Bitcoin price is attempting a fresh increase from the $42,000 support. BTC could gain bullish momentum if it clears the $43,300 resistance zone.

Bitcoin price is attempting a fresh increase above the $42,750 resistance zone.
The price is trading above $42,800 and the 100 hourly Simple moving average.
There is a short-term rising channel forming with support near $42,950 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could continue to rise unless there is a close below the $42,350 support zone.

Bitcoin Price Remains Supported

Bitcoin price formed a base above the $42,000 level and started a steady increase. BTC was able to climb above the $42,200 and $42,500 resistance levels.

There was a move above the 50% Fib retracement level of the downward wave from the $43,740 swing high to the $41,888 low. The bulls were able push the price above the $43,000 resistance. There is now a short-term rising channel forming with support near $42,950 on the hourly chart of the BTC/USD pair.

Bitcoin is now trading above $42,800 and the 100 hourly Simple moving average. Immediate resistance is near the $43,300 level. It is near the 76.4% Fib retracement level of the downward wave from the $43,740 swing high to the $41,888 low.

The next key resistance could be $43,750, above which the price could start a decent increase. The next stop for the bulls may perhaps be $44,000.

Source: BTCUSD on TradingView.com

A clear move above the $44,000 resistance could send the price toward the $44,200 resistance. The next resistance is now forming near the $44,500 level. A close above the $44,500 level could push the price further higher. The next major resistance sits at $45,000.

Another Decline In BTC?

If Bitcoin fails to rise above the $43,300 resistance zone, it could start another decline. Immediate support on the downside is near the $43,000 level and the channel trend line.

The first major support is $42,800 and the 100 hourly SMA. The main support could be $42,350. If there is a close below $42,350, the price could gain bearish momentum. In the stated case, the price could dive toward the $41,800 support.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $42,800, followed by $42,350.

Major Resistance Levels – $43,300, $43,800, and $44,500.

A recent survey conducted by Bitget has shed light on investors’ optimistic outlook towards the upcoming Bitcoin (BTC) halving event scheduled for April 2024. Notably, the survey indicates that most respondents anticipate Bitcoin surpassing its all-time high (ATH) of $69,000 during the next bull run. 

The study also highlights diverse predictions for Bitcoin’s price during the halving and provides insights into investment intentions across different regions.

Bullish Sentiment Soars

According to the survey, an overwhelming 84% of respondents globally predict Bitcoin will exceed its previous ATH of $69,000 in the next bull run. This sentiment is particularly strong in Latin America, East Asia, and South East Asia. However, European regions exhibit more conservative expectations.

The survey reveals diverse predictions for Bitcoin’s price during the halving. While more than half of the respondents anticipate a price range between $30,000 and $60,000, around 30% believe that BTC’s price will surpass $60,000. The optimism is especially pronounced in markets like Latin America.

Moreover, approximately 70% of respondents expressed plans to increase their crypto investments, indicating robust confidence in the potential of the crypto market. 

The study highlights a stronger inclination to increase investments in regions like the Middle East/North Africa (MENA) and East Europe. In contrast, South East and East Asia present a more mixed investment outlook.

The survey reveals interesting regional variations in sentiment and expectations. Western European investors exhibit a “short-term cautious, long-term optimistic” sentiment, while Western Europe shows a relatively conservative outlook during the halving period. 

Gracy Chen, Managing Director of Bitget, emphasizes the significance of the survey results in understanding the evolving landscape of cryptocurrency investment, stating: 

We are pleased to see such positive sentiment emerging as market conditions continue recovering. At Bitget, we firmly believe in Bitcoin’s potential to establish itself as a truly global store of value.

Bitcoin Halving Cycles

Renowned crypto analyst Rekt Capital has delved into the historical patterns surrounding Bitcoin halving events, shedding light on the typically occurring five phases. 

