Crypto Ecosystem

Where might Bitcoin go in December?

, November 30, 2023

In this week’s crypto highlights, we explore the price movements of BTC, UNI, 1INCH, and IOTA. 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

Mt.Gox repayments may start soon

On November 21, Mt.Gox creditors were informed via email that repayments would commence by the end of 2023, extending into 2024. According to an official document, the rehabilitation trustee secured the redemption of 7 billion Japanese yen ($47 million) for claims repayment, leaving trust assets at 8.8 billion yen, or approximately $59 million. After nearly a decade of anticipation, some community members speculated that redemptions might finally take place.

However, the recent email exclusively mentions cash payments, while many Mt.Gox hack victims expect large amounts of Bitcoin to be returned. According to data from the Mt.Gox balance bot, the trustee holds 135,890 BTC (nearly $5 billion) on all known addresses, and 3,795 BTC (around $130 million) on unknown ones. Earlier, the Mt.Gox trustee was expected to repay the exchange’s creditors by the end of October 2023, but the deadline was then moved to October 2024.

In February 2014, Mt.Gox, one of the largest crypto exchanges at that time, was hacked for 850,000 BTC (over $32 billion in current prices). The exchange suspended all activity, and filed for bankruptcy a few days after the hack. 

HTX and HECO Chain were exploited for approximately $110 million

Since an old hack was mentioned, it’s time to cover a fresh one.

On November 22, PeckShield and Cyvers analysts flagged suspicious transfers from HTX’s  HECO Chain bridge, with the overall exploit amounting to $86.6 million. The stolen funds were immediately sent to decentralized exchanges, and sold for other tokens.

Wintermute’s Head of Research, Igor Igamberdiev, noted an additional breach at the HTX crypto exchange, which reportedly caused $23.4 million in losses. Transactions related to this exploit exhibited similar patterns to those observed in the HECO bridge hack, and occurred shortly thereafter.

Confirming the hack, Justin Sun, the de-facto owner of HTX, assured full compensation for the losses, and announced a temporary suspension of deposits and withdrawals. In a November 26 blog post, HTX said that deposit and withdrawal functionality was restored for multiple currencies, including Bitcoin and Ethereum. Justin Sun stated that all efforts to reinstate remaining HTX functionality are expected to be complete by next week.

Cosmos founder called for a chain split, after a recent vote

Ok, it’s drama time.

On November 25, the Cosmos community approved the proposal “848,” dedicated to reducing the ATOM inflation rate from 14% to 10%. The proposal was passed by a narrow margin, with 41.1% of votes in favor and 38.5% against. Supporters argued that the current inflation rate led to excessive spending on Cosmos Hub network security, while opponents expressed concerns about potential harm to smaller validators.

Cosmos co-founder Jae Kwon, reportedly supporting the opposition, suggested an alternative in response to the vote’s outcome. He proposed splitting the Cosmos Hub to create a new network named AtomOne, featuring a new associated token, ATOM1. Additionally, Kwon introduced the idea of a separate fee token, Photon (phATOM1), to work in tandem with ATOM1.

Some called Kwon’s solution “very bullish,” because it could potentially lead to a massive airdrop of new ATOM1 tokens to ATOM holders. Other community members asked the Cosmos co-founder to discard this idea. Currently, the fork remains speculative, and its realization is uncertain.

Aragon DAO voted in favor of funding a legal action against Aragon Association

The drama time has been extended. 

On November 2, the Aragon Association announced that it would dissolve its governing body, and wind down Aragon’s governance token, ANT. The organization stated that it will deploy “most of its treasury,” offering ANT holders the opportunity to redeem their tokens for ETH at a fixed rate. Users will be able to redeem funds within a 12-month period. According to the blog post, no further funds will be sent to the Aragon DAO. The Aragon Association also claimed that “there is no purpose in continuing to hold ANT.”

However, it appears that this decision was made without consulting the Aragon DAO. On November 21, the DAO voted “yes” to allocate 300,000 USDC to Patagon Management to take legal action against the Aragon Association. The core of the proposal is to ensure fair distribution of the project’s treasury funds.

One sentence news

  • A Montenegro court approved the extradition of Terra founder Do Kwon to either South Korea or the U.S.
  • Bankrupt crypto lender Celsius claimed it will focus only on Bitcoin mining in the future.
  • Coinbase’s email to its customers sparked speculation that the Bybit crypto exchange could be the next target for U.S. authorities.
  • The Kyber Network team reported that decentralized exchange KyberSwap suffered an exploit, resulting in the loss of approximately $47 million worth of funds.
  • Circle partnered with SBI Holdings to expand the USDC stablecoin presence in Japan.
  • Chainlink announced the launch of the v0.2 upgrade for its staking program, expanding the pool to 45 million LINK.

