Blockchain

Data shows the cryptocurrency futures sector has gone through a mass liquidation event in the past 24 hours as Bitcoin has witnessed a sharp crash.

Crypto Futures Liquidations Have Added Up To $659 Million In Past Day

The cryptocurrency market has seen sharp price action during the past 24 hours. As is usually the case during such volatility, chaos has occurred on the futures side of the sector.

According to data from CoinGlass, almost $660 million in futures contracts have found liquidation on the last day.

“Liquidation” here naturally refers to the process that any contract undergoes when it racks up losses equivalent to a specific percentage of the position (which may differ between platforms). The exchange has to close it forcibly.

The above table shows that the longs took the brunt of this liquidation flush, as they saw contracts worth about $568 million decimated. This equals about 86% of the total liquidations in the past day.

The forceful closures have been so lopsided due to the sector observing a sharp drawdown following Bitcoin’s crash that took its price to as low as $41,500.

It’s also visible in the table that about $613 million of the total liquidations came during the last twelve hours alone, which again lines up with price action as that’s when the market was most volatile.

Regarding the individual contributions from each of the different symbols, it’s no surprise that Bitcoin-related contracts occupied the largest share of the liquidations at about $148 million.

Generally, though, BTC makes up for a huge part of the total market liquidations, but this time, the asset’s percentage share isn’t too extraordinary. Ethereum (ETH) and Solana (SOL) are the next biggest contributors to the squeeze, with about $111 million and $34 million in liquidations, respectively.

Historically, mass liquidation events like the one seen today haven’t exactly been a rare sight in the cryptocurrency sector due to the high volatility that most coins display on the regular and extreme amounts of leverage being easily accessible in many exchanges.

Recently, the interest in the derivatives side of the sector has become especially pronounced, as CryptoQuant Netherlands community manager Maartunn has talked about in a recent post on X.

As displayed in the graph, the Bitcoin futures volume has generally been higher than the spot volume during the last few years, but the gap between the two especially widened during the second half of 2023.

The indicator’s value saw some decline in the last couple of months of the year, but the recent values of the metric have still been quite high compared to the norm in the past.

Bitcoin Price

Bitcoin has seen some recovery since its initial crash, as the asset is now trading around the $42,700 mark.

Matrixport, a crypto financial services platform, has recently made headlines with the release of two conflicting articles on January 2nd about the future of Bitcoin (BTC). The first publication, radiating optimism, projected that Bitcoin’s price could soar to $50,000 in January, spurred by the potential approval of Bitcoin spot exchange-traded funds (ETFs).

This bullish stance was further grounded by disclosing a possible announcement that could happen on January 8th, 9th, or 10th.

Matrixport’s Sudden Shift: A Bullish Sentiment And Then Bearish Counterpoint

Matrixport’s initial bullish report highlighted the transformative impact a Bitcoin spot ETF approval could have on the crypto market. The anticipated approval is seen as a “pivotal” moment that would “legitimize” Bitcoin in the eyes of institutional investors and potentially unlock a significant influx of capital into the crypto market.

This sentiment echoed the growing optimism within the crypto community, with many stakeholders eagerly awaiting regulatory endorsements that could catalyze Bitcoin’s ascent.

However, in a surprising twist, Matrixport released a second article later the same day titled “Why the SEC will REJECT Bitcoin Spot ETFs again.” This piece presented a starkly bearish perspective, contrasting their earlier optimistic forecast.

The article emphasized the political composition of the US Securities and Exchange Commission (SEC), noting that the current Democratic dominance and Chair Gary Gensler’s cautious stance towards crypto might “diminish the likelihood of a spot ETF approval.”

The report argued that such approval would validate Bitcoin as an alternative store of value, a move Gensler “might not be ready to make.”

The firm noted in the bearish article:

An ETF would certainly enable crypto overall to take off, and based on Gensler’s comments in December 2023, he still sees this industry in need of more stringent compliance. From a political perspective, there is no reason to approve a bitcoin spot ETF that would legitimize Bitcoin as an alternative store of value.

Bitcoin Plunge And Crypto Community Reaction

Matrixport’s bearish outlook had immediate repercussions in the crypto market. Bitcoin experienced a notable decline, shedding around 6% of its value and slipping below the $43,000 mark.