Pre-Halving Period:
The pre-halving period refers to the approximately 77 days leading up to the Bitcoin halving event in April 2024. Historically, this period has presented attractive opportunities for investors, as deeper retraces tend to generate excellent returns in the months following the halving. 
Pre-Halving Rally:
According to Rekt, a pre-halving rally typically occurs approximately 60 days before the halving. Investors “buy the hype” in anticipation of the halving, aiming to “sell the news” and realize profits. Short-term traders and speculators capitalize on the hype-driven rally before selling their positions. The subsequent selling pressure contributes to a retrace known as the pre-halving retrace.
Pre-Halving Retrace:
The pre-halving retrace occurs a couple of weeks before the actual halving event. In 2016, this retrace reached a depth of -38%, while in 2020, it was -20%. Interestingly, Rekt emphasizes that this phase can last for several weeks, leading some investors to question whether the halving will act as a bullish catalyst for Bitcoin’s price.

Re-Accumulation:
Following the pre-halving retrace, a period of re-accumulation typically takes place, lasting up to 150 days or approximately five months. During this phase, Bitcoin experiences consolidation as investors reposition and accumulate more assets. 
Parabolic Uptrend:
Once Bitcoin breaks out of the re-accumulation phase, it enters a parabolic uptrend characterized by accelerated growth and a journey toward new all-time highs. This phase represents the culmination of the halving cycle, where Bitcoin’s price experiences significant upward momentum.

Featured image from Shutterstock, chart from TradingView.com

According to data shared by renowned crypto analyst Ali, Bitcoin has recently witnessed a significant development in its investment dynamics, marking a notable shift in the crypto market.

In a post on X published earlier today, Ali disclosed that Bitcoin is experiencing a substantial accumulation streak, which has not been seen in nearly three years.

According to the analyst, this surge in the Accumulation Trend Score indicates the growing confidence among larger entities in the cryptocurrency market.

Ali’s shared data further reveals that the Accumulation Trend Score for Bitcoin has consistently hovered near the peak level of 1 over the past four months. This sustained high score signals an active and ongoing accumulation by big investors.

#Bitcoin is witnessing one of its most significant accumulation streaks in almost 3 years!

Notably, the Accumulation Trend Score has hovered near 1 for the past 4 months, signaling that larger entities are accumulating $BTC. This trend indicates strong confidence in the market! pic.twitter.com/QcJOEhzBUb

— Ali (@ali_charts) February 1, 2024

A Surge In Large-Scale BTC Holdings

Further complimenting this near 3-year accumulation trend streak, Ali’s recent data revealed that the Bitcoin market has welcomed approximately 67 new “whales.” These entities, each holding over 1,000 BTC, represent a 4.50% increase in this category of investors within two weeks.

This increase in whale activity coincided with a period where Bitcoin experienced a notable dip, falling below the critical $39,000 threshold. Ali noted: “While some shivered with fear during the recent price correction, Bitcoin whales were accumulating more BTC.”

While some shivered with fear during the recent price correction, #Bitcoin whales were accumulating more $BTC!

Around 67 new entities now hold 1,000 #BTC or more, marking a 4.50% increase in two weeks. pic.twitter.com/tje3fhznRR

— Ali (@ali_charts) January 30, 2024

This downturn was primarily attributed to a significant outflow from Grayscale, amounting to over $5 billion since the Bitcoin Spot ETF was approved by the US Securities and Exchange Commission (SEC).

As of January 29, 2024, the number of Bitcoins held by Grayscale was 496,573.8166. Additionally, GBTC’s AUM is approximately $21.431 billion. After the spot ETF passed, Grayscale users sold a total of 120,500 BTC, which is equivalent to approximately $5.508 billion.…

— Wu Blockchain (@WuBlockchain) January 30, 2024

However, as this outflow has cooled off, Bitcoin has shown signs of recovery, trading above the $42,500 mark and registering a 6.1% increase in the past week.

Bitcoin Poised For 40% Surge?

