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Bitcoin's recovery reveals correction was 'short-term blip' |
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Key points: |
Bitcoin climbed past $100K again after a brief bout of depreciation pulled it down to $98,000. FOMC meeting on 28-29 January could affect BTC's short-term volatility.
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News - The last 72 hours have been very interesting for Bitcoin, the world's largest cryptocurrency. Not only did BTC drop below $100K, but it recovered soon after too, gaining by over 3% in 24 hours to hit $103K at press time. That is a lot of short-term volatility, something that is likely to continue on the back of the much-anticipated FOMC meeting. |
Here, it's worth understanding what contributed to Bitcoin falling in the first place. Nervousness around the FOMC meeting, yes, but so did the fall across the U.S stock market. Specifically, both the NASDAQ Futures and S&P 500 lost over 3% of its value after the successful debut of Chinese AI startup DeepSeek. |
A 'short-term blip' - Fortunately for the crypto-market, recovery was quick across the board for Bitcoin. This hinted that while BTC's depreciation below $100K was significant, it was also temporary. Especially since a lot of underlying metrics and datasets still seemed to back Bitcoin's potential. |
For example - Short-term holders didn't participate much during the latest bout of sell-offs. In fact, according to CryptoQuant analyst Alex Adler Jr., the cryptocurrency's short-term holder profit loss has remained under 2000 BTC. |
Historically, whenever Bitcoin has lost over 5% of its market value, figures for the same have been as high as 5000 BTC. What this means is that despite the scale of the crypto's fall, major panic selling was missing. |
That's not all either as according to Alphractal's Joao Wedson, buying pressure made a comeback as soon as the cryptocurrency lost its $100K level on the price charts. |
What's next? - It's a tricky time for Bitcoin right now. While it did cope with the latest bout of correction well, that can't be said for certain once the full implications of the FOMC meeting are realized. |
Worth pointing out, however, that the cryptocurrency still retains the confidence of many holders. MicroStrategy, for instance, made news after it expanded its holdings to 471,000 BTC. |
Ripple secures money transmitter license in Texas, New York |
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Key points: |
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News - San Francisco-based blockchain payments firm Ripple Labs is in the news today after it announced the approval of money transmitter licenses in the state of New York and Texas. Thanks to the same, the firm now has over 50 MTLs. According to a statement from the firm, |
"Texas and New York have defined regulations and stringent licensing requirements with robust compliance standards and regulatory oversight." |
A win for Ripple - The timing of this latest set of approvals is important. Especially since it comes on the back of Ripple's growing visibility after Donald Trump's re-election as U.S President. In fact, the firm's execs were also invited to the President's inauguration a few days ago. |
Both Texas and New York are important markets for any crypto-firm. Texas, for instance, is at the epicenter of the mining ecosystem. For its part, New York is a hub for digital asset businesses. |
That's not all though as just over a month ago, Ripple Labs also secured approval for its RLUSD stablecoin from the New York Department of Financial Services. As it stands, it plans to list this crypto on exchanges soon. RLUSD will be integrated into Ripple Payments later this year too. |
XRP recovers, but... - Ripple's latest update corresponded with XRP's price recovery on the charts. Less than 48 hours ago, the altcoin saw long liquidations of over $32 million. Its correlation with NASDAQ climbed to a new high too, all while the U.S stock market fell on the back of news from China. |
At press time, however, XRP was up 8% in 24 hours, with the crypto's recovery well on the way. |
For its part, XRP itself has been at the center of a major dispute between Bitcoin maximalists and many in the so-called XRP Army. This, after reports broke out that Trump may be contemplating a crypto reserve with a broader, diverse range of assets, rather than just Bitcoin. |
Memecoins will reach point of 'gradual maturation' by 2030 - Analyst |
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Key points: |
CryptoQuant's CEO has revised his opinions on memecoins as an asset class. With the exception of a few, the market's memecoins recovered most losses over the last 24 hours.
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News - Memecoins are an odd asset class, with many people, often with very justifiable reasons, questioning their value over the years. According to many, nothing but hype and speculation drives the value of these cryptos. However, the recent launch of Trump's memecoin changed a few opinions across the board. |
CryptoQuant's Ki Young Ju is one of them, with the exec recently going as far as apologizing to memecoiners. |
"I misunderstood memecoins but now see their value. A good memecoin builds a community that creates social value. Without a community or if harmful, it's a scam." |
Target 2030 - CryptoQuant's CEO went a step further though by drawing a parallel with the art market. According to the exec, the assessment of value is similar across both markets and relies on "legitimizing intangible value through narratives." |
He went on to add, |
"While the hype surrounding memecoins may fade, the market itself will not disappear. I believe it will evolve into a more mature form by around 2030." |
Worth pointing out, however, that Ki Young Ju also issued a caveat alongside his observations. He believes that many "unsightly elements remain" and the memecoin market does have a lot of problems. |
And yet, the future of this market may not be net zero, he concluded. |
Recovery on the way - At the time of writing, the memecoin sector was one of the market's biggest gainers over the last 24 hours. After a major bout of depreciation, the likes of TRUMP, DOGE, SHIB, and FLOKI led the sector's recovery efforts with double-digit hikes. |
PENGU was an exception though, with the crypto losing over 14% of its value over the aforementioned period. |
KuCoin to pay $300M after pleading guilty to charges in the United States |
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Key points: |
Guilty plea entered before Manhattan's Federal Court is part of a settlement deal. As part of the same, exchange's founders have been forced to resign too.
