Bitcoin's 2024 'decline'

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Bitcoin registers downturn in weekend trading volume

Key points:

  • Bitcoin's weekend trading volume dropped to only 13% in 2024.

  • Increased institutional participation has worsened liquidity challenges.

News - From 2018 to 2021, approximately 25% of Bitcoin trading volume happened during weekends. However, this trend has gradually declined, dropping to 13% in 2024, as highlighted by Kaiko.

While offshore exchanges like Binance and OKX show slightly higher weekend trading volumes compared to U.S. counterparts like Coinbase and Kraken, U.S.-based platforms, especially Coinbase, continue to face liquidity challenges.

What caused this? This drop is attributed to increased institutional involvement in Bitcoin, leading to decreased weekend market liquidity. Managing liquidity during weekends has long been a challenge for exchanges due to the 24/7 nature of crypto trading conflicting with traditional financial institutions' operating hours.

Additionally, the closure of several crypto-friendly banks in the United States has further strained liquidity conditions.

While the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States has bolstered Bitcoin liquidity overall, limited transfers between ETF issuers and exchanges during weekends suggest that the liquidity gap may widen as ETF issuers continue to accumulate Bitcoin holdings.

More details - In conclusion, as ETF issuers continue to accumulate Bitcoin holdings, this liquidity gap may widen, underscoring the ongoing need for proactive measures to address liquidity concerns and ensure market stability in the cryptocurrency ecosystem.

Ethereum's price surges amidst whales' moves

Key points:

  • A 2,000 ETH deposit into Coinbase has raised uncertainty about Ethereum's future trajectory.

  • Despite concerns, Ethereum signaled a bullish trend.

News - Ethereum (ETH) recently breached $3200, sparking optimism. However, concerns arose as FTX and Alameda deposited 2,000 ETH ($6.45 million) into Coinbase after the surge, potentially indicating a strategy to capitalize on the price hike.

ETH is currently trading at $3,227.00, up by 3.81%. Positive network patterns suggest a bullish trend. Trader sentiment is shifting towards optimism, with a decline in bearish positions reflecting recent positive price movements.

Clouded optimism - Ethereum's surge past $3200 suggests a strategy to capitalize on the price increase. However, if these whales decide to sell their ETH holdings, it could create selling pressure and trigger market fluctuations. Large sell-offs by significant players may lead to a chain reaction of selling, potentially resulting in a bearish trend.

However, amid these concerns, perpetual volumes hit all-time highs, indicating Ethereum's robust resurgence. Associated projects like Muxprotocol also performed well, boasting a staggering volume exceeding $1.9 billion in the last week with a yield of 93%. This rise underscores the increasing interest in Ethereum-based projects.

What’s happening on the price front? Multiple higher highs and higher lows signal a bullish trend, reinforcing optimism among investors. Ethereum’s network has seen an influx of new users accumulating ETH lately.

Additionally, the growing velocity of ETH transfers signifies heightened activity within the network. Amidst these favorable indicators, a decline in short positions suggests a shift towards a more optimistic outlook among traders.

Solana-based BONK and WIF soar on the charts

Key points:

  • WIF and BONK saw impressive gains in the last 24 hours.

  • Technical indicators suggest potential overbought conditions for WIF.

News - Meme coins built on the Solana blockchain, notably Dogfight (WIF) and Bonk (BONK), have seen remarkable surges in the last 24 hours. BONK surged by 17.22%, while WIF saw an astounding 42.36% hike.

These performances harken back to 2023 when WIF and BONK outperformed many meme coins in other ecosystems.

While WIF garnered more attention with a social volume spike, both coins exhibited negative sentiment, suggesting caution among traders despite the price appreciation.

Traders’ outlook - Traders are closely monitoring the latest developments in the meme coin market, particularly regarding significant price movements and social sentiment. One notable example involves a trader who invested $310 in SOL three months ago, acquiring 2.58 million WIF despite a subsequent decline in the meme coin's value.

However, with the recent pump, the value of the tokens surged by an astonishing 4530x, hitting $1.4 million. This remarkable return has prompted traders to pay close attention to WIF's social volume, which spiked to 21.70 on 27 February, indicating heightened interest compared to BONK.

Further insights - WIF has outperformed BONK since 2 February, surging by 135.61% despite the Relative Strength Index (RSI) signaling potential overbought conditions. Contrarily, the Awesome Oscillator (AO) suggests sustained upward momentum.

With the price surpassing $0.54 and potentially hitting $0.70 in a bullish scenario, caution is advised for a potential retracement towards $0.45. While both BONK and WIF note growth potential, traders should stay attentive to market shifts and technical indicators.