Shifting the focus to the broader financial landscape, Arthur Hayes, founder of BitMEX, has offered an analysis of current economic conditions and their potential impact on Bitcoin. His commentary is particularly relevant in light of recent challenges faced by New York Community Bancorp (NYCB) and the banking sector.

The bank’s significant stock decline, driven by unexpected losses and a substantial increase in loan loss reserves, has raised concerns about the stability and exposure of US regional banks, especially in the real estate sector.

Hayes’s remarks point to a possible near-future scenario where the Federal Reserve might have to intervene by reinstating the Bank Term Funding Program (BTFP) or similar measures to stabilize the banking sector.

He parallels the current situation and the March 2023 banking crisis, suggesting that similar market turbulence could lead to a brief dip in Bitcoin’s value, followed by a significant rally.

Hayes postulates that such developments could see Bitcoin, often regarded as a digital gold or safe-haven asset, experience a surge in value similar to the 40% increase witnessed during the previous banking crisis.

Featured image from Unsplash, Chart from TradingView

In a post on X, Arthur Hayes, the co-founder of the derivatives crypto exchange BitMEX, said it might be time for traders to double down on Solana (SOL) and altcoins in general. Hayes’s comments come at a time of heightened volatility in the broader crypto market, with Bitcoin (BTC) struggling to regain its footing and altcoins, including Ethereum (ETH), posting mixed results.

Time To Switch To Solana?

The co-founder noted that it could be time to get back on the Solana “train.” With this preview, Hayes is convinced that Solana and other altcoins could outperform Bitcoin in the days ahead.

The outlook could be anchored on the possibility of altcoins and Bitcoin rising in the coming sessions. Specifically, Hayes warns that a “few” major banks in the United States could “bite the dust.” 

This comment also comes at a critical position in the United States banking landscape. On January 31, market analysts noted that NY Community Bancorp’s stock price plummeted 45% following a surprise quarterly loss and dividend reduction. 

NY Community Bancorp is crucial in the United States regional banking sector. It also acquired assets from Signature Bank when it collapsed in March 2023. 

Analysts say the bank’s decision to expand harmed its balance sheet. The acquisition of Signature Bank increased its regulatory capital requirements, impacting its dividends and provisions, as seen in its latest earnings report.

A Bank Crisis Is A Boon For Bitcoin, Altcoins

While Hayes’ comments are likely to fuel further speculation about the potential for another banking crisis in the United States, it is not immediately clear whether this might spark a crypto rally. 

However, reading from past events, if indeed a major bank in the United States collapses and files for bankruptcy in the next few days, Bitcoin will likely rally. In March 2023, following the collapse of Signature Bank, among others, Bitcoin initiated a crypto rally that saw Ethereum and Solana record gains.

Considering the significant shift in Solana investor sentiment over the past few months, it is likely that SOL might snap back to trend. In that case, the altcoin might break above $125, extending 2023 gains. 

When writing, SOL is pinned below $100 and under pressure. The local resistance is at $105. A break out might lift the coin towards $125 in a buy trend continuation pattern.

Polkadot, the computing platform known for its interoperability and scalability, has shown remarkable growth in key metrics during the latter part of 2023, as outlined in a recent report by Messari. 

Outpacing Crypto Market Growth

According to Messari’s findings, Polkadot’s circulating market cap experienced a remarkable 111% quarter-on-quarter (QoQ) growth, reaching an impressive $8.38 billion. 

This growth outpaced the overall crypto market’s growth of 54% during the same period. Furthermore, Polkadot’s year-on-year (YoY) change reached 94%, solidifying its position among the top 15 crypto projects by market capitalization.

In terms of revenue, Polkadot witnessed a substantial surge of 2,880% QoQ, generating $2.8 million in Q4 2023. This surge was primarily attributed to the significant rise in extrinsic, driven by the introduction of Polkadot Inscriptions. 

Messari suggests that even excluding the four-day spike from the Inscriptions, Polkadot’s revenue would have doubled from the previous quarter. It is worth noting that Polkadot’s revenue tends to be relatively lower compared to its competitors due to the structural design of its network.

