Crypto News

Bitcoin Pumps, Only to Plummet Amidst Spurious Spot ETF Reports

Bitcoin experienced a roller coaster ride last Monday triggered by a false claim of a BlackRock Bitcoin Spot ETF approval by the SEC. Alleged tweets on the 'X' social media platform and a popular blockchain news website sent shock waves through the crypto market, driving Bitcoin's price to an astonishing $30,000 in a mere matter of minutes, marking an 8% surge. However, this euphoria was short-lived as Bitcoin swiftly plummeted, and over $42 million liquidated.

The original source of this fake news remains undisclosed, but suspicions point toward deliberate price manipulation. Reports suggest a whale made an astounding $5.7 billion Bitcoin Futures purchase following the false announcement. The SEC promptly refuted any such approval.

Prior to the news, investors pondered whether the possibility of a Bitcoin Spot ETF had already been factored into the price. The abrupt price volatility suggested otherwise. Bitcoin has since retraced to pre-fake news levels, potentially offering an entry point for investors.

The crypto community now awaits official approval and watches for any hints of price movement in the short to medium term. The cryptocurrency market is notoriously sensitive to Bitcoin Spot ETF news, making any assumptions uncertain. Investors are poised to react swiftly, aware that in the crypto space, nothing is taken for granted. As of the current time of writing, Bitcoin's price has once more surged beyond the $30,000 mark, driven by optimism surrounding the potential approval of a Bitcoin Spot ETF in the coming months. 

Shock Wave in Crypto World: Ripple Bosses Exonerated as SEC Drops All Charges

Last Thursday marked a significant turning point for Ripple Labs as the Securities Exchange Commission (SEC) dropped all charges against Ripple's Executive Chairman, Christian Larsen, and CEO, Bradley Garlinghouse. This development has breathed new life into a company that had long grappled with regulatory uncertainties. Ripple's native token, XRP, surged by over 11% from the previous day's lows in response to the news.

The legal saga began on December 22, 2020, when the SEC, led by Chairman Gary Gensler, accused Ripple's leadership of facilitating the sale of XRP as unregistered securities. They alleged that Larsen and Garlinghouse were aware of this but continued to sell XRP to investors. Additionally, the SEC accused them of making false and misleading statements to investors about the token. However, it was revealed in court that the SEC lacked sufficient evidence to substantiate these claims.

On July 13, 2023, United States District Court Judge Analisa Torres dismissed the aiding and abetting motion. Concurrently, Ripple made headlines when a ruling determined that XRP was not considered a security when sold to the general public, though it did violate federal securities law in its sale to institutional investors.

While the SEC plans to appeal the former decision, and a trial is scheduled for April 2024, this recent development has cast a veil of uncertainty over the entire case. It suggests that the SEC may be facing an uphill battle, which could have profound implications for the broader cryptocurrency landscape. Ripple, once beleaguered, now glimpses a ray of hope on its regulatory journey.

Gemini and Genesis Grapple with Legal Quagmire Amidst a Wave of Misconduct Allegations 

The cryptocurrency exchange Genesis, overseen by the Winklevoss twins, is mired in a significant legal quagmire alongside two other firms. The New York Attorney General has accused them of deceiving their customers, resulting in substantial financial losses. This development casts a dark cloud over the cryptocurrency space, contrasting with the expected positivity in the SEC/Ripple case.

This news is of particular concern due to its connections with Alameda Research, previously owned by Sam Bankman-Fried, who is currently facing a trial for fraud. The two other companies implicated in these allegations are Genesis, a crypto lending firm, and Digital Currency Group, the parent company of Gemini. These companies are collectively accused of causing losses totalling a staggering $1.2 billion.

The heart of the matter revolves around Gemini's 'Gemini Earn' Program, which promised customers up to an 8% yield on their cryptocurrency holdings, operating in a manner resembling a pyramid scheme. Customers entrusted their funds to Gemini, who, in turn, directed these investments to Genesis. Genesis lent the funds to major institutions, including Alameda. However, when these institutions failed to repay, Gemini customers experienced complete financial losses, particularly during the FTX collapse.

