2024-03-06 11:44

The gap between liquidity on the ask and bid sides of the order book within 2% of the market price has widened to nearly five times is usual value, according to data tracked by Kaiko. The gap between liquidity on the ask and bid side within 2% of the market price has widened to nearly $100 million, according to data tracked by Kaiko. The persistent gap likely stems from investors taking profit at record-high prices and market makers' positioning. Bitcoin's (BTC) price rally may face temporary resistance as the climb to a record high seems to have spurred profit-taking among holders of the largest cryptocurrency by market cap. That's the message from the imbalance between potential sellers and buyers in bitcoin's aggregated order book across 33 centralized exchanges. The gap between the total dollar value of orders to sell bitcoin, the so-called ask side, and orders to buy, the bid side, within 2% of the market price has widened to nearly $100 million, according to Paris-based Kaiko. That's about five times its usual value. Moreover, there has been relatively more liquidity on the ask side, representing potential supply to the market, since late January, a sign investors have been looking to sell on the rise. Bitcoin has surged almost 60% since the start of the year. "The current mismatch is notable because the 2% BTC ask depth has surpassed the bid depth for the longest period since early 2021 (when our data starts). It typically suggests building of limit orders on the sell side of the order book and could mean that traders are taking profit as BTC nears its all-time high," Dessislava Aubert, a research analyst at Kaiko, said in an email. Bitcoin tapped fresh record highs above $69,000 on Tuesday before sliding back and then rebounding. It was recently changing hands at $66,700, little changed on a 24-hour basis. The CoinDesk 20 Index, a broader market gauge, was down 1.5% at 2,553. Market makers could be partly responsible for the imbalance in order book numbers, Aubert said. Market makers agree to provide liquidity to the order book and are always on the opposite side of investors' trades. They are constantly hedging their exposure to maintain a direction-neutral portfolio. "We also observe a strong increase in demand and net buying on most exchanges over the past days, so it [the imbalance] could be related to market makers positioning," Aubert said. The chart below shows the cumulative volume delta (CVD) on major spot exchanges since Feb. 25. A positive and rising CVD indicates a net buying pressure, while a negative CVD suggests the opposite. CVD on Binance, the largest crypto exchange by volume traded, has grown by nearly $1 billion since that date. Other exchanges have also contributed to the net buying pressure in the market. https://www.coindesk.com/markets/2024/03/06/bitcoin-rally-may-slow-as-order-book-imbalance-hints-at-profit-taking/

2024-03-06 09:00

Some meme coins are surging in anticipation of more exchange listings in the coming months. Dogwifhat became the first major meme coin to cross the $2 price mark. A listing on the prominent exchange Binance likely drove the price surge. Solana’s runaway meme coin Dogwifhat (WIF) surged 48% in the past 24 hours to trade over $2.11 early Wednesday, reaching over $2 billion in capitalization just over three months after issuance. Such gains were most in the meme coin category tracked on CoinGecko for tokens with over $1 billion capitalization. The category rose 2.8% on average, with lower caps like myro (MYRO) and mog coin (MOG) rising as much as 80%. WIF was issued in November 2023 and quickly went viral in crypto circles. Much of the token’s memetic value is derived from its connection to an image of a dog wearing a hat – and the “wif hat” usage that has caught on and grown among crypto circles. WIF traded nearly $1 billion in the past 24 hours, CoinGecko data shows. It is the first major meme token with a price of over $1. Meme tokens usually tend to have a significantly large circulating supply – and prices of any major meme, such as dogecoin (DOGE) or shiba inu {{SHIB}], have never crossed the psychologically large $1 mark. A listing on the prominent exchange Binance likely drove such price action, with the exchange recording $219 million in WIF trades within its first day. Anticipation of future exchange listings and popularity among retail audiences contributed to gains, as per some X posts. Meme coins have been in focus since late February amid a bitcoin-led rally. Investors have been treating these tokens as a bet on the growth of their underlying networks, as previously reported. https://www.coindesk.com/markets/2024/03/06/solana-meme-coin-dogwifhat-surges-48-outperforming-bonk-doge/