Polkadot Witnesses Significant Increase In Active Addresses

Following the launch of OpenGov – the governance module and framework within the network – in June, the Polkadot Relay Chain experienced a surge in account activity, largely due to increased governance participation. 

Because the Relay Chain is critical in facilitating governance processes, it experienced a spike in active addresses on October 24, when users claimed their locked DOT tokens from the first batch of parachain auctions held two years earlier.

Throughout Q4, the Polkadot Relay Chain averaged over 10,000 daily active addresses, representing a substantial 90% QoQ increase. Excluding the October 24th activity related to DOT token claiming, the average number of active addresses still saw a significant 70% rise in QoQ, reaching 9,000. 

Additionally, Cross-Chain Message (XCM) transfers on the platform increased by 150% QoQ, reaching an all-time high of 133,000. The total number of active XCM channels nearly tripled in 2023, reaching 203 by the end of the year.

According to Electric Capital’s rankings, Polkadot has 800 full-time and 2,100 total developers, making it one of the largest crypto ecosystems in developer participation.

DOT Price Shows Mixed Performance

Despite notable growth in key metrics demonstrating the network’s expansion, the price of Polkadot’s native token, DOT, has not followed suit and has even experienced declines over longer time frames despite positive developments.

Currently, DOT is trading at $6.7420, representing a slight 0.3% price increase in the past twenty-four hours, coupled with a 9% year-to-date gain.

However, over the past fourteen and thirty days, the token has recorded a 6% and 22% price drop, highlighting the absence of bullish momentum and catalysts that could propel DOT to higher levels.

Although it reached a 19-month high of $9.5711 on December 26, the subsequent price drop has led DOT to a critical juncture, potentially erasing its gains over the past year.

If the current level and its nearest support at $6.3229 fail to halt further price declines, DOT could potentially drop to the $5.4830 level, which serves as the next major support in the token’s 1-day chart.

Conversely, if DOT surpasses its upper resistance at $7.0392, the next objective would be to break the short-term downtrend structure, facing the $7.5332 resistance and another resistance at $8.1631. This would pave the way for another consolidation phase at its 19-month high.

Featured image from Shutterstock, chart from TradingView.com 

On-chain data shows the Bitcoin price has followed a particular pattern when the BitMEX whales have made large withdrawals.

Bitcoin Exchange Netflow For BitMEX Has Seen A Red Spike Recently

As an analyst in a CryptoQuant Quicktake post pointed out, the cryptocurrency exchange BitMEX has recently observed significant withdrawals from the whales.

The indicator of interest here is the “exchange netflow,” which tracks the amount of Bitcoin entering or leaving any exchange’s wallets. The metric’s value is calculated by subtracting the outflows from the inflows.

When the value of this metric is positive, it means that the inflows outweigh the outflows right now, implying that the investors are depositing a net number of coins to the platform.

Generally, one of the main reasons holders want to transfer their BTC to exchanges is for selling-related purposes, as this trend can have a bearish impact on the asset’s price.

On the other hand, the negative indicator implies net withdrawals are taking place on the exchange. Such a trend can suggest either some fresh buying is occurring or some existing investors are simply transferring the BTC they already own towards self-custody.

In either case, the holders withdrawing from the exchange’s custody can be a bullish sign for the cryptocurrency, implying that these investors potentially plan to hold onto their coins for extended periods.

Now, here is a chart that shows the trend in the Bitcoin exchange netflow for the BitMEX platform over the last few months:

As displayed in the above graph, the Bitcoin exchange netflow for BitMEX has registered large negative values just recently. The investors have withdrawn about 4,000 BTC (equivalent to $168.3 million at the current exchange rate) from the platform during this net outflow spree.

The quant has explained that the price of the cryptocurrency and this metric have followed a specific pattern whenever this trend has occurred. Below is a zoomed-out indicator chart showing the previous instances where negative spikes took form.