This downturn wasn’t isolated to Bitcoin alone; Ethereum and other altcoins also saw significant drops, with Solana plummeting by nearly 10%. Data from Coinalyze indicated over $400 million in altcoin liquidations, with long positions bearing the brunt of this market shift.

Largest total market liq event since the uptrend from 25k began in August.

Largest alts liq event in 2 years.

Brought to you by a Matrixport intern. pic.twitter.com/4z71FbkUfB

— Hsaka (@HsakaTrades) January 3, 2024

The publication of these contrasting articles by Matrixport ignited a wave of controversy within the crypto community. Some observers pointed to Matrixport’s founder, Jihan Wu, a prominent Bitcoin Cash supporter, leading to speculations about the firm’s intentions.

This is the guy who founded Matrixport, a supporter of Bitcoin Cash.

If anyone believes anything that Matrixport publishes, I have a bridge to sell to you. pic.twitter.com/cxaxSOcDx7

— James Van Straten (@jimmyvs24) January 3, 2024

This revelation sparked heated discussion, with many saying that Matrixport’s actions were driven by market manipulation motives, especially in light of the market turbulence that followed the viral articles.

Despite the current market condition, as always, some are still bullish, while some even refuse to believe MatrixPort was the cause of this market downturn. Mike Alfred, an investor serving as a board member of BTC miner Iris Energy, already shared his bullish take, noting, “Big money isn’t buying this.”

Top tier Bitcoin miners have shaken off the Matrixport market manipulation and have gone green or moved back towards breakeven. Big money isn’t buying this.

— Mike Alfred (@mikealfred) January 3, 2024

Featured image from Unsplash, Chart from TradingView

As the world of crypto braces for a potential regulatory nod from the US Securities and Exchange Commission (SEC) in favor of a Bitcoin spot exchange-traded fund (ETF), Peter Schiff, a notable crypto critic, has voiced a dissenting opinion.

Schiff projected a grim future for Bitcoin, especially in the event of a spot ETF approval. His comments come at a time when the crypto community is abuzz with expectations of a boost in institutional investor interest in Bitcoin.

Economist Spells Gloom For Bitcoin

In a recent post on X, Schiff expressed his skepticism, suggesting that the speculative buzz around the US.-listed ETF directly investing in Bitcoin has been “inflating” the crypto’s value.

This view aligns with Bitcoin’s price trend, which saw an uptick in late last year, following a false report about the approval of BlackRock’s pending spot ETF application. While crypto enthusiasts view the potential spot ETF approval as a gateway for traditional investors into the crypto market, Schiff’s outlook starkly contrasts this sentiment.

Be careful what you wish for. The promise of a U.S. listed spot #BitcoinETF has been supporting the #Bitcoin price and speculative demand for years. Once the ETFs are launched and the highly anticipated institutional and other new investor demand does not show up, look out below!

— Peter Schiff (@PeterSchiff) January 2, 2024

Community Clashes With Schiff’s Pessimism

Peter Schiff’s statements have not gone unchallenged in the crypto community. On X, his posts have attracted critical responses, with users questioning the basis of his bearish predictions. One X user, known as Bloxpert, directly asked Schiff for examples of ETF launches that led to bearish outcomes.

Schiff, in response, questioned the necessity of a Bitcoin ETF, arguing that since Bitcoin can be bought and stored independently, an ETF seems redundant. He implicitly downplayed the need for such financial products in the crypto space, concluding: “You might as well just own a gold ETF.”

Well there is really no need for a Bitcoin ETF, as you can buy and store Bitcoin yourself for free. What’s the point of owning it in an ETF anyway? You might as well just own a gold ETF.

— Peter Schiff (@PeterSchiff) January 2, 2024

Despite Schiff’s bearish outlook, a significant portion of the crypto community and many experts remain optimistic. For instance, James Butterfill, head of research at CoinShares, sees the approval of a spot Bitcoin ETF in the US as a transformative event for the digital asset market.

Butterfill suggests that an investment increase of 20% from current assets under management could push Bitcoin prices to around $80,000. Such predictions stand in stark contrast to Schiff’s views, reflecting the diverse opinions and expectations surrounding Bitcoin’s future in the wake of potential regulatory changes.

