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Bitcoin price sell-off continues, but data highlights need for healthy correction

Bitcoin price is down 5% over the last 24 hours to trade at $41,645 on Dec. 11. Despite the sharp price correction, technical indicators and on-chain data show that Bitcoin (BTC) still displays strength as bulls strive to push the price back above $44,000.

On-chain data shows Bitcoin price “over-extended”

Bitcoin dropped as much as 7.2%, falling to $40,300 on Coinbase, triggering a conversation among analysts. Julio Moreno, head of research at on-chain analytics firm CryptoQuant, said that the flagship cryptocurrency’s price was “overheating after the recent rally above” the $40,000 psychological level. 

More data from on-chain data analysis firm Lookintobitcoin highlighted exhaustion among bulls. According to its December 2023 report, Bitcoin’s price has reached its golden ratio multiplier near-term target, highlighted by the Crosby Ratio, which shows Bitcoin’s near-term price at “over-extended levels,” resulting in the need to correct, or at least slow down.

The golden ratio multiplier is an indicator that explores Bitcoin’s adoption curve and market cycles to understand how the price may behave in medium to long-term time frames.

Bitcoin Crosby Ratio chart. Source: Lookintobitcoin

In other words, Bitcoin reached overbought conditions above $40,000 as buyer exhaustion set in. Note that the flagship cryptocurrency’s relative strength index (RSI) shows that its has been massively overbought since Dec. 5. 

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Is the Bitcoin price dip toward $40K a bear trap?

Bitcoin (BTC) price finally witnessed a significant 7% pullback on Dec. 11 as multiple indicators flashed sell signals and traders booked profits. Bitcoin’s ability to hold above $42,000 will determine whether this crash is a buy-the-dip opportunity or a general market reversal. 

Short-term volatility or big trend reversal?

The sharp BTC price drop observed on the daily chart corresponds with a sudden 6.5% drawdown and over $300 million long liquidations across the cryptocurrency market.

BTC/USD 4-hr candle chart. Source: Bitstamp

Zooming to the longer 1-day candle timeframe, however, this movement appears as a minor retracement in a more extensive bullish trend established over the past few months. Moreover, the relative strength index (RSI) has retreated into neutral territory below 70. 

BTC/USD 1-day candle chart. Source: Bitstamp

Last week’s analysis confirmed the strong uptrend that Bitcoin has been in, with significant momentum observed after the price breached the $40,000 mark.

This context suggests that the recent dip could be a short-term fluctuation within a continuing upward trend rather than a general trend reversal, though more downside or sideways actions should not be ruled out for the days ahead. 

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$300M crypto long liquidations — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a key week for macro markets with a bump as the weekly close gives way to a sharp 7% BTC price correction.

The largest cryptocurrency broke down toward $40,000 in a fresh bout of volatility, reaching its lowest level in a week.

Arguably long overdue, Bitcoin’s return to test support nonetheless caught bullish latecomers by surprise, liquidating almost $100 million in longs.

The snap move provides a rude awakening for BTC investors at the start of a week, which already holds a multitude of potential volatility triggers. These come in the form of United States macro data that will immediately precede the Federal Reserve’s next decision on interest rate policy.

A bumper collection of numbers coming in swift succession means anything can happen on risk assets — and crypto is no exception.

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Bitcoin bulls’ run toward $45K could produce tailwinds for UNI, OP, TIA and STX

The S&P 500 Index (SPX) achieved its highest close of the year last week, and Bitcoin (BTC) also hit a new 52-week high, indicating that risky assets remain strong going into the final few days of the year. 

Some analysts believe Bitcoin is done with its rally in the short term and may roll over. Popular analyst and social media commentator Matthew Hyland cautioned in a post on X (formerly Twitter) that a drop in Bitcoin’s dominance below 51.81% could signal that the uptrend has ended “along with a likely top put in.”

