Blockchain

Since the latest Bitcoin rally started, there has been speculation going on as to whether derivatives fuel the surge. Here’s what Glassnode says.

Bitcoin Funding Rates Have Remained Cool Recently

In its latest weekly report, the on-chain analytics firm Glassnode has talked about what the derivatives side of the market has looked like while the latest rally in the asset has occurred.

First, the report has looked into the open interest of the perpetual swap markets, where “open interest” refers to the total amount of Bitcoin contracts currently open. The metric has been measured in terms of BTC here so that the USD price fluctuations don’t affect the trend.

From the chart, it’s visible that the Bitcoin open interest saw two large liquidation squeezes back in January and August, with the former one being a short squeeze and the latter one being a long squeeze.

Since the latest rally started, BTC has observed two liquidation events: one of 25,000 BTC and the other of 33,000 BTC. This combined short squeeze is now of the same scale as the aforementioned mass liquidation events.

In terms of the USD values of the liquidation events, the latest squeeze is again comparable with the other ones this year:

On the topic of liquidations, Glassnode reveals that, interestingly, the market has been dominated by long liquidations throughout the history of Bitcoin. There have only been a few phases where shorts have dominated the longs over 30 days.

The latest large short liquidations have resulted in the shorts just overtaking the longs, as the chart below shows.

Curiously, it would appear that during the few periods that the short liquidations have dominated the market (highlighted in yellow), Bitcoin has observed a point of extreme in its price.

While the liquidation data would suggest that the derivatives have indeed played a role in driving the market through this latest rally, the funding rates could tell a different story.

“Of note is that funding rates and cash-and-carry basis in futures markets have remained relatively calm all things considered,” explains Glassnode. “2023 has generally seen futures markets yield annualized rates over 6%, which are greater than US treasury rates.”

Back in August, however, the selloff cooled off these funding rates, and they have since remained relatively low. Even with the latest chaos in the market, the metric still hasn’t seen any significant uptick. The analytics firm notes that this could imply the Bitcoin rally is only partially driven by leveraged speculation.

BTC Price

At the time of writing, Bitcoin is trading at around $34,300, up 23% in the past week.

In a recent development, Ethereum’s latest resurgence (up over 12% in the last seven days) could be threatened by the actions of an Ethereum whale who could potentially end the token’s rally and further cause it to decline. 

Ethereum Whale Moves 30,710 ETH

In a post shared on the X (formerly Twitter) platform, a crypto-related account with the username ‘EmberCN’ noted that a particular Ethereum whale who had withdrawn a total of 42,311 ETH from the crypto exchange Binance since September 20 had just transferred 30,710 ETH (out of the withdrawn funds) back to Binance. 

The account further mentioned that the average ETH price at which this whale had accumulated these tokens is about $1,667, which instantly shows that the whale is currently in profit and could be looking to realize some of their gains by selling the transferred tokens on Binance. 

However, the crypto community will be more concerned with how a potential sell-off could negatively impact the market. It would add to the selling pressure on the asset, which could cause a decline, especially if there is no buying pressure to match it. 

Some might be more inclined to believe that this amount of ETH may not matter in the grand scheme of things, considering that it was recently reported that Ethereum’s ‘Billionaires’ control one-third of the token’s circulating supply. This category of persons is those who hold 1 million ETH and above. 

It is also worth mentioning that on-chain data shows that the Ethereum whale has, since the transfer of the 30,710 ETH, gone on to transfer the tokens to another Binance wallet, which has spread the ETH across different wallets. 

Another Busy ETH Whale

In a post shared on its X platform, the analytics platform Scopescan revealed that the 1inch investment fund had sold 4,685 stETH (staked Ethereum on the Lido platform) for $8.54 million at an average price of $1,823. In the process, they realized an estimated profit of $1.28 million as these stETH were said to be bought on October 13 at the average price of $1,550.

The move may not come as a surprise to some as the investment fund, which has close ties to the DEX aggregator 1Inch, has been actively trading Ethereum since the beginning of the year. During that period, it bought a cumulative total of 17,000 ETH and then went on to take some profits by liquidating 11,000 ETH at $1,906 for $21 million, making a profit of about $3.7 million in the process.

