Dogecoin, Shiba Inu lead crash

December 10, 2024

Reading time: 5 minutes

Dogecoin and Shiba Inu lead memecoin crash as liquidations surge

Key points:

  • Memecoin market hits 3-week low - The sector's market cap shrank to $119.6 billion, down 21% in 24 hours.

  • Massive liquidations - Over $1.7 billion in leveraged positions were wiped out, marking the largest liquidation event since 2021.

News - Memecoins, including Dogecoin (DOGE), Shiba Inu (SHIB), and Dogwifhat (WIF), suffered significant losses on December 10, 2024, erasing much of the gains from their Trump-fueled rally weeks ago. The sector’s total market capitalization dropped to $119.6 billion, its lowest since November 27, reflecting a 21% decline in just 24 hours.

Dogecoin led the losses with a 5.6% drop, followed by SHIB, which recorded a 10.4% loss. Ethereum-based Pepe (PEPE) was the only top-cap memecoin to post a gain, up 1.7%. Daily trading volumes across memecoins nearly doubled during the crash, indicating intense selling pressure.

Memecoin OI decline signals bearish momentum - The downturn was preceded by a sharp drop in open interest (OI) across memecoins:

  • DOGE OI: Fell 20% to $3.1 billion.

  • WIF OI: Dropped 27% to $519 million.

  • PEPE OI: Declined 11% to $302.4 million.

The declining OI suggests bearish momentum, with leveraged traders closing contracts in anticipation of further losses.

Crypto market liquidations surge - The broader crypto market also experienced a massive liquidation event, wiping out $1.7 billion in leveraged positions in the last 24 hours. Memecoin liquidations accounted for a significant share:

  • DOGE: $72.6 million in longs liquidated.

  • SHIB: $22.35 million in longs liquidated.

  • PEPE: $7.9 million in longs liquidated.

  • WIF: $3.6 million in longs liquidated.

This marked the largest liquidation event since 2021 and accompanied significant losses across the crypto market. Bitcoin (BTC) dropped as much as 11% to $92,000 during the sell-off, dragging down altcoins and memecoins.

What's next? - Memecoins remain under pressure as investors reassess their positions in the volatile market. The significant decrease in open interest and rising liquidation trends suggest a cautious outlook for the sector. Analysts warn of potential further declines if bearish momentum persists, while market participants await signs of recovery in the broader crypto market.

Eric Trump predicts $1 Million Bitcoin, calls it a "global asset"

Key points:

  • Eric Trump has predicted that Bitcoin will reach $1 million, citing its scarcity and transformational potential.

  • He compared Bitcoin adoption to email, emphasizing early movers as future winners.

News - Eric Trump, executive vice president of the Trump Organization and son of President-elect Donald Trump, made a bold prediction at the Bitcoin MENA event in Abu Dhabi on December 10, 2024. Speaking to a packed audience, Trump forecasted Bitcoin’s future valuation at $1 million per coin, highlighting its scarcity and potential to revolutionize global finance.

“Bitcoin isn’t just another asset nor just an investment; it’s a global asset. It’s a store of value. It’s a hedge against inflation. It’s a hedge against political turmoil, political instability, acts of God, hurricanes, fires, floods, tornadoes, guys. That’s what makes it so powerful,” Trump declared. He also celebrated Bitcoin’s $100,000 milestone, achieved on December 5, while reaffirming his belief in its long-term potential. 

Bitcoin’s scarcity and adoption - Trump pointed to Bitcoin's capped supply of 21 million coins as a core driver of its value. He compared the slow adoption of Bitcoin to the trajectory of email, which took decades to achieve mainstream acceptance. 

“People are slow as hell to adapt to new technology. We’re going to see that banks have to adapt. We’re going to see that governments have to adapt, and governments will adapt. [...] Those who embrace Bitcoin, those who embrace this digital revolution, those who embrace digital currency, the people who come in early are going to be the people who win,” Trump said, drawing parallels between Bitcoin adoption and major technological breakthroughs. 

Institutional and government embrace - Trump emphasized that Bitcoin’s decentralized nature eliminates the need for intermediaries, posing a challenge to traditional banking. He predicted increased institutional adoption and urged governments to adapt to the digital revolution.

