Ethereum on track for $7,300

December 04, 2024

Reading time: 5 minutes

Martial law sparks $65K Bitcoin crash in South Korea

Key points:

  • South Korea’s declaration of martial law caused Bitcoin prices to plummet to $65,000 on local exchanges.

  • Limited market liquidity and the disappearance of key players contributed to the sharp decline. However, Bitcoin rebounded to $95,000 after the martial law order was reversed by South Korea’s parliament.

News - South Korea experienced a dramatic Bitcoin price crash on December 3, 2024, following President Yoon Suk Yeol’s declaration of martial law. During a live television address, Yoon cited the need to “eliminate anti-state elements” and address threats from North Korea. The announcement sent shockwaves through South Korea’s cryptocurrency markets, with Bitcoin prices on the Upbit exchange dropping to as low as 92 million won (approximately $65,000).

Liquidity crisis amplifies Bitcoin’s decline - The sharp price drop was attributed to a sudden liquidity crisis, as key market players disappeared during the announcement. According to crypto trader Ltrd, the lack of active participants led to an imbalance between bids and asks, creating a 10% spread in trading.

“The reason is simple—it is shockingly hard to enter the Korean market and trade there,” Ltrd explained in an X thread. The trader criticized South Korea’s restrictive market structure, which limits participation to a small number of players, reducing the availability of liquidity and amplifying volatility during times of crisis.

Massive sell pressure across all instruments further exacerbated the decline. Ltrd noted that the market overreacted, suggesting that broader liquidity provider participation could have mitigated the extreme price movement.

Bitcoin recovers after martial law reversal - Hours after the initial declaration, South Korea’s parliament voted to nullify the martial law order. President Yoon accepted the decision, lifting the declaration and easing market tensions.

Bitcoin prices rebounded quickly, climbing back to 135 million won (approximately $95,000). However, the incident highlighted the vulnerabilities of South Korea’s cryptocurrency market to liquidity shocks, particularly during periods of political uncertainty.

Ethereum eyes $7,300 rally post breakout: Analyst predicts 97% gain

Key points:

  • Ethereum (ETH) has been forming a cup and handle pattern, indicating a potential price rally if it breaks the $3,800 resistance level.

  • ETH has risen from $2,400 to $3,700, with analysts targeting a new high of $7,346 if momentum continues.

News - Ethereum (ETH) has been on a promising upward trajectory, with its price rising from $2,400 to $3,700 in recent weeks. This has fueled speculation about the next leg of ETH’s rally, with pseudonymous analyst VentureFounder suggesting a potential target of $7,346 if Ethereum breaches the $3,800 resistance level.

The cup and handle pattern, a classic bullish indicator, underpins this optimistic forecast. If confirmed, the breakout could deliver a 97% price increase from current levels, potentially positioning Ethereum for substantial gains.

The cup and handle pattern: A bullish signal? - Ethereum’s current price action aligns with the formation of a cup and handle triangle, often seen as a precursor to price surges. However, the breakout is not yet confirmed, and Ethereum must establish strong support above $3,800 to validate this pattern.

Analysts warn that without this confirmation, ETH may remain in a consolidation phase. The $3,800 resistance level represents a critical threshold for Ethereum to unlock further bullish potential and approach the $7,300 target.

LTH behavior and market risks - Despite its bullish outlook, Ethereum faces risks from long-term holder (LTH) behavior. The Liveliness indicator, which tracks selling activity among long-term holders, has shown signs of an uptick. Rising Liveliness suggests that more LTHs are liquidating their positions, potentially signaling a bearish shift in sentiment.

If selling by long-term holders intensifies, it could destabilize Ethereum’s rally and lead to a price correction. Analysts caution that a failure to maintain momentum above $3,800 could push ETH back toward the $3,327 support range, delaying its recovery.

ETH price prediction: $4,000 and beyond - Ethereum sits just below the $3,800 resistance, which is key to unlocking its next rally. Breaking this level could propel ETH past its current year-to-date high of $4,000 and attract renewed interest from both retail and institutional investors.