White House concerned about Bitcoin mining's environmental impact

Key points: 

  • White House proposed the DAME tax to address cryptocurrency sustainability amid rising demand.

  • Extreme weather challenges in Texas underscore Bitcoin mining's vulnerability to energy fluctuations.

News - The White House has raised concerns about the strain Bitcoin mining places on the national power grid, citing environmental worries amid the cryptocurrency's increasing demand.

This concern stems from the environmental impact of generating electricity for mining, often relying on non-renewable sources like fossil fuels.

In response to these challenges, the White House has proposed a solution to mitigate the economic and environmental costs associated with mining activities. This, by introducing the Digital Asset Mining Energy (DAME) excise tax.

Market trend amid regulations - The timing of these apprehensions coincides with Bitcoin's recent surge in value. This has intensified the urgency of addressing the environmental implications of Bitcoin mining.

However, the U.S. government's acknowledgment of cryptocurrency mining's environmental impact isn't new. Despite industry efforts, the government remains wary and may propose more regulations.

Challenges ahead - The recent challenges in Texas highlight the vulnerability of Bitcoin mining to extreme weather conditions and energy availability. As a major mining hub, Texas saw a significant drop in temperature, leading to a noticeable decrease in Bitcoin's hash rate.

This underlines the need for regulators and industry stakeholders to address environmental concerns and ensure energy network resilience. Going forward, prioritizing sustainable solutions is crucial for balancing innovation with environmental responsibility in the cryptocurrency industry's growth.

Did you know?

  • Dogecoin, created in 2013 as a joke by software developers Billy Markus and Jackson Palmer, was inspired by the "Doge" meme. Despite its origins, Dogecoin gained popularity and attracted attention from notable figures like Elon Musk and Snoop Dogg.

  • In September 2021, a hamster named Mr. Goxx became a cryptocurrency sensation, earning a 20% return on his initial investment within months. Using an "intention wheel" to select cryptocurrencies and dashing through tunnels for buying and selling, Mr. Goxx gained attention for his uncanny trading ability. Sadly, his rise to fame was short-lived as he passed away soon after, leaving behind a legacy of unconventional success.

  • In 2018, the World Bank issued the world's first blockchain-based bond, raising $110 million. Known as the "bond-i" (Blockchain Offered New Debt Instrument), it was developed with the Commonwealth Bank of Australia (CBA), utilizing a private Ethereum blockchain, showcasing blockchain's potential to revolutionize financial systems.

Top 3 coins of the day

Polkadot (DOT)

Key points:

  • Polkadot’s development activity remained steady throughout the past week.

  • The two oscillators hinted at contrasting fortunes.

What you should know - In the current market environment, numerous cryptocurrencies have seen price increases, with Polkadot [DOT] being no exception. The token’s price appreciated by more than 4.40% over the past 24 hours. At press time, it was trading at $8.48 with a market capitalization of over $10.5 billion. It was flashing green candlesticks on the daily chart, indicating bearish momentum which was further confirmed by the Awesome Oscillator. However, the Volume Oscillator (VO) highlighted a decline in trading activities as it remained below the zero line. Thus, if there’s unprecedented selling pressure entering the market, DOT could certainly go below its support level at $6.31.

Gala Games (GALA)

Key points:

  • GALA followed Bitcoin's bullish price trajectory.

  • The CMF indicated incoming bearish momentum.

What you should know - With Bitcoin surpassing $57,000, Gala Games (GALA) swiftly climbed to the top of the charts in just a few days, signaling a breakout rally. It surged by more than 12% in the last 24 hours alone. At press time, it was trading at $0.03822 with a market cap of $1.06 billion. However, predictions for the token looked somewhat bearish as technical indicators like the Chaikin Money Flow (CMF) were lying in the overbought territory. However, if GALA’s price crosses the resistance level at $0.42, the token might see a robust bullish run.

Decentraland (MANA)

Key points:

  • MANA exhibited stronger bullish momentum after the 1st week of February.

  • The RSI suggested bears could soon have a say.

What you should know - Several altcoins have seen price surges and Decentraland (MANA) is no exception. The token's price spiked by more than 10% over the past week however, this time the severity of the upturn might be more concerning. At press time, MANA was trading at $0.5746. However, its Relative Strength Index (RSI) recently entered the overbought zone, suggesting a potential pullback. This could lead to high selling pressure, potentially causing MANA to fall to a support zone of around $0.42. On the other hand, for MANA to sustain its bullish momentum, it needs to surpass the $0.60-mark.

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