Featured image from Unsplash, Chart from TradingView

Through the rips and dips of the crypto market, the Shiba Inu price has been able to maintain a rather consistent bullish momentum, something that cannot be said for a lot of cryptocurrencies. Given this sustained bullish sentiment, the meme coin is primed to be one of the assets to see a massive rally as the market inches toward another bear market. In the short term alone, pseudonymous crypto analyst MMBTtrader is predicting that the price will mount a 2x rally.

Shiba Inu Price Ready To Rise 100%

In a recent analysis, crypto analyst MMBTtrader reveals why they believe that the Shiba Inu price is set to double.  As the chart shows, there has been a steady uptrend in the Shiba Inu price over the last few months, and even when the uptrend seemed to have come to an end, the SHIB price maintained a relatively high price compared to its October lows.

This outperformance has continued into the new year as SHIB was able to still maintain the $0.00001 level despite dips rocking the crypto market. This suggests that bulls have been able to successfully turn $0.00001 into support. In this scenario, it could easily become a launchpad for the price.

The crypto analyst’s prediction suggests that it could begin to range at its current price. However, once this ranging ends and accumulation is complete, this is where the real fun begins for the SHIB price when the rally is expected to begin.

A bounce from here would see SHIB easily clear the $0.000014 level with no hassle. However, the first roadblock lies just above here. In the event that Shiba Inu is quickly able to surmount the resistance at $0.0000143, another pump is expected that could lead up to $0.000018.

Since there is no such thing as a single continuous upward movement, resistance is expected just below $0.000018. Nevertheless, this is the last resistance and if Shiba Inu climbs above this level, then it is expected to shoot above $0.00002, completing a 100% move from its current price.

SHIB Sways Amid Market Uncertainty

In the weeks leading up to January, confidence around the potential approval of a Spot Bitcoin ETF was at an all-time high, with experts giving it a 95% chance of approval. However, this sentiment has begun to sway especially as BlackRock revealed it will be delaying its $10 million BTC purchase.

As a result, the price of cryptocurrencies across the space declined rapidly and the Shiba Inu price was not left out. SHIB finally lost its footing at $0.00001 for the first time in over two weeks, falling to the $0.000009 region once again.

However, this is not out of the ordinary and could lead to the SHIB ranging and accumulation that the crypto analyst outlines. In such a case, this could present a setup for a bigger price rally as expectations for a bull market grow high.

As the price of Solana (SOL) has skyrocketed by an astounding 722% year-to-date, the network’s rapid growth has attracted both attention and challenges. 

Not only has the native token gained significant value, but the use of Solana-based meme coins such as Bonk Inu (BONK), which has grown over 854% year-to-date, and decentralized applications (dApps) have skyrocketed. Unfortunately, this increased popularity has led to increased attacks against the so-called “Ethereum Killer.”

Malicious Solana dApps Exploited

Web3 security firm Blockaid has recently observed a concerning trend of users falling victim to attacks by Solana-based drainers. 

One notable example is the website lessfeesndgas[.]org, which succeeded in stealing tokens from the Solana Program Library (SPL), which is designed to support the creation and management of tokens on Solana and SOL worth hundreds of thousands of dollars.

Interestingly, according to the company’s post on X (formerly Twitter), Blockaid’s secure wallets remained immune to these attacks from the moment the site went live, preventing any connections from being made.

The sophistication of these drainers is noteworthy, according to the firm, as they can fool the simulations used by Solana wallets, causing users to sign malicious transactions unknowingly. Web3 security firm Blockaid further stated:

As Solana continues to gain popularity, drainer groups are increasingly moving towards it, as indicated by the growing number of malicious Solana dApps detected by Blockaid.

Solana’s rapid ascent as a high-performance blockchain platform has drawn admiration and scrutiny. Its ability to process transactions quickly and at a lower cost than Ethereum has positioned it as a strong competitor. 

However, the network’s success has also made it an attractive target for malicious actors seeking to exploit vulnerabilities and capitalize on its growing user base.

Still, this is not the only bad news for Solana in the past few hours, as its native token has been experiencing a continuous sharp drop in price, leading to the belief that its uptrend and bull run may be over despite the possibility of a rebound in the overall crypto market.

