Ethereum defies market trend

June 05, 2024

Reading time: 5 minutes

Bitcoin ETFs experience second-highest inflow day, surpassing $886 Million

Key points:

  • Fidelity’s Bitcoin Fund led with $378.7M in inflows, followed by BlackRock’s iShares Bitcoin Trust with $274M.

  • The surge in inflows is the highest since March 12, when these funds received a record $1.04 billion.

News - Bitcoin ETFs in the U.S. experienced their second-highest day of net inflows ever, collectively pulling in $886.6 million.

The Fidelity Wise Origin Bitcoin Fund (FBTC) was the most popular choice for investors, recording the largest inflow of $378.7 million. BlackRock's iShares Bitcoin Trust (IBIT) followed closely behind with $274 million net inflows, as per Farside Investors.

What’s more? Coming in third place was the ARK 21Shares Bitcoin ETF (ARKB), which saw $138.7 million in net inflows. This surge in investment marks the highest net inflow for these funds since 12 March, when they achieved a record-breaking $1.04 billion inflow. Interestingly, Bitcoin reached its all-time high of $73,679 just one day later on 13 March.

Data from Farside also indicated a rare inflow day for the Grayscale Bitcoin Trust (GBTC) at $28.2 million. This marks only the seventh time GBTC has seen positive inflows since its conversion from a closed-end fund to a spot ETF in January.

Market’s reaction - Bloomberg ETF analyst Eric Balchunas commented on the situation, noting the "big-time flows all around today for The Ten" – a reference to all Bitcoin ETFs except Hashdex's, which entered the market much later and has struggled to attract inflows. Notably, the Bitcoin ETFs from Invesco Galaxy, Franklin Templeton, WisdomTree, and Hashdex all saw zero inflows on 4 June.

Ethereum decentralized exchange activity slumps by $2.21 B in one week

Key points:

  • Ethereum DEX volume has dropped significantly over the past week, falling from $3.34 billion to $1.03 billion.

  • Despite the falling price and DEX volume, the MVRV Z Score indicates ETH is in a bull phase.

News - Ethereum investors are facing mixed signals, with a recent decline in activity on Decentralized Exchanges (DEXes) raising concerns about demand.

According to data from Messari, the daily trading volume on Ethereum DEXes has dropped significantly over the past week, falling from $3.34 billion on 28 May to $1.03 billion at press time. This represents a decrease of $2.21 billion, signifying a potential drop in liquidity for Ethereum.

What does it imply? The decrease in DEX volume could also be interpreted as a sign of declining demand for ETH. With this drop in demand, some analysts believe that Ethereum may struggle to experience a significant price increase in the near future. In fact, the price of ETH has already fallen by 1.50% within the last week, reaching $3,797 at press time.

This underwhelming price action has led some to question whether Ethereum will be a major player in the next bull market. At press time, the MVRV score sat at 1.63. While this is lower than peaks observed during previous bull runs (14.19 in 2017 and 4.76 in 2021), it still suggests potential for future price growth.

Conclusion - In the short term, however, AMBCrypto analyzed the potential for liquidations to impact the price of ETH. Liquidations occur when an exchange forces a trader to close a position to prevent further losses. The data suggests that large-scale liquidations for Ethereum could take place between $3,882 and $3,946. This indicates that the price may move towards this range in the coming days.

Waves token sees surge in social activity following Binance delisting

Key points:

  • Post delisting news, WAVES price crashed to $1.53, the lowest since October 2023.

  • Technical indicators suggest heavy selling pressure and minimal chance of a short-term rebound.

News - WAVES has been hit hard following its delisting from leading cryptocurrency exchange Binance. The altcoin has witnessed a surge in social media activity, but this hasn't stopped its price from plummeting. According to data from Santiment, WAVES currently ranks as the most discussed cryptocurrency on social media platforms over the past 24 hours.

The trouble began on 3 June when Binance announced it would delist WAVES along with three other assets. This news triggered a wave of sell-offs, causing the price of WAVES to immediately drop by 30%. At the time of writing, WAVES was trading at $1.53, its lowest price since October 2023.

What do the technical indicators say? An analysis of WAVES' one-day chart by AMBCrypto painted a bleak picture. The Relative Strength Index (RSI) and Money Flow Index (MFI) sat at 19.99 and 8.73 respectively, indicating overwhelming selling pressure and minimal buying activity.

