Bitcoin gets ghosted

January 10, 2024

 

Reading time: 7 minutes

Bitcoin's bull rally faces setback as miners liquidate their holdings

Key points:

  • AMBCrypto's analysis revealed a significant number of miners were liquidating their assets, evident from the declining balance of Bitcoin miners observed in the past 30 days

  • CryptoQuant's Miners Position Index (MPI) for BTC indicated that miners were selling their holdings within a moderate range compared to the one-year average

News - BTC's price surged over 7% on 9 January, surpassing $46,000 and fueling optimism for a renewed bull rally. 

However, the mining industry showed a different trend. IntoTheBlock revealed a significant sale of BTC by a major mining pool, F2Pool, which offloaded more than 1,000 BTC on 5 January. Additionally, the overall netflow of Bitcoin miners witnessed a decline in the past week.

What prompted the miner sell-off? One potential explanation for this behavior could be the decrease in miner revenue. 

Data from Coinwarz indicated a notable drop in BTC's hash rate over the past week, with the hash rate standing at 483.89 EH/s at press time. A drop in hash rate signifies reduced computational power dedicated to the network, potentially impacting miners by making the mining process less profitable and competitive.

What lies ahead - While Bitcoin's price demonstrated a bullish trend, on-chain metrics revealed bearish signals. The net deposit on exchanges was notably higher than the seven-day average, suggesting heightened selling pressure on the coin. Despite this, Bitcoin's Open Interest remained bullish, aligning with the upward price movement, suggesting an increased likelihood of the upward trend continuing.

FINRA introduces crypto assets section in annual oversight report

Key points:

  • FINRA is a self-regulatory organization in the U.S. that oversees and regulates securities broker-dealers, for whom membership is mandatory

  • It operates under the oversight of the SEC and follows the agency's guidance when assessing a firm's proposed crypto asset securities business

News - The Financial Industry Regulatory Authority (FINRA) has published its 2024 Annual Regulatory Oversight Report, featuring a dedicated section on crypto assets for the first time. 

Who should read it - FINRA's membership application program approves firms for roles such as serving as an agency in private placements, operating an alternative trading system for crypto asset securities, and offering custody services.

In line with this, the crypto section of the report specifically addresses firms currently involved in or planning to engage in crypto-related activities.

Their recommendations - The organization urged its members to disclose their involvement in non-security crypto assets, including outside business activities of associated persons, private securities transactions, and crypto mining operations. 

The report also outlined an extensive checklist for SEC compliance, covering aspects such as determining the security status of a crypto asset, registration statement relevance, cybersecurity, and Anti-Money Laundering. Additionally, separate checklists were provided for surveillance themes and due diligence.

SOL price spikes as network activity surges, memecoin hype grows

Key points:

  • Solana's hackathons have attracted substantial participation, with over 900 submissions in the recent Hyperdrive hackathon

  • The aforementioned highlights a flourishing developer community and positions the network as an appealing platform for future developers

News - OKX exchange recently listed Solana tokens, including the memecoin BONK, which has gained significant attention in the crypto community.

A look at Solana's progress  - Solana experienced a remarkable 141% surge in daily active addresses over the past 90 days, as reported by Artemis. 

Solana also made significant strides on the development front. With a monthly active developer count consistently ranging between 2500-3000 throughout 2023, Solana showcased its ability to attract and retain top-tier talent. Moreover, the developer retention, exceeding 50%, underscored the commitment of new developers to the SOL ecosystem.

How has all this impacted SOL? In light of these positive developments, the token's price mirrored the prevailing optimism. At the time of writing, SOL was priced at $97.42, boasting a total market cap of $42 billion, securing its position as the 5th leading cryptocurrency.

U.S. SEC's X account breach triggers brief frenzy as false Bitcoin ETF approval post surfaces 

Key points:

  • Multiple news outlets initially covered the U.S. SEC's post, reporting that the regulatory body had granted approval for a spot Bitcoin ETF

  • Fifteen minutes later, SEC Chair Gary Gensler stated that the commission had not approved the listing and trading of spot Bitcoin exchange-traded products, revealing that the SEC's account had been compromised

News - On 9 January, a security breach compromised the U.S. SEC's X account, leading to a false post suggesting the approval of Bitcoin ETFs. The misleading post was live for about 20 minutes and garnered at least 4.4 million views before being removed.