Crypto market data daily view. Source: Coin360

Usually, the first leg of the rally of a new bull market is driven by the leaders, but after a significant move, profit-booking sets in and traders start to look at alternative opportunities. Although Bitcoin has not rolled over, several altcoins have started to move higher, signaling a potential shift in interest.

Could Bitcoin continue its up-move and hit $48,000 in the next few days? Will that boost interest in select altcoins? Let’s look at the charts of the top 5 cryptocurrencies that may remain strong in the near term.

Bitcoin price analysis

Bitcoin has been consolidating in a tight range near the minor resistance at $44,700, indicating that the bulls are not rushing to the exit as they anticipate another leg higher.

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Binance’s CZ must stay in US, Elon Musk seeks $1B for AI, and other news: Hodler’s Digest, Dec. 3-9

Binance founder Changpeng “CZ” Zhao has been ordered to stay in the United States until his sentencing in February, with a federal judge determining there’s too much of a flight risk if the former crypto exchange CEO is allowed to return to the United Arab Emirates. On Dec. 7, Seattle District Court Judge Richard Jones ordered Zhao to stay in the U.S. until his Feb. 23, 2024 sentencing date. He faces up to 18 months in prison after pleading guilty to money laundering on Nov. 21 and has agreed not to appeal any potential sentence up to that length.

A United States Congress committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary with promoting blockchain deployment and thus potentially increase the country’s use of blockchain technology. The act covers an array of actions the commerce secretary must take if passed, including making best practices, policies and recommendations for the public and private sector when using blockchain tech. The bill will now go to the House for a vote. If passed, it must also pass in the Senate before returning for final congressional and presidential approval.

The United States Securities and Exchange Commission has delayed its decision on whether to approve or reject a spot Ether exchange-traded fund (ETF) offering from asset manager Grayscale. In a notice, the SEC said it would designate a longer period for considering a proposed rule change that would allow NYSE Arca to list and trade shares of the Grayscale Ethereum Trust. Grayscale first filed with the SEC to convert shares of its Grayscale Ethereum Trust into a spot Ether ETF in October, adding its name to the list of companies awaiting a decision from the regulator.

Elon Musk’s X-linked artificial intelligence modeler, xAI, has an agreement for the private sale of $865.3 million in unregistered equity securities, according to a filing with the United States Securities and Exchange Commission made on Dec. 5. The company is seeking to raise $1 billion. XAI’s product, a chatbot called Grok, has recently rolled out to X’s Premium+ subscribers. Musk announced the launch of xAI in July and claimed its goal was to “understand the universe.” 

Bitcoin will hit a new all-time high in late 2024 because of a long-feared United States recession and regulatory shifts after the next U.S. presidential election, asset manager VanEck predicts. The firm is confident that the first spot Bitcoin ETFs will be approved in the first quarter of 2024. However, it also made a gloomy prediction for the general U.S. economy. VanEck is among several firms, including BlackRock and Fidelity, that are vying for an approved spot Bitcoin ETF. VanEck also believes that the BTC halving, due in April or May, “will see minimal market disruption,” but there will be a post-halving price rise.

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Bitcoin dominance threatens ‘likely top’ despite BTC price eyeing $45K

Bitcoin (BTC) risks “rolling over” to cancel its latest uptrend, new analysis warns as altcoins surge.

In a post on X (formerly Twitter) on Dec. 9, popular analyst and social media commentator Matthew Hyland flipped cautious on BTC price action.

Bitcoin dominance risks violating key level

Bitcoin bulls kept momentum hot into the end of the week’s Wall Street trading as BTC/USD sealed new 19-month highs of $44,729 on Bitstamp on Dec. 8.

Data from Cointelegraph Markets Pro and TradingView tracked a subsequent return below the $44,000 mark, with Bitcoin cementing itself in an intraday range.

BTC/USD 1-hour chart. Source: TradingView

For Hyland, however, there are more sinister signs that the bull run may be in trouble after robust 60% gains since the start of October.

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Why is Solana (SOL) price up this week?