However, sustained buying pressure and a decline in LTH selling activity will be essential for ETH to maintain its bullish momentum and target the ambitious $7,346 level.

US government transfers $33.6M in seized FTX crypto to undisclosed wallets

Key points:

  • The US government moved $33.6 million worth of crypto, including 5,024 ETH ($18.17M) and $13.58M in BUSD, to undisclosed wallets.

  • The transfers, involving tokens like SHIB and WBTC, raised speculation about their potential market impact if liquidated.

News - The US government has transferred $33.6 million worth of cryptocurrency seized from FTX and Alameda Research to undisclosed wallets, sparking concerns over potential market destabilization. The assets included 5,024 ETH, valued at $18.17 million, along with $13.58 million in Binance USD (BUSD) and smaller amounts of tokens like SHIB, AERGO, and WBTC. Blockchain analytics firm Arkham identified the receiving wallets, which began with 0x9ac and 0x9cd.

Market concerns amid strong ETH performance - Ethereum’s price reached a 2024 high of $3,704, buoyed by a recovering crypto market. However, market participants worry that liquidating these government-held assets could create significant selling pressure, destabilizing token prices.

This concern comes on the heels of recent government activity, including the transfer of 19,780 BTC seized from the Silk Road case to Coinbase Prime. The US government currently holds 198,109 BTC, worth $19.15 billion, seized in various crypto-related criminal cases.

Scrutiny of FTX case and regulatory transparency - The transfers also bring renewed attention to Sam Bankman-Fried (SBF) and FTX’s collapse. SBF faced accusations of misusing customer funds for political donations. Cameron Winklevoss recently criticized the US justice system for dropping campaign finance charges against SBF, alleging it undermines public trust.

Meanwhile, FTX has proposed a reorganization plan to compensate creditors and revive its brand. The plan, set to take effect in January 2025, aims to recover stakeholder value despite lingering challenges from its collapse.

Transparency and policy questions - The US government’s management of seized crypto assets continues to raise questions about transparency and regulatory practices. As debates around crypto governance and corporate accountability evolve, the interplay between seized assets and market stability remains a focal point.

Grayscale joins race for spot Solana ETF with SEC filing

Key points:

  • Grayscale filed with the SEC to convert its Solana Trust into a spot Solana ETF, under the ticker GSOL.

  • If approved, GSOL would trade on the New York Stock Exchange (NYSE) and hold $134.2 million in assets under management (AUM).

  • Grayscale faces competition from 21Shares, Canary Capital, VanEck, and Bitwise in the growing race for spot Solana ETFs.

News - Grayscale Investments, one of the largest digital asset managers, has filed with the United States Securities and Exchange Commission (SEC) to launch a spot Solana ETF. This move comes as competition heats up among major asset managers vying to bring the first Solana ETF to the market.

If approved, the Grayscale Solana Trust (ticker: GSOL) would convert its existing trust structure into a fully-fledged spot ETF. The ETF would trade on the New York Stock Exchange (NYSE) and be supported by Coinbase Custody as the custodian and BNY Mellon Asset Servicing as the administrator and transfer agent.

Grayscale’s filing includes a 19b-4 form, proposing a rule change to allow listing, and an S-1 registration statement, which the SEC must approve to bring the ETF to public markets.

Solana’s growing market presence - Grayscale’s Solana Trust currently holds $134.2 million in AUM, making it the largest Solana investment fund globally, according to the company’s filing. The trust’s Solana holdings represent around 0.1% of all SOL in circulation, underscoring its significant stake in the ecosystem.

The move aligns with Solana’s remarkable growth, as the cryptocurrency has surged 277% in the past 12 months, achieving a market cap exceeding $112 billion. Solana was trading at $238 at press time, up 4% since Grayscale submitted its filing.