These whale movements may have had an impact on Ethereum’s price as the token is, at the time of writing, trading at around $1,770, down over 2% in the last 24 hours, according to data from CoinMarketCap. 

The data of two on-chain indicators may be referred to for finding out whether the latest Ethereum rally can go on or not.

Ethereum Has Enjoyed A Sharp Rally Of More Than 12% In The Past Week

Like the rest of the cryptocurrency market, Ethereum has observed a rally during the past few days. Although the coin’s bullish momentum hasn’t been quite as strong as Bitcoin’s, its weekly gains of 12% are still nonetheless significant.

Yesterday, the asset had been carrying even higher profits, as its price had touched above $1,850. In the past day, though, ETH has noted some drawdown, as it’s now trading under the $1,800 level.

After the pullback, some investors have been wondering whether the Ethereum rally is done for now or if it has hopes for continuing further. On-chain data from Santiment may hold some hints about that.

ETH Exchange Supply Has Plunged, While Whale Transfers Have Spiked

In a new post on X, the on-chain analytics firm Santiment has discussed two important ETH metrics. The first of these is the “whale transaction count,” which keeps track of the total number of Ethereum transactions that carry a value of at least $100,000.

Generally, only the whale entities are capable of moving such a large amount of the asset with a single transfer, so transactions of this scale are assumed to reflect the behavior of these humongous investors.

The below chart shows the trend in this ETH indicator over the past few months.

As displayed in the above graph, the Ethereum whale transaction count has observed some pretty high values recently. This suggests that these large holders have been quite active in the market.

At the peak of this spike, the indicator had a value of 6,049, which is the highest number of daily transactions that the whales have made on the network since April of this year.

The whale transaction count metric by itself can’t point towards a bullish or bearish outcome for the cryptocurrency, as both selling and buying transfers are included in the count.

It’s true, however, that whales would need to stay active if the rally has to continue, as their contribution will provide the necessary fuel for it. So far, the whales have been active indeed, but it remains to be seen whether they are still buying or if they are pivoting towards selling. The pullback in the Ethereum price may hint towards the latter.

The other indicator that Santiment has attached to the chart is the “supply on exchanges,” which measures the percentage of the total circulating ETH supply that’s sitting in the wallets of all centralized exchanges.

From the graph, it’s visible that this indicator has only continued to slide down since the rally started, implying that investors have continued to make net withdrawals from these platforms.

At present, 8.41% of the ETH supply is on exchanges, which is the lowest level since July 2015. Holders continuing to withdraw their coins can be a constructive sign for the cryptocurrency, as it can be a sign that accumulation is going on.

The price of BTC continues to push higher, and the bullish momentum remains intact as news around the Bitcoin ETF (Exchange Traded Fund) improves overall sentiment. In the wake of the recent rally, some trading firms doubled down on their bullish positions.

As of this writing, the price of Bitcoin stands at $24,200 with sideways movement in the last 24 hours. The cryptocurrency rose by over 20% the previous week, operating as the top performer in the top 10 by market capitalization.

Bitcoin ETF To Trigger Larger Rally: What’s The Target?

Via social media platform X, trading desk QCP Capital disclosed their positions coming into the rally. The firm longed Bitcoin volatility with options contracts, taking some profits on their positions as the cryptocurrency rallied.

Still, the firm remains optimistic, holding on to their calls due to expiry in December. By then, the firm targets a BTC price above $38,000 to $44,000, based on the momentum generated by a potential Bitcoin ETF approval.

In the last week, the news generated by this event has shifted market sentiment, leading investors to a more favorable area. However, the firm remains cautious about the US Securities and Exchange Commission (SEC) approving a spot Bitcoin ETF in the short term.

QCP Capital stated:

(…) we believe the SEC will avoid playing the role of kingmaker, sticking with its own precedent set during the BTC/ETH futures ETF approval process and will wait to approve multiple managers at the same time. Nonetheless with this bullish break of 32k, we believe the market has started to price in an approval as the base case. The only question now is when the approval will happen.

