XRP in legal trouble again

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Cardano's ADA witnesses highest shorting activity since September 2023

Key points:

  • ADA’s price decline has led to a surge in short positions in the futures market.

  • Negative funding rates on ADA futures indicate more traders are betting on a price drop.

News - Cardano's price decline has emboldened short sellers in the futures market. 19 June 19 saw the highest short-to-long ratio for ADA futures contracts since September 2023. This surge in short positions reflects a growing number of traders betting on a further price drop for ADA.

Negative funding rates on ADA futures contracts reinforce this bearish sentiment. When the funding rate is negative, as it is currently for ADA at 0.008%, it indicates that short sellers are paying long holders a fee. This incentivizes more short positions being opened.

Any hope of a recovery? Historically, liquidations of overextended short positions can trigger price rallies. In theory, as short positions are unwound, buying pressure increases, pushing the price up.

So far, this hasn't materialized for ADA. The recent price decline has resulted in more long liquidations than short ones, with long liquidations reaching a daily high of $2.86 million on 18 June. Liquidations occur when a trader's position is forcibly closed due to insufficient funds to maintain it in a volatile market.

ADA's technical indicators also paint a concerning picture. Consider this - The Relative Strength Index stood at a low of 33.53, very close to its oversold territory. Hence, a further drop can be expected until RSI reaches the 30 mark.

Ripple CEO faces jury trial over alleged misleading statements on XRP

Key points:

  • A California lawsuit accusing Ripple CEO of misleading statements about XRP will go to trial.

  • The judge ruled XRP could be a security for non-institutional investors.

News - A California judge has rejected Ripple Labs' attempt to dismiss a lawsuit accusing its CEO of making misleading statements about XRP. However, the broader question of whether XRP is a security remains unsettled.

The lawsuit, brought by an investor, alleges that Ripple CEO Brad Garlinghouse falsely claimed in a 2017 interview that he was "very, very long" on XRP, while simultaneously selling millions of his XRP holdings.

Breaking down the legal details - Judge Phyllis Hamilton's 20 June order denied Ripple's motion for summary judgment, meaning a jury will decide whether Garlinghouse's statements were misleading. However, the judge dismissed four separate claims related to Ripple's alleged failure to register XRP as a security.

Ripple argued that the lawsuit should be thrown out entirely based on a July 2023 ruling by Judge Analisa Torres in a separate SEC lawsuit. In that case, Judge Torres found XRP was not a security.

However, Judge Hamilton disagreed. She ruled that XRP could be considered a security when sold to non-institutional investors, as they might have expected profits based on Ripple's efforts to promote XRP for cross-border payments.

Ripple maintains that Judge Torres' ruling establishes XRP as not a security. The company's Chief Legal Officer, Stu Alderoty, stated that the recent decision "does not disturb" the SEC case outcome.

3iQ files for Solana Exchange-Traded Product listing on Toronto stock exchange

Key points:

  • 3iQ is seeking to launch the first North American Solana ETP. 

  • The Solana Fund (QSOL) would track the price of Solana (SOL) on the Toronto Stock Exchange.

News - Canadian digital asset manager 3iQ is seeking regulatory approval to launch the first Solana exchange-traded product (ETP) in North America. The product, called The Solana Fund (QSOL), would be listed on the Toronto Stock Exchange (TSX) if it receives the green light.

3iQ submitted a preliminary prospectus for QSOL with securities regulators across Canada, excluding Quebec. The ETP would provide investors with exposure to the Solana (SOL) cryptocurrency and track its daily price movements against the US dollar.

Additionally, QSOL holders could potentially benefit from staking rewards on their SOL holdings, with 3iQ estimating annual yields between 6% and 8%.

More details - Coinbase Custody and Tetra Trust would be custodians for the ETP, with Coinbase Custody also providing dedicated institutional staking infrastructure for the Solana fund.

3iQ already offers several successful cryptocurrency products on the TSX, including the 3iQ Bitcoin ETF (BTCQ) and the 3iQ Ether Staking ETF (ETHQ). These products hold a combined net asset value of over $270 million, highlighting investor interest in digital assets on the Canadian stock exchange.

While no US asset manager has announced plans for a spot Solana ETF yet, the Solana network has garnered praise from industry players like Franklin Templeton.

