Crypto Ecosystem

How ETF news caused a stormy week in crypto

, November 16, 2023

In this week’s crypto highlights, we explore the price movements of ETH, XRP, AVAX, and IMX. 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

BlackRock filed for a spot Ethereum ETF

On November 9, there were reports that an application for an iShares Ethereum Trust appeared on the Delaware Department of Corporations website. This suggested that BlackRock could try to launch a spot Ethereum ETF. Shortly after that, the company’s plan was revealed and confirmed in a filing by Nasdaq

Notably, ETF Store President Nate Geraci pointed out that the filing included a reference to Grayscale’s court victory against the U.S. Securities and Exchange Commission (SEC) regarding the GBTC transformation into a spot ETF. BlackRock reportedly outlined this as one of the reasons why the SEC “must” approve its application. In addition, Nasdaq stated in the filing that approval of a spot Ethereum ETF would be “a major win for the protection of U.S. investors” in the crypto space.

However, BlackRock wasn’t the first company to pursue SEC approval for a spot Ethereum ETF. Other firms that are currently awaiting the regulator’s decision on their applications include VanEck, Ark 21Shares, Invesco, Grayscale, and Hashdex.

Poloniex was hacked, losing approximately $124 million in stolen funds

On November 10, PeckShield analysts spotted suspicious activity on wallets linked to Poloniex across multiple blockchains. According to Arkham Intelligence, cumulative losses exceeded $124.5 million in digital assets. Some market researchers suggested the Lazarus Group hacking syndicate could be behind the attack.

Justin Sun confirmed the incident, stating that “Poloniex maintains a healthy financial position and will fully reimburse the affected funds.” In addition, Sun offered the hacker 5% of stolen funds in exchange for returning them.

A few hours later, Justin Sun said that “the Poloniex team has successfully identified and frozen a portion of the assets associated with the hacker’s addresses.” He also stressed that “the losses were within manageable limits.” Tron founder Justin Sun acquired Poloniex in 2019.

CBOE will launch margin futures trading for Bitcoin and Ethereum

CBOE Digital, the crypto arm of the Chicago Board of Options Exchange (CBOE), announced that the launch of Bitcoin and Ethereum margin futures trading will take place on January 11, 2024. According to the organization’s press release, the platform will become the first U.S.-regulated exchange and clearinghouse to enable both spot and leveraged derivatives trading on a single platform. 

The new product will be supported by crypto-native and traditional trading firms including B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, Marex, StoneX Financial, Talos, Tastytrade, Trading Technologies, and Wedbush.

SEC could approve a potential FTX reboot

In an interview with CNBC, U.S. SEC Chair Gary Gensler indicated a willingness to consider a reboot of FTX. Gensler’s remark came in response to speculation that Tom Farley, the former president of the New York Stock Exchange (NYSE), could become a potential acquirer of FTX. Specifically, Gensler said that “if Tom, or anybody else” decides to relaunch FTX, this must be done “within the law.”

According to the Wall Street Journal, three suitors are vying to purchase the remnants of FTX. Apart from Farley, fintech startup Figure Technologies, and cryptocurrency venture capital firm Proof Group were called among potential contenders.

One sentence news

  • According to Bloomberg, Circle, a USDC stablecoin issuer, is considering an initial public offering (IPO) in 2024.
  • The OKX crypto exchange is planning to launch its own layer 2 (L2), called X1, in the first quarter of 2024.
  • The Celsius bankruptcy plan was approved, with around $2 billion in Bitcoin and Ethereum to be allocated to creditors.
  • Disney partnered with metaverse firm Dapper Labs to launch an NFT platform named Disney Pinnacle, and tokenize classic cartoon characters.
  • Stablecoin protocol Raft was exploited, resulting in the unbacked minting of $6.7 million in their native stablecoin.
  • Members of the European Parliament voted in favor of approving a Data Act, containing a provision with a smart contract kill switch.

Notable price performances

ETH price reached a seven-month high

Over the last few months, Ethereum struggled to gain momentum, strongly underperforming compared to BTC and many altcoins. A delayed Dencun update, staking equilibrium, and a relatively underwhelming launch of Ethereum futures ETFs were some of the deterrents for the ETH price.

However, with the news about BlackRock’s filing for an Ethereum ETF, the asset joined the recent crypto rally, jumping above $2,000 for the first time since April 2023. The daily spot trade volume hit $7 billion, or the highest level since the FTX collapse. Even Ethereum network fees briefly spiked, pushing up the costs of trading swaps to $100. 

As a result, the asset price managed to break an established descending channel (blue channel). But then, it experienced a slight correction, moving out of the overbought zone on a daily chart. 

If bulls maintain the price above $2,000, it could indicate vigorous buying at lower levels. This could help the price retest the $2,130 level. But if it moves below the 20-day EMA, the 200-day SMA could act as the next potential target for bears. 

XRP price was on a rollercoaster amid fake ETF news

It seems someone was upset that Ethereum attracted BlackRock’s attention, while XRP did not. So they submitted a filing for “iShares XRP Trust” under BlackRock’s name, which was largely identical to the legitimate Ethereum one. This fake ETF application also appeared on the Delaware Department of Corporations website, where BlackRock’s spot Ethereum ETF application was first discovered. 

At first, many crypto enthusiasts thought BlackRock would be filing for an XRP ETF next, and the XRP price jumped by over 10% in less than an hour. However, the news turned out to be fake. The asset rapidly lost almost all of its gains from the daily rally. Now, Delaware’s Department of Justice is reportedly investigating the case. 

This fake ETF story resulted in over $6 million in liquidations, and brought feelings of disappointment to crypto markets. Aside from XRP, certain other altcoins, including SOL and LINK, also showed an around 10% price decline following this event.

Notably, XRP was experiencing a price correction shortly before the controversy. The asset is currently trading near 0.382 Fibonacci point and the 20-day EMA. It moved out of the overbought zone on a daily chart, but is on the verge of forming a death cross pattern. This suggests that bears may have an upper hand.

AVAX price more than doubled in a month

The AVAX price soared by over 70% in a week, and 140% in a month, becoming one of the top performers among the top 100 cryptocurrencies by market cap. Some of the catalysts behind this rally include:

  • Double-digit surge in total value locked (TVL).
  • Increased interest in AVAX staking.
  • GameFi subnets that were processing more transactions than Avalanche’s C-Chain, and fueled increased token burns.
  • Citigroup, one of the largest banks in the world, announced that it used Avalanche technologies to build its blockchain-based forex solution.

This rally pushed the AVAX price to a new 2023 high, and the overbought zone on a weekly chart. Notably, AVAX’s trading volume continues to increase, suggesting that bullish momentum may still have the potential to maintain. In this case, the $28-$30 area could become the next target for bulls. However, if the asset fails to sustain above $21, this may cause a price correction.

IMX price surged amid partnership with Ubisoft

On November 9, Immutable announced its partnership with the Ubisoft video game publisher to develop a “Web3 gaming experience.” Following this news, the IMX price surged by over 40%, while its trading volume increased fivefold. This helped the asset temporarily approach a 2023 high.

However, a few days after this news, the asset price began to consolidate in a narrow range, while the trading volume drastically decreased. The daily RSI reached the overbought zone, and the asset formed a bearish divergence on lower timeframes. This hints that the asset may soon experience a price correction. If the price breaks below the $1.07 level, this could push the asset to the middle of the Bollinger channel on a daily chart.

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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