of restructuring advisors have been clawing back cash, luxury property, and crypto, as well as tracking down missing assets. They’ve already collected more than $7 billion, and that doesn’t include valuables like $26 million in gifts and property to Bankman-Fried’s parents, or the $700 million handed over to K5 Global and founder Michael Kives, who invested FTX cash in companies like SpaceX that have since increased in value.
Bankman-Fried’s defense team has asked the court for a sentence in the range of 63 to 78 months. Beyond the fact that he’s a “first time, nonviolent offender,” attorneys for the FTX founder largely lean on the argument that Bankman-Fried’s risky bets paid off and the bankruptcy estate expects to fully repay FTX customers.
It’s a story that Bankman-Fried was trying to sell as he awaited trial.
“FTX US remains fully solvent,” Bankman-Fried wrote in a Substack post on Jan. 12, 2023, while he was under house arrest at his parents’ home in Palo Alto, California. He said the exchange “should be able to return all customers’ funds.”
One key asset in FTX’s portfolio is its stake in artificial intelligence startup Anthropic. Late last week, FTX’s bankruptcy estate struck a deal with a consortium of buyers to sell the majority of its Anthropic holdings for $884 million. Under Bankman-Fried’s leadership, FTX invested $500 million in the startup in 2021 before the boom in generative AI. The company’s valuation hit $18 billion in December 2023, which would put FTX’s roughly 8% stake at about $1.4 billion.
During Bankman-Fried’s trial, Kaplan denied the defense’s request that it be permitted to say that FTX’s investment in Anthropic was a smart bet.
Renato Mariotti, a former prosecutor in the U.S. Justice Department’s Securities and Commodities Fraud Section, told CNBC that the more money the estate is able to recover for clients, the better for Bankman-Fried.
“If true, that is relevant and the judge is required to consider victim restitution at sentencing,” Mariotti said. “But even if victims weren’t harmed, he is still guilty of the offense.”
Mariotti said he expects the sentence to fall somewhere in between what the prosecution and defense are asking, predicting it will be “at least 20 to 25 years.”
Joseph Bankman and Barbara Fried arrive for the trial of their son, former FTX Chief Executive Sam Bankman-Fried, who is facing fraud charges over the collapse of the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 26, 2023.
Brendan Mcdermid | Reuters
In addition to the Anthropic gains, FTX customers can look at the rebound in crypto for signs of optimism. Bitcoin is trading at close to $70,000, up from less than $17,000 at the time of FTX’s collapse.
Solana fits into a category of so-called “Sam coins,” a group that also includes Serum, a token created and promoted by FTX and Alameda. Solana saw a huge run-up of late, climbing more than eightfold since the end of September.
Meanwhile, FTX’s bitcoin stash, which was worth $560 million at the time of the September report, when the coin was trading at around $25,000, has seen a significant uptick as well. Bitcoin’s value has increased by around 180% since then.
For FTX customers, being made whole, according to a judge’s ruling, means getting the cash equivalent of what their crypto was worth in November 2022. In other words, they’re not seeing any of the upside of FTX’s investments or being given virtual coins that would allow them to cash out at higher valuations.
Braden Perry, who was once a senior trial lawyer for the Commodity Futures Trading Commission, told CNBC that Bankman-Fried faces at least 70 months in prison based on his base level offense, number of victims, sophisticated means and leadership role — even if there’s no monetary loss to the victims. The massive losses that were originally expected would suggest 30 years to life, Perry added.
Wladimir van der Laan – the former lead maintainer of Bitcoin Core – is mulling a comeback to Bitcoin development after the high-profile industry lawsuit, COPA v. Wright, came to a close earlier this month.
In a blog post last Friday, the Bitcoin pioneer expressed relief and disbelief over the prosecutors’ victory, which saw London high court judge Edward James Mellor declare that self-styled Bitcoin creator Craig S. Wright is not, in fact, Satoshi Nakamoto, nor the author of Bitcoin’s whitepaper.
Freedom From Craig Wright’s Pressure
In agreement with the ruling, van der Laan asserted that Wright is an outright fraud and “awful person” who used his fake identity to harass others and destroy lives. Wright’s absence, he said, could make Bitcoin development a less stressful affair.
“Now that this is over, I might become more active in bitcoin development again. No promises though,” van der Laan wrote.
“The last few years have been difficult for me, for this reason and others,” he continued. “But it absolutely helps to have this out of the way.”
Over several years, Wright used his influence to launch numerous lawsuits against anyone who challenged his claim to Bitcoin’s invention. That included defamation suits against high-profile internet personalities who labeled him a fraud, and cases against Bitcoin developers accusing them of violating his so-called intellectual property.
Such actions prompted a lawsuit from the Crypto Open Patent Alliance (COPA), whose aim was to settle Wright’s claims as fraudulent and prevent him from harassing other developers in the future. COPA is backed by several prominent crypto firms including Coinbase, Block, and MicroStrategy.
Van der Laan said the court’s ruling was a win for both Bitcoin and open-source development at large.
“It’s good to remind copyright trolls that even if they have enormous financial backing and the willingness to forge pile after pile of documents, they will lose,” he added.
Who is Wladimir van der Laan?
Wladimir van der Laan was Bitcoin’s longest-standing lead maintainer – the developer who would cryptographically sign all new Bitcoin software releases to verify their authenticity. He is also one of the most prolific contributors to the Bitcoin code of all time, responsible for over 1800 commits as of late 2022.
Van der Laan’s “reign” as lead maintainer began in April 2014 and ended in September 2021, after which Bitcoin Core adopted a more decentralized model of multiple maintainers.
He is known for leading Bitcoin through tumultuous and controversial periods in its development journey, including the so-called “blocksize wars” that culminated in the Bitcoin Cash (BCH) Bitcoin hard fork.
“Wladimir’s judgment and adherence to the principles of open source, decentralized software development were widely recognized as being spot-on,” said Cory Klippsten, CEO of Swan Bitcoin, in a message to CryptoPotato.
“Bitcoin went through several critical milestones during that period and we are all very fortunate to have had him there through those events,” he added.
The lead maintainer who preceded van der Laan, Gavin Andresen, had his administrator access to Bitcoin’s code revoked by the former after he advocated for larger Bitcoin blocks during the heat of the debate. Andresen is also known for once supporting Craig Wright, though he later revoked that support.
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Willy Woo, an on-chain analyst, believes the Bitcoin upswing is far from over. Citing the development in the Bitcoin Macro Oscillator and the possibility of traditional finance jumping on the bandwagon (FOMO), the odds of BTC rallying in at least two strong legs up in the coming session could not be discounted.
On-Chain Data Signals More Upside For Bitcoin
In a post on X, Woo remains confident about what lies ahead for the world’s most valuable cryptocurrency. Based on on-chain development, there are indicators that the coin may firmly push higher, breaking above the current lull.
