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Bitcoin holders' tragedy
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Crypto traders lose $1 Billion as Bitcoin crashes from its All-Time High of $69,200
Key points:
Bitcoin's price surged to a new all-time high but then experienced a sharp drop.
Traders using leveraged bets (options and futures) suffered significant losses when their positions were liquidated.
News - Bitcoin's recent surge to a record high came crashing down, causing significant losses for traders who bet on its continued rise.
Data from Santiment showed that the total value of bets placed on Bitcoin and other cryptocurrencies (open interest) dropped significantly after the price spike on March 5th. This drop reflects the forced closure (liquidation) of leveraged positions held by traders who were wrong about Bitcoin's future direction.
What’s the full story? The price briefly surpassed $69,200, exceeding its previous high from November 2021 by a small margin. Many traders, anticipating a price surge above $70,000, placed bets (long positions) on Bitcoin using options and futures contracts.
The sudden price drop triggered the automatic closing of these leveraged positions, resulting in an estimated $1 billion loss for traders. While some short positions (bets on a price decline) were also liquidated, the majority of losses came from long positions being flushed out.
What to expect next? Analysts see this event as a natural correction, highlighting the risks associated with leverage and the inherent volatility of the cryptocurrency market. While the price drop may have caused temporary concern, it serves as a reminder for investors to exercise caution when using leverage, especially in volatile markets.
At press time though, BTC was changing hands at $65,769 as the $64,000 held tight as a psychological support. With halving on the door, analysts predict, the prices of BTC could easily cross the $75,000 mark.
Binance.US under fire for alleged lack of cooperation in SEC probe
Key points:
The SEC accuses Binance.US of obstructing the investigation by not answering key questions.
Binance.US has denied all the accusations and has stated that it has been cooperating with the agency.
News - The U.S. Securities and Exchange Commission (SEC) is accusing Binance.US, the American arm of cryptocurrency exchange Binance, of obstructing its investigation into how customer assets are handled.
According to the SEC, Binance.US has been "unable or unwilling" to answer key questions about customer asset custody and other core aspects of the ongoing investigation. The SEC filed a report with a court in Washington D.C. requesting intervention to speed up the process of obtaining information from Binance.US.
What does the SEC want? The SEC is particularly interested in determining whether employees from the non-US arm of Binance have access to customer assets held by Binance.US. The SEC claims Binance.US has failed to provide sufficient evidence demonstrating it does not have access to customer assets, such as private keys.
Did Binance respond to this? Binance.US, however, denies the accusations. They claim they have cooperated fully with the SEC, providing them with "thousands of documents" related to their asset custody practices. They also argue that the SEC's requests for information are overly broad and unnecessary.
This ongoing dispute is part of a larger legal battle between the SEC and Binance. Last year, the SEC sued Binance, Binance.US, and its founder Changpeng Zhao, alleging unregistered securities sales and improper handling of customer assets. Well, Binance settled with the Department of Justice in November 2023, admitting to violating money laundering and terrorism financing laws.
Key points:
Shiba Inu's price has surged over 300% in the past week, entering the top 10 cryptocurrencies by market cap.
The surge is accompanied by increased trading activity and high unrealized profits for SHIB holders.
News - Shiba Inu, the popular dog-themed cryptocurrency, has skyrocketed in value, surging over 300% in the past week and breaking into the top 10 list of cryptocurrencies by market capitalization. This dramatic rise comes amidst a broader bull run in the memecoin market.
What’s the exact reason behind the surge?
The price surge has been accompanied by a significant increase in trading activity, with over $13 billion worth of SHIB tokens changing hands in the past 24 hours, a 241% increase from the previous day. This surge in trading is likely driven by investors seeking quick profits, as data suggests the average SHIB holder is currently sitting on unrealized gains of over 90%. These levels of profit haven't been seen since the peak of the 2021 bull market.
Moreover, the launch of version 1.1 of the Shib Name Service (SNS) has generated excitement within the community. SNS allows users to create human-readable addresses for their cryptocurrency wallets, making it easier to send and receive tokens. This is seen as a significant step towards building "Shibdentity," a framework that empowers users to manage their digital identities.
In conclusion - The launch of SNS, coupled with the price surge, has led to a surge in social media activity for SHIB. Mentions of the token on major crypto-related social media platforms have spiked significantly, and the overall sentiment surrounding SHIB is overwhelmingly positive, indicating bullish expectations for the future.