Intense competition among ETF issuers - Grayscale’s filing pits it against several major players in the crypto asset management space, including 21Shares, Canary Capital, VanEck, and Bitwise, all of which have submitted filings for spot Solana ETFs. Franklin Templeton has also expressed interest in launching a Solana ETF.

This fierce competition highlights the growing demand for exposure to Solana’s performance in a regulated investment vehicle.

Grayscale’s entry into the race for a spot Solana ETF emphasizes the increasing institutional interest in Solana and its potential as a leading cryptocurrency. With its Solana Trust already holding substantial assets, Grayscale’s ETF filing represents a significant step in expanding access to Solana for retail and institutional investors alike.

Did you know?

  • The world’s first Bitcoin ATM was installed in Vancouver in 2013, allowing users to exchange cash for Bitcoin and vice versa. Today, there are over 35,000 Bitcoin ATMs around the globe.

  • In 2014, the first real estate transaction was completed using Bitcoin, with a home in Florida being sold for 455 BTC, valued at around $400,000 at the time.

  • The first-ever Bitcoin exchange-traded fund (ETF) was approved in Canada in 2021, allowing institutional investors to gain exposure to Bitcoin without directly owning the cryptocurrency.

Top 3 coins of the day

Tron (TRX)

Key points:

  • At press time, TRX was trading at $0.37.

  • Increasing by approximately 44.32% over the last 24 hours, it was the biggest gainer, as per CoinMarketCap.

What you should know:

The daily chart exhibited a sharp rally for TRX, with its price shooting up significantly, supported by a notable rise in trading volume. The RSI at 75.77 indicated overbought conditions, suggesting that a potential pullback might be on the horizon as traders look to book profits. Moreover, the SMA 9 remained well below the current price, confirming the strong bullish momentum. Immediate resistance is observed near $0.45, corresponding to the recent peak, while support lies around $0.24, aligning with the SMA level. Investors should closely watch these levels for potential retracement or further continuation of the rally.

Cardano (ADA)

Key points:

  • At press time, ADA was trading at $1.20.

  • Increasing its popularity, it remained as one of the top trending cryptocurrencies, as per CoinMarketCap.

What you should know:

A strong bullish trend was illustrated for ADA on the daily chart, as evident from the steep upward movement along the trendline. The MACD (12, 26) indicator confirmed bullish momentum, with the MACD line positioned above the signal line and the histogram printing green bars, indicating continued upward pressure. Moreover, trading volumes remained high, reflecting significant interest from investors. Immediate resistance is seen near $1.24, aligning with the intraday high. On the downside, support is anticipated around $1.17, corresponding to the intraday low. Traders should monitor the MACD closely for any signs of weakening momentum, as well as the key resistance and support levels for potential price reactions.

Algorand (ALGO)

Key points:

  • At press time, ALGO was trading at $0.50.

  • Decreasing by approximately 8.27% over the last 24 hours, it was the biggest loser, as per CoinMarketCap.

What you should know:

On the daily timeframe, Algorand was seen to be undergoing a significant correction after an impressive rally. The Parabolic SAR dots, positioned below the price for most of the recent uptrend, indicated that bullish momentum may still hold despite the retracement. However, the Directional Movement Index (DMI) presented a contrasting picture. The +DI (green) started to converge with the -DI (red), signaling weakening buyer dominance. Meanwhile, the ADX line remained elevated, suggesting that the ongoing trend has still been strong. Additionally, trading volume has reduced slightly compared to the peaks observed during the rally, pointing to declining interest or profit-taking activity. Immediate resistance lies at $0.54, the recent swing high, while support is likely near $0.45, coinciding with previous consolidation zones. Traders should monitor the $0.54 resistance level closely, as a successful breach might reignite bullish momentum. Conversely, a breakdown below $0.45 could lead to further corrections.

Leading the Future of Finance

  • C$152M YTD revenue.

  • Expanding global reach.

  • Zero-debt growth strategy.

How was today's newsletter?

Login or Subscribe to participate in polls.