Crypto Ecosystem

Could the Bitcoin rally slow before halving?

, November 23, 2023

In this week’s crypto highlights, we explore the price movements of BTC, MATIC, YFI and RNDR. Additionally, this recap includes other notable industry news items that occurred over the last seven days. Without further ado, let’s dive into the latest market developments.

Noteworthy market events

Binance agreed to $4 billion settlement with U.S. regulators 

On November 20, Bloomberg reported that the U.S. Department of Justice (DOJ) was negotiating with Binance in an attempt to resolve multiple criminal cases, reportedly asking for more than $4 billion to settle charges. Following this news, some crypto enthusiasts pointed out that Binance transferred 3.9 billion USDT from its “Binance-Cold 2,” to “Binance 3” wallet on November 9. Some market observers assumed this transaction might be associated with recent settlement news.

On November 21, the U.S. Treasury, the DOJ, and the Commodity Futures Trading Commission (CFTC) announced the settlement with Binance. As part of the agreement, Binance will make a “complete exit” from the U.S., and will appoint a five-year monitor to oversee the exchange’s sanctions compliance program. During this period, the U.S. Treasury Department will have access to Binance data and systems.

In addition, Binance founder Changpeng “CZ” Zhao agreed to step down as the crypto exchange’s CEO, and plead guilty to several charges. CZ posted a tweet, stating that former Binance Global Head of Regional Markets, Richard Tang, will become new Binance CEO. He also said that U.S. agencies will not allege Binance engaged in market manipulation and misappropriate usage of customer funds.

The deal will reportedly allow CZ to retain his majority stake in Binance, but he won’t be allowed to hold an executive position at the company. Zhao has been released from custody on a $175 million personal bond. A sentencing hearing has been scheduled for February 23, 2024.

The SEC filed a lawsuit against Kraken for operating as an unregistered exchange

On November 20, the U.S. Securities and Exchange Commission (SEC) announced that it charged Kraken for operating as an unregistered securities exchange, broker, dealer, and clearing agency. In addition, the regulator stated that the crypto exchange mixed up to $33 billion worth of customer funds with its own. 

In a follow-up blog post, Kraken stated that it disagrees with these accusations, and “intends to vigorously defend its position in court.” Kraken co-founder Jesse Powell criticized recent SEC actions, claiming that “$30 million buys you about 10 months before the SEC comes around to extort you again.” In February 2023, Kraken shut down its staking service for U.S. customers, and paid $30 million in fines.

Bittrex Global will shut down operations

Crypto exchange Bittrex Global announced that it decided to wind down its operations, ceasing all trading activity by December 4, 2023. After that date, customers will only be able to withdraw their assets. 

The platform asked users who hold funds in U.S. dollars to convert them to Euro or cryptocurrency while trading operations are available. In addition, the exchange issued a warning, advising against making new deposits, as the safety of such transactions cannot be guaranteed.

Earlier this year, Bittrex’s U.S. arm filed for bankruptcy protection because it was not “economically viable” to continue doing business following the SEC’s lawsuit against the company. 

The Blast L2 network attracted over $40 million, just hours after the bridge launch

On November 21, the team behind the Ethereum layer 2 (L2) network Blast announced early access. According to developers, Blast natively participates in staking. When users transfer ETH and stablecoins (USDC, USDT, and DAI) via a cross-chain bridge to the new network, the coins are “deposited in on-chain T-Bill protocols like MakerDAO, and the yield is passed back to Blast users via USDB, Blast’s auto-rebasing stablecoin.” In addition, Blast depositors earn so-called BLAST points alongside staking rewards.

The new platform raised $20 million from Paradigm и Standard Crypto, and is headed by one of Blur’s co-founders, Pacman. Blur is considered one of the largest NFT marketplaces. 

According to Nansen, Blast attracted over $40 million into its ecosystem in hours after its bridge went live. At the time of this writing, Blast’s total value locked reached $125 million. However, withdrawals will become available after the main network launch, which is scheduled for February 2024. BLAST points will reportedly become redeemable in May 2024.

Once sentence news

  • Fidelity filed for a spot Ethereum ETF, following BlackRock.
  • Kronos Research halted services after a hacker stole $25 million using compromised API keys.
  • According to The Wallet Street Journal, crypto media platform CoinDesk was acquired by crypto exchange Bullish for an undisclosed sum.
  • PancakeSwap introduced a platform for Web3 games, with NFT support.
  • Santander started offering trading and investing in Bitcoin and Ethereum for clients with Swiss accounts.
  • Kazakhstan officially launched its central bank digital currency (CBDC).