The Attorney General alleges that these companies were well aware of the risks but enticed customers with false promises. This legal action follows a prior lawsuit by the Securities Exchange Commission against both Gemini and Genesis, with 'Gemini Earn' investors losing approximately $900 million due to the FTX scandal. Additionally, the companies are accused of concealing losses and failing to assess loan quality.

In Other News: 

Sam Bankman-Fried Trial - Ex-FTX General Counsel's Testimony: No Approval for Any Loans Granted

Going Live - Cardano Launches First Ever Social Media Platform App

JP Morgan Predicts Approval of Bitcoin Spot ETF Within Months

BlackRock's Larry Fink Observes Global Cryptocurrency Demand Surge

Crypto Analysis

Bitcoin

Bitcoin (BTC) has experienced significant upward momentum since our analysis last week. By Friday, price had surged to a peak of $30,379, marking an impressive 14% increase over the course of just one week. As of the time of writing, the price is currently surpassing the 0.786 Fibonacci (Fib) level, which stands at $30,326. This level is derived from the daily swing high between July and the September lows. This development is undeniably positive for BTC, as it has successfully broken free from the $28,000 resistance that had proven to be a significant obstacle. What's particularly promising is the fact that this breakthrough occurred with substantial trading volume and exhibited a bullish price action, suggesting a strong likelihood of revisiting the July highs.

It's worth noting that on the daily chart, the price now appears overbought, with the Relative Strength Index (RSI) exceeding 70.00. Additionally, the 50-day Exponential Moving Average (EMA) has crossed above the 100 EMA. However, it's important to highlight that a decline leading to a daily close below the $28,000 level would be highly bearish for this asset.

Having breached this critical level, we can begin exploring potential upside targets and resistance points to identify significant areas of interest and potential turning points. On the monthly chart to the right, Fibonacci levels are plotted based on the all-time high reached in November at $69,000 and the lows observed in November 2022 at $15,476. The initial area to consider is the 0.382 level, which is situated at $35,922. Notably, there's a convergence of resistance at this point, as indicated by the black arrows on the chart. Should the price succeed in surpassing the recent high from July, which stands at $31,804, it is highly likely to gravitate towards the psychologically significant $30,000 mark and the aforementioned 0.382 level. We will closely monitor the price action on a weekly basis to gauge the ongoing developments.

Solana

Solana (SOL) finds itself at an intriguing juncture, as it approaches a significant resistance zone marked by a rectangular pattern on the daily chart. Notably, SOL has been displaying exceptional strength compared to the broader market, a trend that may persist given the absence of any apparent slowdown. However, it's worth noting that a pullback appears imminent, with clear indicators such as an overbought RSI, a Stochastic RSI that is about to cross and a substantial recent upward surge. Typically, substantial moves like this tend to pause in the short term, and given the current positioning, a breather seems likely.

Despite this, I remain unconvinced that Solana is nearing a mid-term peak. There's a lack of bearish divergence, and the 50-day moving average (EMA) has surpassed the 100-day moving average, suggesting overall bullish sentiment. A pullback towards the 10-day moving average shouldn't be ruled out.

A glance at the weekly chart reveals a steady upward trend channel, with room to climb further within it. My anticipation is that we might experience a brief pullback or a period of sideways consolidation before embarking on another upward leg towards the top of the channel. Nevertheless, it's crucial to remain vigilant, as market conditions can change unpredictably. Presently, there are no glaring signs of a market top, but it's always prudent to monitor closely for any emerging divergences.

Bitcoin Dominance (Excluding Stablecoins)

The chart displayed below represents Bitcoin Dominance, specifically excluding the top stablecoins. This provides an alternative perspective on Bitcoin (BTC) performance when compared to other cryptocurrencies. Currently, we find ourselves encountering significant resistance, evident on both charts. Notably, this resistance coincides with a convergence of factors: a confluence of resistance levels, marked by the blue arrow on the left side of the daily chart, and the 50% midpoint between the highs (1) and lows (0) of January 2021, as depicted on the monthly chart to the right. 

