Dear Teroxx Community,
This week we witnessed a market of digital assets, which experienced slight upswings and subsequent “easing”.
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
Crypto savings platform Genesis and its parent company Digital Currency Group (DCG) reportedly owe their customers a combined $900 million, according to a Dec. 3 Financial Times report citing internal sources.
The massive liabilities are said to be linked to the dramatic collapse of FTX a few weeks ago, with the company’s own Gemini Earn savings plan, which the platform offers in cooperation with the Gemini crypto exchange, being the most affected. Through this Earn account, customers can earn up to 8% interest, but in return they have to provide their cryptocurrencies in the form of Bitcoin and Stablecoins for lending transactions (Lending).
Then on November 16, Genesis had suddenly halted payouts, citing an “unprecedented crisis situation in the markets” when it was revealed that nearly $175 million was stuck on the troubled FTX. Subsequently, rumors of Genesis’ own insolvency quickly surfaced, as no other investment capital has yet been raised to fill the resulting gap.
FTX’s sister company Alameda Research, which is also part of the ongoing insolvency proceedings of FTX’s parent company, has invested a whopping $1.15 billion in mining company Genesis Digital over the past nine months, Bloomberg reported on Dec. 3.
The sizable investment was made in the process during the period from August 2021 to April 2022, before the crypto market had finally crashed. Genesis Digital, one of the largest American mining companies ever. However, there are no ties to the investment firm Genesis Capital, which in turn froze $175 million on FTX’s trading platform.
Former FTX CEO Sam Bankman-Fried recently admitted that he was involved in Alameda’s investment decisions, including the investment in Genesis Digital, after previously denying it. According to official documents, Alameda has invested in the miner four times: $100 million in August 2021, $550 million in January, $250 million in February, and $250 million in April 2022.
Both large and small bitcoin investors are currently accumulating “aggressively.”
One positive sign of a future supply squeeze, where demand meets a larger share of illiquid supply, is that accumulation appears to be accelerating.
According to on-chain analytics firm Glassnode, small investors are primarily responsible for the current trend.
The smaller investors, referred to as “crabs” or “shrimp” depending on their bitcoin quantity, are increasing in number.
There is some important economic data coming out of the United States this week. But crypto analysts are focusing more on China.
Given the already fragile situation in the market, which depends on inflation trends, unrest in factories around the world could affect market development, as some people warn.
In China, a wave of protests against the government’s Corona policy is underway. In several cities, people are taking to the streets to demand an end to “COVID Zero” despite the lockdown.
Against this backdrop, risky assets could face difficulties if the situation gets out of control.
“A crucial range in Bitcoin could not be broken, so we’re still consolidating within that range. Now at a support level,” as explained by Michaël van de Poppe, founder and CEO of trading firm Eight:
“If there is a dip below that, I expect new lows in the markets, probably depending on contagion from China and FTX this week.”
As Cointelegraph Markets Pro and TradingView data show, the bitcoin price is mostly hovering between $16,800 and $17,400.
In this regard, analysts have identified the lower level as an important support to hold, but the stock market could possibly throw a wrench into this successful weekly close with its current weakness.
Many traders see the S&P 500 facing a “decision” soon based on a price pattern that points to a local high, which could also affect other markets.
For example, the correlation from the bitcoin price to the stock market could be put to the test as a result, though this has weakened noticeably since the FTX collapse.
Meanwhile, the U.S. dollar – to which, again, there is an inverse correlation – is not becoming a threat, as the U.S. dollar index (DXY) recently hit a five-month low.
Thus, the DXY stood at only 104.37 points in the meantime, before at the opening of trading on Wall Street, the jump could be made again above 105 points. This could lead to the fact that the market could again experience increased volatility around Christmas.
Technical term of the week
Crypto Grow: Is the new feature released in the Teroxx Wallet app. Through Crypto Grow, users can deposit their held digital assets into “Contracts” and thus actively earn a return by holding the coins. More information about this can be easily found in the Teroxx app.
Digital Asset Markt
Bullish outlook: If there continues to be positive news that provides certainty in the market, a bounce to ~$18,500 could follow.
Bearish outlook: Negative global markets could retest support at ~$16,000.