“When a significant volume of Bitcoins is observed leaving BitMEX, one of the leading cryptocurrency trading platforms, it often signals the formation of local bottoms in the price of Bitcoin (BTC),” notes the analyst.

The graph shows that large net withdrawals also occurred on the exchange right before the current rally in the cryptocurrency’s price began in October of last year.

It’s possible that these historical negative spikes in the indicator corresponded to buying from these BitMEX whales, which helped the price bottom out and turned around.

Given this historical pattern, the latest net withdrawals may have a similar effect to some degree on the coin. The quant cautions, however, that “it is essential to closely monitor these trends, as large inflows into the exchange can have the opposite effect, potentially leading to a decrease in BTC price.”

BTC Price

Bitcoin has erased its recent recovery as the asset’s price has returned to the $42,000 mark now.

Using historical and future Bitcoin halving events, the Bitcoin Stock to Flow (S2F) live data chart model has pointed toward a BTC surge to unprecedented highs during the 2028 to 2032 halvings. 

Bitcoin To Hit $5 Million After 2028 Halving

Crypto analyst Bit Harington recently shared insights in a post on X (formerly Twitter) about the potential surges in the price of Bitcoin during the next halving stages. Using data from the Bitcoin S2F chart, Harington predicted the price of Bitcoin would reach $500,000 by the fourth halving, which is taking place in April. 

His predictions were based on the distinctive trend observed in BTC’s price, where the first to third halving phases exhibited a consistent 10x price increase for each successive halving. 

Responding to the post, the creator of the S2F model, Plan B, made a bold prediction, suggesting that the average price of Bitcoin during the 2028 and 2032 halving events could potentially reach an impressive $5 million. 

The cryptocurrency has consistently experienced bullish rallies following each halving event, from the first Bitcoin halving in November 2012 to the third in May 2020. Due to this, many investors and crypto analysts foresee a similar surge in BTC’s price during 2024 halving. 

These expectations could be attributed to the events that typically occur during a Bitcoin halving event. In each halving phase, BTC mining rewards are cut in half, and the supply of the token is reduced, thereby inducing scarcity and increasing the token’s value. 

While these price projections about Bitcoin are made to keep investors alert, it’s important to note that they remain speculations, and models like S2F can be subject to wide margins of error. 

Analyst Reveals Key Factors To Consider In 2024 Halving

Another crypto analyst, Ali Martinez, has disclosed four crucial factors to keep in mind as the 2024 April Bitcoin halving approaches. Martinez highlighted the significance of the post-halving price corrections in the 2016 and 2020 Bitcoin halving, emphasizing that BTC declined by 30% to 70% within a month after the halving phases. 

He also mentioned BTC’s post-halving rallies, where the cryptocurrency experienced significant surges to 700%, 2,850%, and 11,000%, respectively, during the 2012, 2016, and 2020 halving events. The crypto analyst delved into bull market durations after each halving, which lasted about a year or more.

He concluded his analysis by predicting that the next Bitcoin market top would occur around April or October 2025. At the time of writing, the price of BTC was $42,110, according to CoinMarketCap. 

Bitcoin has been unable to retain its bullish momentum and seems likely to extend its current downside trend. However, the long run remains positive, and the next months could see BTC reach its all-time high, but in a different fashion than in previous rallies, according to a large investor.

As of this writing, Bitcoin trades at $42,000 with a 1% loss in the last 24 hours. Over the previous week, the cryptocurrency still records a 5% profit.

Bitcoin Whales Makes Bullish Forecast

According to a pseudonym Bitcoin Whale that goes by “Joe007” on social media X, the cryptocurrency is poised for a bull run. The institutions trading the US spot Bitcoin Exchange Traded Fund (ETF) will drive this bullish momentum.

In that sense, these institutions are likely to suck the volatility out of Bitcoin by pushing to trade similar to traditional assets. Thus, Joe007 claims that this cycle’s rally will lack the excitement of 2017 and 2021 when BTC hit $20,000 and $69,000, respectively, creating euphoria amongst investors.