Hackers exploit vulnerability, steal $8 Million from Arbitrum DEX
Key points:
WOOFi, a decentralized exchange, suffered an $8 million exploit using a flash loan attack.
Hackers manipulated the price of WOO and stole around 2,000 ETH worth of cryptocurrency.
News - WOOFi, a decentralized exchange operating on Arbitrum, has been exploited by hackers for $8 million worth of cryptocurrency. The attack involved a technique known as a flash loan exploit, commonly used in the DeFi space.
What’s flash loan exploit though? In a flash loan attack, hackers borrow a large amount of cryptocurrency without any collateral, with the condition that they repay the loan within the same transaction. They then use these borrowed funds to manipulate prices or exploit vulnerabilities in DeFi platforms for their own gain. Once the manipulation is complete and they have profited, they repay the loan, leaving no trace behind.
What WOOFi’s investigation reveals? WOOFi's investigation revealed that the attackers exploited a vulnerability in one of the oracles on Arbitrum, impacting the WooPPV2 contract. They used a "contained" flash loan attack to manipulate the price of WOO, a cryptocurrency tied to the exchange. The attackers strategically timed the loan repayment to coincide with a dip in the price, allowing them to maximize their profits.
The WOOFi team reacted quickly after being alerted by security researchers. They suspended operations and launched an investigation. As of now, the attackers have stolen around $8 million worth of cryptocurrency, equivalent to approximately 2,000 ETH.
More stories from the crypto ecosystem
Did you know?
Central bank digital currencies are digital currencies that are issued by central banks. CBDCs are still in the development stage, but they have the potential to change the way we think about money.
Cryptocurrency adoption in Nigeria is growing at an exceptional rate. Due to the constant depreciation of Naira, the country now has more than 50% monthly active adult crypto traders.
The maximum supply of Bitcoin is deliberately pre-set at 21 million. The amount of new coins created and the frequency at which blocks are added to the blockchain is controlled and pre-determined by the protocol.
Top 3 coins of the day
Polkadot (DOT)
Key points:
DOT was trading at a level last seen in May 2022.
It was up by 18.08% over the last seven days with buyers dominating the market.
What you should know - After the market hit the upper circuit on 6 March, DOT was found retracing on the daily chart by 3%. Traders were observed to be taking profits as old coins found new investors. The coin’s near-term support stood within the $6.9 to $7.5 range. Interestingly, DOT registered its highest volume on 4 March, and its weighted sentiment metric was on the positive side, at press time. This goes on to highlight the perception around the alt which has been pretty bullish in recent months. The point of concern, however, was the reading of RSI, which stood at the 75 mark and in the oversold territory. Analysts predict the pent-up sell pressure could soon kick in, thus, initiating a trend reversal in no time.
Filecoin (FIL)
Key points:
Filecoin investors took a sigh of relief after the coin entered a bullish phase as it saw a bullish breakout on 16 February.
The overall outlook on the coin remains bearish on the higher timeframe.
What you should know - On a lower timeframe, FIL has been able to enter an uptrend, but its macro outlook isn’t very pleasant. While Bitcoin has been able to cross its previous all-time high in recent days, Filecoin still struggles to even cross the $15 mark. At press time, it was 96.01% down from its all-time high of $232.70. Even so, it was up 232.62% from its cycle low of $2.79 which it reached on December 19, 2022. Its correlation to Bitcoin hasn’t been very strong either, from the start. It seems like investors haven’t been giving much attention to this decentralized storage network when compared to its competitors. Sounding the bearish bugle was MACD, at the time of this report it was heading toward a bearish divergence.
Aptos (APT)
Key points:
Soon after 24.84 million APTs, valued at over $260 million, got unlocked, the token saw a bearish pull.
Technical indicators were quite bullish, at the time of writing.
What you should know - Aptos had been trading in a sideways range for over two months, after 27 February though, it saw massive demand entering the market. Consequently, it broke out in an upward direction. At press time, APT was trading at $13.38 with an 18.22% increase over the last seven days. The price was breaking above APT's immediate resistance of $14 and the CMF was also positive, it simply highlights that the upward momentum is going to be strong and will continue for the next few days. Some market experts opine the APT could soon hit its previous all-time high if there is less profit-taking along the way.
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