Solana bears target $225 drop

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Solana bears eye $225 as selling pressure intensifies

Key points:

• Solana’s price has been struggling near $238, with selling pressure threatening its $225 support level.

• Indicators like the CMF and BoP point to bearish control. A break below $225 could see SOL dropping to $222 or $200, while renewed buying could push it toward $265.

News - Solana (SOL) has been facing increasing selling pressure, with its price hovering near $238. Coinglass’ liquidation heatmap indicated high liquidity at the $225 support level, suggesting potential vulnerability to further declines. If the selling pressure intensifies, SOL’s price could test this critical support and possibly dip lower.

The Chaikin Money Flow (CMF), a key liquidity metric, has been declining, reflecting rising capital outflows and diminishing buying pressure. Simultaneously, the Balance of Power (BoP) indicator has entered negative territory, further signaling bearish dominance.

Technical indicators signal more downside - Solana’s daily chart revealed bearish signals across multiple technical indicators:

• CMF decline: Indicated growing selling pressure, likely to push the price lower.

• Negative BoP: Suggested bears have firmly been in control, increasing the chances of a drop below $225.

• Fibonacci retracement: Pointed to potential targets at $222 (23.6% retracement) or $200 in a bearish scenario.

The current lack of trading volume exacerbates the situation, making it easier for bears to gain control.

Potential recovery scenarios - While the immediate outlook for SOL is bearish, a surge in buying pressure could shift momentum. If buyers step in, the altcoin’s price could rebound to test the $265 resistance level.

Solana’s price faces a critical moment as bears threaten to push it below the $225 support level. With bearish signals dominating key indicators, investors should remain cautious. A break below $225 could lead to further declines, while increased buying pressure would be required to reclaim upward momentum.

Ethereum L2 TVL exceeds $51B after 205% surge

Key points:

• Ethereum L2 networks have reached an all-time high of $51.5 billion in TVL, a 205% increase from $16.6 billion in November 2023.

• Arbitrum One and Base are the leading contributors, holding 35% and 22% of the total L2 ecosystem’s TVL, respectively.

News - Ethereum Layer-2 (L2) networks have achieved a new milestone, surpassing $51.5 billion in total value locked (TVL), according to L2Beat data. This marks a 205% year-over-year growth, up from $16.6 billion in November 2023. The rapid adoption of L2 scaling solutions underscores growing investor confidence in Ethereum-native assets.

Arbitrum One has been leading the L2 ecosystem, holding $18.3 billion in TVL (35% of the total), followed by Base with $11.4 billion (22%). Notably, Base reached its first-ever $10 billion TVL milestone and set a record 106 transactions per second (TPS) on November 26, 2024, driven by memecoin activity during the ongoing bull cycle.

Scalability meets challenges - Layer-2 networks aim to enhance Ethereum scalability by processing transactions on secondary chains, reducing costs and wait times on the Ethereum mainnet. However, industry experts warn that L2s might be "cannibalistic" to Ethereum’s revenue and Ether’s price potential, raising questions about long-term impacts.

The Ethereum Dencun upgrade, launched in March, played a significant role in stabilizing L2 transaction fees. While many focus on fee reductions, the upgrade primarily expanded capacity and enhanced network scalability. Some L2s, including Starknet, Optimism, Base, and Zora OP, saw median transaction fees drop by 99% after the upgrade.

Adoption trends - The continued adoption of Layer-2 networks reflects their critical role in Ethereum’s ecosystem. As demand for faster, cheaper transactions grows, the rise in TVL and transaction volume highlights the increasing reliance on these scaling solutions. Despite concerns about their potential impact on Ether’s value, their scalability benefits remain pivotal for the Ethereum network’s expansion.

With over $51 billion locked in Layer-2 networks, Ethereum’s scaling solutions are proving essential for reducing fees and improving network efficiency. As Arbitrum and Base drive adoption, the ecosystem's growth trajectory suggests L2s will continue to play a transformative role in Ethereum’s future.

