Decentral Block Post

BNB (BNB), the native token of the Binance crypto exchange, is under threat of undergoing a significant price correction in the coming weeks, based on a mix of technical and fundamental indicators.

BNB triangle breakdown continues

From a technical perspective, BNB has entered the breakdown stage of its multi-month ascending triangle pattern, a trend continuation indicator. The breakdown could last until the price reaches the level that comes to be at the length equal to the triangle's maximum height.

In other words, BNB's ascending triangle breakdown target is near $170, down about 30% from the current price levels, as shown below. The BNB/USD pair could drop to the said level by January 2023.

For now, BNB's breakdown move appears to be halting near $222, which has served as a strong support level in  recent history, including the declines witnessed in the aftermath of the Terra (LUNA) collapse in May 2022.

BNB could retest the $222 as support, based on a rising wedge technical setup forming on the four-hour chart, as shown below. 

Cointelegraph Markets Pro, a data platform designed to level the playing field for cryptocurrency market participants, has been available to the public for nearly two years now.

The platform, which took a year to develop, is the result of an exhaustive analysis of crypto markets and the key drivers of asset price movements.

It was developed jointly by Cointelegraph and The Tie, the most comprehensive and actionable digital asset information provider trusted by 100+ institutional clients.

Testing the VORTECS™ Score

At the heart of the platform is the VORTECS™ Score, which compares current market conditions for over 420 crypto assets to historically similar marketscapes.

A proprietary algorithm analyzes those historic conditions, seeking consistent patterns in market behavior in the following days.

More than six months after the collapse of the Terra ecosystem, South Korean authorities continue to investigate and freeze the funds of persons involved in Terra.

After seizing 140 billion won ($108 million) from Terra co-founder Shin Hyun-Seong in November, the Seoul Southern District Court has recently ruled to confiscate more assets related to Terra.

The South Korean court has ordered to freeze of 120 billion won ($92 million) in assets of former and incumbent CEOs of Terraform Labs’ affiliate firm Kernel Labs, The Korea Economic Daily reported on Dec. 20.

Founded in 2018, Kernel Labs is a blockchain consultancy firm focused on decentralized applications and blockchain payment systems. Kernel Labs is believed to have close ties with Terraform Labs, as CEO Kim Hyun-joong once reportedly served as vice president of engineering at Terraform Labs. According to some sources, Kernel Labs employees also worked at the South Korean office of Terraform Labs.

According to the new report, the Seoul Southern District Court has accepted the prosecution's request to seize property of seven people involved in selling pre-issued Terra (LUNA) tokens to make astronomical profits.

While self-custody is considered the ultimate way to secure one’s funds, many fail to acknowledge the risks associated with physically storing seed phrases. A search conducted by the State Police agency for Nevada ended up making a suspect’s seed phrase public after being picked up by the body cam.

A viral video making rounds on Twitter showed two police officers searching a suspect’s car and coming across pieces of paper. It turns out, the suspect was a strong believer in self-custody as unfolding the pieces of paper revealed the suspect’s seed phrase, which was hand-written — a popular method to prevent online compromises.

As the incident got recorded by one of the officer’s body camera, the suspect’s seed phrase has now become public information.

Binance CEO Changpeng ‘CZ’ Zhao saw the video and warned investors about learning the various risks involved in different methods of storing cryptocurrencies. He said:

“I am a proponent of free choice. Feel free to hold your crypto anyway you wish. But learn the risks of each method.”

Coinbase CEO Brian Armstrong has pushed for stricter regulations on centralized crypto actors but says decentralized protocols should be allowed to flourish given that open-source code and smart contracts are “the ultimate form of disclosure.”

Armstrong shared his views on cryptocurrency regulation in a Dec. 20 Coinbase blog where he proposed how regulators can help “restore trust” and move the industry forward as the market continues to recover from the damage done by FTX and its shock collapse.

But decentralized protocols aren’t part of that equation, the Coinbase CEO emphasized.

“Decentralized arrangements do not involve intermediaries [and] open-source code and smart contracts are “the ultimate form of disclosure,” Armstrong explained, adding that on-chain, “transparency is built in by default” in a “cryptographically provable way” and as such should be largely left alone.

The Coinbase CEO said that “additional transparency and disclosure” checks are needed for centralized actors because humans are involved, with Armstrong hoping FTX’s fall “will be the catalyst we need to finally get new legislation passed.”

The Nigerian government will reportedly soon pass a law that will recognize the usage of Bitcoin (BTC) and other cryptocurrencies as a means to keep up to date with “global practices.”

The news was reported by Nigerian-based masthead Punch Newspapers on Dec. 18 following an interview with House of Representatives Committee on Capital Markets chairman Babangida Ibrahim.

The report stated that if the Investments and Securities Act, 2007 (Amendment) Bill is signed into law it would allow the local Securities and Exchange Commission to “recognize cryptocurrency and other digital funds as capital for investment.”

Ibrahim stressed the need for Nigeria to keep up to date with trends and developments in capital markets:

“Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices.”