Bitcoin remains mostly range-bound when writing, trading within a tight zone capped by $73,800 on the upper end and $69,000 as immediate support. Even with analysts being confident of what lies ahead, the coin has failed to overcome strong selling momentum from sellers to breach all-time highs in a buy-trend continuation.
From how the coin is set up, the current sideways movement may be accumulation or distribution, depending on the breakout direction. For instance, any upswing above $72,400 might spur demand, lifting the coin towards $73,800. Conversely, losses below $69,000 and the middle BB might see BTC slump to March 5 lows or even lower.
Will TradFi FOMO And Short Squeeze Lift BTC?
Even with the slowdown in upside momentum, Woo says there is strong potential for “another solid leg up.” The analyst also added that there could be two surges if TradFi investors “FOMO” into Bitcoin. In the 2017 bull run, the rally to $20,000 was primarily due to retailers jumping in and FOMOing on the coin.
With spot Bitcoin exchange-traded funds (ETFs) available in the United States, speculation is that more institutions and high-net-worth individuals are buying the coin. If BTC rips higher, breaking $74,000, more inflow will likely be into the multiple spot Bitcoin ETFs, fueling demand.
This bullish outlook comes when other analysts expect Bitcoin to surge in the sessions ahead. In a post on X, one analyst says the incoming short squeeze will likely propel the coin above March highs. Whenever a short squeeze happens, prices rise, forcing sellers to buy back at higher prices, accelerating the uptrend.
The assessment is behind a record-breaking gap between institutional investors betting on price increases and hedge funds selling the coin.
Feature image from DALLE, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
On March 12, Russian-Swedish national Roman Sterlingov was found guilty of money laundering conspiracy and other violations by a federal jury in Washington, DC, for having operated Bitcoin Fog, a service criminals used to launder what authorities claim was hundreds of millions of dollars in ill-gotten gains.
The conviction was heralded by the US Department of Justice as a victory over crypto-enabled criminality, but Sterlingov’s lawyers maintain the case against him was flawed and plan to appeal. They allege that the nascent science used to collect evidence against him is not fit for the purpose.
The DOJ investigation used blockchain forensics, a technique whereby investigators scrutinize the public trail of crypto transactions to map the flow of funds. In a statement, Lisa Monaco, deputy attorney general for the US, described the DOJ as “painstakingly tracing bitcoin through the blockchain” to identify Sterlingov as the pseudonymous administrator behind Bitcoin Fog.
Bitcoin and other cryptocurrencies have acquired an undeserved reputation for being less traceable than conventional money, but evidence collected this way has brought down many criminals over the past decade. Blockchain forensics was crucial to the trial of Ross Ulbricht, founder of the infamous Silk Road marketplace. But in the Bitcoin Fog case, the defense has pulled this investigative technique into the spotlight, effectively putting crypto tracing on trial in place of their client. The case is a “first-of-its-kind,” says Tor Ekeland, legal counsel to Sterlingov. “Nobody has challenged blockchain forensics before, because it’s brand-new.”
Before Sterlingov’s trial, his attorneys asked the presiding judge to determine the admissibility of evidence from blockchain forensics experts that had used software from a firm called Chainalysis, which expedites the otherwise tedious process of sifting through the blockchain. He ruled the evidence was admissible.
That decision has been characterized by Michael Gronager, Chainalysis CEO, as an endorsement of his firm and its methods. “We are now the only company in the world with a stamp of approval for our ability to look at a blockchain and create evidence,” he says. But Ekeland says he will work with Sterlingov to appeal both the guilty verdict and the judge’s ruling on the validity of blockchain forensics. The conviction of Sterlingov is the latest example of the unhappy phenomenon, claims Ekeland, whereby “newly emergent junk science leads to unjust verdicts.”
Beth Bisbee of Chainalysis, formerly the company’s head of US investigations, disputes that characterization. “The evidence that the government presented to the jury demonstrated the exact opposite,” says Bisbee, who testified as an expert witness at the trial. “Our methods are transparent, tested, reviewed, and reliable.”
Natsec Threat
Until it was shut down by US law enforcement in 2021, Bitcoin Fog supplied what’s known as a crypto mixing or crypto tumbling service. Funds belonging to many parties are pooled, jumbled up, and spat out into brand-new wallets, masking the origin of the coins held in each. Mixers were originally promoted as a way to improve the level of privacy cryptocurrency could afford consumers, but they have been readily co-opted for the purpose of money laundering. Bitcoin Fog was among the first mixers to emerge, in 2011, making it “the longest-running bitcoin money laundering service on the darknet,” the DOJ says.
In the past few years, the US government has cracked down on crypto mixers, which it considers a threat to national security. After taking down Bitcoin Fog, the US Treasury sanctioned Tornado Cash, another mixer, in 2022. The year after, it took down another, ChipMixer, and charged the founder with money laundering. To identify the individuals behind these operations, investigators had to follow the crypto money.
The positive Bitcoin Coinbase Premium that drove the latest rally above $70,000 has dissipated, suggesting buying has already slowed down.
Bitcoin Coinbase Premium Gap Has Returned To Neutral Levels
CryptoQuant Netherlands community manager Maartunn explained in a post on X that the Bitcoin Coinbase Premium Gap has declined back toward the neutral line.
The “Coinbase Premium Gap” here refers to a metric that keeps track of the difference between the BTC prices listed on cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
When the value of this metric is positive, it means that the price listed on Coinbase is greater than that on Binance right now. Such a trend implies that the buying pressure on the former is higher than that on the latter platform (or alternatively, the selling pressure on there is just lower).
On the other hand, a negative value can imply the selling pressure on Coinbase is higher than on Binance as the price of the cryptocurrency listed there is lower.
Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the past few days:
The value of the metric appears to have been close to the neutral line recently | Source: @JA_Maartun on X
The chart shows that the Bitcoin Coinbase Premium Gap had taken to notably positive values as the latest upward push in the asset’s price had occurred. Since then, though, the metric has fallen, with its value approaching zero.
It would seem that the buying pressure on the platform contributed to the surge. The fact that the rally has slowed since the metric returned to neutral levels may add further evidence.
This isn’t unnatural for this year, however, as the Bitcoin price and Coinbase Premium Gap have shown a pretty tight relationship since the start of 2024.
Coinbase is popularly known as the preferred platform of American institutional investors, while Binance hosts more global traffic. As such, the premium’s value provides insight into how the behavior of the US-based large holders differs from that of world users.
Since the Coinbase Premium Gap has been the driver of the recent price surges, buying from these institutional entities could potentially have provided the fuel.
As the indicator’s value has now neared the neutral mark, it would imply that these whales have lifted their foot off the gas. Given the close relationship the metric and BTC price have held recently, it may be worth keeping an eye on how things develop in the coming days.
BTC may register some decline if the premium flips into the red from here. Naturally, a continuation of positive values would be a bullish sign instead.
BTC Price
At the time of writing, Bitcoin is trading around the $70,100 level, up more than 11% over the past week.
