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The circumstances behind the mysterious $16 million withdrawal from the Pepecoin (PEPE) project’s multisig wallet have seemingly been revealed, with the finger being pointed at three ex-team members who went rogue.

On Aug. 24, the price of PEPE plunged by roughly 15% amid fears of a potential rug-pull after the community spotted that $16 million worth of PEPE was withdrawn from the Pepe multisig wallet and sent to several exchanges.

Clearing up the matter in an Aug. 25 post on X (Twitter), one of the anonymous founding members behind Pepecoin provided a community announcement from the @pepecoineth account, detailing what they claim had happened.

According to the statement, three team members abruptly stole the funds from the multisig and then abandoned the project completely, leaving it in full control to the sole remaining member.

“The multi-sig was set up to require 3/4 signers present for an approval. Yesterday these 3 ex-team members came back behind my back, logged onto the multi-sig, stole 16 Trillion/ 60% of the 26 trillion multi-sig tokens, and sent them to exchanges to sell.”

Federal Reserve Chair Jerome Powell spoke today and in his Jackson Hole speech he cautioned that inflation remains too high and that the central bank remains open to raising rates further if needed. The remarks by Powell strengthen the narrative that interest rates are likely to remain higher for longer. 

However, a positive sign is that after a brief sell-off, the United States equities markets have recovered from their intraday lows. With the event having passed without any major price movement, traders are back to guessing as to what could move the markets next.

Pantera Capital believes that Bitcoin’s (BTC) price action will continue to follow its previous halving cycles. If that happens, Bitcoin could rise to $35,000 by April 2024 when the next halving is expected to occur. After that, Bitcoin could rally sharply and climb to $148,000.

Will bears maintain their selling pressure and pull the price below the respective supports in Bitcoin and altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin price analysis

Bitcoin once again turned down from the overhead resistance at $26,833 on Aug. 23, indicating that the bears continue to sell on rallies. That has kept the price stuck inside the range between $26,833 and $24,800.

Judge Martin Glenn shot down efforts to have a special shareholders class declared in the Celsius Network bankruptcy case in a court document filed on Aug. 25. The judge also declined to settle whether or not the CEL token was a security. 

In a motion filed on July 25 and heard before the United States Bankruptcy Court Southern District New York on Aug. 14, investor Otis Davis asked the court to create a legal class for investors to be considered separate from Celsius Network employees and customers.

Davis also requested that the court sanction the legal team representing the Unsecured Creditors Committee (UCC) over alleged failure to disclose required information.

The filing further asked the court to declare CEL “not a security” in light of the recent findings in the SEC vs Ripple where, according to Davis, Judge Analisa Torres determined that XRP was not a security.

Related: Breaking: Judge rules XRP is not a security in SEC's case against Ripple

Stablecoin issuer Tether maintains a liquidity cushion of nearly $3.3 billion to provide stability to the Tether ecosystem and garner trust among shareholders. 

Tether’s reserves report as of Aug. 24 reveals a combined surplus in shareholder capital cushion of $3.29 billion — spread over 15 blockchain ecosystems. Apart from Algorand and Polygon, Tether has reserved authority to issue USDT (USDT) tokens in the millions.

Out of the lot, the Solana ecosystem leads in terms of the value pre-authorized for issuance, currently standing at $1.57 billion, with Ethereum and Tron taking up the next two slots with pre-authorization of $617 million and $353 million respectively.

Tether has not yet responded to Cointelegraph’s request for comment about the importance of issuance preauthorization when it comes to ensuring transparency and trust among the masses.

The total assets under Tether stand at $86.1 billion with total liabilities amounting to $82.8 billion — thus confirming a reserve backing of over 100%.

Crypto advocacy group Coin Center has criticized the latest indictment of two former Tornado Cash developers, arguing that the facts offered don't show any clear violations of money-transmitting-related offenses.

Roman Storm and Romen Semenov were indicted by the United States Office of Foreign Asset Control (OFAC) on Aug. 23 for conspiring to operate an unlicensed money-transmitting business, among other charges.