Bitwise aims for SEC nod with 10 Crypto Index Fund ETF filing

Key points:

• Bitwise has applied for an ETF based on its 10 Crypto Index Fund, launched in 2017.

• The fund is heavily weighted toward Bitcoin (75.14%) and Ether (16.42%), with additional allocations to Solana, Ripple, Cardano, and others. 

News - Bitwise Asset Management has filed with the U.S. Securities and Exchange Commission (SEC) for an ETF tied to its 10 Crypto Index Fund. The proposed ETF will be listed on the New York Stock Exchange (NYSE) Arca, which submitted a filing to list the fund as an exchange-traded product (ETP) on November 15.

The Bitwise 10 Crypto Index Fund, launched in November 2017, provides diversified exposure to ten leading cryptocurrencies. Its current allocation includes 75.14% Bitcoin, 16.42% Ether, and smaller portions of Solana, Ripple, Avalanche, Chainlink, Cardano, Bitcoin Cash, Uniswap, and Polkadot. As of now, the fund has $1.4 billion in assets under management (AUM).

ETF details - The proposed ETF will offer investors indirect exposure to the cryptocurrencies in the fund, with Coinbase Custody managing the crypto assets and the Bank of New York Mellon (BNY Mellon) serving as the custodian for cash holdings. Furthermore, the filing specifies that the fund will not hold any digital assets beyond its listed portfolio.

The SEC has acknowledged the submission but has not set a timeline for approval or rejection. Moreover, the filing reflects Bitwise’s continued efforts to expand its ETF offerings, following the recent rebranding of its European XRP ETF and applications for other ETFs, including spot Bitcoin, Ether, and Solana funds.

Pro-crypto sentiment fuels optimism - The timing of the filing aligns with increasing optimism in the crypto industry, as President-elect Donald Trump and a crypto-friendly Congress promise a more favorable regulatory environment. This backdrop has spurred industry leaders to predict a wave of innovation and approval for crypto-related financial products.

Bitwise’s application for a 10 Crypto Index Fund ETF signals its ambition to diversify its product lineup and meet growing demand for institutional-grade crypto investment options. If approved, the ETF would mark another milestone in bridging traditional finance with the crypto ecosystem.

New crypto tax proposal: Hong Kong targets hedge funds and investors

Key points:

• Hong Kong has proposed exempting cryptocurrency gains from taxes for hedge funds, private equity, and family offices.

• The initiative aims to strengthen its position as a leading crypto financial hub and compete with Singapore and Switzerland.

News - In a bid to bolster its status as a global crypto financial hub, Hong Kong has unveiled a proposal to exempt cryptocurrency gains from taxes for hedge funds, private equity firms, and family investment offices. The proposal, which is open for a six-week consultation, extends tax exemptions to investments in private credit, international real estate, and carbon credits.

This move aligns with Hong Kong’s ambition to compete with regional rivals like Singapore, known for its Variable Capital Company (VCC) framework, and Switzerland, a leader in wealth management. Hong Kong has already promoted its Open-Ended Fund Company (OFC) structure since October 2023, attracting over 450 funds.

Competing for crypto dominance - The tax exemption proposal reflects Hong Kong’s effort to stay competitive in the fast-evolving crypto landscape. Singapore’s VCC framework, launched in 2020, now hosts more than 1,000 funds, offering a significant advantage. If approved, Hong Kong’s proposal could enhance its attractiveness by reducing tax burdens and encouraging more inflows of digital and alternative assets.

Analysts suggest the move could position Hong Kong as a premier offshore financial center in Asia-Pacific, fostering innovation and expanding the region’s crypto market.

Broader crypto initiatives - The tax break proposal comes on the heels of significant developments in Hong Kong’s crypto sector. ZA Bank, the city’s largest virtual bank, recently launched a new crypto service allowing retail users to trade Bitcoin and Ether directly using fiat. The service, developed in partnership with crypto exchange HashKey, highlights Hong Kong’s regulatory drive to integrate traditional banking with digital assets.