Looks like the value of the asset has been going up over the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Bitcoin (BTC) has established a local bottom at $56,000 for its current trading range following a 17.5% decline from an all-time high of $73,700.
Bitfinex analysts revealed in the latest edition of the Bitfinex Alpha report that the primary factor behind BTC setting a bottom is the stabilization of flows into spot Bitcoin exchange-traded funds (ETFs). This shows that demand for the asset is beginning to slow down, allowing the market to find its equilibrium.
Bitcoin Establishes Local Bottom
Historical Bitcoin market cycle patterns show that significant declines from local highs have never been more than 23%. This was seen in the bear market bottom in November 2022, when BTC slumped below $15,500. The average correction in this cycle, including intra-day flash crashes mostly triggered by leverage, hovered within the 20% to 22% range.
With Bitcoin’s last correction sitting at 17.5%, analysts believe the current cycle is following the steps of previous ones.
Bitfinex’s claim is further substantiated by the realized price of short-term BTC holders, which hovers around $55,800, serving as a major support and resistance level in this cycle. A decline to $56,000 would align BTC with the maximum plunge expected by analysts, amounting to 23-24%, as witnessed historically. The $56,000 level could also be pivotal for Bitcoin’s short-term market trajectory.
“Regardless of these levels it is important to note that BTC has already corrected 17.5 percent which is close to the average downturn from local highs since the bear market bottom. Regardless of whether we see BTC move lower, we do not expect a V-shaped recovery as has been the case for previous dips since 2023,” analysts clarified.
Bitcoin ETFs See Negative Flows
Last week, spot Bitcoin ETFs experienced net negative flows for the first time since their launch in early January. Every trading day witnessed a net negative flow, with total outflows from Grayscale’s GBTC exceeding $2 billion. However, after discounting the inflows from the newborn nine products, the net outflow for the week was $896 million.
Demand for the ETFs has reduced, as seen in the inflows plummeting from the high records of more than $1 billion per day.
Meanwhile, Bitfinex anticipates a period of ranging for BTC in the near term due to the reduction in ETF demand. The downturn is expected to be relatively moderate, and data from Monday shows that the flows have turned positive.
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Last week was rough for Spot Bitcoin ETFs as they failed to attract strong inflows day after day. As a result, these Spot Bitcoin ETFs witnessed consecutive daily outflows every day last week, indicating the bullish sentiment among institutional traders might actually be waning. This seems to have been reflected in the price of Bitcoin, as the cryptocurrency fell to as low as $61,370 during the week.
This maximum investor interest saw the ETFs setting new trading records for exchange-traded funds in the US. However, these ETFs have now set a negative record of five consecutive days of outflows to beat a four-day outflow streak set in January.
According to data from BitMEX Research, these ETFs witnessed five days of consecutive outflows of $154.4 million, $326.2 million, $261.6 million, $93.1 million, and $51.6 million. At the same time, Grayscale’s GBTC set a new record for the most daily outflow.
BitMEX also reveals that the world’s largest crypto asset manager saw redemptions of 9,539.7 BTC worth over $642.5 million on Monday, the largest single-day outflow in GBTC’s history.
[1/4] Bitcoin ETF Flow – 22 March 2024
All data in. 5th day of net outflows. $52m total net outflow for the day. Blackrock with a record low inflow of $18.9m pic.twitter.com/63u297xh8d
Grayscale’s outflow wasn’t particularly surprising, considering that the fund has witnessed consistent daily outflow since its launch. The surprise came from very weak inflow into other Spot ETFs like BlackRock (IBIT) and Fidelity (FBTC), whose huge inflows have always offset outflows from GBTC.
Particularly noteworthy is the fact that Blackrock (IBIT), which has consistently been the target of the majority of inflow, established a new inflow low of $18.9 million on Friday, March 22. Fidelity, on the other hand, also saw its inflow fall to as low as $5.9 million on Monday, March 18.
Bitcoin is now trading at $65.122. Chart: TradingView
Can Bitcoin Price Recover?
The big question now is whether Bitcoin can stage a strong recovery and reclaim its recent all-time high above $73,000. A continuation of outflows from Spot Bitcoin ETFs could further weigh on Bitcoin price.
Interestingly, the weak inflow hasn’t really related to low trading activity, as trading volume remained significant throughout the week. Data shows that the cumulative trading volume of the 10 ETFs is now at $164 billion after witnessing $22.71 billion in trading volume last week.
Featured image from Pexels, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
AUSTIN — There is a sort of clubhouse for Austin’s bitcoin believers on the second floor of the Littlefield Building at the corner of Congress Avenue and Sixth Street. The hideaway is at the crossroads of two worlds — the majestic thoroughfare that leads to the Texas State Capitol and the iconic, albeit notorious, stretch of bars, restaurants, and live music that define the capital’s party vibes. It’s an apt metaphor for the space itself.
The Bitcoin Commons is, at once, many things.
By day, it functions as an open plan, fluorescent-lit co-working space for the more corporate-minded bitcoin operators, but at night, it moonlights as a safe space for underground meet-ups of the industry’s rogue actors. Periodically, it plays host to conferences that draw in a mix of attendees ranging from venture capitalists to armed preppers living entirely off the grid. And on some afternoons, once happy hour hits, the kitchen at the back is retrofit with a stowaway bar.
“We also fund developers, and we help them advance their projects,” said Parker Lewis, one of the stewards of the Commons, as well as the author of a new book on bitcoin called “Gradually, Then Suddenly.”
“We help advance bitcoin through education and actually developing the monetary network, the code base, and the applications,” said Lewis, who is widely considered to be one of Texas’ de facto bitcoin ambassadors.
Francisco Chavarria was born in Mexico City and spent time in Salt Lake City, but three years ago, he made the move to Austin to be a part of a community of like-minded thinkers. His company, Yopaki, which is a neobank for bitcoin focused on the Latin American market, just won first place in a hackathon put on at the Commons.
“If you talk to other builders in the competition, a lot happens here,” said Chavarria. “There definitely is a sense of, ‘I don’t need for others to lose for me to win.’ There really is a relationship and a collaboration for bitcoin to succeed.”
“Right now it feels like we’re all winning because of the price, but those of us who have been building in the bear market, we know,” Chavarria added.
Austin’s “Bitcoin Commons” hosts regular meetups and conferences for the city’s bitcoiners.
CNBC
Bear or bull market, bitcoiners have flocked to Austin because of a combination of pro-crypto policies, abundant, renewable energy, and an ever-growing network of some of the brightest developers and miners on the planet. And even in the price doldrums, they typically bring the same level of enthusiasm to the conversation — though bitcoin’s recent stretch of record-breaking price moves has gone a long way toward boosting morale.
