News Updates October 15 &16, 2022
1. Bitcoin Futures Market Remains Heated As Leverage Stays High.
On-chain data shows the Bitcoin futures market has remained heated recently as leverage taken on by investors has been quite high.
Bitcoin Estimated Leverage Ratio Declines A Bit, But Still Remains Very High
Following the rise in derivative activities, the leverage in the market hit a new all-tine high recently, as noted by an analyst in a CryptoQuant post.
The “all exchanges estimated leverage ratio” is an indicator that’s defined as the ratio between the open interest and the derivative exchange reserve.
When the value of this metric is high, it means the average investor is currently using a large amount of leverage on exchanges. Such a trend suggests holders are willing to take high risk currently.
On the other hand, low values of the indicator imply holders are going for a low-risk approach at the moment as they aren’t using much leverage.
Now, here is a chart that shows the trend in the Bitcoin all exchanges estimated leverage ratio over the last couple of years.
2. North Korea Targeting Japanese Crypto Exchanges.
According to a report by The Japan News, which cites information provided by the National Police Agency, several Japanese exchanges have suffered from cyberattacks conducted by the notorious Lazarus Group, which is believed to be directly controlled by the North Korean government. The employees of affected companies were tricked into opening phishing emails sent by hackers. Their computers ended up getting infected with viruses. It was identified that Lazarus was behind the hacking incidents after an investigation that was conducted by regional police and the NPA’s cybercrime unit. North Korean hackers have been attacking Japanese businesses for several years.
The NPA deliberately made all the details about the recent wave of attacks public in order to spread awareness. As reported by U.Today, the burgeoning cryptocurrency sector in Southeast Asia has been the main target of North Korean hackers for a long period of time. The authoritarian state uses stolen crypto in order to fund its weapons programs after being slapped with a litany of sanctions. Lazarus was responsible for some of the biggest hacks of 2022, including the Ronin heist. North Korean hackers would often rely on the Tornado Cash mixer in order to launder their funds, which prompted the U.S. government to ban the cryptocurrency tumbler.
3. Bitcoin Price Analysis: BTC Forms Huge Wedge Pattern, Will it Trigger The Next Rally or Crash?
Bitcoin’s price has been trapped inside a consolidation range between $18K and $25K for months already, and is trading sideways with extremely low volatility. However, the primary cryptocurrency is now closer to the lower boundary of the range around $18K, and if this level breaks, we can expect new yearly lows.
Technical Analysis
The Daily Chart
The following chart indicates that the market suffers from insufficient activity and a lack of demand. As a result, the price action has been minor, with low volatility, making it difficult to trade.
From the bullish side, BTC is trapped under two critical resistance lines: the 50-day moving average at the $19.6K level and the 100-day moving average around $21K. Bitcoin must break above these crucial levels with considerable trading volume, in order to retarget higher levels.
However, considering the current bearish state of the market, the price could get rejected to set new yearly lows (below $18K).
The 4-Hour Chart
Looking on the shorter time frame, the price action has been trapped between $18K and $20.5K since mid-September. Meanwhile, Bitcoin has formed a bearish wedge pattern (as can be seen on the chart below).
After a steady decline from $20.5K, the price touched the wedge’s lower trendline and quickly bounced back on Thursday, amid the CPI data release.
4. Here's Why Ethereum's Price Crashed So Low Since Merge: Details
According to the onchain analytics firm Santiment, Ethereum large holders, namely shark and whale addresses having up to 1 million ETH, have dumped $4.2 billion worth of ETH, which is 3.3 million coins in the last five weeks. The Ethereum Merge occurred on Sept. 15, to the joy of the community.
The excitement around the Merge, which finalized the network's transition to proof of stake, boosted the price of Ethereum and that of related cryptocurrencies, including Ethereum Classic. However, the savage crypto bear market has already erased the majority of these gains. The price of Ethereum itself is at $1,284, down roughly 13% from the day of the Merge. The massive dump of Ethereum addresses may now be considered a major contributing element to the decline.
