Bitcoin jumped to $44,000. What might be next?
In this week’s crypto highlights, we explore the price movements of BTC, AVAX, DOGE, and ADA. Additionally, this recap includes other notable industry news items that occurred over the last seven days. Without further ado, let’s dive into the latest market developments.
Table of contents
- Market spotlight: Bitcoin experienced a double-digit rally in a week
- A bug fix on Bitcoin Core could end Bitcoin Ordinals and BRC-20 tokens
- Crypto mixer Sinbad was sanctioned by the U.S. Treasury
- The BNB Chain team presented the opBNB L2 network roadmap
- FTX obtained court approval to sell Grayscale, Bitwise trust assets
- One sentence news
- AVAX entered the top 10 by market cap
- DOGE celebrated its anniversary with a price spike
- ADA took advantage of a TVL increase
Market spotlight: Bitcoin experienced a double-digit rally in a week
Bitcoin price moved from $38,000 to $44,000 in a week, reaching the highest point since April 2022. The asset outperformed most top crypto markets, pushing Bitcoin dominance to a 2023 high. The major catalyst behind this move is considered to be ETF anticipation. Here are some of the latest developments related to this topic:
- The U.S. Securities and Exchange Commission (SEC) asked for public feedback on spot Bitcoin ETFs. Bloomberg analyst James Sayffart saw this as a potential sign that there may be a wave of approved applications.
- BlackRock received seed funding for its iShares Bitcoin Trust (IBTC), and there were rumors that the company may move around $200 million to help its ETF “in the early days of the race.” This indicates a major preparation for a potential launch.&
- Hashdex, one of the asset managers filed for spot Bitcoin ETFs, anticipates that these instruments could be available for trade in the U.S. by Q2 2024.
As we mentioned previously, the “almost there” narrative could be a significant driver for Bitcoin price. However, it’s not the only catalyst that helped Bitcoin update its 2023 high. Bitcoin is arguably experiencing a supply shock, as 70% of BTC hasn’t moved in a year. In addition, November 2023 saw the largest easing of U.S. financial conditions in 40 years, boosting wider markets and general liquidity.
In our previous analysis, we highlighted the $43,000-49,000 range as a short-term target for bulls. Currently, the asset is trying to sustain above $43,000, but has started facing decreasing trading volumes. The latter suggests that Bitcoin may experience a price consolidation before another major potential move.
In addition, as the Bitcoin price continues moving up, more supply is held in profit. This number reportedly moved above 90%, and short-term holders upped profit-taking over the past week, recording approximately $5 billion in sales. If this bearish pressure is maintained, Bitcoin may struggle to explore higher levels.
A lot of market observers also anticipate the “buy the rumor, sell the news” scenario, meaning that the asset may experience a price decline after potential spot ETF approval. A similar situation happened in December 2017 with the launch of the first Bitcoin futures in the U.S.
In general, the Bitcoin rally may potentially slow in the coming weeks, or it could go into a pitstop for some time. The weekly and daily RSIs are within overbought levels, supporting the view that Bitcoin may need a break from price jumps.
Noteworthy market events
A bug fix on Bitcoin Core could end Bitcoin Ordinals and BRC-20 tokens
While the BTC price flirted with the $45,000 level, the Bitcoin network was experiencing a rise in unconfirmed transactions. The major suspect was a new flood of BRC-20 tokens and Ordinal inscriptions. In May 2023, they caused a surge in Bitcoin transaction fees by over 1,000% in a week, and pushed the number of pending transactions to 400,000. At the time of this writing, 276,000 Bitcoin transactions are waiting for confirmation.
This sparked a new wave of debate over the viability of inscriptions. Luke Dashjr, a Bitcoin Core developer and CTO of the OCEAN mining pool, claimed that inscriptions are “exploiting a vulnerability,” resulting in “spamming the blockchain.” He said that inscriptions bypass the limit on the size of extra data in Bitcoin transactions.
This “bug” was recently fixed in the latest Bitcoin Knots client update. Dashjr anticipates the same could happen in further updates of the primary client, Bitcoin Core. When asked about the fate of Ordinals and BRC-20 tokens after the vulnerability is addressed, Dashjr confirmed they would no longer be operational. Nonetheless, existing inscriptions would still remain.