SEC To Avoid Kingmaking In Bitcoin ETF Approval.

The trading firm believes the financial instrument will get approved in 2024. The SEC will likely avoid favoring one firm to prevent BlackRock or other asset managers from taking a large portion of the clients and the trading volume, as when the future Bitcoin ETF was approved.

The firm believes the financial instrument could get approved “much later than the market expects now.” As mentioned, investors have begun pricing in any price action associated with the ETF, which could lead BTC to another range until 2024.

The firm cautioned players from taking late long positions:

(…) we are seeing stretched positive perp funding rates especially on Deribit (BTC over 70% and ETH over 100%) as well as elevated short-end ATM vols (BTC up to 75%!) – typically indicative of an exhausted short-term move.

Cover image from Unsplash, chart from Tradingview

The Shiba Inu community burn rate has seen a significant decline over the last few days. The burn rate which had been on a tear earlier in the month started to recede and has fallen double-digits in the last 24 hours alone. Given that this burn initiative was implemented to reduce supply and increase the price in the process, this decline in burn rate could have an impact on SHIB’s price performance.

Shiba Inu Burn Rate Down Over 80%

As data from the Shiba Inu burn tracking website, Shibburn, shows, the Shiba Inu burn rate is down more than 80% in the last day. The reason for this decline is lower participation in the burn rate, as investors have turned their focus to the surging crypto market prices.

At this time, only 29.98 million SHIB have been burned. Compared to the figures from earlier in the month which often came out above 100 million tokens burned, it shows a serious lack of participation from the Shiba Inu community members.

Burns have come from over 40 wallets but the number of SHIB each transaction was carrying was very small, hence the lackluster burn rate recorded at this time. However, on the weekly time frame, the burn rate is faring much better, as the burn tracker revealed on X (formerly Twitter) that it has seen a 61.82% increase. This means that over 362.4 million tokens were incinerated in the seven-day period.

Will This Affect The SHIB Price?

A look at the Shiba Inu price chart shows that the meme coin has seen a slowdown in its rally over the last day. But this has not completely eliminated the bullish tendencies that the SHIB price has shown. For example, whales are not giving up on the crypto and are instead choosing to accumulate through the twists and turns.

As Bitcoinist reported, Shiba Inu whales picked up 4.52 trillion tokens from the market, which saw the price rally resume once more. This shows that these large players expect the price to continue to rally, especially in the short term, making it a good time to be in the cryptocurrency.

However, there has been a significant decline in the excitement and participation in the SHIB token. CoinMarketCap data shows a 20.94% decrease in its daily trading volume, which suggests that sellers may be gaining ground.

Nevertheless, Shiba Inu has done a good job of sticking with the Bitcoin rally. And if the leading cryptocurrency continues its upward march, Shiba Inu’s tendency to follow the same path will see its value rise despite the decrease in burn rate.

In a definitive response to swirling rumors regarding the possible discontinuation of the Djed stablecoin, Charles Hoskinson, founder of Cardano, firmly stated that not only will the project continue, but it will also receive a significant upgrade. “No, we aren’t dropping Djed. We are supercharging the team,” he announced.

Cardano Developer IOG Doubles Down On Djed

Djed, an overcollateralized stablecoin by Input Output Global (IOG) and COTI has been under scrutiny due to its unique financial mechanism recently. Specifically, the stablecoin uses Cardano’s ADA token as a reserve, aiming to maintain a circulating supply backed by four times the number of its outstanding coins.

While designed to provide enhanced security and stability for its users, recent metrics indicated the reserves had decreased to 356%, prompting a temporary suspension of minting new Djed tokens.

In the midst of this, IOG issued a series of statements indicating structural changes and expansions. Hoskinson tweeted about the addition of Sean Ford, noting, “Glad to welcome my good friend Sean Ford to the IOG family.” This was in conjunction with IOG’s formal announcement, detailing the appointment of Sean Ford as CEO and David Markley as COO of a newly formed subsidiary concentrating on the stablecoin sector.

