Bitcoin overtakes Gold

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Liquidations sweep the market as ADA, DOT, SHIB tumble on the charts

Key points:

  • Bitcoin's price drop triggered significant declines in SHIB, DOT, and ADA. SHIB fell the most, dropping over 11% and losing its top 10 position.

  • Rising trading volume despite falling prices suggests potential for further decline.

News - Sharp declines in Bitcoin's price triggered a domino effect, dragging down other major cryptocurrencies like SHIB, DOT, and ADA over the past 24 hours.

SHIB bore the brunt of the drop, plummeting a staggering 11.87%. This not only pushed its price down to $0.000029 but also knocked it out of the top 10 cryptocurrencies by market cap. DOT and ADA weren't spared either. DOT suffered a 4.27% price decrease, dropping to $10.64, while ADA lost 5.95% and was trading at $0.71, at press time. This downturn also triggered substantial liquidations in the market.

Liquidations hit long positions - Unfavorable price movements led to a forced closure of positions by exchanges due to insufficient funds. Notably, SHIB experienced a significant long liquidation worth $1.19 million over 24 hours. Coinglass data revealed a similar trend for ADA and DOT, with more long liquidations than short positions closed.

Trading volume spikes amid downturn - Interestingly, the trading volume for these cryptocurrencies surged despite the price drops. Cardano's volume jumped to 1.85 billion, Polkadot's to 1.06 billion, and Shiba Inu's volume initially spiked to 2.81 billion before settling at 2.50 billion.

While rising volume with increasing prices typically indicates a healthy uptrend, the situation here suggests potential weakness. With prices falling despite the surge in volume, these cryptocurrencies might be headed for further decline.

Bitcoin overtakes Gold in portfolio allocation amid ETF surge, JP Morgan reports

Key points:

  • Bitcoin allocation in investor portfolios surpassed gold when adjusted for volatility.

  • Spot Bitcoin ETFs are attracting significant inflows, exceeding $10 billion since launch.

News - Bitcoin's popularity among investors is surging, with its allocation in portfolios exceeding that of gold, according to a recent analysis from JPMorgan. This trend is particularly evident when considering volatility, where Bitcoin allocation is 3.7 times higher.

The rise of Bitcoin ETFs (exchange-traded funds) is fueling this shift. Since their launch in January, these investment vehicles have witnessed significant inflows, surpassing $10 billion. Analysts estimate the potential market size for Bitcoin ETFs to reach a staggering $62 billion, potentially rivaling gold's position.

What’s more? Another report from JPMorgan Securities predicts even greater growth, with the spot Bitcoin ETF market potentially reaching $220 billion within the next three years. This significant influx is expected to significantly impact Bitcoin's price.

The success of Bitcoin ETFs is evident. February saw a net inflow of $6.1 billion into spot Bitcoin ETFs, compared to just $1.5 billion in January. The largest daily inflows even reached over $1 billion on March 12th. Analysts believe this number will climb further as outflows from existing Bitcoin trusts subside.

Looking ahead - The upcoming Bitcoin halving event is expected to further drive demand. This event reduces the daily supply of new Bitcoins by half, potentially leading to a supply crisis within the next six months.

Arbitrum prepares for token unlock amid Wintermute Trading's massive investment

Key points:

  • Market maker Wintermute's large purchase of ARB tokens suggests confidence in the project.

  • A major token unlock on March 16th could increase supply and potentially cause a price dip.

News - Market maker Wintermute Trading has made a significant investment in Arbitrum (ARB) tokens, acquiring $36.3 million worth ahead of a major token unlock scheduled for March 16th.

More on Token unlock - The Ethereum Layer 2 project Arbitrum plans to release a substantial amount of its tokens, roughly 1.45 billion, representing 15.7% of its total supply and valued at $2.93 billion. This increase in supply can potentially lead to a price drop if demand doesn't keep pace.

Wintermute's substantial purchase suggests a belief that the token unlock might not cause a significant or lasting price decline. This could be interpreted as a sign of a potential post-unlock price recovery.

Positive sentiment shift - Despite a recent 6.5% price dip, the overall sentiment surrounding Arbitrum has improved. The project's weighted sentiment, which tracks positive and negative commentary, has shifted from negative to slightly positive territory. This indicates a growing bullish outlook among market participants.

Well, the number of ARB holders has also seen a notable increase. In just three months, it has grown from 985,000 to 1.17 million. This suggests that investors are accumulating the token with a long-term perspective. While a temporary dip below $2 is possible near the unlock date, several metrics suggest a potential price recovery in the aftermath.

PancakeSwap unveils Version 4, promising enhanced flexibility and efficiency

Key points:

  • PancakeSwap v4 promises significant improvements in flexibility, functionality, and efficiency.