Notable price performances

Bitcoin created six bullish weekly candles

Almost two months ago, we mentioned that the last two times Bitcoin experienced a green September, the rest of the year continued green for the asset as well. October confirmed that such an outcome is possible, and now November is about to become another bullish month for Bitcoin. Following this pattern, December arguably has a high chance of maintaining existing upward momentum.

A major contributor to this potential rally could be ETF anticipation. According to CoinShares, digital asset funds recently saw the largest weekly inflows since late 2021 because of this factor. A potential approval of spot Bitcoin ETFs is widely expected in early January 2024, meaning a bullish “it’s almost there” narrative could fuel Bitcoin throughout the entirety of December.

In addition, Bitcoin recently created six bullish weekly candles in a row. This last happened in 2019 and 2020, and such price developments historically lead to a new price rally.

The weekly Ichimoku Cloud also suggests a continuation of the upward trend. Ichimoku’s leading spans (blue and red lines) have crossed, causing a formation of a new upside cloud. In addition, a lagging span (green line) crossed a downside cloud, indicating that upward price movement is likely to follow. 

Notably, in the previous two cycles, the upper border of a downside cloud acted as a price resistance for pre-halving rallies. This suggests that $43,000-$49,000 (white range) may be a short-term target zone for Bitcoin bulls.

However, there are a few bearish things to consider. First of all, the weekly RSI is in the overbought zone, hinting that a price correction could be around the corner. The next factor is rather a behavioral one.

In December 2017, Bitcoin price was also partly fueled by the anticipation of TradFi instruments — Bitcoin futures launches on CME and CBOE. Back then, there also was a lot of speculation that institutional investors were about to break into the market. However, the anticipation was much higher than the initial demand, and disappointment pushed the price lower. Considering how crypto markets recently reacted to any ETF news (legitimate or not), a similar situation may occur this time.

This analysis corresponds to our previous one about pre-halving Bitcoin, meaning a price increase, and then its correction closer to halving, could be one of the possible scenarios.

UNI price surged by 20% in a day

UNI price surged by almost 50% over the last month, while the Uniswap decentralized exchange experienced its largest monthly trading volume since April 2023. In addition, shortly before this price rally, the asset formed a bullish divergence on a daily timeframe.

On November 22, the UNI price jumped by over 20% in a day, becoming one of the top weekly climbers among top digital assets by market cap. A potential catalyst behind this jump could be news of Binance’s $4.3 billion settlement with U.S. regulators, outflows from Binance, and increased appeal of decentralized exchanges.

However, after failing to sustain above the $6.70 resistance area, the price started to experience a correction, potentially forming a bearish double top pattern. The 20-day EMA and 0.382 Fibonacci point could act as the next potential target for bears.

1INCH price seems to be preparing for a token unlock

This week is quite loaded in terms of token unlocks, as over $600 million worth of tokens are about to come into circulation. Leading the pack is DYDX, with its almost $500 million token unlock. But while DYDX is gaining increased attention, let’s focus on a smaller, similar event that will happen on the same date.

On December 1, 1INCH is scheduled to unlock almost 100 million tokens, or around 9.48% of the total supply. The previous major 1INCH unlock happened on June 2, and shortly after that, the asset showed a double-digit price drop. 

The asset is currently struggling to sustain above the 20-day EMA, hinting that bears may have an upper hand. In addition, the daily Awesome Oscillator (AO) is close to making a bearish zero cross, suggesting that downward momentum has the potential to continue. If the asset breaks the $0.322 level, bears may try to explore the 200-day SMA.

IOTA price jumped amid Abu Dhabi registration

According to a press release, the IOTA Ecosystem DLT Foundation asserts itself as the “first” foundation registered under the regulatory framework known as the DLT Foundations Regulations, established by the Abu Dhabi Global Market (ADGM), the city’s financial watchdog. The new organization will be funded by $100 million worth of IOTA tokens, locked up for four years.

Following this news, the IOTA price updated its 2023 high, jumping by over 66% in a day. But the next day, the asset dropped to the 0.382 Fibonacci point. The daily RSI reached the overbought zone, while AO hints at a potential formation of a bearish twin peaks pattern. This suggests that bears may try to push the asset to lower levels.

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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