Ford’s credentials in the technology sector are quite noteworthy, having been part of the founding team at Algorand where he served in both COO and CEO capacities. Additionally, David Markley, before joining IOG, was deeply entrenched in Algorand’s Operations, Venture, and Business Solutions teams.

Articulating his vision for the evolving stablecoin sector, Ford stated, “The stablecoin space is rapidly evolving as the next frontier in digital asset payments, settlement, and innovation. I am excited to engage with the IOG team and the broader blockchain, stablecoin, and crypto community as we work collectively to create and launch the next generation of stable assets.”

Hoskinson, reflecting on his long-standing involvement in the field, emphasized the necessity of stablecoins for the blockchain industry. Drawing attention to his work from BitShares to Djed, he said, “The blockchain industry needs stablecoins to realize its mission and fully protect its values. I’m incredibly proud to welcome my friend Sean Ford to lead a new venture to develop stablecoins and other payment solutions alongside their supporting ecosystems.”

These developments suggest a recalibration of the Djed project under new leadership. With firm support from the Cardano ecosystem, Djed could make a new attempt to conquer a part of the huge stablecoin market in the crypto sector.

ADA Breaks The Downtrend

Last Saturday, the ADA price managed to break above a descending trend line that has its origin in mid-April, when ADA reached its high for the year at $0.463. Since then, ADA has been in a downtrend, which may now be coming to an end, as discussed in our latest analysis.

The Cardano price has recaptured the 0.236 Fibonacci retracement level on the 1-day chart and is now close to the extremely important 200-day EMA at $0.298.

Solana (SOL) has experienced remarkable growth in the past month, outpacing its peers in the cryptocurrency market. According to data from Messari, SOL’s market capitalization surged over 60%, solidifying its position among the top ten crypto assets. 

This rally comes after a challenging period for SOL bulls who struggled to maintain support at the $20 mark, not to mention the significant drop to $8 following the FTX exchange implosion in November.

The price of major ecosystem tokens has recently been on the rise.

Solana in particular has experienced a nearly 55% price appreciation over the last 30 days.

Major Ecosystem Screener: https://t.co/TPNhzaeln4 pic.twitter.com/EXbjvQvO79

— Messari (@MessariCrypto) October 23, 2023

Solana Price Recent Fluctuations

SOL’s price reached a peak of $32 before settling at its current level, approximately $31.28, as reported by CoinGecko. Although there has been a slight 0.4% dip in the last 24 hours, the cryptocurrency has shown an impressive seven-day rally, with a gain of 30.2%. To put this in perspective, the last time SOL was trading at a similar price level was in November 2022, just before the FTX exchange incident shook the market.

The surge in SOL’s price can be attributed to the overall bullish momentum in the cryptocurrency market over the past few weeks. Data from Santiment reveals that SOL’s daily trading volume has surged by more than 30% since October 16. This increased trading activity indicates growing investor interest and confidence in Solana’s potential.

A closer look at the momentum indicators on a daily chart highlights the significant accumulation of SOL compared to distribution among spot traders. This indicates that buying activity has been outpacing profit-taking activity, contributing to the sustained rally in SOL’s price. 

However, it’s important to note that these indicators also suggest that the cryptocurrency has become overbought and may be due for a correction. Investors should remain cautious and monitor the market closely in light of this overbought signal.

Solana’s Expanding Influence In The Web3 Space

The interest in Solana extends beyond the native token SOL, as the Solana protocol continues to gain ground in the Web3 ecosystem. One notable development is the adoption of Solana by Ryder, a pioneering hardware wallet secured by a user’s social network. Ryder has chosen the Solana blockchain due to its unparalleled scalability and rapid transaction capabilities.

Ryder will integrate @solana and join the mission of unlocking value beyond browsers and phones.

Imagine a world where Web3 seamlessly weaves into our daily lives.https://t.co/wq7Y0RJu6N

— Ryder (@Ryder_ID) October 24, 2023

Ryder’s move to utilize Solana’s blockchain is a strategic step toward achieving ultimate decentralization within its ecosystem, reducing reliance on major tech companies. This highlights the blockchain’s versatility and its potential to reshape the landscape of decentralized finance and applications in the near future.