  • The release is scheduled for the third quarter on both Ethereum and BNB Chain, aiming to redefine standards within the DEX space.

News - PancakeSwap has officially announced the much-awaited release of version 4 (v4), marking a significant step forward for the popular decentralized exchange. This upgrade promises to deliver greater flexibility, functionality, and efficiency for users and developers alike.

Revolutionizing AMMs - PancakeSwap v4 aims to address the limitations of the previous version and redefine the standards for DEX operations within the Automated Market Maker (AMM) space. With a scheduled launch on both Ethereum and BNB Chain in Q3 2024, it seeks to transform the trading experience.

A key element of v4 is its open-source codebase. This move signifies a commitment to fostering collaboration within the DeFi community. By allowing community developers to contribute and build upon the platform, PancakeSwap v4 paves the way for further innovation in blockchain technology.

More features? PancakeSwap v4 would introduce a groundbreaking feature called "hooks." These external contracts will act as add-ons, enabling developers to customize functionalities within liquidity pools. This allows for features like dynamic fee adjustments and integration of custom oracles, granting unprecedented control over pool behavior.

Another key feature of v4 is Flash Accounting. This innovation consolidates all liquidity pools into a single contract. This not only reduces deployment costs by a staggering 99% but also significantly lowers gas fees for users engaging in multi-hop swaps.

Crypto Scams Uncovered

  • Thodex, a Turkish crypto exchange launched in 2017, abruptly shut down in April 2021 under the guise of maintenance. Founder Faruk Fatih Özer disappeared with over $2 billion from investors, leaving over 100,000 victims in his wake.

  • BitConnect presented itself as a legitimate investment platform, allowing users to lend their crypto and earn high returns. However, this facade crumbled as it was revealed to be a Ponzi scheme. The scheme ultimately defrauded its victims of an estimated $4 billion through a multi-level marketing structure.

  • Quadriga used to be Canada's top crypto exchange, trusted by many. But it turned out that it was actually a scam from the start, run by people who knew how to trick others. The main person behind Quadriga, Gerald Cotten, was the only one who could get to the private keys holding onto about C$250 million worth of users' cryptocurrencies. He died under suspicious circumstances while on a trip to India with his new wife, Jennifer Robertson.

Top 3 coins of the day

Solana (SOL)

Key points:

  • “Solana market cap is $73B, whereas $MSTR is $30B. That’s just nuts. Alts are overdue for a major correction,” as per crypto analyst, Samson Mow.

  • SOL has been closely following in Bitcoin’s footsteps as its correlation with the king coin has remained strong over the last month.

What you should know - On a daily chart, one could easily see that Solana has been on a clear uptrend for the majority of its trading sessions from December 2023 to mid-March. Buying pressure has been outweighing the sellers by a greater margin. In fact, SOL has also indirectly benefited from its exposure to the DePIN sector. The alt’s immediate demand zone stood near the $132 mark, while its supply zone can be capped at $199. The market sentiment for the coin remained bullish. However, technical indicators like RSI revealed that the coin was overvalued and a sizable correction could follow soon. Traders, therefore, should exercise caution.

Binance Coin (BNB)

Key points:

  • BNB Chain intends to work on a new upgrade “BEP 633” over the next few months.

  • The BEP 633 is similar to Ethereum’s EIP-4844, which has significantly reduced transaction costs on Layer-2 (L2) projects.

What you should know - After trading within a tight range for over two months, BNB saw a breakout in the upward direction at the $432 mark. Thus, implying that the traders were waiting for a bullish confirmation before placing long bets. The alt quickly reached a high of $631 only to retrace back at the $544 mark. Its trading volume has also fallen significantly over the past few days. Selling pressure has been dominant and sellers were in full control of the market, at the time of writing. Technical indicator MACD, however, flashed a bullish divergence, but its momentum looked weak.

Avalanche (AVAX)

Key points:

  • Large Holders’ activity increased on the AVAX network, during press time.

  • The Cumulative Liquidation Levels Delta (CLLD) metric was positive, hinting at a slightly bearish bias.

What you should know - AVAX has been on quite a volatile journey of late. It reached $57 on the 12th of March. However, the attempt at breaking through the key resistance failed. At press time, bulls were attempting to retest the region. A successful close above the region could send AVAX to $59.92. The width of the Bollinger Bands (BB) revealed that massive price fluctuations can be expected in the near term. It also underlined the fact that BNB was trading in the overbought territory, at press time. Well, the current price movement can find its support at the $39 mark but sellers will have to take the charge. Anyway, the social sentiment around AVAX remained positive, which could be a piece of good news for the investors.

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