Crypto rally hits breaks? ✋
Volatility is pushing the traders on edge. Crypto trading around key levels - BTC 28k. ETH 1.8k. Ripple's $200M litigation bills. Brad Sherman's anti-bitcoin sermon. Philippines unravel crypto scams.
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Bitcoin (BTC) is starting the week off with a bang, and not the kind you'd expect. With the highest fees in two years putting pressure on its price action, BTC finds itself at the centre of new crypto industry drama.
When the big boss goes wonky, everyone else follows. So what's going on? 👇
Binance CEO calls “FUD”
Binance pumped the brakes not once, not twice, but three times on Bitcoin withdrawals since the weekend citing "congestion" on the Bitcoin network while simultaneously moving a giant chunk of funds between wallets. And increased bitcoin withdrawal fees from 00002 BTC ($5.59) to 0.001 BTC ($27.94) per withdrawal.
Meanwhile, a flood of transactions overwhelms the Bitcoin mempool, pushing fees to new heights. To everyone's surprise, miners end up earning more from fees in a single block than from the block subsidy itself, sparking curiosity about the source of these transactions.
BTC price dips. Traders eye key levels
The strain on Bitcoin's network and the events surrounding Binance and fees impact BTC price action. The price dips below $28,000, and traders closely monitor key levels. Following that, $27,300 as a crucial support level, while others observe a tightening wedge structure, anticipating a breakout.
The 50-day exponential moving average (EMA) near $27,950 is considered a potential support zone. BTC hits a two-week low, prompting discussions about the selling pressure and the need for scalability solutions.
The high fees and commotion are leaving their mark on Bitcoin's network value to transaction (NVT) ratio, which has skyrocketed to its highest level in four years.
Now all of this sparked quite the buzz about a potential "attack" on the network, like a Denial of Service (DoS) party crasher.
But analysts assured everyone that it wasn't a dastardly attack, but just some crazy demand causing transaction fees to shoot up to $19.20 or 0.00068 BTC.
Risk-on rally based on microeconomic events
Key events is the US will have a bearing on the price of all the assets, crypto is no different.
Bitcoin miners liquidating BTC
Bitcoin miners continue to grapple with the consequences of the 2022 bear market, their BTC reserves are at two-year lows.
As per on-chain analytics platform CryptoQuant, the amount of BTC in miners’ wallets is still trending downward, despite the recovery in BTC price seen through 2023.
Miners currently hold 1,826,695 BTC as of May 8, the least since July 2021.
An interesting week and the month awaits for the crypto markets, which has largely had a good 2023 so far. Many milestones and a narrative that has ploughed through the regulator devastation that the industry has had to endure. The levers for volatility are in back in the spotlight.
TTD Blockquote 🔊
Brad Sherman, Congressman (need we say more?)
“Cryptocurrencies are a crock […] They help criminals and terrorists […] they help startups perpetrate fraud […] undermine the dollar, encourage gambling for no social benefit [..] and are popular with guys who want to sit on their couch and tell their wives they are going to be millionaires.”
Not a fan of the cryptocurrency industry. Not gonna stay quiet about it.
Sherman’s crazed bitcoin attack isn’t quite lawsuit-worthy #DoRead
TTD Numbers 🔢
The amount Ripple has spent defending the case brought against it by the United States Securities Exchange Commission (SEC).
During a fireside chat at the Dubai Fintech Summit on May 8, CEO Brad Garlinghouse, lamented about US crypto regulation and a politics-first policy, advising entrepreneurs to avoid the United States.
Garlinghouse first piece of advice for entrepreneurs when they ask him about getting something started.
"If I were you, I would not start in the United States.”
Philippine police rescued more than 1,090 human trafficking victims who were forced to work up to 18 hours a day for cryptocurrency scams in a May 4 operation. The victims, mainly from across Asia, including Vietnam (389), China (307), the Philippines (171), Indonesia (143), were lured by social media posts promising high-paying jobs.
Michelle Sabino, a spokesman for the Philippine National Police force's anti-cybercrime group
"You're like a prisoner without a cell. You're not even allowed to talk to your roommates. They're not allowed to leave outside the bounds of the gate. After 18 hours of work, they're brought to their dormitory."
Officers raided a cluster of buildings Thursday in Mabalacat City about 90 kilometers north of Manila.
The victims were forced to target unsuspecting people in the United States, Europe and Canada.
Their passports were confiscated, and they were made to work up to 18 hours a day, with salary deductions for interacting with colleagues or taking extended breaks.
TTD Surfer 🏄
Coinbase is boosting its relationship with regulatory authorities in the UAE, trying to work its way around growing challenges in the US.
Liechtenstein is planning to add Bitcoin (BTC) as a payment option for government services; received crypto will be exchanged for Swiss francs.
Tencent-backed Australian blockchain company Everledger has entered insolvency proceedings after failing to raise new funding.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.