5. Crypto lender Celsius incurs more than $3 million in legal fees.
Embattled crypto lender Celsius has incurred more than $3 million in legal fees as it moves through Chapter 11 bankruptcy proceedings.
Between July 13 and July 31, law firm Kirkland and Ellis charged the crypto lender almost $2.6 million in fees as it represented Celsius in Chapter 11 proceedings, according to a document filed on Friday. Another legal representative, Akin Gump, charged almost $750,000 for its services between July 13 and August 31, according to a similar filing. So far, Celsius has incurred legal fees totaling more than $3 million.
The Block contacted Celsius for comment but had not heard back by the time of publication.
After pausing withdrawals and transfers in June amid turbulent market conditions, Celsius filed for Chapter 11 bankruptcy in July. Since then, it's been working its way through a restructuring process and examining ways to pay creditors.
Later reports have revealed considerable financial difficulties with $2.8 billion in crypto liabilities and Kirkland & Ellis projecting that Celsius will be almost $40 million in the red by the close of October.
In September, the company was accused of using a Ponzi-like scheme by the Vermont Department of Financial Regulation, and this month it disclosed the names and trading history of its platform's users in the latest legal filing. Such events have resulted in Celsius losing much of its senior leadership, with its CEO and co-founder stepping down from the company.
6. India aims to develop crypto SOPs during G20 presidency, says finance minister
Sitharaman has previously called for global collaboration to decide on crypto's future and has been cautious against mainstream crypto adoption citing risks to financial stability.
The finance minister of India, Nirmala Sitharaman, revealed India’s plan to develop standard operating procedures (SOPs) for cryptocurrencies during its G20 presidency, from Dec. 1, 2022, to Nov. 30, 2023.
Sitharaman has previously called for global collaboration to decide on crypto's future and has been cautious against mainstream crypto adoption citing risks to financial stability. However, speaking to local Indian reporters on Oct. 15, she confirmed, "That (crypto) will also be part of India's thing (agenda during G20 presidency)."
The G20, or Group of Twenty, is a global forum for addressing the major issues related to the global economy. According to Sitharaman, no country can alone effectively handle or regulate crypto, adding that:
“But if it’s a question of platforms, trading of assets which have been created, buying and selling making profits and, more importantly in all, these countries are in a position to understand the money trade, are we in a position to establish for what purpose it’s being used?”
Sitharaman further highlighted the use of crypto assets in money laundering as detected by India’s law enforcement agency, Enforcement Directorate.
She further added that members of the G20 have also acknowledged the same concerns while reiterating the need for the participation of all countries when it comes to effectively regulating crypto assets.
7. Fed governor says the U.S. doesn't need a digital dollar.
At least one governor of the Federal Reserve Board is a hard no on a digital dollar.
Fed Governor Christopher Waller threw the coldest of waters on the prospect of a Fed-issued digital currency during a speech on Friday that reiterated and expanded upon his opposition to the idea.
“The factors supporting the primacy of the dollar are not technological, but include the ample supply and liquid market for U.S. Treasury securities and other debt and the long-standing stability of the U.S. economy and political system,” Waller said in prepared remarks delivered at Harvard University. “No other country is fully comparable with the United States on those fronts, and a CBDC would not change that.”
Waller elaborated that he is skeptical of arguments put forward by CBDC advocates that a digital dollar would address fraud, theft and money laundering or improve payments more than existing technologies.
“Meaningful efforts are underway at the international level to improve cross-border payments in many ways, with the vast majority of these improvements coming not from CBDCs but improvements to existing payment systems,” said Waller.
Discussions around a U.S. CBDC began in earnest after China started experimenting with a digital yuan. But the Fed governor cast doubt on a foreign CBDC supplanting the U.S. dollar’s global reserve currency status, an argument put forward in support of a digital dollar.
