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Weekly Crypto Highlights: Are exchange tokens in danger?

, December 29, 2022

This weekly piece of cryptocurrency price analysis and thought leadership is brought to you by the expert team at CEX.IO, your crypto guide since 2013. At CEX.IO, we’re committed to providing the latest industry developments and potential price scenarios to help our users make the most informed decisions along their crypto journeys. 

In this week’s update, we explore the price movements of BTC, LTC, LUNC, and XRP. Additionally, this recap includes notable market news over the last seven days.

Read along for in-depth breakdowns, and enjoy reviews of correlated markets.

Notable market events

SEC claims FTT is a security 

The U.S. Securities and Exchange Commission (SEC), in a complaint against Alameda Research CEO Caroline Ellison, and FTX co-founder Gary Wang, labeled the FTT token a security. Some in the crypto community believe that this move from the SEC could set a dangerous precedent for other exchange tokens. 

For example similarities between FTT, and Binance’s BNB token, have been noted. The SEC highlighted that FTT has a buy-and-burn program similar to a stock buyback program. Binance also offers a burn program for BNB, introduced in late 2021. This observation led to speculation that the SEC could potentially classify BNB as a security, and that Binance.US may theoretically delist it.

At the same time, several members of the community countered that BNB is not similar to FTT, because it is also a native token of the BNB Smart Chain (BSC). Binance CEO Changpeng Zhao chimed in, observing that many people “think all exchange tokens are the same,” and pointed out that BNB has utility outside Binance CEX. 

The BNB price barely reacted to this drama and continued to trade near a major resistance level of $250.

1inch released a major upgrade called Fusion

The team behind the decentralized exchange (DEX) liquidity aggregator 1inch Network, activated a Fusion update. It is focused on integrating the 1inch Swap Engine, a combination of technologies designed to improve the cost-efficiency and security of swaps. The system facilitates Fusion mode, which allows users to place orders with a set price and time range, without paying network fees. The add-on also protects users from potential MEV attacks.

The 1inch Network’s governance and tokenomics have been revamped significantly as well. Under the new governance system, users can stake their 1INCH tokens for a period ranging from one month to two years. Stakers ​​will receive “Unicorn Power,” which could be used to participate in network governance. 

After the update release, the 1INCH price attempted to break upward into the established trading range of $0.38-$0.4, but failed.

Major NFT projects DeGods and Y00ts will leave the Solana ecosystem

Leading Solana-based NFT projects DeGods and y00ts announced migration to other networks in the first quarter of 2023. DeGod will move to Ethereum, while y00ts plans to bridge to Polygon. According to data from Magic Eden, in the week leading up to the announcement, sales of DeGods and Y00ts accounted for nearly 70% of all Solana NFT sales. 

This news arrived a few days after Delphi Digital announced that Solana became the second ecosystem for NFTs in sales volume, trailing only Ethereum. However, Solana could fall outside of the top 10 by sales volume due to the exodus of DeGods and y00ts. 

The NFT space is considered a major contributor to the Solana ecosystem. But the total value locked in it dropped by over 96% in 2022. Without the top NFT projects, it could drop even further. 

The SOL price fell below a crucial support level of $11, but bearish pressure may continue to prevail. Notably, there is no horizontal support for SOL until $4.

Waves founder released Waves 2.0 plan with new stablecoin

Waves founder Sasha Ivanov released the Waves 2.0 plan, which includes achieving 1,000+ transactions per second on L1, and adding a “multi-chain EVM L2.” As a governance model, he proposes to use Power DAO. To achieve sustainability, the updated blockchain will include SafeFi and “adaptive DAO-governance based stablecoins.” However, in the comments, Sasha Ivanov was called “Do Kwon 2.0.” 

Following this announcement, the WAVES price dropped below its previous low of $1.47.

Uniswap partnered with MoonPay to offer crypto purchases with fiat

Uniswap DEX now allows users to purchase crypto via debit cards, credit cards, and bank transfers. The service will initially support Ethereum, Polygon, Optimism, and Arbitrum networks for purchasing DAI, ETH, USDC, USDT, Wrapped Bitcoin (wBTC), and Wrapped Ether (wETH). The list of available tokens is subject to the user’s location. 

The UNI price bounced off the $5 level after the announcement, but this didn’t help bulls maintain buying pressure for more than a few days.

Bitcoin dressed as a stablecoin

Predominantly, Bitcoin has been trading in a narrow range of $16,700-$17,000 (cyan channel) over the last week, cosplaying stablecoins. This indicates that traders were not clear about the next directional move. The asset tested $17,000 several times but failed to sustain above this level. This increased bearish pressure and helped move the price outside the range.

The next targets for the bulls could be around $16,400 (purple line), and $16,000 (orange line). In the case of a rebound from one of the horizontal lines, bulls may retest $17,000 and see the $17,200-17,400 zone (green channel) as a potential resistance. 

Litecoin failed to break a major resistance level

After finding a support level near $62, the LTC price created a bullish engulfing candle which helped the asset move upward 20-day EMA. This price movement returned optimism for Litecoin, empowering bulls to push the price toward $71. 

However, the asset bounced off the descending resistance line (blue line) and 0.382 Fibonacci level (orange line). The catalyst could be RSI, which reflected that the asset entered the overbought zone. The asset moved below 20-day EMA, indicating that the path of least resistance is down to $62.

Terra Classic made a jump after a roadmap proposal

Recently, Terra Classic core developers Tobias “Zaradar” Anderson, and Edward Kim, formed a new developer group, “Joint L1 Task Force” to work on “more innovative and long-term advancements.” These developers contributed significantly to the revival of Terra Classic by re-enabling staking and introducing a burn tax. In addition, Edward Kim has shared a potential roadmap for the first quarter of 2023.

This event helped the price break upward the resistance level of $0.00015 (orange line) and the upper border of the descending channel (cyan channel). As a result, LUNC experienced an almost 20% price increase in a day. However, the asset rapidly entered the overbought zone and a bullish momentum faded away. 

If the bulls manage to sustain the price above $0.00015, they could make another attempt to approach the $0.00019 resistance level (green line). Otherwise, the price could return to a local low near $0.000126 (red line).

Ripple faces a test of the crucial support line

The XRP price is trading inside a symmetrical triangle which is considered a neutral pattern. Recently, the price approached an ascending support line (lower blue line) which the bulls have been protecting for over six months. Its breakout could trigger a potential price drop to a yearly low of $0.285 (red line), or fall even further. 

However, if the bounce takes place, the next potential resistance level for the bull could be near $0.39 (orange line). In turn, if the price turns up and breaks above the triangle, the next potential resistance for the bulls could be $0.45.

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.


Disclaimer: Not investment advice. Seek professional advice. Digital assets involve risk. Do your own research.


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