Get Smarter About Crypto

₿itcoin reached $66,920. +0.78%

♢Ethereum reached $3,790. -1.03%

What we will talk about today...

🌐💼 Bitcoin Holders Start Selling After a Year of Buying

📈🚀 Ethereum Close to $4K but Needs to Be Careful of Derivative Market

🔍🤔 US Judge Says Some Crypto Trading is Securities Trading

Bitcoin Holders Start Selling After a Year of Buying

Bitcoin is ending a year of buying more coins, which could lead to a big price increase. The recent rise in BTC, now at $67,017, has made some holders sell their coins. This ends a year of buying more coins that started after the 2022 price drop, according to Glassnode’s data.

📊 Less Coins in Accumulation Addresses

Glassnode’s data shows that BTC balances in “accumulation addresses” have gone down. These are wallets that only receive coins and never send them. Since February 11, these balances have gone down by 2.6%, now at 3,176,293 BTC (worth $212 billion).

📈 Not a Bad Sign but a Change in Plan

The lower balances might look like a bad sign, but history shows a different story. Accumulation wallets usually buy coins when they are cheap, and start selling when the price goes up, not down.

🔍 Accumulation Trend Still Strong

A wider view, looking at Bitcoin’s whole history, shows a steady accumulation trend since mid-2018. This means that the lower balances might not mean a negative mood.

💼 ETF Effect and a $100,000 BTC Price Goal

The US approval of Bitcoin exchange-traded funds (ETFs) in January has changed Bitcoin’s supply. More buying pressure, and new events like reaching new highs before a block reward cut, are changing the game.

Timothy Peterson, founder and manager at Cane Island Alternative Advisors, says that more ETF demand could push Bitcoin to $100,000 by October 2024. The link between unspent transaction output (UTXO) numbers and BTC price shows a daily growth rate of 0.34%.

The changing factors in Bitcoin’s world, with different accumulation patterns and the ETF impact, suggest a possible exciting future for the top cryptocurrency in the next months. 🚀📈

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Ethereum Close to $4K but Needs to Be Careful of Derivative Market

Ethereum (ETH) is doing well, with the price almost at $4,000, going up by 13% in the last week and reaching the highest level since December 2021. But, as people get more excited, there are some warning signs from the derivative market, which could hurt the current positive trend.

🚀 Good Trend and Problems

The current ETH market cap of $456 billion makes it much bigger than its rivals. Investors hope for a new record high, maybe over $4,800 this cycle. But, there are some problems, like scaling issues, unclear rules, and reliance on the Ethereum Foundation.

🗓️ Spot ETF Decision Coming Soon

The spot Ethereum exchange-traded fund (ETF) decision on May 23 could be a big deal, with experts saying there is a 50-70% chance of approval. While the rules are still not clear, Ethereum is growing, with more developers joining, challenging the idea of centralization.

💼 Risk from Derivative Market Confidence

The main short-term risk for ETH comes from traders using derivatives being too confident. Ether futures’ open interest reached a record high at $13.4 billion, showing a lot of demand for leverage. The Ether futures premium, a comparison with spot exchanges, went up to its highest point in over 18 months, showing overconfidence.

⚠️ Worries Over Too Much Leverage

Ether’s futures premium went over the 10% normal level, hitting 23%, showing too much demand for long positions. Retail traders are more and more choosing bullish leverage positions, with the funding rate reaching levels showing overconfidence. This makes it possible for big losses due to price changes.

📉 Network Data and Rival Growth

Despite price hopes, recent Ethereum decentralized applications (DApps) data shows a 6% drop in volume and an 11% drop in active addresses in the last 30 days. On the other hand, rivals like BNB Chain and Solana saw a lot of growth in volume.

🧐 Doubts Over Surge Lasting

While Ethereum’s recent price rise could be related to possible ETF approval, the too much leverage from both retail and professional traders, more than 12 weeks before the decision date, makes us doubt if the rise over $4,800 can last.

In short, Ethereum’s path to $4,000 is positive but careful, especially because of derivative market factors and changing network data. 📉

US Judge Says Some Crypto Trading is Securities Trading

A U.S. District Court Judge, Tana Lin, has agreed with the Securities and Exchange Commission (SEC), saying that trading some cryptocurrencies on other markets is securities trading. This important decision is part of a case about insider trading with former Coinbase product manager Ishan Wahi, his brother Nikhil Wahi, and friend Sameer Ramani.

🤔 What the Case is About

The ruling came from the “first-ever cryptocurrency insider trading case,” where Ishan Wahi, a former Coinbase product manager, and his friends were accused of insider trading. The SEC said that trading some crypto assets on the Coinbase market was securities trading.

🔍 Which Crypto Assets are Securities

Judge Lin supported the SEC’s view, saying that trading some crypto assets on other markets, especially on Coinbase, is securities trading. Some tokens that the SEC mentioned in its complaint are Amp, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM.

🌐 How it Affects Coinbase and the Crypto World

Former SEC official John Reed Stark said the ruling was a “huge loss” for Coinbase and the whole crypto world. The decision, according to Stark, makes a new rule for future decisions and shows a possible change in the rules.

📰 How Coinbase Reacted and What it Means

Coinbase was not part of the insider trading case, but it has had problems with the SEC. In June of the last year, the SEC said Coinbase did not register as an Exchange, Broker-Dealer, and Clearing Agency. Coinbase’s Chief Legal Officer, Paul Grewal, said the recent ruling was not important, because it was a default judgment and no one argued against it.

💼 How it Impacts the Crypto World

The ruling and what it means for crypto markets make us wonder about the rules and how some crypto assets are classified. Former SEC official John Reed Stark expects a big effect on the whole crypto market and uses the ruling as extra support in the current Binance case.

The recent ruling is a big change in the connection of crypto and securities rules, and could change the legal situation for cryptocurrencies in the future. ⚖️📉

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Stay tuned for more twists and turns in the crypto world & Happy Investing🚀💎