Solana's native token (SOL) surged by 17% between Dec. 7 and Dec. 8, reaching its highest level since May 2022.

SOL's fate changed dramatically on Dec. 1 when Brian Armstrong, CEO of Coinbase, revealed a plan to integrate the Solana network, including its tokens, although no specific date has been provided. This news sparked interest in Bonk (BONK), a Solana SPL meme token listed on Bybit, KuCoin, and Solana's decentralized exchange, Orca, which gained 236% between Dec. 1 and Dec. 8.

On Dec. 6, Coinbase exchange announced the listing of Jito (JTO), an SPL token on the Solana network, which saw instant success as JTO doubled in price between Dec. 7 and Dec. 8. With the current circulating supply of 115 million, Jito's market capitalization now stands at $422 million.

The governance token of the Solana-based liquid staking protocol Jito conducted an airdrop of 80 million tokens to early users, validators, and protocol contributors. In total, approximately 9,900 addresses staked SOL using Jito ahead of the snapshot date, resulting in an impressive distribution of 4,941 JTO tokens for each participant.

The decentralized finance (DeFi) application Jito allows users to benefit from SOL staking and receive a derivative JitoSOL token in exchange for additional flexibility and yields, a common practice in the Ethereum ecosystem through the Lido platform. According to Coingecko's order book depth, Binance leads the JTO market with bids totaling $606,000.

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Markets rethink Fed rate cuts as Bitcoin circles $44K on US jobs data

Bitcoin (BTC) tapped $44,000 after the Dec. 8 Wall Street open as United States employment data shrunk market bets on interest rate cuts.

BTC/USD 1-hour chart. Source: TradingView

Bitcoin holds firm as jobs data unsettles U.S. dollar

Data from Cointelegraph Markets Pro and TradingView covered the latest BTC price action as risk assets reacted to the latest U.S. inflation cues.

Nonfarm payrolls came in above expectations at 199,000 versus 190,000, while unemployment was lower than forecast at 3.7% versus 3.9%, per an official release from the U.S. Bureau of Labor Statistics.

Both suggested that the full impact of Federal Reserve monetary tightening had yet to show itself, and while other data had already captured declining inflation, markets treated the labor figures nervously.

Data from CME Group’s FedWatch Tool nonetheless put the odds of anything other than a rate change freeze continuing at next week’s Fed meeting at practically zero.

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Bitcoin may hit $50K on altcoin ‘FUD’ as Ethereum, Solana beat gains

Bitcoin (BTC) struggled to hold above $43,000 into Dec. 8 as an altcoin surge put Ether (ETH) in the spotlight.

BTC/USD 1-hour chart. Source: TradingView

ETH, SOL step up as Bitcoin takes liquidity

Data from Cointelegraph Markets Pro and TradingView showed ongoing BTC price consolidation as ETH/USD added up to 7.6% in around 24 hours.

Bitcoin, having tapped new 19-month highs of $44,490 earlier in the week, now troubled market participants as both ETH and Solana (SOL) stole attention.

Eyeing Bitcoin’s share of the overall crypto market cap, popular analyst Matthew Hyland described recent progress as a potential “false breakout.”

Dominance hit 55.26% on Dec. 6, in line with the BTC price highs — the highest reading since April 2021.

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HK game firm to buy $100M crypto for treasury, China/UAE CBDC deal: Asia Express

Our weekly roundup of news from East Asia curates the industry’s most important developments.

Boyaa Interactive International, a publicly traded Hong Kong holding company specializing in online card and board games, wants to secure the approval of its shareholders to invest $100 million in crypto.

According to this week’s announcement, Boyaa Interactive directors want to allocate $45 million of corporate funds to Bitcoin (BTC), $45 million to Ether (ETH), and $10 million to stablecoins such as Tether (USDT) and USD Coin (USDC). As for rationales for the investment, the directors wrote:

“The Internet gaming business mainly operated by the Group has a high degree of logical fit with Web3 technology. It attaches great importance to communities and users, covers virtual asset attributes and other characteristics, making Web3 technology easier and more widely used in the Internet gaming industry.”

