Stablecoins push Bitcoin to new ATH

December 16, 2024

Reading time: 5 minutes

Bitcoin shoots past $100K again, but volatility concerns remain

Key points:

  • Bitcoin breached $100K again, climbing to a new ATH of $104,797 on the charts.

  • Retail investors remain cautious, with many still anticipating potential bouts of depreciation.

News - Bitcoin has reached a significant milestone, stabilizing above $100K, with its price hitting $104,797 after a 3.03% surge in just 24 hours. Thanks to the same, Bitcoin’s market cap has now exceeded $2 trillion too.

While the cryptocurrency continues to trail traditional 20th-century assets such as real estate and bonds, its rapid ascent from $67K to $104K in just 40 days highlights its growth potential.

With stablecoins flooding the market and providing liquidity now, investors are seeing significant profits. This has raised concerns about potential sell-offs as the market adjusts to this high volatility.

Growing influx of stablecoins - Stablecoin inflows into exchanges have fueled bullish sentiments for Bitcoin, with significant liquidity entering the market, especially around key price levels like $88K and $96K. These inflows have supported BTC’s price movements, demonstrating strong investor confidence in the cryptocurrency’s ability to breach the $100K milestone.

However, in light of the persistent market volatility, institutional players have been stepping in to absorb selling pressure. This, while retail investors remain cautious, waiting for potential dips before entering.

MicroStrategy steps up Bitcoin game - Michael Saylor continues to lead MicroStrategy's aggressive Bitcoin investment strategy, with the exec hinting at a further BTC purchase after the crypto hit $100K.

Saylor has always been optimistic about the cryptocurrency, with BTC’s latest price action merely reinforcing his long-term belief in Bitcoin's potential. Here, it’s worth pointing out that Bitcoin’s latest milestone came on the back of the firm securing a spot in the Nasdaq 100.

Market blues target Solana as SOL eyes a possible dip below $200

 

Key points:

  • Solana’s [SOL] price has struggled to recover its post-election gains.

  • Long-term holders are optimistic, but they need strong support from major market players.

News - Solana [SOL] bulls are currently facing a significant challenge as the cryptocurrency struggles to break free from a prolonged downtrend. Despite a powerful rally following the "Trump pump" that saw SOL hit a new all-time high of $264, the price has since eroded much of its post-election gains.

Long-term HODLers have continued to show conviction though, fueling speculation of an imminent rebound. And yet, concerns remain over the potential for a deeper pullback as market pressures mount.

Recent struggles - Solana has struggled to maintain its position as one of the market’s top cryptocurrencies, lagging behind in recent market trends. Despite this, speculation about a significant rebound is growing, with some optimistic predictions suggesting a potential $500 price target by the end of Q1 next year.

While Solana’s volatility has historically led to significant gains, the altcoin’s price action indicated cautious optimism as investors looked closely for potential recoveries.

What’s next? - The last three weeks have showcased the intense volatility around SOL, as bulls and bears battled for dominance. Despite a strong 5% surge after dipping to $236, the momentum was short-lived, with Open Interest (OI) peaking at $6.05 billion, before dropping to $5.16 billion.

This alluded to a cautious environment, with traders wary of SOL's inability to sustain its gains. While long-term holders remain steadfast, without decisive action from major players, a potential dip below $200 could be a strategic entry point for buyers.

RippleUSD launch sparks investor FOMO as exec issues warning

Key points:

  • Ripple’s RLUSD stablecoin will stabilize at around $1 once supply conditions normalize.

  • Ripple’s RLUSD aims to complement XRP in cross-border payments, focusing on institutional adoption and liquidity.

News - Ripple's CTO David Schwartz recently raised concerns about potential supply shortages for the firm’s upcoming U.S dollar-pegged stablecoin, RippleUSD (RLUSD). Schwartz emphasized that early trading could see artificial price inflation, with some speculative bids reaching significantly higher values than the intended 1:1 parity with the U.S dollar.

In fact, one such example showed RLUSD being valued at approximately $1,200 per token on a Ripple wallet, highlighting the risks associated with pre-launch speculation.

Background - Ripple's recent surge in investor confidence can be attributed to greater regulatory clarity, with CEO Brad Garlinghouse announcing that Ripple's stablecoin, RLUSD, has received regulatory approval from the New York Department of Financial Services.

For its part, Ripple is seeking to capture a significant portion of the $200 billion stablecoin market.

What impact will it have? - Schwartz emphasized that the price of Ripple’s RLUSD stablecoin would stabilize close to $1 once supply conditions normalize. However, he also cautioned against FOMO (Fear of Missing Out), urging investors not to chase inflated prices in hopes of quick riches.