Stablecoin Surge And NFT Sales Fail To Prevent SOL’s Price Drop

In just five hours, the price of SOL experienced a significant 13% drop, hitting a low of $85 on Wednesday. This decline occurred despite notable growth in stablecoin transfers, which saw a rise of over 45% this week. 

Additionally, on Tuesday, SOL surpassed Ethereum in monthly trading volume for non-fungible token (NFT) sales, marking a milestone for the network.

SOL is the fifth-largest cryptocurrency, boasting a market capitalization of $42.6 billion. It holds a $12 billion lead over XRP and trails just behind Binance Coin (BNB) by a mere $6 billion.

The trajectory of SOL’s price remains uncertain as investors await signs of a potential bullish momentum resurgence.

Building a more secure framework for decentralized applications (dApps) could be pivotal in restoring investor confidence and attracting additional capital to the ecosystem, potentially propelling SOL to reclaim its one-year high of $126, previously achieved on December 25.

Featured image from Shutterstock, chart from TradingView.com 

Cardano has consistently remained one of the largest cryptocurrencies in the industry with the price of its native ADA coin following the crypto market rally. However, it has not performed as well as other cryptocurrencies despite its marked popularity among investors. Given this, crypto pundit Ben Armstrong, popularly known as BitBoy, has shared his views on why the network is struggling.

Cardano Struggles Through Misinformation

One of the problems that the crypto analyst mentioned that Cardano has run into over the years is the fact that there has been misinformation. A lot of times, Cardano has been subject to FUD (Fear, Uncertainty, and Doubt) especially when it comes to its decentralized finance (DeFi) capabilities.

The network is really playing catch-up when it comes to DeFi as the likes of Ethereum and Solana enabled this ability years before Cardano. However, the network has seen significant growth since it first announced smart contract capabilities back in 2021.

Armstrong explains that a lot of FUD have also been directed at the founder Charles Hoskinson whose involvement with Ethereum as one of the co-founders in the early days is often called into question. But contrary to popular belief, the analyst believes that Hoskinson’s involvement with Ethereum actually helps to boost the credibility of the Cardano network.

Hoskinson has also been subject to allegations of being a scammer, as well as the Cardano network being “finished,” among other interesting allegations, as well as its native ADA token being referred to as a stablecoin. The last part takes a jab at the fact that the ADA price has not moved much in the last year.

However, Armstrong explains that Cardano boasts one of the most decentralized token distributions in the entire crypto industry. “Currently, over 60% of the supply is staked and during the bull market, the number was well over 70% on a regular basis,” he stated. This makes the coin an attractive choice for investors.

ADA Community Similar To XRP Community

Armstrong has been vocal about his support for the XRP community which he believes is the strongest community in crypto. Then coming up behind the XRP community, the crypto analyst believes that the Cardano community is the second-strongest in the industry.

In addition to this, Armstrong calls ADA “one of the most consistent performing coins in the history of crypto.” ADA, on its own, has managed to perform incredibly well in each bull market since its inception. During the 2020-2021 bull market, the ADA price would go from around $0.02 to over $3 before correcting back downward.

Presently, the ADA price is trending at $0.61, rising approximately 143% in the last year alone. With a market cap of $21.7 billion, it is currently the eighth-largest cryptocurrency by market cap.

Bitcoin appeared to have been securely floating above support just earlier, but today, the picture has changed as the price has suddenly crashed to $42,500.

Bitcoin Has Crashed More Than 6% During Past 24 Hours

Bitcoin had kicked off 2024 with some sharp bullish momentum as the market had been looking toward the potential ETF approvals with hopeful eyes. The asset had only been at the $45,000 level not seen since April 2022 for just a couple of days before the price suddenly crashed.

The chart below shows how cryptocurrency has performed during the past few days.

During this plunge, Bitcoin had briefly hit a low under $41,500, but the cryptocurrency has since seen a bit of a rebound as its price is now trading around the $42,500 level.

As is usually the case, the rest of the sector has also plunged alongside the original digital asset, with most coins registering drawdowns of even greater degrees.

Just before this crash, Bitcoin had been floating above a critical support line and appeared set to continue its recent bullish momentum.