Winklevoss twins donate $2 million in Bitcoin to Donald Trump's campaign

Key points:

  • Co-founders of Gemini exchange have donated $2 million in Bitcoin to support Donald Trump.

  • This donation highlights the growing influence of the cryptocurrency industry in shaping political discourse.

News - Cameron and Tyler Winklevoss, founders of the cryptocurrency exchange Gemini, have donated $2 million in Bitcoin to support Donald Trump's presidential campaign.

The Winklevoss twins announced their contributions on Thursday, with each donating $1 million in Bitcoin towards Trump's campaign efforts.

The move underscores the increasing political influence of the crypto industry as it seeks to shape regulatory policies in Washington.

No support for Biden - Tyler Winklevoss expressed concerns over the Biden administration's regulatory stance towards the crypto industry, criticizing it for being overly aggressive and detrimental to growth.

He particularly highlighted Operation Choke Point 2.0, accusing federal agencies of pressuring banks to sever ties with crypto firms, leading to operational challenges and financial losses.

Additionally, Tyler Winklevoss criticized the Securities and Exchange Commission (SEC) for its failure to provide clear regulatory guidelines, citing outdated rules that create uncertainty and hinder blockchain technology development.

Following their donation announcement, Gemini revealed it now facilitates cryptocurrency contributions for pro-crypto political candidates.

Crypto scams uncovered

  • Sohrab Sharma and two others were arrested, tried, and convicted after their company - Centra Tech - was found to have deceived investors by falsely claiming that the start-up would offer cryptocurrency products and services. The company also lied about having a partnership with Visa, with Centra Tech claiming that its ‘Centra Card’ will allow card purchases at Visa establishments.

  • Between 2014 and 2019, BitClub Network fraudulently solicited funds worth over $722 million from clueless investors, in exchange for supposed shares in crypto-mining pools. According to the U.S. Justice Department, investors were also rewarded if they could bring additional new investors into the scheme.

  • Back in 2021, Ameer and Raees Cajee absconded after they were accused of defrauding investors via their crypto-platform Afriscrypt. According to reports, over $3.6 billion went missing from the platform. At the time, the brothers claimed that Afriscrypt had been hacked. However, the incident soon instigated an investigation by South Africa’s Financial Crimes division.

Top 3 coins of the day

Tron (TRX)

Key points:

  • At the time of writing, TRX was exchanging hands at $0.1175.

  • It was one of the few cryptocurrencies that saw buying pressure in the last 24 hours.

What you should know - While most of the cryptocurrencies struggled to see buying pressure on the daily chart, TRX defied expectations by registering a 2% gain over the last day. Starting 22 May, the coin has been trading within the range of $0.11825-$0.11198, with occasional dips to the $0.11033 level. At the time of the analysis, RSI stood at the 58 mark, looking northwards. Thus, highlighting that the price has more room to grow before it starts retracing on the daily chart. However, amidst all the bullish factors, the most concerning factor has been the volume which has been declining in the recent past.

Shiba Inu (SHIB)

Key points:

  • SHIB has remained in a strong bear trend over the last 20 days.

  • Market structure, at press time, favored the sellers.

What you should know - Shiba Inu memecoin has been moving in a downward channel - The decline initiated on 30 May. Consequently, SHIB lost 39% of its value in a matter of 22 days. In fact, the daily active address interacting with the Shiba Inu blockchain has also fallen over the past few days. Thus, reflecting investors’ waning interest in the token. The reading of MACD indicator, at press time, highlighted that SHIB will likely continue its downward move unless some major news sparks the turnaround.

Ethereum (ETH)

Key points:

  • ETH managed to outperform Bitcoin in terms of MVRV ratio growth rate.

  • ETH’s net deposit on exchanges was high compared to the last seven days’ average.

What you should know - After a significant price jump on 20 May, Ethereum settled into a trading range between $3,693 and $3,934. However, on 10 June, the price broke below this support level, dropping to $3,355. If there's a buying surge, ETH might reach $3,660 first, but this could trigger sell-offs due to increased liquidation pressure. The Awesome Oscillator indicator also suggests a potential further decline, with its bearish signal. However, in the long-run, ETH can surely be expected to cross the 3,900 level, especially if BTC breaks above the $73,000 level.

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