In March, bitcoin hit multiple, fresh all-time highs, as trader enthusiasm for the digital asset sector soared. A lot of that price run-up has to do with the record flows into the newly-launched spot bitcoin exchange-traded funds in the U.S., led by the world’s largest asset manager Blackrock and its $15.5 billion iShares Bitcoin Trust, which have helped to solidify bitcoin’s place as an asset class that’s here to stay.
Collectively, these spot ETFs have brought in around $60 billion, and in some cases, they have been breaking records for ETF flows altogether.
“The biggest driver is certainly the ETF flows, which have surpassed the expectations of all but the most bullish pundits,” said Castle Island Venture’s Nic Carter of bitcoin’s record price moves this month. “And these blockbuster flows have materialized before the major wirehouses, asset managers, and RIAs have actually approved the ETF for their clients.”
Carter added that there is also new liquidity coming into bitcoin from Asian markets via two main pathways: bitcoin’s version of non-fungible tokens known as ordinals, as well as bitcoin-issued coins called BRC20 tokens.
In the last 20 years, Austin has matured into one of the country’s leading tech centers, a trend accelerated by the Covid pandemic, which saw industry leaders migrate en masse from California.
“Bitcoin was founded in 2009. A lot has happened post-financial crisis. Austin was already emerging as a tech center, and you know, enter bitcoin, and it just became the logical home,” said Lewis, who runs business development at Zaprite, a bitcoin-native financial services firm.
It helps that Texas is a libertarian-friendly state that actively supports free market policies. It has proven to be a big draw for a group of people who think of bitcoin as a way of life — that is, a monetary network that is decentralized, borderless, and doesn’t answer to central banks or governments.
Austin’s “Bitcoin Commons” draws in an eclectic mix of people, including venture capitalists, bitcoin miners, and coders.
CNBC
Many hardcore bitcoiners ironically embrace the term maximalist or maxi as a way to self describe. In Texas, though maxis exist along a professional spectrum from venture capitalists, to miners, coders, company executives, and generalist techies, the eclectic tribe have a few things in common. Many are family-oriented, patriotic carnivores with an aversion to the overreach of government and a strong belief in the right to bear arms, among multiple other personal, individual liberties.
Bitcoin’s eponymous Austin lair, which is adorned with the Texas state flag and bitcoin memorabilia, has adopted Chatham House rules for many of its events to protect the identities of those conversing within its walls. One such meetup is the monthly BitDevs (short for bitcoin developers) gathering, where bitcoin builders, investors, and the bitcoin curious are all welcomed, so long as no pictures or videos are taken.
At these meetings, topics run the gamut, from detailed discussions about code to concerns that the Microsoft-maintained GitHub may pose a greater existential threat to the bitcoin network since much of the development work and conversations among coders happen on that platform. At one such gathering, the moderator of the two-hour session asked the room who ran a bitcoin node. More than half of the people in attendance raised their hands.
After attending multiple Austin BitDev meetups over the last three years, a few common conversation themes have emerged, including the focus on identifying threat vectors to the network and brainstorming workarounds. Beyond software, there are also concerns over hardware vulnerabilities, given that the ASIC chip used in bitcoin mining rigs are manufactured out of China, a country which has proven hostile to the crypto sector in recent years.
The “Bitcoin Commons” functions as a sort of clubhouse for the city’s bitcoin believers. It puts on a mix of programming, including conferences and hackathons, as well as hosts a co-working space by day.
The Commons hosted a hackathon, BitDevs, and a one-day conference dubbed the Bitcoin Takeover on the sidelines of the annual South by Southwest tech festival, which put on virtually no crypto programming this year.
Across those multiple gatherings, there was a newfound interest in talking about the burgeoning ecosystem of projects building on top of bitcoin’s blockchain, which began to heat up with the introduction of ordinals in Jan. 2023 — bitcoin’s version of non-fungible tokens.
One underrated driver of bitcoin’s recent rally is new programming innovations that may allow it to reach technological parity with ethereum. These advancements involve beefing up the bitcoin ecosystem with tools like smart contracts, which are programmable pieces of code that help to eliminate middlemen like banks and lawyers from transactions. That makes it easier for developers to create products and applications for consumers.
BitVM, for example, has a promising plan to do just that. It is ultimately trying to bring smart contracts to the bitcoin network, which has helped spur this renaissance of interest in layer two technology — that is, the startups being built on top of bitcoin’s base chain.
“I’ve never seen deal pacing move this aggressively in the bitcoin space in my entire career,” Carter tells CNBC.
Indeed, the VC appetite for these layer two bitcoin projects has been picking up in the last few months.
PitchBook says that the fourth quarter of 2023 was the first time in almost two years that deal value in the crypto sector had increased, reaching $1.9 billion — up 2.5% from the previous quarter. While still well off the 2021 high of $31 billion, funds are building back interest, and trust, in the space.
Grant Gilliam spent 15 years working in private equity in New York before pivoting to run a bitcoin VC fund called Ten31. This investment platform, which is focused exclusively on bitcoin, has invested $125 million of equity in aggregate since launching five years ago. More than $100 million was deployed in the last two years during the bear market.
“We invest across the bitcoin ecosystem across every major theme,” Gilliam told CNBC. “Anything that is relevant to bitcoin infrastructure, we like to say the picks and shovels of companies building products and services for holders of bitcoin.”
Gilliam, who spent a few years commuting from New York to Austin every month for the BitDevs meetup, said that some of the layer two bitcoin investments are more hype than substance, but he’s still bullish overall on the deal space.
“There’s been a lot of L2 hype lately, mainly driven by the ordinals, and inscriptions, developments or innovations, if you want to call it that,” Gilliam said. “There’s a lot of activity in that right now, but we haven’t been as focused on that. It’s our firm view that the ordinals will prove to be a passing fad.”
Gilliam says that Ten31 is focused on basic building blocks of the ecosystem, such as companies that are providing financial services, which could be custody trading and lending, or projects that are working to scale the lightning network.
Lightning, with is the layer two payment technology meant to realize bitcoin’s original vision of being peer-to-peer cash continues to struggle with the issue of reaching scale. Developers tell CNBC that a lot of engineering work remains to close that gap.
The Boys Club put on its own Austin summit on the sidelines of SXSW with programming on the new internet, crypto, and digital culture.
“Number go up” is a big mantra among bitcoiners, but as the community evolves, so too does the thinking about the price of the coin.
“Price is really an output of many inputs of human beings, building tools to make bitcoin both more secure and a greater utility,” Lewis said. “Price is the best indicator of more people coming to the conclusion that bitcoin is money, and it’s a better store of value, so it is very relevant.”
Every four years, bitcoin undergoes a market making event known as the halving. It cuts the production of new bitcoin in half, and it has typically come before a major run-up in the price of bitcoin.
Miners from around the world flocked to Texas when China banned the practice in 2021, attracted by the abundant renewable energy and a grid that’s friendly to flexible buyers of power — both ideal conditions for miners.
In April, however, the profits for these bitcoin miners will be cut in half.