The Bitcoin whale stated:

I think we’re about to witness the most boring rally in Bitcoin history. No retail-driven parabolic swings that excite degens/noobs and produce headlines. Rather a slow relentless drive higher by professional accumulators taking out layer after layer of paper handed holders.

The whale dismissed the possibility when asked if traditional institutions could fail in “taming” BTC due to the “systemic crises” in the space. In addition, Joe007 dismissed the possibility of the cryptocurrency not running higher in the long run.

The only thing that could stand between Bitcoin and a rally is a “low probability” scenario where the traditional finance sector experiences a similar crash to 2008. The BTC whale added:

(…) unless there is a sudden complete tradfi meltdown (2008-style or worse). Then I can see Bitcoin being dragged into a general panic-crash, at least initially. Certainly possible but hard to assign realistic probability.

BTC Price In The Short Term

On low timeframes, an analyst pointed at the Daily On Balance Volume (OBV), which suggests further downside for BTC. The chart below shows that this metric broke out of a trending channel during Bitcoin’s recent crash.

The OBV was rejected out of a critical level and seems poised to trend to the upside along with the price of BTC. The analyst stated:

Daily OBV still looks like it wants more downside. Looks like this might have been a lower high that we just put in.

Cover image from Unsplash, chart from Tradingview

Two high-volume transactions involving Solana (SOL) have caught the attention of the crypto community considering the impact they could have on the crypto token’s price. Moreover, these transactions have come at a time when SOL risks dropping below the psychological price level of $90. 

Solana Whales Move $82 Million Worth Of SOL

Data from the blockchain analytics platform Whale Alert shows that an unknown wallet address (7v2M…Ao3C) moved 659,283 SOL to another unknown wallet address (3vxh…gkom). The movement of such a significant amount of SOL has raised speculations as to what the intention of the wallet owner might be.

A common theory is that the transaction might have been made in a bid to offload these crypto tokens. That could have a negative impact on SOL’s price, considering how much is involved. However, the fact that the SOL tokens weren’t sent to a centralized exchange helps to counter this theory and raises the possibility of the tokens being transferred for other purposes. 

Meanwhile, the second recent whale move provides some needed relief to the Solana community, considering the nature of the transaction. Data from Whale Alert shows that 150,000 SOL was sent from a wallet address linked to the Bybit crypto exchange to an unknown wallet address (42br…pJFd).

Moving tokens from a centralized exchange (CEX) like Bybit usually passes a bullish narrative as it suggests that the token holder was likely moving their tokens to cold storage. Such a move also means that the Solana whale in question was planning on holding the token long-term, as they believe in its potential to make more gains in the future. 

SOL To Drop Below $90?

Like the rest of the broader crypto market, SOL has recently suffered a decline in its price, dropping below the $100 support level in the process. This current downward trend has also raised fears that SOL could retest the $90 price level and even drop below it if it is unable to find support at that level. 

Crypto analyst Bluntz Capital recently provided some insights into where SOL’s price might be headed from a technical analysis standpoint. According to him, SOL is likely to “bounce first before coming down for a C wave down into the 0.618 later on.” From the accompanying chart he shared, one could see that the C wave is placed at $88.99, just below the $90 level. 

 At the time of writing, SOL is trading at around $93, down over 7% in the last 24 hours, according to data from CoinMarketCap. 

On Wednesday (January 31), the highly anticipated Jupiter (JUP) airdrop took place. Jupiter, a decentralized exchange aggregator built on the Solana blockchain, has been making waves in the crypto space lately, even surpassing Uniswap in terms of trading volume. However, the airdrop, while initially boosting JUP’s value, has been followed by controversy.

Jupiter (JUP) Airdrop Stats

Tom Wan, a researcher at 21.co, the parent company of 21Shares, commented on the magnitude of the airdrop, stating, “It was one of the largest airdrops on Solana ever, with over 440,000 addresses claiming 622 million JUP tokens, valued at approximately $3.6 billion. Remarkably, 54% of eligible wallets have yet to claim their JUP, leaving approximately 378 million JUP unclaimed.”