Notable price performances

Bitcoin price might be close to its halving target zone

Bitcoin price experienced another turbulent week due to ETF news, and other market developments. BTC temporarily slid to $35,000, after the SEC postponed its decision toward a batch of spot Bitcoin ETF applications. But then, a rebound followed amid reports that the SEC engaged with exchanges regarding the same spot Bitcoin ETFs. Bloomberg analyst Eric Balchunas called it “a good sign.”

After the election of a reportedly Bitcoin-friendly president in Argentina, the asset reclaimed its $37,000 level. Binance settlement news also brought a certain amount of volatility to markets, but the asset remained above $36,000.

Due to such market behavior, it seems Bitcoin is currently sitting in “a waiting room,” anticipating the SEC’s decision on spot Bitcoin ETFs, and the halving event. While potential SEC approval of ETF filings is widely speculated to come in January 2024, the halving is set to appear in April 2024. So let’s take a look at potential halving target zones.

According to the chart, in each cycle, BTC experienced a rally before halving (gray lines). Typically, the price encountered a halving date near the 0.618 Fibonacci point. Even when the price experienced a significant rally shortly before halving, like in early 2016, the asset still retraced closer to the 0.618 area. This assumes that a potential target for the next halving in April 2024 could be somewhere around $36,000.

According to Glassnode, over 83.6% of the Bitcoin supply is now held in profit. This is the highest level since November 2021 (Bitcoin price’s all-time high). However, the magnitude of unrealized profit held within these coins remains modest. As a result, current levels may not encourage BTC holders en masse in potential profit-taking. But if the price continues its upward movement, it may potentially increase bearish pressure.

Weekly RSI is already in the overbought zone, and momentum indicators on a daily timeframe hint that bullish pressure may be fading. Although a potential spot Bitcoin ETF approval might cause another local price jump, there is still a chance for a correction before halving.

MATIC price arguably formed a head and shoulders pattern

When MATIC was labeled a security by the SEC in legal actions against Coinbase and Binance in June 2023, its price experienced a double-digit drop. In a recent regulator lawsuit against Kraken, MATIC was mentioned as a security again, arguably sparking significant bearish pressure. The asset price dropped by over 20% in a week, becoming one of the top sliders amid the largest cryptocurrencies by market cap.

As a result, the MATIC price potentially formed a head and shoulders pattern, which indicates a bullish-to-bearish trend reversal. The potential price target after confirmation can be calculated by adding the height of the head to the breakout point. This means that the asset may potentially move between 0.618 and 0.786 Fibonacci points. 

MATIC reached an overbought zone on a four-hour chart, suggesting temporary price recovery. However, bears may still have an upper hand. The 200-day SMA could act as a major support level for the price.

YFI price experienced a rollercoaster amid a targeted attack

Before November 17, the YFI price was inside an uptrend, surging by over 170% in a month. But on that date, decentralized exchange dYdX experienced a targeted attack focused on long positions in YFI tokens, which resulted in $38 million worth of liquidations. The YFI price rapidly dropped by over 40% in a day, then continued its price correction.

The asset moved out of the overbought zone, and is currently trying to sustain above the $7,420 support area. If successful, the asset may try to retest the 20-day EMA. If it fails, it may try to explore the $6,500 level.

dYdX informed the community that about $9 million from its v3 insurance fund was used to fill gaps in YFI liquidations. The platform’s founder Antonio Juliano said that they are investigating the incident.

RNDR took advantage of the AI spotlight

Over the last week, AI-related crypto projects enjoyed increased interest, which helped some of them with their token price performance. The catalyst behind this attention could be the drama between OpenAI and Sam Altman, in which he was first fired, and then reinstated, as the company’s CEO. OpenAI is known as a developer of ChatGPT and DALL-E. 

One of the beneficiaries of this AI spotlight was Render (RNDR), a token of a decentralized network focused on GPU-based rendering solutions. Its price surged by over 40% in a week. This token is also among the best performers throughout this year, with over 700% year-to-date price increase.

However, the asset recently formed a bearish divergence (white lines) on a daily chart, suggesting that bullish momentum might be fading. The 20-day EMA could act as the next potential target for bears.

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.

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Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.


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