For some, it may prove an Armageddon-level event. Others have braced for impact by swapping out their fleet of machines for more efficient rigs. The price run-up in bitcoin has also helped to give some of these companies a buffer in their profit margins.
West Texas miner Jamie McAvity has 60 megawatts at his mining site. It runs on a part of the grid that is 90% powered by a mix of solar and wind power.
“If you’ve been in for more than one cycle, you have situated yourself in a place where you can resist the halving to the best of your ability,” McAvity told CNBC at Austin’s Bitcoin Commons.
McAvity, who previously worked for ten years as a trader on the floor of the New York Mercantile Exchange, added that ETF flows have helped to change the pricing dynamics for the world’s largest coin.
“The spot ETF inflows are so massive that reducing the available supply of newly mined bitcoins from 900 to 450, is probably going to be immaterial relative to that,” he said.
“But who knows, the ETFs could cool off for a while, and it’s hard for someone to credibly say that a reduction in supply is not going to change the market price equilibrium, because that’s a fundamental principle of market economics,” he added.
A ten minute walk west from the Bitcoin Commons is the Austin Proper Hotel, a five-star establishment where the lighting is intentionally dim to strike a certain mood. Here, the Boys Club, a popular and buzzy, female-led organization which self-describes as a “social collective bringing new voices to the new internet” put on its own crypto conference on the sidelines of South by Southwest.
The Boys Club caters to a more blockchain agnostic crowd, where the focus is less on exclusivity to one coin or chain — and more about borrowing the best features from across the ecosystem to solve problems in the real world.
CNBC caught up with Micha Benoliel at the one-day summit. Benoliel built Nodle, a decentralized wireless network that’s now getting into the business of using the blockchain to battle AI-powered deepfakes.
“Blockchain is the only way to make a record that is immutable, and is going to prove the time at which this photo has been taken, or video, and also to help you prove the location and other elements that are going to reinforce that proof, so it creates a real immutable proof of authenticity,” he said.
The Boys Club put on its own Austin summit on the sidelines of SXSW with programming on the new internet, crypto, and digital culture.
CNBC
The one-day popup event gathered together more of a web3 crowd to talk about everything from the latest trends in tokenization to the resurgence of on-chain meme culture.
Similar to other bull runs in the price of bitcoin, some altcoins have seen a meteoric rise alongside blue chip names in crypto, because they’re seen as a comparatively cheaper buy.
Dogecoin, a meme-coin that was started as a joke, now has a market cap of nearly $25 billion, placing it in the top ten most valuable cryptocurrencies on the planet. Boden, a coin named after President Joe Biden, saw a run-up of more than 800% in a six-hour window after Super Tuesday, and the newly popular DogWifHat is collectively worth more than $2 billion.
Typically, this is the bellwether of a peak bubble moment, but analysts say that despite frothy conditions, this bull run is different to past cycles.
The price of bitcoin is cyclical, and it sees price run-ups roughly every four years. Each time, the price floor is higher. What’s also a departure this time around is the fact that institutional money is here in a way that it hasn’t been during past bull runs.
Fundamentals in the crypto market are playing a big role, as well.
In a note from JPMorgan on Mar. 15, analysts credit ether, the world’s second-biggest crypto token by market cap, for being a significant driver of crypto’s recent gains, including Coinbase‘s stock price rise. Ether has rallied nearly 50% so far this year, recently breaching the $4,000 price level and outpacing bitcoin’s returns, before paring back some gains.
“While the focus of the cryptocurrency marketplace has been the net new money going into U.S. spot Bitcoin ETFs and the positive impact on Bitcoin token prices (here, the spot Bitcoin ETF and its ultimate launch in January has driven the cryptoecosystem over the past several months), we see impact of ETH appreciation also as particularly meaningful,” JPMorgan wrote.
Regulators in the U.S. remain a universal concern for the crypto sector, especially amid reports of the Securities and Exchange Commission probing crypto companies building on the ethereum network.
Still, many in the space, including coders and investors remain optimistic.
Ethereum, the blockchain that underpins ether, underwent a major upgrade on Mar. 13 dubbed Dencun. Developers told CNBC it was expected to slash transaction fees by up to 90%. That is game-changing not just for the end-users, but also for the coders building apps on top of ethereum.
Base, crypto exchange Coinbase’s self-built layer two network, is ethereum-based and allows developers to more easily build decentralized apps. Coinbase’s Base lead, Jesse Pollak, anticipates this will open the door to applications in both the gaming and decentralized social media arena now that it is no longer nearly as cost prohibitive to build these types of programs.
“The thing that is happening with Dencun is we’re going to create a whole new kind of storage on ethereum that’s purpose built for Layer 2s like Base,” Pollak told CNBC.
“That means that right now we pay a ton to ethereum, and we’re going to pay a lot less, which is going to lower the fees for everyone. Because ethereum is basically going to build a product purpose built for us,” continued Pollak.
Chris Dixon, crypto chief at venture firm a16z, echoed that sentiment, noting that part of their portfolio is focused on these startups.
“The core idea is that if you build a social network, or a game or a financial service, on top of the blockchain, it has all sorts of benefits where the money and control flow out to the users and the creators that access the network, as opposed to the companies that control it,” said Dixon. “In the same way that steel was a better way to build bridges and buildings than wood was in the Industrial Revolution, blockchains are a building material.”
The on-chain analytics firm Glassnode has explained that Bitcoin tends to reach a potential top when the long-term holders show this pattern.
Bitcoin Long-Term Holders Have Been Ramping Up Distribution
In a new report, Glassnode discussed the influence that the BTC long-term holders have on the cryptocurrency’s supply dynamics. The “long-term holders” (LTHs) here refer to the Bitcoin investors who have been holding onto their coins for more than 155 days.
The LTHs comprise one of the two main divisions of the BTC user base based on holding time, with the other cohort known as the “short-term holders” (STHs).
Historically, the LTHs have proven themselves to be the persistent hands of the market. They don’t quickly sell their coins regardless of what is happening in the broader sector. The STHs, on the other hand, often react to FUD and FOMO events.
As such, it’s not unusual to see the STHs participating in selling. However, the LTHs showing sustained distribution can be something to note, as selling from these HODLers, who usually sit tight, may have implications for the market.
There are many different ways of tracking the behavior of the LTHs, but in the context of the current discussion, Glassnode has used the “LTH Market Inflation Rate” metric.
As the report explains:
It shows the annualized rate of Bitcoin accumulation or distribution by LTHs relative to daily miner issuance. This rate helps identify periods of net accumulation, where LTHs are effectively removing Bitcoin from the market, and periods of net distribution, where LTHs add to the market’s sell-side pressure.
Now, here is a chart that shows the trend in the BTC LTH Market Inflation Rate over the past several years:
The value of the metric seems to have been on the rise in recent days | Source: Glassnode
In the chart, the analytics firm has also attached the data for the asset’s Inflation Rate, which is basically the amount that the miners are introducing into the circulating supply by solving blocks and receiving rewards for them.
