Bitcoin, Ethereum, Metaverse Tokens Sink Further After Holiday Crypto Rally

In brief

  • The cryptocurrency market is down 7% over the last 24 hours.
  • Bitcoin, Ethereum, and Solana have all lost value today, along with gaming and metaverse tokens.

The cryptocurrency market was in the green over the weekend as Bitcoin neared a return to $52,000 and the total crypto market cap nudged back above $2.5 trillion. However, much of the market has seen deepening losses today, with leading coins like Bitcoin and Ethereum down, along with metaverse and gaming tokens.

Bitcoin (BTC) sits at $47,950 as of this writing, according to CoinGecko, after dropping more than 6% over the last 24 hours. It’s still up slightly on the week at 1.5% higher than seven days ago, but is down more than 12% during the 30-day span.

With $50,000 seen as a key resistance level, it’s not surprising to see Bitcoin drop back below that level after surpassing the milestone figure over the weekend. It may also be due in part to post-Christmas profit taking ahead of the new year.

The tumbling market has led to significant liquidations of leveraged positions, according to data from CoinGlass, likely leading to further losses in the process. The site shows nearly $523 million worth of futures contract liquidations over the last 24 hours from more than 165,000 traders, including over $167 million in Bitcoin positions alone.

In any case, it’s not just Bitcoin that’s suffering in the markets today. Overall, the total cryptocurrency market cap is down 7% as of this writing. Ethereum (ETH) is also down more than 6% at a current price of $3,827, while the third-largest cryptocurrency Binance Coin (BNB) is down nearly 6% at $537 per coin.

Solana (SOL) has experienced an even more pronounced drop at almost 10% over the last 24 hours, down to a current price of $181, with Cardano (ADA) down nearly 9% and Polkadot (DOT) dropping nearly 12% over the last day.

Some metaverse and crypto gaming-related coins and tokens, which have seen volatile swings of late amidst significant recent gains, are also down double-digits today.

Gala Games (GALA) is down 13%, for example, with Decentraland (MANA) and Enjin Coin (ENJIN) each losing about 12% of their respective value over 24 hours. The Sandbox (SAND), meanwhile, is down a more modest 8% during the span.


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Bitcoin Price Analysis: Bitcoin Plunged Over $4K In a Day, Where is the Next Key Support?

After the price topped at $52K on Monday, Bitcoin had lost over $4000 in just a day. Is BTC entering a deeper correction, or where is the local bottom?

Technical Analysis

Short-Term Analysis

Last week the bitcoin price broke above a mid-term descending trend line on the 4-hour timeframe. After completing a pullback, the price increased again and touched $52k resistance (Monday).

However, the market did not have enough momentum to continue the rally (low volume), and the bears won the battle. For now, BTC is supported by the static support zone – as can be seen on the following chart.

If BTC loses the first support zone, the $45k-46k range will be the next critical supporting level. Additionally, looking at the RSI indicator, we can see that the lower band of the Bollinger is getting closer to the oversold territory; hence, we likely see a positive correction at some point.


Daily Analysis

Bitcoin could not break out of the Ichimoku Cloud on the daily time frame. Now, the primary cryptocurrency had lost Tenkan-Sen as support.

Based on the historical reactions that the price has shown before, bitcoin must break above the Ichimoku Cloud in order to regain its bullish momentum. As shown on the chart below, the green zones might serve as strong supports levels on the daily time frame.


Onchain Analysis

Currently, 26% of the supply is in the loss territory. Historically, the market saw 32% supply-in-loss at $29K bottom in July.

Therefore, there is a high possibility that the $40K-$42K range will be retested, and likely become a local bottom for the midterm. As a matter of fact, the lowest level was reached amid the March-2020 COVID crash, where almost 60% of the supply was in loss.


The above analysis was complied by analysts @GrizzlyBTClover,  @N__E__D__A, and  @CryptoVizArt exclusively for CryptoPotato.


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Cryptocurrency charts by TradingView.


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FTX exchange floats $1M prize for banks to accept stablecoins

Cryptocurrency derivatives exchange FTX is calling on banks to reach out and discuss the possibility of accepting stablecoins in exchange for a $1 million reward.

In a Tuesday Twitter post, FTX said it was exploring forming relationships with banks in different regions to allow users to have “near-instant and near-free deposits and withdrawals” through stablecoins. The exchange floated the idea of offering a $1 million prize for the first bank in each region to accept the tokens but hinted it would be open to giving more.

The pitch to the exchange’s more than 350,000 Twitter followers came following FTX CEO Sam Bankman-Fried, or SBF, suggesting additional regulatory clarity was needed for the crypto space — including stablecoins — to move forward as an industry. According to the CEO, creating a “reporting/transparency/auditing based framework” to confirm how the coins are backed would “solve 80% of the problems while allowing stablecoins to thrive onshore.”

FTX said it aimed for an audience including but not limited to U.S. banks in calling for an agreement on stablecoins, and would be open to speaking to credit unions. The exchange is incorporated in Antigua and Barbuda and headquartered in The Bahamas but also operates FTX US for U.S. users.

“We just acquired a bank and this is a good idea,” said Oliver von Landsberg-Sadie, CEO of the London-based BCB Group. “No prize required by us, you are already a client of ours, and we all gain in the long run.”

Related: Regulators are coming for stablecoins, but what should they start with?

This year, many U.S. regulators have turned their attention to stablecoins, with The President’s Working Group on Financial Markets releasing a report in November suggesting that issuers should be subject to “appropriate federal oversight” akin to that of banks. Nellie Liang, the Undersecretary of the Treasury for Domestic Finance, has also hinted at additional laws affecting the coins.