The company’s brand of 75 online games, such as its Texas Hold’em casino, has around 1.18 million daily active players. In Q3 2023, Boyaa Interactive generated $14 million in revenue and $4.2 million in earnings, respectively. 

A Boyaa Interactive online casino.
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Bitcoin options data shows whales betting big — Will $50K BTC come in January?

Bitcoin (BTC) options open interest reached an unprecedented milestone, surging to a staggering $20.5 billion on Dec. 7. This remarkable achievement signifies the active involvement of institutional investors in the cryptocurrency space. Unlike futures contracts, BTC options come with predetermined expiration prices, offering valuable insights into traders’ expectations and the markets’ sentiment.

At the forefront of the Bitcoin options market stands Deribit, boasting an impressive 90% market share. The exchange currently holds a substantial $2.05 billion open interest for options expiring on Jan. 26. However, it's worth noting that a significant portion of these bets may lose their value as the deadline approaches.

Deribit BTC options open interest for Jan. 26, BTC terms. Source: Deribit

Nonetheless, with the prospect of a spot exchange-traded fund (ETF) gaining regulatory approval, previously sidelined bullish bets are reentering the playing field.

How costly is a Bitcoin call (buy) option?

Presently, the $54,000 call option set to expire on Jan. 26 is trading at 0.02 BTC, equivalent to $880 at current market prices. This option necessitates a 25% increase in Bitcoin's value over the next 49 days for the buyer to turn a profit. It's noteworthy that sellers can hedge their positions using BTC futures while pocketing the options premium, mitigating some of the perceived risk associated with this trade.

Analysts have emphasized the significance of the $250 million open interest stemming from the $50,000 call options on Deribit. At the current price of $44,000, these options are collectively valued at $8.8 million. This valuation could experience considerable growth if regulatory authorities greenlight the spot ETF plans. However, it remains uncertain whether the buyers of these $50,000 call options intend to employ them for bullish strategies.

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Bitcoin price continues to drop, but how are pro BTC traders positioned?

Bitcoin (BTC) has experienced a remarkable 15.7% price surge in the first six days of December. This surge has been heavily influenced by the anticipation of an imminent approval of a spot exchange-traded fund (ETF) in the United States. Senior Bloomberg ETF analysts have expressed a 90% probability for approval by the U.S. Securities and Exchange Commission, which is expected before Jan. 10.

However, Bitcoin’s recent price surge may not be as straightforward as it seems. Analysts have failed to consider the multiple rejections at $37,500 and $38,500 during the second half of November. These rejections have left professional traders, including market makers, questioning the market’s strength, particularly from the perspective of derivatives metrics.

Bitcoin’s inherent volatility explains pro traders’ reduced appetite

Bitcoin’s 7.6% rally to $37,965 on Nov. 15 resulted in disappointment as the movement fully retracted the following day. Similarly, between Nov. 20 and Nov. 21, Bitcoin's price declined by 5.3% after the $37,500 resistance proved more formidable than anticipated.

While corrections are natural even during bullish markets, they explain why whales and market makers are avoiding leveraged long positions in these volatile conditions. Surprisingly, despite positive daily candles throughout this period, buyers using long leverage were forcefully liquidated, with losses totaling a staggering $390 million in the past five days.

Although the Bitcoin futures premium on the Chicago Mercantile Exchange (CME) reached its highest level in two years, indicating excessive demand for long positions, this trend doesn't necessarily apply to all exchanges and client profiles. In some cases, top traders have reduced their long-to-short leverage ratio to the lowest levels seen in 30 days. This indicates a profit-taking movement and reduced demand for bullish bets above $40,000.

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‘Early bull market’ — Bitcoin price preps 1st ever weekly golden cross

Bitcoin (BTC) is lining up an “early bull market” as a unique chart feature plays out for the first time in history.

