Crypto Ecosystem

A “pullback for ants,” or preparation for a deeper Bitcoin correction?

, March 28, 2024

In this week’s crypto highlights, we explore the price movements of BTC, BCH, ICP, and TON. 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.

Market spotlight: Bitcoin’s U-shaped price movement

Bitcoin is preparing to register its seventh green month in a row for the first time in a decade. However, current price action gives mixed signals on whether bullish momentum has the potential to be maintained.

Historically, Bitcoin has experienced a price correction prior to halving. It was around 20% in 2020, and 40% in 2016. When Bitcoin recently updated its all-time high, reaching $73,750, it arguably entered a pre-halving danger zone. Shortly afterward, a 16% price correction happened, accompanied by record weekly outflows from digital asset funds. 

Some called it a “pullback for ants,” as such price fluctuations could be considered insignificant within a wider Bitcoin rally. For instance, Bitcoin experienced four 20% dips in 2023, but still showed a more than 150% price increase over that year.

Once the asset rebounded from $61,000 and reclaimed $71,000, amid reestablished positive inflows to U.S. spot Bitcoin ETFs, some market participants turned more optimistic, claiming that the correction might be over. However, a 16% drop may be insufficient to be treated as a pre-halving correction. 

The Volume Oscillator (VO) on a daily chart indicates that Bitcoin updated its all-time high with decreasing volume. In addition, the recent price correction and recovery were accompanied by consecutively lower volumes. This suggests that bullish momentum may be fading, which could potentially lead to a trend reversal.

In addition, Bitcoin remains in the overbought zone on a weekly timeframe, indicating that there is still a chance for a deeper correction.

Bitcoin’s recent price movement resembles a sloping cup on a four-hour chart, which may lead to the formation of a bullish cup and handle pattern. The Ichimoku Cloud indicator on the same timeframe also suggests that there is a potential for upward movement continuation in the short term.

As a result, while longer-term timeframes hint that a deeper correction might appear, there is still room for an upside move in the short term.

Noteworthy market events

Ethereum Foundation might be under SEC investigation

While the Ethereum Foundation members participated in the ETHTaipei 2024 event, presenting the rainbow staking concept, and discussing the gas limit increase, the crypto community paid close attention to regulatory actions against the second-largest cryptocurrency.

On March 20, several crypto industry media outlets reported that the Ethereum Foundation was under scrutiny from an undisclosed “state authority,” after a disclosure refuting such claims was removed from the organization’s website. Concurrently, Fortune published an article, indicating that the U.S. Securities and Exchange Commission (SEC) issued subpoenas to numerous U.S. companies to obtain additional data about the Ethereum Foundation. It’s theorized this action was taken to potentially support the classification of ETH as a security.

Some interpreted this as an attack on Ethereum, while others suggested that this could contradict prior regulatory actions. The events sparked a new wave of discussion on whether or not Ether ETFs will be approved.

Some claimed that subpoenas could explain the SEC’s apparent reluctance to engage with potential issuers of spot Ether ETFs. Earlier this month, Bloomberg analysts stated that Ether ETFs likely won’t get approved in May 2024 because of the latter. According to Polymarket, May’s ETF approval odds decreased to 28%. However, some crypto enthusiasts remain positive that spot Ether ETFs have a good chance of approval this year.

U.S. DOJ charged KuCoin and its founders for violating anti-money laundering laws

U.S. authorities continued to follow Pokemon’s “Catch them all” strategy against certain crypto platforms.

On March 26, the U.S. Department of Justice (DOJ) announced charges against KuCoin founders Chun Gan and Ke Tang, for their alleged failure to implement an anti-money laundering (AML) program at the crypto exchange. The DOJ claims that this negligence resulted in KuCoin being exploited for illicit activities, including money laundering and terrorist financing.

According to the indictment, KuCoin processed more than $5 billion in suspicious transactions associated with activities such as darknet black markets, malware, ransomware attacks, fraud, and sanctions violations, since its inception in 2017. 

In addition, the indictment asserts that KuCoin deliberately evaded U.S. AML regulations by falsely claiming to have no U.S. customers, despite allegedly having a significant customer base in the country. The DOJ unveiled criminal charges alongside a civil enforcement case filed by the U.S. Commodity Futures Trading Commission (CFTC).