2024-03-06 07:24

Crypto markets slid as much as 10% in the past 24 hours, but have quickly been bought up by bulls. The selling pressure was likely driven by profit-taking and miners offloading some bitcoin holdings. Solana’s SOL, Cardano’s ADA, ether and meme coins, started to reverse some of Tuesday’s losses. Buying demand and a reset in funding rates for perpetuals has buoyed bitcoin (BTC) prices early Wednesday, fueling a broader-market recovery. The world’s largest cryptocurrency tumbled over 7% on Tuesday after briefly touching all-time highs, causing a market-wide sell-off and more than $1 billion in liquidations amid the volatility. It dropped to as low as $60,800 but neared $67,000 in Asian morning hours – indicating resilience. Some observers said the selling pressure was likely driven by profit-taking at historical highs and miners offloading some of their bitcoin holdings. Data shows that inflows in spot bitcoin exchange-traded funds (ETFs) remained strong, with BlackRock amassing over $760 million on Tuesday. Meanwhile, some market analysts said lofty price targets for bitcoin remained in view as April’s anticipated halving event, which reduces mining rewards in half, approaches. “As demand from bitcoin ETFs, with $500 million in daily average inflows, continues to outstrip new production, we may see bitcoin’s ongoing surge continue,” Alex Adelman, CEO of bitcoin rewards application Lolli, shared in an email. “Following the Halving, increased scarcity and strong demand from retail and institutional investors will likely push bitcoin’s price even higher. Based on historical trends following the Halving, bitcoin’s price could top $150,000 in the next year.” Some developers say Bitcoin fundamentals are stronger this cycle compared to the previous ones, pointing to the introduction of Ordinals technology and their adoption. "New innovations such as Ordinals, digital collectibles (NFTs) that are inscribed in the Bitcoin blockchain have driven $3.6 billion in BTC payments over the last 6 months alone," shared Stijn Paumen, founder of crypto payments firm Helio, in a message to CoinDesk. "If this trajectory continues we'll see global adoption of crypto as a mainstream method of a payment in the coming 4-year BTC cycle." Major tokens, such as Solana’s SOL, Cardano’s ADA, ether (ETH) and meme coins, started to reverse Tuesday’s losses, rising as much as 5% in the past hour on bitcoin’s strength. Dog-themed tokens dogecoin (DOGE) and shiba inu (SHIB) saw sell-offs of more than 15% on Tuesday but did not rebound alongside the other major tokens. https://www.coindesk.com/markets/2024/03/06/bitcoin-rebounds-as-150k-target-for-2024-comes-in-view/

2024-03-06 06:13

"The allegations of the SEC severely undermined institutional trust in our platform," Binance.US executive Christopher Blodgett said during a deposition. After the SEC’s action, Binance.US saw a $1 billion asset exodus, a 75% revenue drop, and 200 layoffs. The exchange struggles with legal costs, auditor expenses, and lost banking relationships, impacting operations. The Securities and Exchange Commission’s (SEC) effort last year to freeze Binance.US’ operations via a Temporary Restraining Order (TRO) led to mass layoffs at the company as revenue imploded and it struggled with market trust, one of its executives said during a court deposition. “In the immediate aftermath of the TRO, we saw somewhere in the neighborhood of $1 billion of assets flee the platform, crypto, and fiat,” Christopher Blodgett, a Binance.US executive, said during a December 2023 deposition that was recently published as part of a status update on the SEC-Binance lawsuit. This loss of $1 billion in assets led to a 75% loss in revenue and 200 layoffs – two-thirds of its workforce – at the U.S.-incorporated arm of Binance. This reduction in headcount has impacted the exchange’s ability to respond to discovery requests from the SEC because teams are stretched thin. Blodgett also said that the exchange’s legal costs skyrocketed to $10 million, and its auditor expenses have increased by “10x” in addition to the loss of banking relationships, which allowed customers to withdraw their digital assets into fiat. “In the immediate wake of the TRO, our banks demanded drastic increases in collateral. But eventually, they fully terminated the relationship. As a result, our customers were prevented from depositing and withdrawing fiat to the platform, effectively choking the business,” he said. Since then, the exchange has been unable to find new banking partners to work with it, Blodgett testified. “To banks, we’re radioactive,” he said. Who can blame them? The second it becomes known that they’re working with Binance.US, they can reasonably expect a nasty subpoena from the SEC.” https://www.coindesk.com/policy/2024/03/06/binanceus-slashed-two-thirds-of-its-workforce-as-revenue-plunged-after-sec-lawsuit-court-transcript/