It's crucial to observe that Fibonacci levels on this specific chart tend to adhere to certain patterns, as exemplified by the test of the 0.382 level at 54.76% back in June 2022, as indicated by the blue arrow on the monthly chart. Even though the 50% level isn't technically a Fibonacci number, it holds significance as a pivotal point, representing the midpoint between the major highs and lows, essentially serving as a balance point between bullish and bearish sentiments. A bullish movement from this juncture could readily lead to an advancement towards the 0.618 Fibonacci level at 62.84%.

There is a distinct possibility that Bitcoin's dominance may continue to rise in the short term, as it appears to be adjusting from overbought conditions on the RSI, with no current signs of divergence. The Stochastic RSI indicator has witnessed a rapid decline over just a few days, suggesting that prices may soon enter oversold territory, hinting at a potential continuation of the upward trend. Furthermore, the strong, solid green candle for this month signals a bullish sentiment. If we manage to close the month near the upper portion of this candle, it could imply further upside potential.To identify any potential peak in the chart, we should closely monitor the prevailing conditions, keeping an eye on the altcoin market for any signs of a rally, as well as being vigilant about any bearish divergences that may arise.

Macro News

Markets on Edge following Jerome Powell Speech

Last Thursday saw continued risk off sentiment with equities continuing Wednesday’s drop and yields at the long end rising, following Jerome Powell’s speech at the Economic Club of New York. Whilst the Fed sees inflation continuing in the right direction, Powell noted the economy is still running hot and that further hikes may be needed, although rising long end yields means the bond market is doing some tightening for them.

Higher Rates a Headwind for Equities

Higher long bond yields are a headwind for equities, particularly lower cap and indebted companies as the cost of capital squeezes margins and increases borrowing costs. The number of delinquencies, defaults and bankruptcies is rising as consumers and businesses continue to feel the pressure. Whilst not showing in official data yet, anecdotal evidence shows households and smaller businesses are struggling to stay afloat, people working multiple jobs and lay-offs continuing.

Middle East Concerns

The continuing Hamas/Israel conflict has also caused market jitters, contributing to the risk off sentiment with gold surging and oil back to nearly $90/barrel. The weekend appeared to calm markets somewhat, with crypto doing well and Asia trade leaving futures green although some of that has been given back since European markets opened this morning. Tensions are still high with the risk of the conflict spreading further into Lebanon as skirmishes between Hezbollah and Israel increase.

Busy Week for Data and Earnings

Lots of earnings this week with some big tech names including Microsoft (MSFT), Alphabet (GOOG), Meta (META), IBM (IBM) and Amazon (AMZN).

Consumer stocks have been hammered recently, so names like Coca-Cola (KO), Verizon (VZ), Hilton (HLT), Southwest Airlines (LUV) and Hershey (HSY) will be ones to watch to gauge consumer sentiment.

Key events this week:

Monday

• Eurozone consumer confidence

Tuesday

• Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI

• UK S&P Global / CIPS Manufacturing PMI, jobless claims, unemployment

• US S&P Global Manufacturing PMI

• UN Security Council is expected to open debate on the Middle East

Wednesday

• Australia 3Q CPI

• Germany IFO business climate

Thursday

• South Korea GDP

• European Central Bank rate decision

• EU leaders summit in Brussels (Thursday-Friday)

• US wholesale inventories, GDP, US durable goods, initial jobless claims

Friday

• Japan Tokyo CPI

• China industrial profits

• US personal spending and income, University of Michigan consumer sentiment

And Finally…

A few weeks ago I mentioned Greece looks promising for growth. I have added to my position and now Greece’s credit rating has been upgraded to BBB which is a move to investment grade: