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Bitcoin (BTC) may be struggling at $30,000, but under the hood, all-time highs of a different kind keep coming.
The latest data shows that Bitcoin network fundamentals — difficulty and hash rate — will hit new records this week.
Bitcoin mining difficulty, hash rate refuse to slow down
Bitcoin’s 2023 recovery has been about more than just BTC price action, with miners seeing a significant turnaround of their own.
As BTC/USD added 70% in Q1 alone, pressured mining participants saw some much-needed relief after the bear market squeezed profit margins to practically zero.
The comeback for miners is evident in difficulty, which among other things, reflects competition for block subsidies.
Bitcoin (BTC) abruptly reversed gains on April 19 as a cascade of long liquidations sent BTC/USD plummeting lower.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin sees "beautiful" retracement
Data from Cointelegraph Markets Pro and TradingView followed the pair as it made lows of $29,015 on Bitstamp.
The sudden move followed an equally strong rebound above the $30,000 mark the day prior, with bulls ultimately unable to preserve higher levels.
As volatility returned, Bitcoin thus fell to its lowest since April 10 as the upside saw its latest challenge.
“Deep correction on the markets, as Bitcoin can’t hold at $29,700-29,800 and shoots downwards through a cascade of liquidations,“ Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.
MicroStrategy’s bold Bitcoin (BTC) investment strategy is playing out profitably so far into 2023.
Today, MicroStrategy’s stock, MSTR, is up roughly 140% year-to-date (YTD) to $350 per share, its highest level since September last year. It mirrored Bitcoin’s 90% YTD gains, maintaining a strong positive correlation with the top cryptocurrency.MSTR daily price chart featuring its daily correlation with BTC. Source: TradingView
Proxy Bitcoin investment boom
To recap, MicroStrategy is essentially a proxy for direct BTC investment without a spot Bitcoin exchange-traded fund (ETF) in the United States. It holds 140,000 BTC worth $4.26 billion, the most by a publicly traded company as a part of its treasury strategy.
MSTR investors typically get their buying or selling cues from the same catalysts that drive Bitcoin market trends.
As a result, the stock has mirrored the BTC price uptrend so far in 2023, led by rush-to-safety trades amid the U.S. banking crisis and anticipation that the Federal Reserve would stop hiking rates.
Bitcoin (BTC) price reclaimed the $30,000 support on April 18 after briefly testing $29,130 on the previous day. However, traders question whether the recovery is sustainable given the increased regulatory scrutiny, especially in the United States.Bitcoin price in USD, 4-hour. Source: TradingView
Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), said on April 14 that Binance intentionally broke U.S. rules concerning futures and commodities trading. For example, knowingly allowing U.S. citizens to participate on the exchange through the use of obfuscation tools. The comments stem from the CFTC’s March 27 lawsuit against Binance and its CEO Changpeng “CZ” Zhao for alleged trading violations.
Also on April 14, in an open meeting with U.S. Securities and Exchange commissioners and staff, SEC Chair Gary Gensler said the agency will be revisiting the proposed redefinition of an “exchange”. The SEC intends to bring certain brokers under additional regulatory scrutiny, and explicitly include decentralized applications.
On April 17, the U.S. Securities and Exchange Commission (SEC) charged crypto asset trading platform Bittrex and former CEO William Shihara for operating an unregistered securities exchange, broker, and clearing agency. Separately, Bittrex Global is being charged for operating a shared order book with Bittrex.
Bittrex had already announced its intention of closing down U.S. operations on April 30 after reportedly receiving a Wells Notice in March warning about the impending regulatory action.
In a February interview with New York Magazine, Gary Gensler, chairman of the United States Securities and Exchange Commission, said that just about every crypto transaction, with the exception of Bitcoin spot transactions and buying or selling things with cryptocurrency, falls within the jurisdiction of the SEC.
In the interview, when discussing what types of crypto transactions should be regulated as securities, Gensler didn’t mince words. “Everything other than Bitcoin. You can find a website, you can find a group of entrepreneurs, they might set up their legal entities in a tax haven offshore, they might have a foundation, they might lawyer it up to try to arbitrage and make it hard jurisdictionally or so forth,” Gensler said.
Gensler continued, “They might drop their tokens overseas at first and contend or pretend that it’s going to take six months before they come back to the U.S., but at the core, these tokens are securities because there’s a group in the middle and the public is anticipating profits based on that group.”
Gensler contends that the SEC’s jurisdiction over most cryptocurrencies is based on a 1946 Supreme Court ruling in the case SEC v. W.J. Howey Co. According to Investopedia, the W.J. Howey Co. sold citrus groves to Florida buyers. Those buyers would lease the groves back to the company. The company cultivated the trees and sold the oranges on behalf of the Florida buyers. Both would share in the profits. W.J. Howey Co. subsequently failed to register with the SEC, arguing that its transactions were not investment contracts.(State Library and Archives of Florida, Public domain, via Wikimedia Commons)
W.J. Howey Co. lost the case when the court ruled that the leaseback arrangements were investment contracts, thus establishing the Howey test wherein four criteria are used to determine whether something constitutes an investment contract: An investment of money, in a common enterprise, with the expectation of profit, to be derived from the efforts of others.