The aftermath -

  • As a result of the incident, Bitcoin experienced a surge of approximately 2.5%, reaching $47,901, followed by a subsequent drop of around 7% to $44,701.

  • While the regulator stated that its staff was not responsible for the "unauthorized" post,  some community members suggested it could be an accidental premature announcement, citing similarities in language and structure to the typical communication style of the SEC.

  • Several U.S. lawyers and senators urged the Congress to investigate the securities regulator, demanding transparency regarding the events that led to the false post.

  • After confirming that the breach had been successfully terminated, the SEC announced that it would work with law enforcement to investigate the matter.

  • Meanwhile, crypto industry observers and analysts opined that the recent X incident is unlikely to cause a delay in the decision on a spot Bitcoin ETF, expected on 10 January.

  • After conducting a preliminary investigation, X's safety team revealed that the U.S. SEC had not activated two-factor authentication (2FA) on its primary X account, allowing the hacker to gain access.

Crypto scams uncovered

  • In 2012, BitFloor, a Bitcoin exchange, suffered a hack, losing approximately 24,000 BTC. The attacker exploited a vulnerability in the exchange's security, gaining access to an unprotected backup of wallet keys. The hack emphasized the importance of implementing strong security practices, especially in the handling and storage of cryptocurrency wallet keys.

  • In 2021, Africrypt, a South African crypto platform, alleged a hack, following which its founders Ameer and Raees Cajee urged investors not to report the incident to authorities, claiming it would impede their efforts to recover the funds. However, suspicions of an exit scam were soon validated as the duo disappeared, taking with them an estimated $3.6 billion worth of investors' cryptocurrency.

  • In November 2022, the cryptocurrency exchange FTX spiraled into bankruptcy, creating a wave of crypto crime. Its users were subjected to a scam offering a refund, $415 million of crypto was stolen in a series of cyber attacks, and another $3.1 billion was wiped from the market.

Top 3 coins of the day

Binance Coin (BNB)

  • At press time, core developer count on BNB had declined to 51, signaling a slowdown in the release of new features on the chain

  • In its Q4 report, BNB disclosed a notable achievement, showcasing a 22% surge in Daily Active Users, reaching nearly 1.2 million

What you should know - At press time, BNB was trading at $296.50, after a 2.5% decline in the last 24 hours and a 7.9% over the last week. The recent breakout below the $300 psychological indicated increased selling pressure, potentially leading to a further decline in the near term. The MACD seemingly confirmed this trend as it projected several red histograms below the half-line, especially as the lines progressed south. 

Shiba Inu (SHIB)

  • Shiba Inu holders have transferred 5.27 trillion SHIB ($50 million) out from trading platforms and exchange-hosted wallets over the last two weeks

  • Historical trends show that SHIB price has often rallied when supply on exchanges decreases significantly

What you should know - SHIB was priced at $0.0000092 at press time, having declined 20% in the first 10 days of 2024. SHIB price faced major resistance at the $0.000011 mark, which it breached on 17 December 2023, marking an 8-month peak. In the current scenario, the $0.000091 acts as a key support zone for SHIB. With no clear advantage for bulls or bears, the RSI's reading of 42, at press time, indicated weak bearish momentum in the market.

Filecoin (FIL)

  • FIL traded in a closed range between $4.415 and $4.916 for a brief period, following which the price regained momentum in December

  • During the last 10 days of December, the coin experienced a remarkable 34% increase in its valuation

What you should know - After a period of uptrend, Filecoin faced rejection at $7.861 at the beginning of this year. Since then, the price has been trading under a bearish influence and has recorded a correction of approximately 20% in the past week. At the time of writing, FIL was trading at $5.37, reflecting a 2.6% decrease in its value over the last 24 hours. The RSI registered a reading of 44 below the neutral 50-levels, suggesting that sellers were in command.

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