Bitcoin Had Broken Above An Ascending Triangle Pattern With Recent Rally

In a post on X before the crash, analyst Ali had discussed where the Bitcoin price might be heading after its break above the $45,000 level based on technical analysis data. Below is the chart that the analyst shared in the post.

In the graph, Ali highlighted an Ascending Triangle pattern that Bitcoin appeared to have successfully broken out of with the price surge. An “Ascending Triangle” refers to a continuation pattern of two trendlines forming a triangular shape.

One of the trendlines is a horizontal level made by connecting highs in the asset, while the other is a diagonal line that joins together higher lows. The pattern is “ascending” in its name as the overall consolidation between these two trendlines narrows towards the upside.

Generally, when the price retests the horizontal level, it could likely feel some resistance and form a local top. If the resistance is broken through, it could be a sign that the asset would now display some continued upward momentum.

Similarly, the diagonal line is usually a point of support for the asset, and sustained breaks below could be to watch out for, as they can signal that a bearish trend is taking over.

From the chart, it’s visible that Bitcoin had gained some distance over the triangle above earlier and had appeared to be finding support at the 0.786 Fibonacci ratio, which is situated at around $44,900 for the asset.

Ali had noted that if sustained buying would continue at this support, Bitcoin might be able to push towards the $49,000 level. But as it has turned out, the market had other plans for the cryptocurrency, as its price has plunged far below this support level.

Arbitrum (ARB), a layer 2 (L2) protocol has achieved yet another major milestone in its Total Value Locked (TVL) reaching new heights, following a surge in the crypto asset’s price.

Arbitrum Sees Surge In Total Value Locked (TVL)

According to the L2beat platform, Arbitrum’s TVL recently went past the $10 billion mark putting it in the spotlight. Data from the analytics firm reveals that the network’s TVL is currently at $10.36 billion.

L2beat’s report shows that Arbitrum One’s TVL soared by a remarkable 16.49% over the past seven days. With this accomplishment, the network is firmly established as the first Layer 2 network to surpass the $10 billion TVL threshold.

L2beat shows that Arbitrum is above Optimism (OP) by about 40% which comes in second place with a TVL of $6.44 billion. Optimism’s TVL has also increased significantly by 11.63% in the last 24 hours. 

When analyzing Arbitrum’s TVL, Ethereum (ETH) makes up about 30% of the TVL, while the ARB token makes up about 23.68%. Meanwhile, stablecoins make up a substantial portion of 29% of the TVL, with the remaining 15.76% going to other assets. This diverse composition highlights the platform’s increasing popularity and attractiveness to a larger range of users.

In addition, L2beat has also revealed a surge in the network’s market share. The data shows that Arbitrum One’s market share has seen an increase of over 48%. 

So far, the network’s token ARB seems to have experienced a rise in response to the rise in TVL. The digital asset price is currently set at $1.84, indicating a 2.82% increase in the past day.

As of the time of writing, the network’s trading volume has increased significantly by 60% in the past 24 hours. Meanwhile, its market capitalization is up by 1% in the past day, according to data from CoinMarketcap

The price rise is indicative of investors’ increased faith and interest in Arbitrum’s ecosystem. The network’s success also highlights the growing need in the Ethereum ecosystem for scalable and affordable solutions.

Analyst Predicts A Clear Uptrend For ARB

Cryptocurrency analyst Michaël van de Poppe has predicted a clear uptrend for Arbitrum, signaling a possible breakout. The analyst shared his projections for the token on the social media platform X (formerly Twitter).

Related Reading: Arbitrum Network Faces Major Outage, ARB Token Faces 4% Decline

In his analysis, he noted that the uptrend is “taking place with beautiful retests of previous resistances, becoming a support zone.” Poppe further pointed out a possible retest optimal “go-to level” between $1.50-1.60. 

This area denotes a tactical stage where the token might experience a retest before opting to breach the psychological barrier of $2.  However, this will only take place if the ARB continues on the current upward path.

Lastly, Poppe highlighted a difficulty in the token initiating its first cycle when put against Bitcoin. “Against $BTC, this pair barely wakes up and starts its first cycle,” he stated.

With the recent price of Arbitrum sitting at $1.84, it appears that the analyst’s predictions will soon come to pass.