Bitcoin (BTC) returned above $30,000 on April 18 as volatility preceded the day’s Wall Street open.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin erases intraday losses
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as the pair suddenly added $500, delivering daily gains of more than 3%.
The pair had previously worried traders, who watched as $30,000 support looked set to remain as longer-term resistance.
Before crossing the $30,000 mark, Binance order book activity was a focus for monitoring resource Material Indicators, which identified bid liquidity moving closer to spot price.
“Some has already started moving closer to the active trading zone. Watching to see if more of it follows or if price drops back into the $28s to fill,” part of accompanying commentary read.
Glassnode’s latest analysis suggests that Bitcoin has built a strong foundation below the $30,000 level, and the current supply structure shows similarities to early 2016 and early 2019.
The report shows that the Long-Term Holder (LTH) supply is just shy of a new all-time high, with a total supply balance of 14.161 million Bitcoin (BTC). In contrast, short-term holders (STH), who acquired coins after FTX failed, have seen their supply balance of 2.914 million BTC remain relatively constant in 2023.
By April 12, 155 days had passed since the FTX exchange collapsed on Nov. 8, 2022. The 155-day mark is crucial because it is the minimum length of time that a Bitcoin holder must have held their coins to be classified as a long-term holder (LTH).
Thus, the supply distribution can be divided into two halves, first, before FTX’s collapse to represent LTH supply, and the other after, to represent short-term holders.Bitcoin Long/Short-Term Holder Supply. Source: Glassnode
The report also drew a comparison of previous market cycles based on LTH behavior expressed via changes in their supply. It noted that Bitcoin is currently experiencing a period of “Plateau of Patience,” where LTH supply tends to hover around its ATH, often from several months to over a year.
On April 17, the price of Solana (SOL) crept lower in the wake of similar price moves across the top-ranking cryptocurrencies, including Bitcoin (BTC) and Ether (ETH).
SOL's price dropped over 4% under $24.50 despite rising to $26 — a two-month high — earlier in the day.
In comparison, BTC's and ETH's prices dropped 3.5% and 3%, respectively, hinting at a bearish start to the week.SOL/USD hourly price chart. Source: TradingView
SOL price in a technical correction
The SOL/USD selloff on April 17 started after it entered its 2023 resistance range.
Notably, the $25-27 price area has capped Solana's upside attempts since January 2023. Testing it as resistance has preceded 25-40% corrections on multiple occasions this years, as illustrated below.
Tether (USDT) has emerged as a clear winner amid the ongoing banking crisis and crypto crackdown in the U.S.
On April 17, the U.S. dollar-pegged stablecoin's circulating market valuation reached nearly $81 billion, just 1.5% below its record high of $82.29 billion from a year ago. It has grown about 20% year-to-date (YTD) already and is now eyeing new all-time highs.USDT market capitalization monthly chart. Source: TradingView
Tether rivals hit new yearly lows
USDT's growth came as Tether ate up the market share of its stablecoin rivals, USD Coin (USDC) and Binance USD (BUSD). That is due to crypto traders' belief that Tether's operations have no exposure to the potential banking crisis contagion.
For instance, the circulating market capitalization of the USD Coin, the second-largest stablecoin, has dropped over 25% YTD to $31.82 billion, its worst since October 2021, primarily due to its exposure to the failed Silicon Valley Bank.USDC market capitalization monthly chart. Source: TradingView
BUSD, on the other hand, has witnessed a 60% drop in market capitalization in 2023 to $6.68 billion, its lowest since April 2021, as the New York Department of Financial Services (NYDFS) ordered Paxos, a regional crypto firm, to stop its mint and issuance.
Bitcoin (BTC) headed lower into the April 17 Wall Street open as downside began liquidating longs.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin price tipped for break below $29,000
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD wicking to $29,247 on Bitstamp — its lowest in a week.
Gains for Asian stocks failed to rescue the losses on the day, these beginning immediately after the April 16 weekly close.
Traders, many of whom had predicted a retest of $30,000 support, were unsurprised, with many hoping that the event would form a “buy-the-dip” opportunity before Bitcoin moved higher.
Popular trader Crypto Ed said that BTC/USD had “swept the lows,” while others focused on the area around $28,500 as a potential bottom zone.
Bitcoin (BTC) starts a new week under $30,000 as analysts’ predictions of a short-term support retest come true.
The largest cryptocurrency saw a classic dive following its latest weekly close as the latest gains evaporated, but will they return?
Ahead of a fairly innocuous week for macro data releases, catalysts are likely to come elsewhere as BTC price action decides on a key support zone.
Much is at stake for traders, as the week prior offered the opportunity to reinvestigate altcoins as Bitcoin itself cooled its upside. With a retracement now in effect, attention will be on whether those altcoins can hold at their own higher levels.
Under the hood, it appears to be business as usual for Bitcoin, with network fundamentals already at or near all-time highs, showing no definitive signs of a comedown this week.