In a post on X (formerly Twitter) on Dec. 7, entrepreneur Alistair Milne drew attention to Bitcoin’s first ever weekly golden cross.

Bitcoin goes from death cross to golden cross in 10 months

Recent BTC price upside has delivered considerable profits to various Bitcoin investor cohorts, but 165% year-to-date gains are now significant for another reason.

Should current performance continue, Bitcoin will witness a crossover of two weekly moving averages (MAs), which have never delivered such a bull signal before.

The 50-week and 200-week MAs are key trendlines for Bitcoin traders and analysts alike. The latter is the ultimate bear market support level, and it has so far never decreased in value.

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Games need bots? Illivium CEO admits ‘it’s tough,’ Web3 games 42X upside: Web3 Gamer

Some think that bots in games is a sign of the apocalypse, or perhaps just the makers trying to fill up an empty venue to make it look popular.

But Pixels founder and CEO Luke Barwikowski says that conversely, if people aren’t trying to fill your game with bots, then it’s probably because the game isn’t exactly the talk of the town.

“If people aren’t trying to bot your game — it’s not because they can’t — it’s because they don’t care enough to do it.”

According to Barwikowski, if you’re making a game that doesn’t have any bots and flaunting it, that’s not something to boast about.

“It’s not always the flex you think to say you don’t have any bots in an ecosystem,” he declares.

Crypto game Illuvium. Looks a little like Axie Infinity Mark II?
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Bitcoin HODL Waves: 2020 bull market buyers now control 16% of supply

Bitcoin (BTC) has gained a new generation of hodlers in the past three years as stubborn investors refuse to sell.

Data from the popular HODL Waves metric shows that those who bought Bitcoin in late 2020 are still sitting on their coins.

BTC price should go “way higher” for hodlers to sell

Bitcoin’s longer-term investor cohorts, also known as long-term holders (LTHs), are in no mood to decrease their exposure despite the 2023 bull run.

HODL Waves, which groups the BTC supply by the time elapsing since each coin last moved, shows a particular age band growing considerably over the past year.

Since the bear market bottomed in late 2022, unmoved coins in two to three years have increased their presence within the overall supply considerably. Last December, the group accounted for around 8% of the supply; now, its share is more than 15%.

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Lawmakers’ fear and doubt drives proposed crypto regulations in US

Real bipartisan legislative efforts are rare in Washington, DC, these days, but Democratic Senators Elizabeth Warren and Joe Manchin and Republican Senators Lindsey Graham and Roger Marshall have managed to come together to co-sponsor a bill focused on crypto crime. 

According to the senators, the Digital Asset Anti-Money Laundering Act of 2023 aims to close loopholes in the nation’s Anti-Money Laundering rules. The bill would amend the Bank Secrecy Act and would designate a diverse range of digital asset providers as financial institutions. 

The Bank Secrecy Act establishes program, recordkeeping and reporting requirements for national banks, federal savings associations, federal branches and agencies of foreign banks. Digital asset providers would be required to adhere to many of the same regulations as traditional banks.

Warren introduced the legislation to the United States Senate on July 27, 2023, on behalf of herself and Senators Joe Manchin, Roger Marshall and Lindsey Graham. The bill was then referred to the Senate Committee on Banking, Housing and Urban Affairs. It hasn’t been voted on by the entire Senate or sent to the U.S. House of Representatives for consideration. Nor has President Biden signed it, and it is not a matter of law at this time. 

The legislation would add several types of cryptocurrency providers to U.S. regulators’ list of financial institutions. These include unhosted wallet providers, digital asset miners and validators or other nodes that validate third-party transactions, miner extractable value searchers, other validators or network participants with control over network protocols, or just about anyone else who facilitates or provides services related to exchange, sale, custody or lending of digital assets.

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Bitcoin is up 170% since the ECB called its ‘last gasp’ at $16.4K

Bitcoin (BTC) has gained almost 170% since the European Central Bank (ECB) warned of its impending “irrelevance.”