In a follow-up opinion piece, Coin Center research director Peter Van Valkenburgh argues that the claims in the indictment appear to run counter to guidance from the U.S. Financial Crimes Enforcement Network — arguing that Tornado Cash only provides the software to transmit money, rather than transmitting the money itself.

"The only thing the indictment claims regarding the defendants’ unlicensed money transmission is that they 'engaged in the business of transferring funds on behalf of the public' and did so without registering with FinCEN," wrote Valkenburgh.

But does the indictment state any facts that actually show that the defendants engaged in any activities that qualify as money transmission under the relevant law?

When the markets are trending, traders should be active if they want to earn money. On the other hand, in a ranging market, it is better to wait on the sidelines with patience or traders may lose money due to choppy random moves in either direction.

Bitcoin’s (BTC) sideways price action since the sharp fall on Aug. 17 shows that the bulls and the bears are unsure about the next directional move. Therefore, it is better to wait for the breakout to happen before waging large bets.

In the short term, institutional traders also seem to be taking a cautious approach. A CoinShares report showed an outflow of $55 million from digital asset investment products for the week of Sept. 13.

What are the important support and resistance levels that need to be crossed for a trending move to start in Bitcoin and altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin price analysis

The long tail on Bitcoin’s Aug. 22 candlestick is a positive sign as it shows that the bulls are fiercely trying to protect the support at $24,800.

The cryptocurrency market has experienced a notable downturn recently, with the total market capitalization falling by 10% between August 14 and August 23, reaching its lowest point in over two months at $1.04 trillion. This movement has triggered significant liquidations on futures contracts, the largest since the FTX collapse in November 2022. 

Several economic factors have contributed to this decline. As interest rates have surpassed the 5% mark and inflation remains above the targeted 2%, finance costs for both families and businesses have risen, placing pressure on consumer spending and economic expansion. That causes less money available for savings and could force people to let go of their investments just to cover monthly bills.

Since inflation expectations for 2024 stands at 3.6% and average hourly earnings increased by 5.5% year-over-year, at the fastest pace since 2020, the Federal Reserve (Fed) is likely to maintain or even raise interest rates in the coming months. Consequently, a high interest rate scenario favors fixed-income investments, which is detrimental for cryptocurrencies.

Inflation has receded from its peak of 9% to the current 3%, while the S&P 500 index is only 9% below its all-time high. This could indicate a "soft landing" orchestrated by the Federal Reserve, suggesting that the likelihood of an extended and profound recession is diminishing, temporarily undermining Bitcoin's investment thesis as a hedge.

Factors emerging from the cryptocurrency industry

Investor expectations had been high for the approval of a spot Bitcoin exchange-traded fund (ETF), particularly with heavyweight endorsements from BlackRock and Fidelity. However, these hopes were dashed as the SEC continued to delay its decision, citing concerns over insufficient safeguards against manipulation. Complicating matters, a substantial volume of trading continues to occur on non-regulated offshore exchanges based in stablecoins, raising questions about the authenticity of market activity.

GenZ cryptocurrency investors in South Korea are reportedly more keen to invest in altcoins, specifically Ripple (XRP) than Bitcoin (BTC) and Ethereum (ETH), according to a local South Korean news outlet.

News1 Korea analyzed data from the crypto exchange Bithumb’s investment data from the first half of the year, particularly keying in on investment propensity by age. It found that investors in their 20s showed a more “aggressive” investment tendency compared to other age groups.

Moreover, GenZ investors showed a higher proportion of investments in altcoins other than BTC and ETH, which are classified in this study as both “long-term” investments and “stable investments” due to their relatively low volatility.

According to the report, 82.5% of investors in their 20s invested in altcoins excluding ETH. XPR was the most selected by GenZ investors with 20.7% holding the digital asset.

An Aug.4 report from the crypto derivatives exchange Bitget said that GenZ makes up nearly half of crypto copy traders. 