Tel Aviv's Magistrate Court has reportedly issued a ruling allowing Israel's government to seize all the crypto in more than 150 digital wallets it blacklisted over alleged links to funding terrorist groups. 

According to Dec. 18 local Israeli media reports, Israeli Defense Minister Benny Gantz has revealed the court's Dec. 15 ruling has already allowed authorities to seize a further $33,500 from digital wallets linked to the Islamist militant group Hamas.

Prior to the court ruling, Israeli authorities had only been legally allowed to seize digital assets with direct links to terrorist activity but not additional funds in the same wallets. In December 2021, authorities seized $750,000 from the wallets.

The de facto ruling authority of the Gaza Strip in Palestine since 2007, Hamas is classified as a terrorist organization in whole or in part by several countries and international blocs including the United States, European Union, Israel and the United Kingdom.

Starting in Jan. 2019 Hamas began appealing to its supporters to send funds using Bitcoin (BTC) via the messaging app Telegram as a method to combat sanctions and financial isolation.

The total cryptocurrency market capitalization dropped 8.1% in the past two days after failing to break the $880 billion resistance on Dec. 14. 

The rejection did not invalidate the 4-week-long ascending channel, but a weekly close below $825 billion will confirm a shift to the lower band and reduce the support level to $790 billion.

The overall investor sentiment toward the market remains bearish, and year-to-date losses amount to 66%. Despite this, Bitcoin (BTC) price dropped a mere 2% on the week, down to the $16,800 level at 17:00 UTC on Dec. 16.

A far different scenario emerged for altcoins which are being pressured by pending regulation and fears that major exchanges and miners could be insolvent . This explains why the total market capitalization had dropped by 4.7% since Dec. 9.

According to court documents filed on Dec. 15, a United States Trustee announced the committee responsible for part of FTX's bankruptcy proceedings. Among those is Wintermute Asia, a leading market maker and GGC International, an affiliate of the troubled lending platform Genesis. Investors remain in the dark about who the biggest creditors from the failed FTX exchange group are and this is fueling speculation that contagion could continue to spread.

Ether (ETH) price is down on Dec. 16 and the pre-FOMC rally to $1,350 was obliterated after Federal Reserve chair Jerome Powell issued hawkish statements following a 0.50% hike in interest rates.

The Ether sell-off follows a market-wide decline that has sent Ethereum network fees plummeting by 39.90% in the past 30-days.

The total value locked in Ethereum-based smart contracts also decreased by decentralized finance by 4.49% in 24-hours.

Following the FTX exchange scandal, regulators are attempting to fast-track new regulations on the cryptocurrency sector.

While some analysts believe Ethereum still possesses multiple bullish catalysts that warrant investing in the asset, on-chain data paints a grim picture of its short-term price prospects.

Bitcoin (BTC) looked set to ditch $17,000 after the Dec. 16 Wall Street open as United States equities continued to fall.

Analyst: $240BNB "has nothing but air below it"

Data from Cointelegraph Markets Pro and TradingView tracked new intraday lows of $16,743 for BTC/USD on Bitstamp.

The pair had abruptly dived nearly 3% earlier in the day, compounding losses, which immediately followed one-month highs.

Ongoing concerns over largest global exchange Binance pervaded the mood, these coming despite the best efforts of CEO, Changpeng Zhao, to dispel what he called “FUD.” As Cointelegraph reported, longtime crypto traders were similarly skeptical of the credibility of the “craziest rumors” about the crypto exchange sector.

Nonetheless, markets refused to give them a break, and beyond Bitcoin, warnings increased over the fate of Binance’s in-house token, Binance Coin (BNB).

Institutions in Bermuda will soon be able to trade real-time settlements using a stablecoin with a 1:1 ratio with the United States dollar, Jewel Bank's founder and chairman Chance Barnett told Cointelegraph. 

Called Jewel USD (JUSD), the first stablecoin to be released in the territory is powered by the Polygon blockchain, enabling transactions between wallets available to institutional clients. In the future, the bank plans to use the Polygon ecosystem for commercial and retail stablecoin-based payment solutions, including transactions between institutions, businesses, and payments between individuals.

"The need for a USD real time settlement network outside of the US is significant for both fintechs and digital asset firms, so we’re filling a large gap in the market. The US has solutions like Signature Signet for real time settlement, and now Jewel Bank is providing a Bermuda-based non-US solution for the industry, and the response by clients in signing up prior to launch has been significant.", noted Barnett.

On the Polygon blockchain, 25 stablecoins are currently traded, including a synthetic Euro token, a Yen-pegged Japanese stablecoin, and a South African stablecoin pegged 1:1 with the South African Rand (ZAR).

Related: 13% of Americans have now held crypto: JPMorgan research

As the coldest days of the crypto winter set in, investors’ speculative interest in the crypto market has fallen to pre-2021 levels, impairing the chance of a substantial directional price move. However, there’s a possibility of a bear market rally akin to the July through August 2022 uptrend.