1/ One of the largest Airdrop on @solana is live

Over 440k Addresses claimed 622M ($3.6B) JUP token from @JupiterExchange. 54% of the eligible wallets haven’t claimed JUP yet, and there are ~378M unclaimed JUP pic.twitter.com/7my3PLTo5I

— Tom Wan (@tomwanhh) February 1, 2024

Wan went on to provide insights into the distribution of JUP tokens, revealing that a majority of claimants received less than 1,000 JUP. He stated, “59% of claimants, or 261,000 wallets, received only 200 JUP, while approximately 1,500 wallets received between 100,000 and 200,000 JUP. Notably, those who received higher airdrop amounts appear to be holding onto their JUP tokens, with 72% of recipients of less than 1000 JUP having already sold their tokens.”

Regarding the Solana network itself, it continued to perform exceptionally well during the airdrop event. Solana handled 13% more transactions than in the past 90 days, maintaining a block time of approximately 400 milliseconds. The network also experienced a surge in active addresses, reaching a one-year high on the day of the JUP airdrop. However, Solana handled this increased activity perfectly.

Despite the average transaction fee doubling compared to the previous day, it remains relatively low at around $0.017 per transaction. Additionally, the minimum priority fee on the Solana network remained at 0, indicating that the network still accommodated users’ transactions without significant fees.

JUP Price Quadruples, Then Plunges On Controversy

Initially, the JUP token’s price surged to over $2 on some exchanges, such as KuCoin, quadrupling its value. However, this enthusiasm was short-lived due to controversial actions taken by the Jupiter team. It allegedly conducted a large-scale public token sale, sparking outrage, fear, uncertainty, and doubt (FUD) within the crypto community.

Among others, crypto analyst Lord Ashdrake expressed his concerns, stating, “We literally bought into an OpenMarket sale for JUP, akin to an IPO on the stock market.” Similarly, Adam Cochran, a partner at CEHV, criticized the team’s actions, highlighting that they retained a significant portion of tokens without a lockup period.

So [Jupiter] gave 50% of token to themselves, it was not their first token, used their own platform which also paid self, pulled liquidity from the pool in cash, gave a cut to the dev team. So cash out $30m day one with no lockup, and still own 50%? Shitty antics throwing away reputation of what could have been a *very* successful business long term.

In response to the criticism, Jupiter co-founder Meow defended the team’s decisions, clarifying that they only sold 250 million JUP tokens and reduced the sales ratio from 20% to 2.5%. Meow emphasized the team’s willingness to experiment with new concepts and prioritize the community’s interests.

Meow stated, “We are doing so to figure out a good open market dynamic that prioritizes users, does not wreck early launch pool buyers, and does not demoralize community hodlers. We think this system is a good one because it compels the team to price it reasonably and strengthens alignment between early buyers, the team, and community hodlers.”

Hi all, i got advice in discord to be even more clear so let me say it simply:

If i did an OTC deal or a regular IDO, we would have gotten a similar amount if not more without any of the confusion that comes with pioneering new concepts and absolutely zero risk. Trust me, that…

— meow (@weremeow) February 1, 2024

Buy Or Sell Jupiter (JUP) Now?

Despite the controversy, Jupiter presented impressive statistics for January, including being the most-used trading platform in DeFi, having a direct 80% organic volume, and being the most-used protocol on the Solana network. The project also ranked among the top 2 by volume on CoinGecko and was one of the leading perpetual platforms with $1.4 billion in volume over the past week.

So, while the Jupiter (JUP) airdrop may have faced initial controversy, the project is still showcasing remarkable potential. As it positions itself as a direct competitor to Ethereum’s Uniswap, the history of Uniswap’s UNI token price may suggest JUP’s promising future, provided it navigates its early tokenomics challenges effectively.

At press time, JUP traded at $0.6118 on Binance.