Solana’s recent surge in market capitalization and price is indicative of the cryptocurrency’s growing prominence in the digital asset landscape. However, investors should remain vigilant as overbought conditions may necessitate a market correction. 

Meanwhile, Solana’s expanding influence in the Web3 space showcases its potential to revolutionize how we interact with technology and finance, making it an exciting project to watch in the blockchain industry.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from The Daily Hodl

Bitcoin has had an eventful week in terms of price action. The world’s largest crypto saw an 18% increase in the past seven days, its highest percentage increase this year. This unexpected surge caused a flurry of short position liquidations, and according to Glassnode, 60,000 BTC worth of futures positions were closed. Amidst all the price surge, data from Glassnode has shown a large portion of investors are now breaking above profit. 

Bitcoin Surges Past $35,000, Flipping Millions of Coins Into Profit

Bitcoin bulls managed to push Bitcoin price above $35,100 in the past 24 hours, marking the biggest one-day increase this year. The upward movement began near the $25,000 level and continued until it reached its new yearly high. 

A blockchain analytics platform Glassnode report showed that Bitcoin zooming past $35,000 is a big deal for holders. At this price level, millions of BTC holdings were pushed into profitability. During this rally, the percent of supply in profit from the $25,000 to $35,000 price jump increased by a massive 4.7M BTC, equivalent to 24% of the total circulating supply. 

Long-term investors, in particular, had a big break in profit at this price point. Although approximately 29.6% of long-term holder supply is still held at a loss, their aggregate holdings recently broke into a new all-time high of 14.899 million BTC.

Source: Glassnode

Short-term holders were also not left out, as investor confidence has recovered from bearish to neutral on the cost-basis models. We’re now at a crossover point to a positive bullish sentiment for short-term holders. A look into the average buy price of short-term holders puts the majority of entry into the market at $28,000, indicating a profit margin for both short and long-term traders. 

What’s Behind Bitcoin’s Sudden Price Surge?

The sudden surge in Bitcoin can be attributed to the excitement behind the approval of BlackRock’s spot Bitcoin ETFs application. Bitcoin backers pointed to the listing of BlackRock’s iShares Bitcoin Trust on the Depository Trust and Clearing Corporation (DTCC) website, suggesting that BlackRock had begun seeding money for the ETF. 

Although Bitcoin has since shed off some of this price gain and is now trading at $33,860 at the time of this writing, metrics show that 80% of holders are making money at the current price. Exchange signals also point to bullish momentum, as traders are now exchanging their assets for BTC on crypto exchanges.

The rise in the value of Bitcoin to $35,000 was reflected in the stock prices of crypto-related companies like Coinbase and MicroStrategy. At that price, MicroStrategy’s Bitcoin holdings would have generated a profit of $857 million for the company.

Amid the bullish sentiment in the crypto market, Shiba Inu (SHIB) has recently garnered significant attention from traders and investors. A recent analysis by renowned crypto analyst Ali Martinez has spotlighted a rare buy signal for the token, potentially hinting at an upward trajectory for its price.

Buy Shiba Inu Now?

For those not familiar, the TD Sequential is an indicator used by traders to identify potential price patterns and reversals. Developed by Tom DeMark, the TD Sequential is a series of numbers and letters that represent specific counts on a price chart.

When the count reaches a ‘9’ (TD9), it typically suggests a potential reversal in the market’s current trend, whether bullish or bearish. Its utility in predicting market turns has made it a staple in many traders’ toolkits, especially in the realm of cryptocurrencies.

Ali Martinez, in a recent tweet, pointed out that the TD Sequential has flashed a buy signal on the Shiba Inu’s weekly chart. Such an occurrence isn’t just significant due to the potential for a bullish turn but also because of the infrequency of these signals.

Historical data analysis reveals that in the last two instances when such a buy signal manifested, the SHIB price surged by 118% and 71%, respectively. These past performances, while no guarantee of future results, do provide a tantalizing backdrop to the current scenario.