Some community members pointed out that inscriptions give miners more fees and higher profits, so they are unlikely to be discarded.
Crypto mixer Sinbad was sanctioned by the U.S. Treasury
Tornado Cash recently obtained a new fellow sufferer.&
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) continued enforcement efforts against crypto mixers, accusing Sinbad of money laundering by the Lazarus hacking group. OFAC sanctioned Tornado Cash in August 2022 for similar reasons.
According to the announcement, Sinbad was allegedly processing millions of dollars worth of virtual currency linked to Lazarus Group’s high-profile hacks, including Horizon Bridge, Axie Infinity’s Ronin Bridge, and Atomic Wallet. These hacks resulted in a collective loss of around $820 million at the time. Sinbad’s website was also seized following an investigation by the U.S., Dutch, and Finnish law enforcement agencies.
The BNB Chain team presented the opBNB L2 network roadmap
As outlined in a new technical roadmap for layer 2 (L2) network opBNB, BNB Chain developers aim to significantly enhance transaction speed and slash network fees. The proposed improvements anticipate elevating processing to 10,000 transactions per second (TPS) from the current 4,000, and cut transaction costs by 90% within six months. This cost reduction is achieved through the implementation of sharding and BNB Greenfield, eliminating the need for permanent data storage on the main chain.
Moreover, the opBNB team envisions the introduction of appchains designed to facilitate the development of decentralized applications on the L2 network. The developers also intend to integrate the multi-proof system to establish a more flexible and secure operational environment.
FTX obtained court approval to sell Grayscale, Bitwise trust assets
Delaware bankruptcy court judge John Dorsey granted a motion that sought permission to begin selling FTX’s units in Grayscale and Bitwise crypto funds, worth over $744 million. This move could be the first stage in the sale of assets owned by FTX, which were valued at $3.4 billion. When it comes to the selling process, the platform indicated it wants to minimize market disruption, while also maximizing returns for defrauded customers.
One sentence news
- Bankrupt crypto lender Celsius reportedly opened crypto withdrawals for some qualifying users following a court order.
- Ethereum L2 project Mantle released its own liquid staking protocol.
- Circle Research introduced two solutions to reverse blockchain transactions.
- Binance will cease support for its BUSD stablecoin on December 15.
- Velodrome and Aerodrome decentralized exchanges suffered a frontend exploit.
- Brazil’s largest private bank, Itau Unibanco, announced the launch of crypto trading services.
Notable price performances
AVAX entered the top 10 by market cap
The AVAX price surged by almost 30% in a week, becoming one of the top climbers among larger-cap altcoins. This helped the asset enter the top 10 by market cap, and reach the highest point since August 2022. Some potential catalysts behind this move might be the end of the Platypus saga, the Republic’s listing of its profit-sharing platform, and Avalanche adoption in India.
After the recent rally, trading volume started to decline, hinting that bullish momentum may be fading. The asset also arguably formed a bearish divergence on a daily chart, indicating that a price correction may follow. The 20-day EMA currently acts as a dynamic support for the price.
DOGE celebrated its anniversary with a price spike
On December 6, Dogecoin, the largest memecoin, turned 10, and celebrated by moving above $0.10 for the first time since April 2023. Shortly before that, the asset saw a 58% surge in open interest amid Tesla’s Cybertruck release. Dogecoin was mentioned more than 50 times in the Cybertruck checkout page code, and some crypto enthusiasts assumed that DOGE may be announced as a payment method for the vehicle. But at the time of this writing, this hasn’t materialized.
After reaching the $0.106 level, the asset began to experience a price correction. It broke the upper border of the Bollinger channel on a daily chart, hinting that a price correction may persist. If the asset fails to defend the $0.094 level, it could push the price to the 0.382 Fibonacci point.&
ADA took advantage of a TVL increase
According to DefiLlama, the Cardano total value locked (TVL) surged by over 18% in a week, showing the largest increase across most major chains. This pushed the TVL above $300 million, which is near the ecosystem’s all-time high.
This development had a positive impact on the ADA price, registering a double-digit weekly increase, and approaching a major $0.45 resistance level. However, the daily RSI indicates that a price correction could be around the corner. If bulls fail to sustain above it, it could open the road to $0.38.
Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.
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Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.
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