Bitcoin (BTC) consolidated into the weekend as market participants stayed optimistic about further gains.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
“Most still sitting on the sidelines” with Bitcoin
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering near $30,500 on April 15.
The pair had finished the Wall Street trading week on a less volatile note, along with fairly flat United States equities.
With the 10-month highs of $31,035 remaining in force, traders and analysts considered the options for how BTC price action could play out next.
“We’re going higher. Much higher,” Credible Crypto summarized, retweeting a chart of BTC/USD and funding rates from popular technical analyst Murfski.
FTX’s new management plans to relaunch the exchange in 2024, Ethereum’s Shapella hard executed on mainnet and OpenAI faces rising competition.
Bitcoin (BTC) price rallied over 10% between April 9 and April 14, marking the highest daily close in more than ten months. While some analysts may argue the move justifies a degree of decoupling from traditional markets, both the S&P 500 and gold are near their highest levels in over six months.
Bitcoin price breaks $30,000 despite macro headwinds
Bitcoin’s gains and rally above $30,000 also happened while the dollar strength index (DYX), which measures the U.S. currency against a basket of foreign exchanges, reached its lowest level in 12 months.
The indicator fell to 100.8 on April 14 from 104.7 one month prior as investors priced in higher odds of further liquidity injections by the Federal Reserve.
Related: Bitcoin price teases $30K breakdown ahead of US CPI, FOMC minutes
The latest Federal Reserve’s monetary policy meeting minutes, released on April 12, made explicit reference to the anticipation of a “mild recession” later in 2023 due to the banking crisis. Even if inflation is no longer a primary concern, the monetary authority has little room to raise interest rates further without escalating an economic crisis.
Ethereum’s long-anticipated Shanghai and Capella upgrade was activated on April 12 and the total withdrawals in the first 40 hours after the Shapella upgrade stood at 142,425 ETH, per Nansen data. This falls in line with previous estimates.
For a brief moment on April 12, when Shapella was activated, the deposits to ETH staking contracts outpaced withdrawals. However, deposits have slowed down come April 13 while the withdrawals are going strong.
ETH moved for withdrawals
The validators are required to update their staking software clients with withdrawal credentials changed to 0x01 from 0x00 and point to a valid Ethereum address. Once validators do that, the partial withdrawals, i.e. the withdrawals of rewards above 32 ETH, will be processed automatically.
Over 70.1% of validators have changed to 0x01, with 407,851.20 worth over $850 million set for withdrawal.
Additionally, 875,325 ETH worth $1.85 billion are waiting for full exit. Adding to the amount already processed in the first 40 hours, over 1.42 million ETH will be withdrawn from the staking contract.
Bitcoin (BTC) preserved new 10-month highs at the April 14 Wall Street open as analysts kept hoping for further gains.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
$31,000 revealed as make-or-break trend line
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD consolidating around $30,700 after spiking past the $31,000 mark.
The pair saw no major retracement as it headed further into grounds it originally lost in June 2022.
Now, market participants eyed the potential for bulls to capitalize on existing momentum with the help of positive macro trends.
United States equities opened higher, with the S&P 500 and Nasdaq Composite Index both up 0.3% at the time of writing.
The price of Bitcoin (BTC) has grown by more than 50% since Tesla unveiled its approximately $1 billion BTC sales in July 2022. In other words, the Elon Musk-owned electric carmaker would have made an additional $500 million if it had waited until today to sell.
Are Tesla's Bitcoin trades profitable?
Tesla infamously dumped nearly $936 million of its total Bitcoin holdings in Q2/2022, accounting for 75% of its remaining reserves, to secure a $64 million profit. At the time, Bitcoin was trading about 70% lower than its record high of $69,000 in November 2021.BTC/USD monthly price chart featuring Tesla's Bitcoin sales purchases and sales. Source: TradingView
Originally, Tesla purchased $1.50 billion worth of Bitcoin in February 2021 at an average price of $36,000. The company then sold BTC worth $272 million to boost its Q1/2021 accounting by $101 million.
The company has nevertheless held on to its remaining BTC as of Q4 2022 despite the price of Bitcoin sitting at bear-market lows of around $16,000 at the time. Today, Tesla holds 10,725 BTC worth around $330 million, almost 15% below the procurement value from February 2021.
Overall, Tesla made roughly $165 million in profit from two separate Bitcoin sales. As of April 14, it sits atop an unrealized loss of around $56.6 million on its remaining BTC holdings. While its net profit to date sits at around $108 million.
Bitcoin (BTC) broke through $31,000 on April 14 as bulls hoped altcoins would soon follow.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Analyst eyes potential dip under $30,000
Data from Cointelegraph Markets Pro and TradingView captured new 10-month highs of $31,035 for BTC/USD on Bitstamp.
The pair had risen gradually the day before after a consolidatory period around new macroeconomic data prints from the United States.
These had furthered the bullish risk asset narrative, with the Consumer Price Index (CPI) and Producer Price Inflation (PPI) prints showing inflation slowing faster than expected.
While Bitcoin did not react immediately, the latest uptick reinforced market participants’ convictions over continued strength and a break with the long-term downtrend.
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