Martinez stated:

The TD Sequential flashed a buy signal on [the] SHIB weekly chart. Notably, the previous two bullish turns from this indicator led to price surges of 118% and 71%, respectively. Given the infrequency yet precision of such signals, it’s a pivotal moment to keep a keen eye on SHIB.

The TradingView chart, shared by Martinez, outlines the SHIB/TetherUS (USDT) Perpetual Contract on the Binance platform. It shows that back in June 2022, Shiba Inu recorded an impressive surge of approximately 117.80% within eight weeks. This rally was preceded by a ‘9’ candlestick on the TD Sequential indicator, hinting at the buy setup.

In late September 2023, another TD Sequential ‘9’ buy signal emerged, resulting in a 71.17% ascent in SHIB’s value within the subsequent nine weeks. As of October 25, 2023, yet another ‘9’ buy setup has manifested on the weekly time frame. Given the token’s historical reaction to these setups, a bullish move seems likely.

However, while the TD Sequential is a respected tool, it’s worth noting that all indicators should be used in conjunction with other tools and analysis methods. The volatile nature of the crypto market means that predictions, even when based on historically successful indicators, come with inherent risks.

A Consistent Signal

At press time, the Shiba Inu price was trading at $0.00000732 and has thus managed to recapture the neckline of the descending triangle in the weekly chart. As detailed in earlier analysis, SHIB was in a make-or-break moment in the last two weeks. However, since SHIB was able to bounce above the neckline, the bullish scenario has now come to the fore.

As was the case from June to early August 2022 after the formation of the third bottom (yellow circle), SHIB could now rally again towards the descending trend line of the triangle as a result of the fourth bottom (second yellow circle).

Thus, the TD9 signal and this technical pattern coincide. As then, however, a new decisive moment would come for the Shiba Inu price – the battle to break out of a more than 2-year downtrend.

Pro-XRP legal expert Fred Rispoli has shared some expectations following Judge Analisa Torres’ order, where she officially dismissed the US Securities and Exchange Commission’s (SEC) claims against Ripple’s executives Brad Garlinghouse and Chris Larsen. 

SEC Can Still Bring Claims Against Ripple’s Executives

In a post shared on his X (formerly Twitter) platform, Rispoli noted that the SEC could still file another lawsuit against Garlinghouse and Larsen if they were to appeal Judge Torres’ ruling on the programmatic sales and other distributions and get a judgment in their favor. 

His assumption is based on the fact that the Judge’s latest order showed that the SEC only dismissed the claims against them with respect to the institutional sales, as the Commission had alleged that both Garlinghouse and Larsen aided and abetted Ripple Labs in violating securities laws with respect to the crypto company’s offers and sales of XRP.

However, he stated that any action would only be restricted to the programmatic sales and other distributions since the dismissal with respect to the institutional sales was with prejudice, meaning a claim cannot be brought again regarding that particular matter. 

In July, Judge Torres also ruled that the institutional sales were investment contracts, which amounted to them being securities. In line with this, the SEC and Ripple will move to settle on the latter’s violation of securities laws, with the firm expected to pay a particular amount as a fine for its violation of the act. 

Will The SEC Appeal Judge’s XRP Decision?

As to whether the SEC will appeal Judge Torres’ ruling on the programmatic sales and other distributions, Rispoli seemed to suggest that that was unlikely as the SEC was more focused on crunching the numbers (probably the monies Ripple will pay as fine) and “wrap this one up for good.”

In a subsequent post, he also mentioned that there was the possibility that they received assurances from the SEC to not file an appeal as one would expect that Garlinghouse and Larsen’s “high-powered attorneys” would have asked that the SEC dismissed all the claims, including the ones relating to the programmatic sales and other distributions. 

Interestingly, Rispoli had once predicted the likely outcome of this case as he had stated that the SEC was unlikely to drag Ripple’s executives through a trial and that they had only brought forward the claims against them in order to force Ripple into a “weak settlement position.”

The SEC is also unlikely to appeal, going by pro-XRP legal expert John Deaton’s comments when he suggested that the ETH Gate saga may have forced the SEC into what Ripple’s Chief Legal Officer Stuart Alderoty has described as a “surrender.”