When the LTH Market Inflation Rate equals 0%, these HODLers are accumulating amounts exactly equal to what the miners are issuing.
This implies that the indicator below the 0% mark suggests the LTHs are pulling coins out of the supply, while it being above is a sign that they are either distributing or just not buying enough to absorb what the miners are producing.
The graph shows that historically, the cryptocurrency’s price has tended to reach a state of equilibrium and potentially even a top when the LTH distribution has peaked.
The LTH Market Inflation Rate has been increasing recently, but it’s yet to reach any significant levels. As for what this could mean for the market, Glassnode says:
Currently, the trend in the LTH market inflation rate indicates we are in an early phase of a distribution cycle, with about 30% completed. This suggests significant activity ahead within the current cycle until we achieve a market equilibrium point from the supply and demand perspective and potential price tops.
BTC Price
Bitcoin has retraced most of its recovery from the past few days, as its price has now declined to $63,800.
Looks like the price of the asset has witnessed a drawdown again | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, Glassnode.com, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Despite optimism about Bitcoin’s future trajectory heading into the Bitcoin Halving, analysts at JPMorgan have raised concerns that things may not go according to everyone’s expectations. They believe that a storm still lies ahead for the flagship crypto token before any massive move to the upside.
Further Bitcoin Pullbacks Are To Be Expected
According to a Bloomberg report, JPMorgan strategists have warned that Bitcoin could still experience further pullbacks following its recent decline. They alluded to the recent net outflows recorded by the Spot Bitcoin ETFs, which underscored the current bearish sentiment in the Bitcoin ecosystem.
These strategists, led by Nikolaos Nikolaos Panigirtzoglou, also highlighted the sustained open interest in CME Bitcoin futures as another bearish signal for Bitcoin’s price. They further argue that Bitcoin “still looks overbought” and expect further price dips leading up to the Halving event in mid-April.
Meanwhile, these JPMorgan analysts emphasized the decline in net inflows into Spot ETFs, noting that this proves that a sustained one-way net inflow is not possible. Therefore, they expect investors in these funds to keep taking profits heading into the Bitcoin Halving. This wave of profit-taking is also more likely, considering that Bitcoin “still looks overbought despite the past week’s correction.” they claimed.
This recent research note by JPMorgan further reaffirms their bearish sentiment towards Bitcoin’s price despite the flagship crypto exceeding expectations. Last month, the bank predicted that Bitcoin could drop to as low as $42,000 after April as “Bitcoin-halving-induced euphoria subsides.”
Naeem Aslam, chief investment officer at Zaye Capital Markets, also echoed JPMoragn’s sentiments when he suggested that Bitcoin’s recent rally didn’t show enough strength. Aslam believes Bitcoin could fall below $50,000 if the Halving event “fails to really keep the momentum going.”
What Could Happen After The Halving Event
Crypto trader and analyst Rekt Capital recently provided insights into what could happen after the Havling event while elaborating on the four phases of Bitcoin Halving. According to him, there is usually a re-accumulation period after the Halving, which could last for up to five months.
During this period, he noted that many investors get “shaken out in this stage due to boredom, impatience, and disappointment with lack of major results in their BTC investment in the immediate aftermath of the Halving.” Rekt Capital added that this time could be different since it is the first time this re-accumulation could develop around the new all-time high (ATH) area.
Therefore, he believes this “Re-Accumulation Range may simply take the shape of a regular sideways range and may not last very long before additional uptrend continuation.”
Featured image from Crypto News, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Recent observations by Eric Balchunas, a senior ETF analyst at Bloomberg, suggest that the movements in Bitcoin’s price are influenced by factors beyond just the flows of spot Bitcoin Exchange Traded Funds (ETFs).
According to Balchunas, who shared his insights on X, “bigger forces at work” shape the largest cryptocurrency’s valuation. This indicates that the correlation between spot ETF flows and Bitcoin’s price action is less direct than some assume.
The ETF Influence And Market Movements
This analysis emerges amid a period of significant financial activity for Grayscale, which has seen substantial outflows, described by Balchunas as experiencing a “second wind” of departures.
Yesterday, Grayscale reported outflows of $281.57 million, marking a notable decrease in its Bitcoin holdings by more than 40% since the inception of spot Bitcoin ETFs on January 11.
This scenario highlights a broader narrative within the cryptocurrency investment sphere, where the relationship between ETF activities and Bitcoin’s market performance is complex and multifaceted.
Interesting is price of bitcoin still went up yesterday and yet it went down second half of last week when Ten saw net inflows = there are other players controlling this market. ETFs def a factor but bigger forces at work here.
Despite the record outflows from Grayscale’s GBTC, Bitcoin’s market behavior has shown resilience. The cryptocurrency recently exceeded the $67,000 mark before experiencing a slight retracement, currently trading at a price of $66,106.
BTC price is moving sideways on the 30-minute chart. Source: BTC/USD on TradingView.com
This movement coincides with comments from Federal Reserve Chair Jerome Powell, which seemingly spurred a rally across various risk assets, including cryptocurrencies.
Powell’s reassurances regarding the outlook on rate cuts prompted a slight recovery in Bitcoin’s price, demonstrating how external economic factors and sentiments can impact cryptocurrency markets. It is worth noting that Bitcoin traded below $65,000 before the announcement.
On-Chain Insights And Bitcoin Future Prospects
Further deepening the analysis, Charles Edwards, a crypto analyst, recently suggested that pullbacks are common in Bitcoin’s bull runs, with corrections of around 30% within the realm of possibility.
A normal Bitcoin bullrun pullback is 30%. Back in December, we were already in the longest winning streak in Bitcoin’s history. A 20% pullback here takes us to $59K. A 30% pullback would be $51K. These are all levels we should be comfortable expecting as possibilities.
In related news, data from the on-chain analysis platform CryptoQuant has recently indicated a nearly 40% reduction in Bitcoin’s supply on exchanges over the past four years.
This trend points towards a bullish sentiment within the Bitcoin ecosystem, suggesting that investors are inclined to hold onto their assets in anticipation of future value increases.
Moreover, CryptoQuant’s data reveals that Bitcoin’s demand has consistently outstripped its supply since 2020, a trend that supports the asset’s value on the premise that scarcity enhances perceived value.
This dynamic is expected to intensify following the upcoming Bitcoin halving event, which will reduce the miners’ supply by half, potentially leading to further increases in Bitcoin’s price.
Featured image from Unsplash, Chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
A South Korean altcoin issuer was arrested by the Seoul Southern District Prosecutors’ Office’s Virtual Asset Crime Joint Investigation Team on March 19, facing fraud charges.
The unnamed individual is accused of defrauding investors of $16.1 million, an arrest that follows after a crypto market maker’s failed attempt to flee by sea in December last year.
