Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | January 20 - January 26, 2024

Crypto Weekly Recap

Bitcoin:

• Weekly change: -0.17%
• BTC recovered from a drop to $40,500, stabilizing between $41,200 and $42,000 over the weekend.
• Bitcoin's price began falling on Monday, hitting $39,600 due to a stronger U.S. Dollar Index (up 2.71%) and Grayscale Bitcoin Trust (GBTC) outflows of $2.8 billion, exacerbated by FTX's bankruptcy estate offloading nearly $1 billion in GBTC shares.
• CryptoQuant attributed Monday's selling pressure to short-term investors and major BTC holders taking profits, rather than GBTC outflows.
• Bitcoin plunged to $38,600 on Tuesday, its lowest since early December 2023, amid a record $640 million outflow from GBTC and $3.45 billion in total. Spot Bitcoin ETFs' approval triggered a sell-off, with $2 billion deposited into exchanges for potential sales. Critical support levels were identified at $38,000 and $36,000, despite China's $278 billion market stimulus and the small impact of Mt. Gox's Bitcoin repayment news.
• On Wednesday, Bitcoin rebounded toward $40,000, gaining $30 billion in market cap. Whale activities on Bitfinex and a $100 million net outflow from post-ETF Bitcoin markets contributed, along with BlackRock's acquisition of 4,080 Bitcoins.
• Thursday saw Bitcoin fluctuating between $39,700 and $40,100. The U.S. reported a 3.3% GDP growth and 3.4% inflation rate. Tesla's unchanged 9,720 Bitcoin holding and Binance's significant bid liquidity indicated potential support for Bitcoin's price.
• As of Friday, Bitcoin remained near $40,000 despite the U.S. government planning to auction $118 million in Bitcoin from Silk Road. JPMorgan analysts noted a slowdown in GBTC selling, with $4.3 billion moved since the ETF conversion, aiding Bitcoin's rebound above $41,000. Placeholder VC’s Partner Chris Burniske warned of a potential drop to $30,000-$36,000.

Ethereum:

• Weekly change: -8.93%
• ETH experienced a significant drop of over 8% this week, surpassing BTC's decline.
• Over the weekend, ETH's value hovered around $2,400 but plummeted to $2,317 by Monday, coinciding with the announcement of Ethereum's Dencun upgrade on testnets. A critical bug fix by Nethermind highlighted the importance of client diversity, though it didn't indicate a bearish trend.
• ETH's value dipped below $2,200 on Tuesday following Celsius's transfer of 13,000 ETH to Coinbase and 2,200 ETH to FalconX, alongside selling over $125 million in Ethereum. This activity, which included significant whale movements, contributed to the decline.
• From Wednesday, ETH fluctuated between $2,178 and $2,262. Mixed views on the potential approval of a spot Ethereum ETF and concerns over Celsius's continued deposits led to market uncertainty.
• By Friday, Celsius had shifted $1 billion in Ethereum to exchanges, influencing ETH's market value. The U.S. SEC's postponement of decisions on Ethereum ETFs cast a shadow over ETH. Nonetheless, positive prospects from ongoing developments, including the Dencun upgrade, might support ETH's price recovery.

Altcoins:

