Thecrypto market slid in the past 24 hours as traders likely took profits after weeks of an uptrend. Ether and dogecoin (DOGE) led the declines among major tokens, falling more than 5%, Cardano’s ADA and Polygon’s MATIC dropped 4%, while bitcoin lost just 1.6%, CoinDesk data shows. The drops caused upward of $173 million in longs, or bets on higher token prices, to be liquidated. Ether futures saw $86 million in liquidations, while traders of bitcoin futures lost $46 million, according to data source Coinglass.
Binance founder and CEO Changpeng Zhao (Antonio Masiello/Getty Images)
Binance mistakenly kept collateral for some of the crypto assets it issues in the same wallet as funds belonging to its customers, Bloomberg reported Tuesday. The exchange issued 94 so-called Binance-peg tokens (B-Tokens), and reserves for almost half of those are stored in a cold wallet called Binance 8. The wallet contains more tokens than required for the number of B-Tokens issued. The issue is, when collateral is pooled together and used for trading, it’s locked up, and clients or holders of assets may not be able to withdraw if the pool is reduced, Laurent Kssis, a crypto trading adviser at CEC Capital, said in a note to CoinDesk. “In essence this means that there is no segregation of assets between clients’ funds and any collateral used,” Kssis said. “This could lead to the owner(s) not being able to withdraw due to lack of funds or liquidity by the exchange.
The District of Columbia Court of Appeals has set a date to begin hearing oral arguments in Grayscale Investment’s appeal of the Securities and Exchange Commission’s decision to deny the conversion of the Grayscale Bitcoin Trust into an exchange-traded fund, according to a court order filed Monday, CNBC reported. The arguments will take place on March 7, which is sooner than Grayscale had expected. In a tweet on Tuesday, Grayscale said that “we previously anticipated oral arguments to be as soon as Q2 2023, so having them scheduled to begin on March 7 is welcome news.” Grayscale is a sister company of CoinDesk.
Market Insight: Party Like It’s 2019
TradingView/CoinDesk
Bitcoin could be positioning for a big move higher if history is any guide, with a recent upswing paralleling the bull revival of mid-2019 that saw the price surge by almost 250%.
The leading cryptocurrency by market value has jumped nearly 40% to $23,000 this month, according to CoinDesk data. The rally follows a yearlong swoon that knocked 68% off the price followed by prolonged consolidation at the depths of the bear market at around $18,000 and comes as the U.S. Federal Reserve nears the tail end of its liquidity-tightening cycle that roiled risky assets, including cryptocurrencies.
The conditions echo those that preceded bitcoin’s bull revival in the second quarter of 2019. Then, the price surged 247% to $13,800 as the Fed’s tightening cycle peaked.
The chart shows ether’s daily price action and shifts in the 50-day and 10-day simple moving averages of the cryptocurrency’s price since November.
The 50-day SMA is about to top the 100-day SMA, confirming what is known as a bull cross – a closely followed positive technical signal that suggests strengthening of upward momentum and more gains ahead.
Some observers argue that crossovers lag prices and are unreliable as standalone indicators.
Ether has rallied nearly 30% this month and recently hit a four-month high of $1,680.
– Omkar Godbole
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