The market enters a state of limbo

The FTX implosion impacted over 5 million users globally and adversely affected numerous crypto companies that were exposed to it. The industry is currently in a recovery mode and Cumberland, a U.S.-based crypto market broker, recently echoed this narrative in a tweet. The firm noted that "dozens of crypto companies are either severely curtailed or out of business, and the industry's future is as cloudy as ever."

Data suggests that building a sustainable bullish move will be challenging because the market is pushed back to a low liquidity and volatility regime.

Crypto analytics firm, Glassnode, reported “depressing” futures volumes for Bitcoin and Ethereum, tracing back to pre-2021 levels when Bitcoin’s price surpassed $20,000 for the first time.

The open interest volume of Bitcoin and Ethereum futures has dropped significantly toward mid-2022 levels, which was after the collapse of Luna-UST. The BTC and ETH leverage ratio indicator, which measures the ratio between open interest volume, is currently down to 2.5% and 3.1%.

Mike Belshe, the CEO of digital asset custodian BitGo has confirmed that Alameda Research attempted to redeem 3,000 Wrapped Bitcoin (wBTC) in the days before FTX’s bankruptcy filing on Nov. 11. 

During a Dec. 14 Twitter Spaces hosted by decentralized finance (DeFi) researcher Chris Blec, Belshe confirmed the firm knocked back the redemption request because the unknown Alameda representative involved didn’t pass Bitgo’s security verification process and seemed unfamiliar with how the wrapped-Bitcoin burning process worked.

“[The security details] didn't match the process. So we held it up and we said no, no, no, no. This is not what the burn looks like. And we need to know who this person was.”

“So we held it and while we were holding it, waiting for a response on those issues [Alameda] went bankrupt and of course, once they went bankrupt, everything halted,” Belshe added.

The Bitgo CEO also said that Alameda’s 3,000 BTC mint request remains “stuck” on the platform’s dashboard and added that the firm would most likely leave the tokens where they are until they’re dealt with by the trustees taking on Alameda's bankruptcy case.

On Dec. 14, Bitcoin (BTC) price hit a 1-month high and saw a brief resurgence in bullish momentum, but the Federal Reserve’s Federal Open Market Committee (FOMC) hawkish report and comments from Fed chair Jerome Powell sent BTC to an intraday low at $17,659. 

Stocks and Bitcoin started the day slightly up but quickly retracted on the FOMC report. To date, Bitcoin price remains closely correlated to equities and a majority of investors have concerns about the impact of further rate increases in the future.

Rising interest rates and hawkish talk from Powell impact BTC price

While the Consumer Price Index (CPI) report showed easing inflation at 7.1%, Powell still wants to reach 2% overall inflation. Inflation has been a determining factor in raising interest rates and the current 0.5% hike had consensus amongst FOMC participants. The Fed members also agree that rate hikes should continue in 2023.

During the Dec. 14 press conference, Powell stated:

“We may see higher rates for a longer period to achieve the 2% inflation goal”

Ether (ETH) rallied 6.3% to $1,350 on Dec. 13, mimicking a similar failed attempt that took place on Nov. 10. Despite reaching the highest level in 33 days, the gains were not enough to instill confidence in traders according to two key derivatives metrics.

Bulls' frustrations can partially be explained by Binance exchange facing a near-record $1.1 billion in withdrawals over a 24-hour period. The unusual behavior comes as Binance attempts to put out multiple disputes about its proof of reserves and overall solvency on crypto Twitter. According to Binance CEO, Changpeng Zhao, the social media posts amount to nothing more than FUD.

However, Binance's USD Coin (USDC) reserves were emptied after alleged troubles with commercial banking hours.

The negative newsflow continued on Dec. 13, as the United States Securities and Exchange Commission (SEC) filed charges against Sam Bankman-Fried, the former CEO of now-bankrupt FTX crypto exchange. The fresh charges come just a day after his arrest by Bahamian authorities at the request of the U.S. government.

On Dec. 13, the United States Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Sam Bankman-Fried, FTX and Alameda Research, claiming violations of the Commodity Exchange Act and it demanded a jury trial.

In a recent blog post, cryptocurrency legend and former BitMEX CEO Arthur Hayes mentioned he holds sizable bags of GMX and LOOKS tokens. According to Hayes, his main reasoning for investing in both tokens was their platform revenue and the potential of both assets to outperform standard treasury bills. 

Let’s take a brief look at on-chain data and compare GMX and LOOKS to competitors to determine whether Arthur’s assumption will work out. 

GMX usage cooling after a strong November

The week prior to Nov. 16 provided decentralized Finance (DeFi) with a significant influx in fees after the centralized exchange (CEX) exodus triggered by FTX’s bankruptcy. The temporary high inflows to DeFi propelled GMX to outperform Uniswap in protocol fees.

On Nov. 28, GMX earned about $1.15 million in daily trading fees, which surpassed Uniswap’s $1.06 million in trading fees on the same day.

While usage of GMX may be decreasing, the token is outperforming the industry. The GMX token is only 8% away from an all-time high after gaining 59% in the past 30-days.