FTX founder Sam Bankman-Fried has seemingly been doing it tough behind bars, eating only bread with peanut butter to accommodate his vegan diet, while exhausting his supply of prescription medication.

In the same hearing where Bankman-Fried pleaded not guilty to seven fraud-related charges, Bankman-Fried’s lawyers pleaded for the former FTX CEO to receive better treatment inside Brooklyn’s notorious Metropolitan Detention Center (MDC), according to an Aug. 22 transcript shared by the Inner City Press.

Bankman-Fried’s attorneys claimed that due to the lack of vegan options provided by the prison, he had been forced to subsist on a diet of bread, peanut butter and water. The former FTX boss refused to eat the “flesh diet” being served at the MDC.

Bankman-Fried’s attorney, Mark Cohen, noted that his client hadn’t received his ADHD medication since arriving in prison and was “fearful” they would run out.

“My client takes Adderall... And like many people in the world, he follows a vegan diet. He had not received his Adderall at all, in the last 11 days,” said Cohen.

Bankrupt cryptocurrency lender BlockFi is trying to block attempts by the similarly bankrupt FTX and Three Arrows Capital (3AC) that aim to retrieve hundreds of millions of dollars to pay back their creditors.

BlockFi claimed in an Aug. 21 filing to a New Jersey bankruptcy court that its own creditors shouldn’t be pushed to the back of the line because FTX’s creditors were harmed by the exchange allegedly misappropriating $5 billion BlockFi lent it.

“FTX seeks to recover on over $5 billion of claims filed against the BlockFi estates at the direct expense of the ultimate victims of FTX’s fraud: BlockFi’s clients and other legitimate creditors.”

“To prevent further injustice to the creditors of BlockFi’s estates, the Court should disallow the FTX Claims under the doctrine of unclean hands,” BlockFi added.

FTX also provided $400 million to BlockFi in June 2022 in addition to buying BlockFi equity pursuant to a loan agreement, the filing stated.

The recent crypto crash hit meme coins hard, culminating with a 9% drop in total market capitalization from Aug. 14 to Aug. 21. During the same period, Pepe (PEPE), Shiba Inu (SHIB), and ApeCoin (APE) saw a 25% decline. The big question is whether this trend will affect the wider market, signaling a broader bear market or simply reflects lagging performance of meme coins.

Meme coins, like Dogecoin (DOGE), burst onto the scene driven by viral memes and community enthusiasm. However, their appeal faded due to a mix of factors. These coins rely on media hype and online communities for attention, yet they lack value beyond their meme origins. Their speculative nature leads to rapid price changes and volatility.

Furthermore, the meme coin market has become saturated with copycats, drawing focus and resources to more traditional cryptocurrencies.

Capital rotates as investors shift their attention to new trends

For traders, the mid-August crypto market crash was a stark reminder of meme coin volatility. Many of these coins emerged in the last six months, like PEPE, HarryPotterObamaSonic10Inu (BITCOIN) , and Milady Meme Coin (LADYS). This might push new entrants away and create a negative sentiment, potentially extending a bear market to the broader crypto landscape.

However, this underperformance is typical for meme coins, as seen in the past, like when APE), SHIB, and PEPE lagged the total crypto market by 18% between June 5 and June 15.

Digital asset investment products saw $55 million in outflows for the week of September 13-19, according to a report from CoinShares. 

Optimism surrounding what was previously thought to be the impending approval of a spot-based Bitcoin exchange-traded fund has begun to give way as $42 million worth of the week’s outflows came from BTC alone.

Ethereum products didn’t fare much better given its market share. Ether funds saw $9 million in outflows, while Polygon, Litecoin and Polkadot also saw outflows totaling a combined $2 million.

The only cryptocurrencies to experience inflows for the week were Ripple and Cardano. The former saw $1.2 million in inflows and Cardano pulled in a modest $100,000.

Related: Bitcoin ETFs: A beginner's guide to exchange-traded funds