Hong Kong’s proposed crypto tax exemptions represent a strategic move to boost its competitiveness in the global financial landscape. By offering incentives to hedge funds and investors, the city aims to attract more liquidity and strengthen its digital economy. If approved, these measures could position Hong Kong as a key player in the crypto financial ecosystem, rivaling other regional powerhouses.

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Interesting facts

• In 2014, several early Bitcoin wallets containing significant amounts of BTC, which had been dormant for years, were revived as the value of Bitcoin surged, drawing attention to the phenomenon of dormant Bitcoin rediscoveries.

• Vitalik Buterin was just 19 when he published the Ethereum whitepaper in 2013, introducing the idea of a decentralized platform with smart contracts and dApps.

• The 2016 DAO Hack, which resulted in a hard fork splitting Ethereum into ETH and ETC, involved over $60 million worth of Ether and sparked debates on blockchain governance and immutability.

Top 3 coins of the day

Solana (SOL)

Key points:

• At press time, SOL was trading at $235.

• It was down by about 2.52% over the last 24 hours but remains one of the top trending cryptocurrencies, as per CoinMarketCap.

What you should know:

SOL was seen consolidating after a strong uptrend on the daily chart, supported by the Parabolic SAR dots positioned below the price. This reflected that the overall trend remained bullish despite the recent pullback. A trendline drawn from late October further highlighted a consistent uptrend with higher lows and higher highs. The Directional Movement Index (DMI) supported the bullish momentum, with the +DI (green) at 38.12, significantly above the -DI (red) at 15.74. The ADX (yellow) at 23.11 indicated a moderately strong trend but suggested caution if it begins to decline further. Trading volume remained steady, reflecting ongoing market interest. Immediate resistance lies at $245, while support is seen near $232, aligning with the trendline and Parabolic SAR levels. SOL’s position as a top trending cryptocurrency reinforces its current market interest, making it one to watch closely.

Ethena (ENA)

Key points:

• At press time, ENA was trading at $0.71.

• It has increased by approximately 13.96% over the last 24 hours and is among the top crypto gainers, as per CoinMarketCap.

What you should know:

The daily chart indicated that ENA was experiencing a strong bullish trend. The price broke above the upper Bollinger Band, suggesting heightened volatility and potential overextension. While this signals strong momentum, a pullback to the middle Bollinger Band near $0.60 is possible if traders take profits. The Awesome Oscillator confirmed the bullish sentiment with green bars above the zero line, reflecting strong positive momentum. Trading volume surged significantly, supporting the ongoing rally and signaling robust market interest in ENA. Immediate resistance is anticipated around $0.75, which aligns with the recent highs, while the middle Bollinger Band at $0.60 serves as key support in case of a correction. The surge in price and volume underlines ENA’s strong performance, positioning it as a notable market mover today.

Mantra (OM)

Key points:

• At press time, OM was trading at $3.46.

• It has decreased by approximately 1.40% in the recent session and is among the top crypto losers, as per CoinMarketCap.

What you should know:

On the daily time frame, OM experienced a pullback after its recent rally. The price was trading below the 9-day Simple Moving Average (SMA) at $3.64, suggesting short-term bearish momentum. However, the proximity to the SMA indicates a possible recovery if buyers return to the market. The Relative Strength Index (RSI) was at 64.78, which is in neutral-to-bullish territory but cooling off from overbought levels earlier this week. This suggests OM could consolidate further before attempting a rebound. Trading volume has decreased compared to the rally, reflecting reduced market activity during the pullback. Immediate support is around $3.30, while resistance lies near the SMA at $3.60, a critical level to watch for a potential reversal. OM’s position as a top loser highlights its current correction, but its broader trend remains intact as long as key support levels hold.