In a flash, nearly $200 billion in value was wiped out of the cryptocurrency market today in a larger selloff driven by rumors that pending Bitcoin ETF approvals could end up denied by the SEC. Despite the carnage across crypto today, this could be the moment dip buyers have been waiting for.

Recapping The Crypto Market Flash Crash

At around 6AM this morning, Bitcoin price began falling, causing a cascade of liquidations in altcoins. Bitcoin dropped nearly 10% while altcoins fell anywhere between 20 and 30% from local highs.

The move has likely caused a lot of fear, uncertainty, and doubt. And when in doubt, you’re supposed to zoom out. Moving away from the daily timeframe and into higher timeframes like the monthly can provide comforting view in contrast to the nasty wick left behind on the daily chart.

Instead, the high timeframe view shows that there is a breakout confirmed by high volume. The market has the rest of January to close with a gain, turning the volume bar green. If it does, this could prove to be the ideal buy the dip moment.

Why A Breakout Could Be Confirmed By The End Of January

A high volume breakout after three years of declining volume is undeniably significant and could hint at a cryptocurrency market bull run in the coming months. Volume tends to confirm price breakouts when paired with technical indicators and/or chart patterns.

In the example above, 1M BTCUSD closed above the Ichimoku’s Kijun-sen. This didn’t happen in 2019, but did in 2020 into 2021. Not pictured, Bitcoin also closed above the upper Bollinger Band – another situation that only happened in 2020.

A close above the Bollinger Band is a buy signal, especially when confirmed with high volume. Volume being high represents more BTC being traded at the current price.

The more trading volume, the more orders being filled which often is due to either big players or widespread market participation. Both scenarios are potentially bullish, but the monthly must close with a green volume bar.

XRP YouTuber Moon Lambo has hit out at those who believe that the XRP price could be worth $20,000 in the future. The analyst believes that this price level is unattainable for the crypto token as he highlighted reasons why he holds this belief. 

Why The XRP Price Cannot Rise To $20,000

In a video on his YouTube Channel, Moon Lambo explained that XRP’s market cap will need to run into quadrillions of dollars if it were to achieve that price level based on its current market cap. However, from his calculation, there is not enough money in the world for such an occurrence, as at least $100 trillion will need to flow into the XRP ecosystem for that to happen.

According to the YouTuber, there is a “0% chance” that this will happen. He dismissed any argument that some assets could be sold off to fund this amount of inflows into the XRP ecosystem. This is unlikely to happen as those assets will need to go to zero to get the amount of liquidity needed to get the XRP price to $20,000, Moon Lambo argued. 

XRP being worth that amount would also mean the crypto token having a market cap worth over ten times more than the value of the US stock market. Moon Lambo says that it is “utter nonsense” to think that this will happen. He believes there is no way that XRP can be more valuable than all the foremost companies in the US put together. 

He also alluded to arguments that XRP can attain this price by becoming the currency for the global reserve. He says that swapping out the dollar, which currently accounts for a huge chunk of the global reserve, won’t still see the crypto token get the required liquidity to hit $20,000.

Enough Reason To Still Be Excited As An XRP Holder

Despite his stance, Moon Lambo is still bullish on the XRP price. He stated that the crypto token doesn’t need this “crazy hype nonsense” for one to be excited as an XRP holder. The crypto analyst believes that as far as XRP is widely adopted, there is enough money that can flow into it, which could cause its price to hit three digits. 

Unlike a price prediction of $20,000, XRP’s price hitting three digits is still within the “realm of possibilities.” However, Moon Lambo doesn’t see that instantaneously happening as he says that it could take “many market cycles.” The good news is that anyone who has been in on XRP for some time is already well-positioned for such a multiplier effect. 

Meanwhile, analysts who have in the past made such “impossible” price predictions of $20,000 were not spared in the crypto analyst’s rant. Moon Lambo mentioned that such people only make baseless claims and do not provide justification for such assertions. 

He provided insight into why these analysts make such predictions as he suggested that they were doing this to get more audience. He remarked that he would probably get more subscribers if he jumped on this “bandwagon.” However, he has no intention to do that as he says it will be “intellectually dishonest” to do that.