Following this news, KuCoin pulled the classic trio, stating that it is aware of these reports, continues to operate, and user assets are safe. According to Nansen data, KuCoin saw a net outflow of over $780 million across multiple chains in a day, after the U.S. DOJ lodged charges against it.

Incorrect reports about the EU banning anonymous transactions and self-custodial wallets went viral

The crypto community sometimes relies too much on the “too long; don’t read” (TL;DR) concept, especially when it comes to regulatory rules. The latter typically features enormous documents, written in legalese, also known as legal language many people don’t understand. And as this situation demonstrates, the TL;DR approach may open wide room for misinterpretation.

The European Union’s (EU) Committee recently passed the Anti-Money Laundering Regulation (AMLR) bill. Following this news, industry media reported that “payments to self-custody wallets and anonymous transactions are now illegal,” citing a statement from Patrick Breyer, an EU parliament member.

The topic went viral and sparked active discussions in the crypto community. However, some swiftly countered the fervor, dismissing it as misinformation. Patrick Hansen, the EU Strategy and Policy Director at Circle, clarified that the AMLR isn’t exclusively a crypto-focused regulation, but rather a comprehensive framework targeting anti-money laundering and counter-terrorist financing across sectors.

Hansen highlighted that AMLR applies to entities classified as “obliged,” including crypto-asset service providers (CASPs) regulated under the Markets in Crypto-Assets legislation (MiCA). He emphasized that all CASPs, such as centralized crypto exchanges and custodial wallet providers, will be obligated to adhere to standard KYC and AML procedures, as well as restricted from offering accounts for privacy coins and serving anonymous users.

Fantom prepares to launch the Sonic upgrade, enabling 2,000 TPS

Michael Kong, the CEO of Fantom Foundation, announced the upcoming launch of the Sonic upgrade, poised to achieve 2,000 transactions per second (TPS), with sub-second finality. The existing Opera version of Fantom facilitates 200 transactions per second, meaning that Sonic may offer a tenfold increase in the network throughput.

Sonic’s deployment aims to bolster DeFi activities on Fantom by introducing features like support for liquid staking tokens. In addition, the team intends to utilize Sonic as a “shared sequencer” for both layer 1 (L1) and layer 2 (L2) networks.

The upgrade is anticipated to launch in late summer or early fall this year.

One sentence news

  • Polygon’s zkEVM network experienced an outage, and failed to produce blocks for nearly 24 hours.
  • The Floki Inu (FLOKI) team unveiled its roadmap for 2024, aiming to introduce debit cards, digital accounts, and educational platforms for users.
  • The London Stock Exchange (LSE) announced its plans to launch exchange-traded notes (ETNs) for Bitcoin and Ether on May 28.
  • The SEC asked a U.S. judge to approve the assessment of $1.95 billion in fines and penalties for Ripple.
  • Worldcoin open-sourced the core components of the orb software, and introduced the Personal Custody privacy feature.
  • Tether announced the establishment of a new division focused on AI initiatives.

Notable price performances

BCH price jumped ahead of halving

While Bitcoin’s coming halving has been in focus, it seems that some forgot about Bitcoin Cash and its halving, which is scheduled to take place next week. But this week, the event attracted increased attention, which helped the BCH price to surge by almost 30%. Bitcoin Cash entered the top 15 digital assets by market cap.

However, a bearish divergence formed on a daily chart (white lines). This suggests that Bitcoin Cash may struggle to sustain upward movement, and a price correction might soon take place.

ICP price took advantage of AI smart contracts

The ICP price temporarily jumped by over 80% in a week, becoming one of the top gainers, among the top 100 digital assets by market cap. The catalyst behind this move is considered to be the introduction of the first blockchain-based AI smart contract. These contracts are currently running on the ICP’s testnet, but the project plans to allow developers to run them on other networks soon.

After touching the $21 level, the asset price started to experience a correction. MACD made a bearish cross on a four-hour chart, suggesting that downward movement has the potential to continue. 

TON price almost doubled in a month

The TON price maintained its upward trend, experiencing a 20% weekly increase. Amid this, Toncoin became one of the best-performing non-memecoin altcoins, showing an almost 100% price surge over the last 30 days. A potential driver behind the latest upward price action could be TON Foundation’s community rewards initiative, worth over $100 million.

However, there are signs that the asset may experience a slight correction, as a bearish divergence formed on a daily chart. The 20-day EMA currently acts as a dynamic support.

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


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