On Dec. 20, 2023, the individual, known under the alias Jon Bur Kim and real name Park, aged 42, was intercepted by Coast Guard officials while attempting to escape to China via a fishing boat from Jindo. His escape was hindered by a storm, leading to the boat’s docking at Mokpo.
Park, who had garnered a significant social media following by showcasing his luxury sports car collection, is currently detained and undergoing trial at the Haenam Branch of the Gwangju District Court. He is charged with illegally manipulating coin transaction prices, including providing bribes to crypto exchange employees to artificially inflate prices.
Prosecutors allege that from February 2021 to April 2022, Park collaborated with the arrested token issuer to launch and promote fraudulent cryptocurrencies, commonly referred to as “scam coins.” They are accused of using deceitful practices such as false data disclosure and market manipulation to convince investors of the legitimacy of their coins.
The prosecution further suggests that the duo might have engaged a “coin listing broker” to facilitate the listing of these coins, which subsequently led to rapid price surges, enabling them to sell their holdings for substantial profits.
The case against Park includes investigating his potential involvement in the crimes attributed to the unnamed token issuer as authorities continue to unravel the extent of their collaboration. The incident is part of a broader trend of scrutiny against altcoin issuers in South Korea amid growing concerns over the proliferation of scam coins and the involvement of celebrities in low-cap altcoin controversies.
Meanwhile, on March 8, U.S. prosecutors revealed preparations to appeal a Montenegrin high court ruling on the extradition of Terraform Labs’ former CEO, Do Kwon, to South Korea. The development is part of a complex legal battle involving multiple nations, including South Korea and the United States, both of which are seeking Kwon’s extradition on charges relating to the Terra ecosystem’s $40 billion collapse.
The charges against Kwon in the U.S. include fraud and market manipulation, with South Korea also pressing charges of fraud and capital markets law violations. Kwon’s legal team has shown a preference for his extradition to South Korea, emphasizing the proximity to his family and the potential for a 40-year prison sentence.
Bitcoin’s price has been on a downright spiral for the past several days, losing way more than ten grand after charting a new all-time high last week at nearly $74,000.
Although many experts warned that such a correction could arrive and forecasted a ‘healthy’ 20% retracement before another leg up, the community wonders how low it can go, so we decided to ask the popular ChatGPT rival – Perplexity – whether there is even more pain in the asset’s future.
BTC’s Downfall
The primary cryptocurrency had a strong start to this year, which intensified after the first month of trading for the January-launched 11 spot Bitcoin ETFs in the States. As the demand for those products skyrocketed and the inflows charted new records, BTC’s price went on a roll and gained more than 60% since the start of 2024 at one point. This culminated last week when the cryptocurrency soared to $73,800 to chart a new all-time high.
However, the landscape started to change at this point, and many analysts warned that there would be an inevitable correction before Bitcoin could continue climbing. This has indeed been the case since last Thursday, as the asset plummeted to $65,000 during the weekend and even more in the first days of the new business week.
In fact, Bitcoin marked a 15-day low earlier this morning at under $61,000 before recovering some ground. This means that the asset had declined by roughly 20% since its peak in less than a week.
BTCUSD. Source: TradingView
According to Perplexity, it’s difficult to determine what would be Bitcoin’s low during this retracement, because its price is influenced by several factors, such as…
The Factors
The popular AI chatbot believes one of the key reasons why BTC has been freefalling is profit-taking by investors and miners who had been waiting for the asset for years to return to its 2021 levels. Also, there are some new ones who entered when BTC stood below $30,000 and have now seen their funds more than double in less than a year.
Additionally, Perplexity outlined another factor that could be driving uncertainty in all financial markets, but especially in the more volatile and risky by nature – crypto. The Federal Reserve is set to meet later today in its second FOMC meeting for the year, which could lead to major changes in the central bank’s monetary policy. In general, such changes have indeed impacted BTC’s price movements in the past.
Nevertheless, most experts believe the Fed will not raise the interest rates anymore as it has refused to do in the past few such meetings.
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Bitcoin price extended its decline below the $65,000 support. BTC is now struggling to stay above the $62,000 support zone and might test $60,000.
Bitcoin price is moving lower below the $64,000 support zone.
The price is trading below $63,500 and the 100 hourly Simple moving average.
There is a connecting bearish trend line forming with resistance at $63,300 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could start a decent upward move if it clears the $65,200 resistance zone in the near term.
Bitcoin Price Grinds Lower
Bitcoin price remained in a short-term bearish zone below the $66,500 zone. BTC traded below the $65,000 and $64,000 support levels to set a new weekly low.
There was a push below the $62,500 support. A low was formed near $61,537 and the price is now consolidating losses. The price is now struggling below the 23.6% Fib retracement level of the recent decline from the $68,898 swing high to the $61,537 low.
Bitcoin is now trading below $63,500 and the 100 hourly Simple moving average. Immediate resistance is near the $63,300 level. There is also a connecting bearish trend line forming with resistance at $63,300 on the hourly chart of the BTC/USD pair.
The first major resistance could be $64,000. If there is a clear move above the $64,000 resistance zone, the price could even attempt a move toward the $65,200 resistance zone. It is close to the 50% Fib retracement level of the recent decline from the $68,898 swing high to the $61,537 low. Any more gains might send the price toward the $67,000 level.
More Losses In BTC?
If Bitcoin fails to rise above the $63,300 resistance zone, it could continue to move down. Immediate support on the downside is near the $62,000 level.
The first major support is $61,500. The next support sits at $60,500. If there is a close below $60,500, the price could start a drop toward the $60,000 level. Any more losses might send the price toward the $58,800 support zone in the near term.
Technical indicators:
Hourly MACD – The MACD is now gaining pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.
Major Support Levels – $61,500, followed by $60,000.
Major Resistance Levels – $63,300, $64,000, and $65,200.
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
In the lead-up to the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday, March 20, the Bitcoin and crypto market is experiencing a severe downtrend. BTC price has plunged roughly -10% in the past two days, and Ethereum (ETH) is down -12% in the same period.
The anticipation surrounding the Fed’s stance on interest rates has heightened in the wake of recent economic indicators, including unexpected spikes in the US Consumer Price Index (CPI) and Producer Price Index (PPI), stirring volatility across markets, including digital assets.
The consensus, with a 99% probability according to the CME FedWatch tool, suggests interest rates will hold steady. Nonetheless, the spotlight turns to the Fed’s dot plot, a graphical representation of the individual members’ expectations for future interest rates, which could provide crucial insights into the monetary policy outlook for the coming months and years.
Anna Wong, Chief US Economist for Bloomberg, remarked via X (formerly Twitter), “Another reason why FOMC [is] not ready to cut: members not yet of broad agreement of that need. Here’s visualizing the dispersion of FOMC views with the help of our new weekly NLP Fed spectrometer. “
Another reason why FOMC not ready to cut: members not yet of broad agreement of that need. Here’s visualizing the dispersion of FOMC views with the help of our new weekly NLP Fed spectrometer. (Interactive version at @TheTerminal BECO models —> Fedspeak —> spectrometer) pic.twitter.com/Kney89BERM
Macro analyst Ted, expressing his perspective on X, underscores the nuanced relationship between macroeconomic trends and the crypto market at the moment. Ted elucidated that spot Bitcoin ETF flows have taken the backseat while macro factors came to the foreground.