• Frax completed its V3 rollout, introducing bonds.
• Debiex faced romance scam allegations, with the CFTC citing $2.3M in losses.
• Trezor users received an alert due to a third-party security breach.
• Dogecoin reached a 7-day high as ‘XPayments’ gained 100K followers in one day.
• An OSL executive mentioned the potential debut of Hong Kong's spot crypto ETF by mid-year.
• Injective launched gas compression, promising lower fees than Solana.
• Concentric's liquidity manager was exploited for $1.8M in a private key hack.
• EigenLayer outlined a 'shared security' model for dapps.
• Cosmos Hub rejected a proposal to reduce minimum ATOM inflation to zero.
• Socket recovered $2.3 million in ETH following a bridge protocol exploit.
• Swiss fintech firm Taurus received approval to offer tokenized securities to retail clients.
• Radiant Capital began repaying debt after a $4.5M flash loan exploit.
• Rabby Wallet introduced a points program.
• 0x Labs debuted a ‘gasless’ swap API, used by Robinhood and Coinbase Wallet.
• Hackers targeted crypto email lists, netting over $600,000 in phishing attacks.
• Edward Snowden supported a legal fund for Tornado Cash Co-Founder Roman Storm.
• Nexo sought $3B in damages from Bulgaria over a dropped investigation.
• Worldcoin hinted at a new Orb for improved iris-scanning.
• SUI's value increased with support from Alibaba and Mysten Labs.
• Synthetix deployed the first perpetuals protocol on Base blockchain.
• Polygon's AggLayer aims to unify multiple blockchains into a single chain experience.
• Former Ozys security chief was accused of sabotaging a firewall before a $81.5 million exploit.
• AltLayer opened airdrop claims, with a $2.9 billion fully diluted valuation.
• Bitcoin Ordinal inscription tokens, such as ORDI and SATS, underperformed due to decreasing demand, "sell the news" sentiment, and BTC correlation.

Bitcoin's Price Drop and Institutional Optimism

Bitcoin's rapid drop to $38,600, driven by GBTC outflows, futures market declines, and short-term holders' pressure, has raised concerns. The market faces potential further corrections, with support levels at $38,000 and $36,000. Whales sold 70,000 BTC, while technical analysis suggests a retracement to the 50% Fibonacci level. 

Despite market turbulence, jurors are cautiously optimistic about institutional capital inflow due to SEC-approved Bitcoin ETFs. Overall, recent dynamics reveal selling pressure, potential price corrections, and the expectation of increased institutional involvement in the Bitcoin market amidst ongoing market recalibration.  

Terraform Labs' Chapter 11 and SEC Lawsuits

Terraform Labs, the creators of TerraUSD stablecoin, filed for Chapter 11 bankruptcy with assets and liabilities estimated between $100 million and $500 million. The U.S. SEC's delay of the fraud trial for Do Kwon, Terra's figurehead, adds another layer of complexity. Kwon faces potential extradition to the U.S. and South Korea, with substantial legal battles looming. 

The bankruptcy filing includes 100 to 200 creditors, with plans to continue operations in the Web3 space. However, the SEC's $40 billion fraud lawsuit and a U.S. judge's ruling on LUNA and MIR as securities contribute to uncertain times for Terraform Labs and its community.  

Changpeng Zhao's Legal Troubles and Binance's Challenges

Changpeng Zhao (CZ), Binance founder, faced legal issues and a travel ban despite a $4.5 billion equity offer. In November 2023, Zhao pleaded guilty to anti-money laundering charges with a potential 18-month prison sentence. His plea to travel to the UAE to support a family member's surgery was rejected due to potential flight risk. 

Binance.US also faced regulatory challenges, with licenses in Alaska and Florida suspended. However, the exchange negotiated agreements in other states, including Arkansas, Illinois, and South Dakota, indicating adaptability. This legal storm has impacted both CZ and Binance's future, while Binance's native token, BNB, remains resilient.  

SEC Delays Grayscale's Ethereum ETF and Ethereum's Resilience

The SEC delays Grayscale's Ethereum spot ETF decision by 35 days, stirring market interest and legal scrutiny. Optimism clashes with regulatory opposition, with estimates ranging from a cautious 50% to a confident 70% likelihood of approval. Ethereum's price holds steady amidst Celsius's significant ETH transfer and pending ETF verdicts. 

The upcoming Dencun upgrade promises to redefine Ethereum's scalability, with proto-danksharding potentially reducing transaction costs by 80%-90%. Despite setbacks, Ethereum's resilience and innovation continue to captivate the crypto community as it navigates significant developments and regulatory challenges.  

BlackRock Shelves XRP ETF Plans and XRP's Uncertainty

BlackRock, the world's largest asset manager, has reportedly shelved plans for a spot XRP ETF, amidst CEO Larry Fink's vague remarks and their focus on Bitcoin and Ethereum ETFs. Despite XRP's growing adoption and a 65% price increase last year, analysts remain doubtful about a spot XRP ETF due to the SEC's ongoing lawsuit against Ripple and the lack of an XRP futures ETF. 