While these oversold readings suggest a potential correction, the Chaikin Money Flow narrated a different story. WAVES' CMF plunged to -0.49, the lowest level in the token's history. This metric signifies a significant outflow of capital from the WAVES market, further dampening hopes of a swift recovery.

With these technical indicators stacked against each other, and continued selling pressure, WAVES could potentially fall below $1 and trade as low as $0.69.

FLOKI's price poised for a takeoff with a $12 million boost

Key points:

  • Market maker DWF Labs commits $12 million to buy FLOKI tokens.

  • This follows a previous $10 million investment in February, which coincided with a 69% price increase for FLOKI.

News - FLOKI is back in the news, and this time it might be good news for holders. The Floki development team announced on 4 June that market maker DWF Labs has agreed to purchase $12 million worth of FLOKI tokens.

Market makers play a crucial role in providing liquidity for crypto projects and exchanges. This strategic purchase, according to a Floki Medium post, aims to "further strengthen Floki's position in the industry," particularly as the project prepares for the release of "several key products."

DWF Labs’ commitment - This isn't DWF Labs' first investment in FLOKI. In February, they committed $10 million to the memecoin, which coincided with a 69.13% price increase. This suggests their involvement could have a positive impact on FLOKI's value.

Further bolstering confidence, the Floki team recently released a trading bot, demonstrating their commitment to enhancing network utility. While the price is currently down 5.60% at $0.00026, the latest developments suggest a potential upswing for FLOKI, which they've dubbed their "most explosive bull run."

Some analysts are even predicting a $10 billion market cap for FLOKI during this cycle. If achieved, this could propel the price to $0.0010 (based on current circulating supply).

While there are still negative comments surrounding the project, as evidenced by the Weighted Sentiment of -0.119, there's a growing positive perception that could translate into increased demand for FLOKI.

Interesting facts

  • In 2022, a decentralized autonomous organization (DAO) called PleasrDAO raised a whopping $4 million in cryptocurrency to acquire a rare copy of the first-ever printed pizza menu from 1894.

  • As of 2024, over 15,000 companies worldwide accept Bitcoin as a payment method. Some of the businesses that accept Ethereum and Bitcoin as payment options are Sotheby, Shopify, and Overstock, along with blue chip companies like Microsoft.

  • In the United States, people making over $100,000 annually constitute over 25% of all crypto-holders, but only 15% of the general population.

Top 3 coins of the day

Binance Coin (BNB)

Key points:

  • At press time, BNB was trading at $699.89 after 8.57% hike over the last day.

  • The number of Open Interest saw a sudden spike on 4 June, hinting at capital inflows.

What you should know - From 25 December 2023, BNB has been on an uptrend on a macro-frame. However, after reaching a high of $645, the coin fell gradually to its lowest point of $495 on 19 March. This level has acted as a very good support. Additionally, from 15 March to 2 June, BNB moved sideways within a range of $527-$640. Surprisingly, on 4 June, it saw an upward breakout from this range, which helped BNB reach $716 - its all-time-high (ATH) figure. Technical indicator RSI suggested the token was overbought, at the time of writing. Hence, a trend reversal can surely be expected in the next few days.

Key points:

  • LINK was facing heavy sell pressure, at press time.

  • Candlesticks of the last day showed indecision in the market.

What you should know - At the back of Bitcoin ETF inflows, the king coin crossed the $70k barrier. Most of the altcoins followed suit. But Chainlink was an exception. Its Open Interest increased marginally by 0.37%. Curiously, after 26 March, traders resorted to massive profit-taking, due to which LINK’s price declined to the level of $11.78. But soon after buyers overtook sellers, thus pushing the price close to $19.22 in the next few days. If bulls fail to maintain the $16.91 support, the price could slip to its strong support zone of $12.18-$13.88. At the time of writing, the selling signal looked strong, as seen by MACD, which was awaiting a bearish divergence.

Monero (XMR)

Key points:

  • At the time of reporting, XMR was trading at $162 with buying pressure in the fore.

  • Its derivatives market registered good volume over the last day.

What you should know - XMR has been on a roll since mid-April, surging to new highs after a steep sell-off in early February. With continued buying pressure, XMR could break through $170 soon. However, a cloud looms on the horizon. The RSI, currently in overbought territory at 82.87, suggests a potential price correction in the near future. Overall, the sentiment around XMR is cautiously optimistic. Short-term gains are possible, but the high RSI indicates a pullback could be imminent.

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