2024-03-06 06:04

The market-wide resetting of funding rates means potential for a more long-lasting move to record highs in bitcoin. Bitcoin’s overnight pullback from record highs has normalized funding rates in the crypto perpetual futures market. The market could continue to cool in the coming weeks, one observer said. Bitcoin’s (BTC) overnight pullback from new record highs has cleared out excess leverage from the market, normalizing funding rates in the crypto perpetual futures market. The leading cryptocurrency by market value fell 10% to $59,700 after reaching a new lifetime high above $69,000. The correction led to the forced closure of $1 billion worth of leveraged perpetual futures bets across digital asset markets. The CoinDesk 20 Index (CD20), a broader market gauge, rose to a high of $2,627 on Tuesday and has since pulled back to $2,496. Since then, the annualized funding rates or the cost of holding leveraged bets in perpetual futures tied to the top 25 cryptocurrencies have reset to less than 20%, down significantly from triple-digit figures observed a few days ago. In other words, the overheated perpetual futures market has cooled, opening doors for a more long-lasting move to record highs. Funding rates surged above 100% early this week as bitcoin’s strong bullish momentum saw investors jump in with both feet, using leveraged products to maximize gains. Exchanges use the funding rate mechanism to keep perpetuals prices aligned with spot prices. A positive funding rate indicates that perpetuals are trading at a premium to the spot price, indicating increased demand for bullish bets. As such, a high funding rate, as seen early this week, is said to reflect over-optimism, often observed at interim market tops. The chart by Velo Data shows funding rates for the top 25 cryptocurrencies have ranged from mildly positive to as high as 150% or more over the past week. The latest reading for most coins is below 20%. According to John Glover, chief investment officer at Ledn, the market could continue to deleverage in the coming weeks., potentially pushing bitcoin’s price back to $40,000. “The euphoria surrounding the recent rally in BTC prices is very reminiscent of the last time we were trading at $65k. While many people will point to the fact that the sell-off that ensued post-November 2021 (and previously after April 2021) was due to bad players in the market, I would argue that, while it may have been precipitated by the bad players, the sell-off was due to people being over-leveraged with unrealistic expectations for a straight-line appreciation to $100,000,” Glover said in an email. “I believe that we are back in that same situation and we will see a correction back to the mid-to-low $40,000 area in the coming weeks. Things always look bullish at the peak,” Glover added. https://www.coindesk.com/markets/2024/03/06/crypto-funding-rates-reset-after-bitcoins-sharp-pullback-from-69k/

2024-03-06 00:58

The federal regulator instituted a cease-and-desist against ShapeShift, which dissolved its U.S. crypto exchange in 2021. The Securities and Exchange Commission filed a cease-and-desist against crypto exchange ShapeShift, barring it from operating as an unregistered dealer in the U.S. that listed crypto securities. ShapeShift offered to settle the charges, which the SEC said it accepted. The U.S. Securities and Exchange Commission filed a cease-and-desist against ShapeShift, a crypto exchange that previously operated out of Denver, Colorado, but has since shut down its U.S. exchange operations, alleging it operated before 2021 as an unregistered dealer for cryptocurrencies that were securities. As part of Tuesday's filing, the SEC said it would accept a settlement offer by ShapeShift, which included a $275,000 fine and an agreement that the company would no longer violate the Securities Exchange Act. ShapeShift offered "at least 79 crypto assets" to its customers, which included "those that were offered and sold as investment contracts," the filing said, though it did not name any specific digital assets as being securities. However, it said the exchange operated as an unregistered dealer in the U.S. between 2014 and 2021, an accusation similar to the one the SEC brought against other U.S. crypto exchanges like Coinbase, Kraken and Binance.US. "ShapeShift regularly bought and sold crypto assets for and from its own accounts, carrying inventory in – and holding itself out to customers as willing to buy and sell – the crypto assets offered on ShapeShift.io," the filing said. The company shut the U.S. exchange in 2021, the SEC said. A footnote also noted that the findings in the cease-and-desist "are not binding on any other person or entity in this or any other proceeding." SEC spokespeople did not immediately return a request for comment. ShapeShift founder Erik Voorhees emailed CoinDesk a link to a tweet in which he quoted from one of the Federalist Papers. https://www.coindesk.com/policy/2024/03/06/shapeshift-settles-sec-charges-it-sold-crypto-securities/