Retail and corporate bitcoin buyers, miners get rid of coins: what to expect next
After hitting an all-time high (All Time High, ATH) of $69,000 in November 2021, bitcoin (BTC) has been in a continuous downtrend. The recent collapse of FTX caused the price of bitcoin to fall below $16,000 – more than 75% over ATH.
Power prices are rising, and so is the difficulty of mining BTC. According to research by Glassnode and Cryptoslate, the cost of mining 1 bitcoin is now $17,008. That’s 5% more than the current spot price of the asset. Because of this, miners are getting rid of their bitcoins at the fastest rate in 7 years. Their sales are up 400% this year.
There is a lot of turbulence in the financial markets in general, which we can see even by looking at how the current stock price of Apple is constantly changing.
Retail investors are hoarding BTC
According to Glassnode, wallets holding less than 1 bitcoin have accumulated over 96,200 BTC since the FTX crash. The number of coins in wallets holding 1-10 bitcoins has also reached an all-time high. They have accumulated more than 191,600 BTC in the last 30 days. Which institutional investors are buying bitcoin?
Bitcoin whales are, on the contrary, getting rid of their coin holdings. In the last month they dumped over 6,500 BTC. Many miners have been accumulating BTC for years and have naturally fallen into the category of whales. Most of the bitcoin sales came from them.
The market avoided another FUD
The crypto community is actively discussing the transfer of more than $2 billion in BTC from a cold Binance wallet to an unknown address and wondering if their funds are safe.
Binance CEO Changpeng Zhao (CZ) clarified the situation on Twitter. According to him, the transaction was part of a Proof-of-Reserve audit.
“The auditor requires us to send ourselves a certain amount and show that we control the wallet,” he wrote.
Some users pointed out, two weeks ago, CZ called moving large amounts of cryptocurrency a clear sign of problems at the exchange. And one crypto auditor wrote that proving control of the address doesn’t require moving such large amounts.
Nevertheless, Zhao still managed to reassure the community and prevent another wave of FUD.
Earlier, we reported that JPMorgan says FTX’s collapse has positive consequences.
Cryptotraders lost more than $250,000,000 in liquidations after Fed rate hike
Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.
Cryptotraders lost $132,000,000 in BTC
Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.
Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.
The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.
Regulators continue to hunt the cryptobusiness
Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.
The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.
We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.
Binance was caught circumventing KYC to register Chinese clients
Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.
The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.
The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.
An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.
We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.
Why cryptoanalysts expect bitcoin to fall
The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:
The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.
The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.
However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.
There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.
We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.
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