He stated via X, “If BTC is to be considered digital gold, it’s expected to mirror gold’s market movements, albeit with a higher degree of volatility. In the current climate, with the market bracing for the Fed’s upcoming meeting, macroeconomic factors momentarily take precedence, driven by recent developments in PPI and CPI figures.”
He further speculates that “Despite the eventual remarks from [Fed Chair] Powell, the market has already adopted a hawkish stance in anticipation of a ‘higher for longer’ interest rate scenario.”
Michaël van de Poppe, a noted figure in the crypto analysis domain, provided his insights on the recent downward price movement of Bitcoin via X, citing a mix of factors including the anticipation of the FOMC meeting and significant capital outflows from Grayscale‘s Bitcoin Trust. Van de Poppe advises, “It’s typically in these pre-FOMC periods, perceived as risk-off intervals, that the savvy investor finds opportunities to ‘buy the dip’.”
In a reflection of market sentiment adjustments, analyst @10delta on X pointed out the strategic positioning of investors in anticipation of the Fed’s rate decisions. “The market is currently pricing in a reversal to the November ’23 interest rate levels, a clear indication that investors are adjusting their expectations based on the Fed’s potential pivot signaled in the previous dot plot,” he noted.
Accordingly, he argues that the FOMC & dot plot will be a “buy the news” event as the market expectations are being properly adjusted. “The macro worries […] should dissipate & crypto idiosyncratic bullish factors, such as the ETF inflows […] as well as the BTC halving take hold. All considered I think there’s a good R/R for ‘buying the dip’ heading into the March 20 event,” the analyst added.
Goldman Sachs Predicts (Only) 3 Rate Cuts This Year
Goldman Sachs Research recently provided a detailed analysis in their March FOMC Preview. The report highlights the nuanced balance the Fed seeks to achieve between controlling inflation and supporting economic growth.
“Our revised forecast now anticipates three rate cuts in 2024, a slight adjustment from our previous prediction, primarily due to a modest uptick in the inflation trajectory,” Goldman Sachs analysts elucidated. They further speculate, “While the immediate focus is on maintaining current rate levels, the trajectory for rate cuts will hinge on inflation dynamics and economic performance indicators.”
Goldman Sachs further predicts that the Fed will still target a first cut in June. “This combined with a default pace of one cut per quarter implies that the most natural outcome for the median dot is to remain unchanged at 3 cuts or 4.625% for 2024,” the banking giant remarked.
Goldman: Inflation has been firmer in recent months, but we think it is still on track to fall enough by the June FOMC meeting for a first cut. pic.twitter.com/0I1BPYiU8W
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) March 17, 2024
As the crypto market and broader financial ecosystems await the outcomes of the FOMC meeting, the prevailing sentiment is one of cautious anticipation. Market participants are closely monitoring the Fed’s commentary for indications of future monetary policy directions via the dot plot.
The question for the Bitcoin and crypto market is whether there will be an unpleasant surprise or whether market participants were right with their “higher for longer” policy assumption.
At press time, BTC found support at the $62,400 price level, trading at $63,118.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Following his arrest nearly three years ago, a Jury in a US federal district court found Roman Sterlingov, operator of the crypto mixer Bitcoin Fog, guilty of a four-count charge regarding money laundering.
The founder of Bitcoin Fog faces up to a maximum of 50 years in prison for all his charges.
Sterlingov Convicted
According to a press release on March 12, the jury declared Roman Sterlingov guilty of money laundering conspiracy and sting money laundering. The 35-year-old Russian-Swedish Bitcoin Fog founder was also found guilty of operating an unlicensed money-transmitting venture and violations of the D.C. Money Transmitters Act.
While Sterlingov’s sentencing has been scheduled for July 15, 2024, the first two charges each carry a maximum sentence of 20 years imprisonment, while the last two charges have a maximum prison sentence of five years each.
Bitcoin Fog, which operated for a decade between 2011 and 2021, served as a money laundering tool for criminals looking to obfuscate their ill-gotten money. The crypto mixer moved over 1.2 million Bitcoin throughout its operation, which was worth close to $400 million at the time and is valued at $88 billion at BTC’s current price.
As stated in the press release, most of the Bitcoin was gotten from darknet marketplaces linked to computer fraud, illegal narcotics, and identity theft. The mixer also serviced people who supplied child sexual abuse material.
Meanwhile, Bitcoin Fog’s biggest clients, according to the government, were dark web markets such as Silk Road, AlphaBay, and Agora.
Commenting on the latest development, US Attorney of the District of Columbia, Matthew Graves, said:
“Darknet criminals should know by now that operations like Bitcoin Fog cannot provide the anonymity for cryptocurrency transactions that they claim they can. This conviction demonstrates that the United States can and will combat the use of technology to carry out crimes in cyberspace.”
Apart from the guilty verdict, the jury granted forfeiture of assets previously seized by law enforcement, which include 1,354 BTC held in a Bitcoin Fog wallet, $349,625, and other crypto assets in seized accounts on the cryptocurrency exchange Kraken.
Sterlingov’s Lawyer Seeks to Reverse Guilty Verdict
Meanwhile, Tor Ekeland, the lawyer representing Sterlingov, said that they would appeal against the jury’s guilty verdict. During Sterlingov’s trial, Ekeland argued that there was no evidence pointing to the fact that his client operated Bitcoin Fog.
Sterlingov, who was arrested in April 2021, said in his testimony said that he did not remember if he created the domain name for the crypto mixer, and was doubtful that he was behind the creation.
Guilty verdict in U.S v. Sterlingov. Now we appeal.
US prosecutors brought in Ilya Lichtenstein and Larry Harmon to testify in the trial. Lichtenstein previously pleaded guilty to a money laundering conspiracy charge in 2022 in connection to his hack of Bitfinex in 2016 and theft of funds. Harmon, owner of Bitcoin mixer Helix, also pleaded guilty to money laundering in 2021.
Lichtenstein, testifying in the trial, said that he used mixers such as Bitcoin Fog to obfuscate the stolen funds, but he stated that Sterlingov’s crypto mixing service was not his main tool for money laundering.
Crypto mixing services continue to come under intense scrutiny from US authorities, which believe that such services serve as a useful tool for criminals. One prominent crypto mixer, Tornado Cash, was sanctioned by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in 2022.
Tornado Cash allegedly helped to launder proceeds of cybercrimes for malicious actors such as Lazarus Group. Developers Roman Semenov and Roman Storm are facing charges ranging from money laundering to violations of sanctions, to which Storm pleaded not guilty. Semenov, however, is currently at large.
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