Concurrently, the transfer of 26.8 million XRP to Bitstamp amid price dips has sparked crash fears. This whale activity, coupled with market volatility, keeps investors wary in the fluctuating crypto landscape.

OKX's Flash Crash and Shift Away from PoW Mining

On January 23, OKX's native token, OKB, experienced a 48% flash crash, dropping from $46.80 to $25.10 in under 15 minutes, wiping out $6.5 billion in market cap. This was triggered by the liquidation of large leverage positions, causing a cascade effect. OKX pledged full compensation for users' additional losses from this event. 

Concurrently, OKX announced the shutdown of its mining pool operations due to business adjustments, marking a strategic shift from proof-of-work mining to focus on other sectors like payments, DeFi, and NFTs, aligning with broader industry trends away from PoW mining.

Ondo Finance Expands in APAC and Token Price Dip

Ondo Finance, a U.S. tokenized securities issuer, has launched its first APAC office, addressing the region's demand for U.S. asset exposure. Holding a 40% global market share, Ondo offers products like OUSG and USDY. Concurrently, Ondo's token price fell 13% due to a suspected 20 million token sale, causing market stir. 

Despite this, Ondo retains a significant token reserve, valued at $31.77 million. This move aligns with broader market trends and reflects Ondo's strategic positioning in the dynamic crypto landscape, balancing expansion with market fluctuations.

FTX Customers Challenge Bankruptcy Plan and Alameda's Moves

Former FTX customers are challenging the exchange's bankruptcy plan, deeming the proposed crypto reimbursement values based on November 2022 as unfair due to market recovery. Alameda Research, linked to FTX, transferred significant crypto assets, including 135 WBTC and 1150 ETH, to various exchanges, indicating potential market impacts. 

Additionally, Alameda dropped its lawsuit against Grayscale Investments post the conversion of Grayscale's GBTC fund into a spot ETF, leading to substantial redemptions. FTX's estate also sold about $1 billion in GBTC shares, reflecting the ongoing financial adjustments and market strategies following FTX's collapse.

Solana Labs' Token Extensions and NFT Market Growth

Solana Labs has rolled out token extensions for the SPL standard, enhancing interactions and introducing transfer fees and confidential transfers. Telefónica, in collaboration with Nova Labs, is deploying Helium Mobile hotspots in Mexico, utilizing the Solana-powered Helium 5G network for expanded mobile coverage. 

The Solana meme coin Dogwifhat (WIF) surged 30% at one point after its Bitget listing, reflecting a growing interest in Solana-based digital assets. Additionally, Solana's NFT trading volume has spiked by 25%, driven by high-value collections, indicating a robust and evolving NFT market within the Solana ecosystem.

Controversy Surrounding SatoshiVM's SAVM Token

The launch of SatoshiVM's SAVM token sparked controversy, with its price dropping 38% amid allegations of scamming between Ape Terminal and MacnBTC. MacnBTC accused Ape Terminal of unfairly allocating SAVM tokens to its team, profiting from sales, while Ape Terminal claimed MacnBTC, allegedly SatoshiVM's founder, manipulated sales for personal gain. 

Both parties denied each other's accusations. The dispute, involving claims of dishonest practices and token manipulation, has led to skepticism in the crypto community and a volatile price for SAVM, highlighting risks in new token launches and influencer involvement in the crypto market.

Top Weekly Altcoin Gainers and Losers

Gainers:

Manta Network MANTA (+45.48%) 

Bittensor TAO (+33.32%) 

Chiliz CHZ (+22.83%)

Frax Share FXS (+16.75%) 

Ronin RON (+16.09%) 

Losers:

Ordinals ORDI (-19.38%) 

SATS 1000SATS (-17.75%)

WOO Network WOO (-14.24%) 

BitTorrent New BTT (-12.60%) 

Sei SEI (-10.43%)