As noted by crypto proponent Eric Wall and others on Dec. 4, BTC price action has done the complete opposite of economists’ predictions.

ECB Bitcoin myopia: “What else are they wrong about?”

Bitcoin traded at just $16,400 when, on Nov. 30, 2022, the ECB published a blog post dedicated to its death.

Coming just after the implosion of the FTX exchange and subsequent market flight, the post argued that even those levels were a stopping point on the way to new lows.

“The value of bitcoin peaked at USD 69,000 in November 2021 before falling to USD 17,000 by mid-June 2022. Since then, the value has fluctuated around USD 20,000,” it stated.

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Bitcoin price hit 2023 high, so why are retail traders waiting on the sidelines?

The total market capitalization of the cryptocurrency market surged past $1.55 trillion on Dec. 5, driven by remarkable weekly gains of 14.5% for Bitcoin (BTC) and 11% for Ether (ETH). Notably, this milestone, marking the highest level in 19 months, propelled Bitcoin to become the world’s ninth-largest tradable asset, surpassing Meta’s $814 billion capitalization.

Despite the recent bullish momentum, analysts have observed that retail demand remains relatively stagnant. Some attribute this to the ripple effects of an inflationary environment and decreased interest in credit, given that interest rates continue to hover above 5.25%. While analyst Rajat Soni’s post may have dramatized the situation, the underlying, in essence, holds true.

Numerous United States economic indicators have surged to record highs, including wages, salaries and household net worth. However, analyst Ed Yardeni suggested that the “Santa Claus rally” might have already occurred earlier this year, with the S&P 500 gaining 8.9% in November.

This rise reflected diminishing inflationary pressures and robust employment data. Yet, investors remain cautious, with approximately $6 trillion in “dry powder” parked in money market funds, waiting on the sidelines.

With no dependable indicator to track retail participation in cryptocurrencies, a comprehensive data set is necessary for making conclusions, beyond relying solely on Google Trends and crypto-related app download rankings. To determine if retail traders have missed out on the rally, it’s essential that the indicators align across various sources.

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Bitcoin bulls charge to $44K as week-to-date BTC price gains pass 10%

Bitcoin (BTC) clipped $44,000 later on Dec. 5 as the Wall Street trading session delivered more snap BTC price gains.

BTC/USD 1-hour chart. Source: TradingView

Bitcoin applies more pressure to bears

Data from Cointelegraph Markets Pro and TradingView followed a fresh round of upside for Bitcoin as it outpaced altcoins to reach $44,011 on Bitstamp.

Taking week-to-date gains to 10%, this marked its highest levels since early April 2022 and represented a key challenge to significant resistance.

As noted by popular trader and analyst Rekt Capital, $44,000 constitutes the high point of a range that has occurred several times since early 2021.

“Bitcoin has successfully revisited the Range High resistance at ~$43900,” he continued in subsequent commentary on X (formerly Twitter).

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BTC price sets new 19-month high in ‘choreographed’ Bitcoin whale move

Bitcoin (BTC) returned above $42,000 on Dec. 5 as analysis remained suspicious of market manipulation.

BTC/USD 1-hour chart. Source: TradingView

Analysis: New Bitcoin bids are not “organic”

Data from Cointelegraph Markets Pro and TradingView showed a BTC price rebound taking BTC/USD to highs of $42,498 on Bitstamp.

These beat the 19-month peak set the day prior, with retracements being short-lived amid a general atmosphere of excitement throughout crypto.

As Bitcoin continued to reclaim ground lost in mid-2022, however, warnings over the rally’s sustainability continued to flow in. These centered on the behavior of large-volume traders, also known as whales.

In a dedicated thread about the phenomenon on X (formerly Twitter), trading resource Material Indicators explained that from order book liquidity cues, it appeared that these traders could be deliberately coordinating higher prices in order to sell into an uptrend with minimal slippage.

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