What’s next? - Trump concluded his speech by congratulating the Bitcoin community on recent milestones, while expressing optimism about its global impact. “Bitcoiners, I love you. The Trump family loves you. It’s truly a great honor to be here today,” he said.

As Bitcoin continues its upward trajectory, Trump's $1 million prediction adds to growing optimism among industry leaders and investors alike.

Satoshi’s 1 Million BTC at risk? Quantum tech raises alarms

Key points:

  • Advancements in quantum computing have raised concerns over Bitcoin's earliest transaction formats, including Satoshi Nakamoto's 1 million BTC holdings.

  • Debate surrounds whether these vulnerable holdings should be frozen to safeguard Bitcoin's decentralization and market stability.

News - Concerns about the security of Satoshi Nakamoto’s 1 million Bitcoin are resurfacing as advancements in quantum computing threaten the early transaction format used to store these coins. Unlike modern pay-to-public-key-hash (P2PKH) transactions, Satoshi’s coins reside in pay-to-public-key (P2PK) outputs, which expose public keys on the blockchain, making them potentially vulnerable to future quantum attacks.

Quantum computers, if sufficiently advanced, could theoretically derive private keys from these exposed public keys, rendering Satoshi’s holdings a high-value target. This has sparked debate within the crypto community over whether these coins should be frozen to protect Bitcoin's integrity.

Vulnerability of Satoshi’s coins - P2PK outputs, once widely used in Bitcoin’s early days, have been largely replaced by P2PKH transactions, which hide public keys behind a hash until spent. This improvement makes quantum attacks significantly more difficult. However, Satoshi’s coins remain in the older format, leaving them exposed to potential quantum threats.

Currently, the risk is hypothetical, as quantum computers capable of exploiting this vulnerability do not yet exist. However, experts like Emin Gün Sirer, founder and CEO of Ava Labs, caution that advancements in quantum computing could eventually make this scenario plausible.

Freezing Satoshi’s holdings - To address the quantum threat, some propose freezing Satoshi’s 1 million BTC by altering Bitcoin’s consensus rules. This would involve:

  • Creating a Bitcoin Improvement Proposal (BIP) to identify vulnerable unspent transaction outputs (UTXOs).

  • Implementing a network soft or hard fork to enforce the freeze.

While technically feasible, this proposal raises significant challenges, including gaining broad community consensus. Historically, such agreements have proven difficult for Bitcoin, given its decentralized ethos.

Ethical and market implications - Freezing Satoshi’s holdings challenges the core principle of Bitcoin as an immutable and decentralized ledger. Critics argue that this move could set a dangerous precedent, inviting future interventions that compromise Bitcoin’s trustless nature. Proponents, however, see this as a necessary exception to protect the network from potential market disruption caused by quantum threats.

A freeze would also likely spark controversy within the broader crypto ecosystem, questioning Bitcoin’s foundational values of censorship resistance and immutability.

What’s next? - The possibility of quantum computing advancing to a level capable of threatening Satoshi's holdings remains speculative but continues to raise important discussions about Bitcoin's long-term resilience. As debates unfold, questions about Bitcoin’s decentralization, security, and the potential role of its anonymous creator in safeguarding the network's future remain unanswered.

Will Bitcoin developers and the community act preemptively, or will they rely on Satoshi Nakamoto to intervene if quantum threats become imminent?

Tether's USDT gains approval in Abu Dhabi's financial hub

Key points:

  • Regulatory milestone - The Abu Dhabi Global Market (ADGM) has officially recognized Tether’s USDT stablecoin as an Accepted Virtual Asset (AVA), enabling licensed financial service providers to integrate it into regulated financial ecosystems.

  • Expanding market influence - Tether's approval comes as its market capitalization surpasses $138 billion, solidifying its position as the largest stablecoin.

News - The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market has approved Tether’s USDt stablecoin as an Accepted Virtual Asset (AVA). This recognition allows licensed financial service providers within ADGM to offer services involving USDT, advancing its integration into the region's regulated financial landscape.

The approval extends to USDT on multiple blockchains, including Ethereum, Solana, and Avalanche, aligning with the UAE's broader strategy to become a global leader in digital finance.

Tether’s market capitalization has grown significantly, currently exceeding $138 billion, further emphasizing its dominance in the stablecoin sector.