Ripple’s RLUSD stablecoin aims to enhance its cross-border payment solutions by integrating with XRP, creating a complementary system for global transactions. Thus, by leveraging XRP’s widespread exchange availability, RLUSD aims to prevent de-pegging, ensuring stability for institutional and retail users alike.

Justin Sun backs Trump’s crypto project with $30M investment

Key points:

  • World Liberty Financial has invested nearly $45 million in cryptocurrencies.

  • Despite challenges, Justin Sun made a $30 million investment into the project.

News - Donald Trump’s crypto venture, World Liberty Financial, has significantly ramped up its crypto acquisitions in December, amassing nearly $45 million in token purchases. Recent buys include $250,000 of Ondo (ONDO), $500,000 of Ethena (ENA), and substantial investments in Ether and Coinbase Wrapped BTC (cbBTC).

With a total spend of $44.75 million, World Liberty Financial is solidifying its presence in the cryptocurrency market.

Why it matters - For those unaware, WLF, a DeFi platform linked to Trump and his family, has faced challenges in selling its WLFI token, having sold less than a quarter of its $300 million offering. However, despite struggles, the project gained momentum when Tron founder Justin Sun invested $30 million, becoming its largest investor and adviser.

According to Nansen’s Nicolai Søndergaard, the token buys may be part of a strategy to build trust and promote the project's visibility, potentially enhancing its success.

What’s next? - World Liberty Financial’s recent proposal to deploy its own Aave instance received approval from AaveDAO, enabling the borrowing and lending of assets like Ether and Wrapped Bitcoin.

Thus, despite ongoing controversies, including accusations from the SEC against Justin Sun and Tron for selling unregistered securities, World Liberty Financial is continuing to push forward with its DeFi ambitions.

Did you know?

  • In 2021, Ethereum co-founder Vitalik Buterin donated over $1 billion in cryptocurrencies to the India Covid Relief Fund and other charities. The donation included 50 trillion Shiba Inu (SHIB) tokens, sent to a fund established by Sandeep Nailwal, co-founder of Polygon.

  • A Chainalysis report revealed that in 2024, stablecoins noted significant year-over-year growth, particularly in retail and professional-sized transactions. This has also resulted in support for real-world applications, especially in low and lower middle income countries across regions like Sub-Saharan Africa and Latin America.

  • In 2013, James Howells lost 8,000 Bitcoin in a landfill in Newport, Wales, now worth $750 million. Despite securing funding for an excavation, Newport City Council has denied permission due to costs and environmental concerns. During recent court proceedings, Howells' team sought a full trial, while the Council maintained full ownership of the site.

Top 3 coins of the day

Fantom (FTM)

Key points:

  • FTM was trading at $1.38, at press time.

  • Altcoin’s price surged by over 90% in the last 30 days.

What you should know:

At the time of writing, FTM seemed to be riding a bullish wave following a 13.39% hike in the last 24 hours. Over the last 30 days, the altcoin posted an impressive rally of over 90%, reflecting strong market momentum. On the charts, the Relative Strength Index (RSI) stood at 62.07, firmly in bullish territory, signaling robust buyer demand. However, trading volumes revealed a noticeable decline, hinting at waning market enthusiasm and the potential for a bearish breakout. If FTM sustains its upward momentum and breaks past the resistance level at $1.49, the bulls are likely to retain dominance. Conversely, a drop below the critical support at $1.24 could pave the way for a bearish reversal.

Dogecoin (DOGE)

Key points:

  • At press time, DOGE was trading at $0.399.

  • It was one of the top trending cryptocurrencies on CoinMarketCap.

What you should know:

Dogecoin (DOGE), the world’s most-popular dog-themed memecoin, became one of the most trending coins on CoinMarketCap, driven by increased trading activity. At the time of writing, DOGE was trading at $0.3992, having fallen by over 8% in just over a week. On the price charts, the widening Bollinger Bands suggested heightened price volatility, indicating a potential shift from bullish to bearish momentum. This finding was backed by the RSI, with the same alluding to a possible bearish takeover. Nevertheless, if the bulls manage to break the resistance level at $0.419, a potential rally could follow.

Key points:

  • At press time, LINK was trading at $30.36.

  • The altcoin’s price appreciated by 5.27% in just 24 hours.

What you should know:

Chainlink (LINK) flashed bullish momentum on its daily chart, climbing by 5.27% to trade at $30.36. The altcoin’s movement mirrored the broader crypto market's trend. The MACD indicator also supported this outlook as it remained above the Signal Line. The indicator’s increasing green histogram bars signaled robust bullish strength. However, the altcoin’s trading volume highlighted a slight decline from its previous highs, suggesting that traders are cautious and awaiting clearer price direction. If LINK surpasses its critical resistance level of $31.85, it could initiate a bullish rally. Conversely, a drop below the $27.98 support level may mean a bearish reversal.

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