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News - The legal tussle between KuCoin, one of the world's most popular crypto-exchanges, and the U.S Department of Justice has finally come to a conclusion. This, after the exchange entered a guilty plea as part of a settlement. Under the same, KuCoin admitted to operating a money-transmitting business without a license. |
Back in March, the exchange was accused of having very ineffective Anti-Money Laundering and KYC programs. In fact, according to the Justice Department, KuCoin didn't require any identifying information from users for a long time. Some of its employees were also found to be bragging about the lack of KYC. |
Details of plea agreement - The aforementioned settlement deal includes the forfeiture of upto $184 million plus a fine of over $112 million. That's not all either, as the exchange has also agreed to exit the United States' market for two years now. |
The deal had a corresponding effect on KuCoin's execs too. Founders Michael Gan and Eric Tang have been forced to resign, and will no longer play any role in its operations or management. |
Worth pointing out, however, that the DoJ dismissed the charges personally attached to the execs "upon the satisfaction of certain conditions." |
Reactions - Reactions to the settlement were swift and positive. For its part, KuCoin released a statement claiming, |
"This resolution provides much-needed clarity and paves a clean path forward, enabling KuCoin to focus fully on global growth, innovation, and delivering even greater value to its users." |
The exchange's Chief Legal Officer BC Wong will now take over as CEO. |
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More stories from the crypto ecosystem |
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Interesting facts |
In April 2018, a Bitcoin Core developer discovered a potentially critical flaw in the Bitcoin Cash code. He privately alerted developers about this issue. This could have led to a chain split within the Bitcoin Cash network, if exploited. Over 24,000 cryptocurrencies have entered the market since Bitcoin's debut back in 2009. According to CoinGecko though, over 50% of these cryptocurrencies have failed or have "died." 2018 saw someone pay 600 ETH for a CryptoKitty dragon. At the time, 600 ETH was valued at just about $170,000. Today, 600 ETH would be worth just less than $2 million.
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Top 3 coins of the day |
XRP |
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Key points: |
At press time, XRP was trading at $3.09 after hiking by over 11%. Less than 48 hours ago, the crypto was valued at just under $2.80.
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What you should know: |
After a major bout of correction, XRP recovered on the charts to emerge as one of the market's biggest gainers. In fact, the altcoin hiked by 11% in just over 24 hours to climb back above its $3-level. While the broader market's recovery helped its price performance, so did news of Ripple Labs getting a money transmitter license in Texas and New York. XRP's technical indicators highlighted the briefness of its aforementioned correction as at press time, the Parabolic SAR's dotted markers had switched to position themselves above the price candles - A sign of bullish momentum. Similarly, the Chaikin Money Flow remains above zero, underlining positive capital inflows into the market. |
Cardano (ADA) |
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Key points: |
At press time, ADA was trading at $0.950. Last 24 hours saw the cryptocurrency register gains, despite its week-long downtrend.
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What you should know: |
Ranked 9th among the world's top cryptocurrencies, Cardano [ADA] has had a tricky time on the price charts since its November - December 2024 uptrend came to a halt. In fact, over the last few weeks, the altcoin has been trading within a tight price range. The same was reiterated by the crypto's Bollinger Bands, with the mouth of the indicator holding tight around the price candles. Over the last 24 hours, ADA registered gains of over 5%. However, these gains came on the back of the altcoin losing over 16% of its value in just over a week. Worth noting, however, that at press time, Cardano's market seemed to be in a state of equilibrium. This was evidenced by the RSI's reading of close to 50. |
Pudgy Penguins (PENGU) |
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Key points: |
At press time, PENGU was valued at $0.0182 following major losses. Despite the wider market's recovery, PENGU was one of the few to fall further on the charts.
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What you should know: |
PENGU has been one of the crypto market's most visible altcoins over the last two months. However, that visibility hasn't always translated to good price performances. This was evident at press time too, with the crypto losing over 32% of its value in just under 2 days. While it did recover somewhat on the back of anticipation around the Abstract chain mainnet's launch, this didn't last. This, despite its social volume climbing on the charts. PENGU's bearishness was highlighted by the findings of its technical indicators. While the Moving Average was well above the price candles, the MACD line registered a bearish crossover with the Signal line. |
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