Regulatory impact - This move underscores ADGM's commitment to fostering innovation in the financial sector while supporting the UAE's economic diversification. By bridging traditional finance with digital assets, the approval strengthens Abu Dhabi's role as a key financial hub.

However, concerns remain globally regarding stablecoin integration. The U.S. Financial Services Oversight Council (FSOC) has warned about potential systemic risks, citing Tether's dominance as holding 70% of the stablecoin market's value. The FSOC has called for enhanced risk management standards to address vulnerabilities such as exposure to bank runs.

Market context - Tether has continued to exert significant influence in the crypto market. In November, the company minted over $5 billion USDT in just 72 hours, coinciding with Bitcoin’s climb to record highs. The market cap of USDT surged from $124 billion to $138 billion by December 10, 2024, reflecting growing adoption and market activity.

What's next? - The regulatory acceptance of USDT in Abu Dhabi could pave the way for broader stablecoin adoption in the region. As Tether continues to expand its influence, questions around risk management and financial stability will remain critical for both regulators and market participants globally.

Interesting facts

  • In 2021, Miami's mayor, Francis Suarez, proposed a plan to issue Bitcoin-backed bonds and integrate cryptocurrency into the city's financial infrastructure, aiming to create a more crypto-friendly environment for innovation and investment.

  • The first crypto "millionaire" was believed to be Laszlo Hanyecz, who famously paid 10,000 BTC for two pizzas in 2010. While his purchase was a joke at the time, it would be worth over $250 million today, highlighting the massive increase in Bitcoin’s value.

  • Chainlink, launched in 2017, revolutionized the use of smart contracts by connecting off-chain data to the blockchain, allowing real-world data (like weather forecasts, market prices, etc.) to interact with decentralized applications (dApps).

Top 3 coins of the day

Curve DAO (CRV)

Key points:

  • At press time, CRV was trading at $1.15.

  • Increasing by approximately 9.41% over the last 24 hours, it was one of the biggest gainers, according to CoinMarketCap.

What you should know:

The daily chart for CRV showed a robust uptrend, with the price trading well above the SMA (9) at $1.06, signaling strong bullish momentum. The RSI was at 72.81, indicating overbought conditions that could lead to a potential correction in the short term. The trading volume surged significantly, reflecting heightened market activity and interest from investors. Immediate resistance is observed at $1.21, corresponding to the intraday high, while support is found near the SMA (9) level at $1.06. A sustained move above resistance could signal continued bullish momentum, while a drop below support might indicate a possible retracement. Traders should monitor these levels closely for confirmation of the trend's strength.

Ondo (ONDO)

Key points:

  • At press time, ONDO was trading at $1.56.

  • Increasing by approximately 3.18% over the last 24 hours, ONDO was one of the top trending cryptocurrencies and the biggest gainers, as per CoinMarketCap.

What you should know:

A strong bullish trend was reflected for ONDO on the daily chart. The +DI value of 47.28 on the Directional Movement Index (DMI) indicated dominant bullish momentum, while the ADX value of 17.29 signaled a trend that has been strengthening but still moderate. The On-Balance Volume (OBV) consistently rose to 131.62M, suggesting steady buying pressure. ONDO was trading above its key support at $1.40, with intermediate resistance around $1.64. The immediate resistance has been noted at $1.78, aligning with the recent highs. A breakout above this level could signal a continuation of the bullish trend, while a drop below $1.40 may hint at a potential retracement. Traders should also monitor volume surges and DMI changes for signs of weakening momentum or possible reversals.

IOTA (IOTA)

Key points:

  • At press time, IOTA was trading at $0.36.

  • Declining by approximately 6.12% over the last 24 hours, it was the biggest loser according to CoinMarketCap's data.

What you should know:

On the daily timeframe, IOTA was seen to be in a strong bearish trend, with the Parabolic SAR dots positioned above the price, confirming a downward momentum. Additionally, the MACD reflected a bearish crossover, with the MACD line moving below the signal line and shrinking histogram bars, signaling waning bullish strength. Trading volume showed a slight decline, reflecting reduced market activity, though the price action remained under pressure from sellers. Immediate support is identified around $0.33, aligning with the last consolidation zone, while resistance is near $0.40, marking a significant psychological barrier. A break below support could signal further decline, while reclaiming resistance might initiate a recovery.

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