Decentral Block Post

Bitcoin NFT inscription activity has remained strong with consistency in the daily number of NFTs inscribed on Bitcoin. At the same time, the infrastructure to foster Bitcoin trading is finally coming together with the development of wallets and marketplaces supporting Ordinals.

NFT marketplaces, Gamma and Magic Eden, added support for Bitcoin NFTs this week. While the initial response of traders has been subdued, the activity is expected to pick up soon.

Improving the infrastructure around Bitcoin NFTs

Bitcoin NFTs, also-known-as Ordinals, began with much fanfare in late January as they enhanced the utility and revenue of the Bitcoin blockchain.

Dune dashboard from data analyst dgtl_assets shows that the Ordinals inscription activity remains robust, with nearly 580,000 NFTs inscribed in less than three months.

While the daily inscription activity is vigorous, the trading volume of Bitcoin NFTs is still muted, which can be primarily attributed to the absence of Bitcoin wallets and supporting marketplaces.

Bitcoin (BTC) diced with $28,000 at the March 24 Wall Street open as fresh banking woes failed to provide a further boost to crypto.

Traders stay optimistic on BTC long-term trend

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD losing momentum to hit daily lows of $28,001 on Binance.

The pair was attempting to cement support after a classic comeback the day prior erased panic on the back of the latest United States economic policy moves.

The Federal Reserve hiked baseline interest rates by 0.25% on March 23, this along with mixed comments from Chair Jerome Powell serving to unsettle risk assets amid a lack of clear trajectory.

Related: Fed balance sheet adds $393B in two weeks — Will this send Bitcoin price to $40K?

As of March 22, the Fed's balance sheet surged by nearly $94.5 billion — a $297 billion increase from the last week when the banking crisis started.

New QE hopes boost Bitcoin price

Overall, the U.S. central bank's liabilities increased by $393 billion in the last two weeks to $8.734 trillion. That is closer to the all-time high of $8.95 trillion a year ago when the Fed started its quantitative tightening program and reduced its assets by $600 billion.

The Fed released the data on March 23, coinciding with Bitcoin (BTC) price rallying 5.5% toward $29,000. The rise occurred amid speculations that the Fed's expanding balance sheet results from quantitative easing (QE).

But the Fed did not use new dollar reserves to purchase long-term treasuries. Instead, the central bank dropped its U.S. Treasury holdings by $3.5 billion to $7.937 trillion, suggesting that quantitative tightening is still in place to curb inflation.

On the other hand, Fed's balance sheet grew because it dispatched short-term loans to the ailing banking sector.

The official Arbitrum airdrop page crashed right after the claiming process began around 9 a.m. EST. Some users still managed to claim it through alternative methods like Arbiscan. In the first two hours, the market witnessed a massive sell-off of the token as its price declined from over $10.29 to lows of $1.

At ByBit, the token started trading for $7.50, but dropped to $1.50 within minutes. At the time of writing, the token was trading at $1.33.

Only one address successfully sold the token at $10.29 through the ARB/USDC pool on Uniswap, bagging $64,340 for 6,250 tokens. A few others were able to sell for $4.50, however, the price dropped quickly below $1.50 as more sellers arrived. 

Nansen data shows that out of 6.03 million ARB claimed by “smart money” wallets, $5.01 million were moved to a centralized or a decentralized exchange, most likely to sell. The analytics firm puts “smart money” tags on addresses that trade in significant size and are usually active.

While some smart money accounts added 3.45 million from DEXs. Overall, the amount moved to exchanges was 150% larger than inflows to the wallets, suggesting a massive sell-off.

Bitcoin (BTC) returned to near $29,000 on March 23 as bulls ignored news of a fresh United States regulatory crackdown.

Bitcoin shrugs off Coinbase, Do Kwon arrest

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining almost 8% versus its overnight lows to challenge nine-month highs on Bitstamp.

The pair kept the volatility coming as the dust settled on the prior day’s interest rate decision and associated commentary from the Federal Reserve.

Despite Fed Chair Jerome Powell giving mixed signals over how and if rate hikes would continue, crypto market commentators argued that the sudden drop that Bitcoin witnessed had been over-the-top.

“Make sure to remember the panic and calls for lower next time you get a dip during a HTF uptrend,” popular trader Crypto Chase wrote in part of Twitter analysis.

Litecoin (LTC) emerged as one of the best-performing cryptocurrencies on March 23, surpassing its top-ranking rivals Bitcoin (BTC) and Ether (ETH). 

Litecoin attracts Bitcoin and Ethereum investors

LTC price rallied 5.5% to reach an intraday high of around $92.50. In comparison, the total crypto market capitalization (TOTAL) has risen 2.25% to $1.14 trillion, with BTC and ETH rising 1.79% and 1.42%, respectively.

The Federal Reserve's 25 basis points (bps) rate hike on March 22 appears to be the key driver behind Litecoin beating its crypto rivals over the past 24 hours.

Notably, LTC price rallied over 15% versus BTC and about 14.5% versus ETH since the Fed announcement.

One reason could be that Litecoin has relatively underperformed the cryptocurrency market in March, dropping over 6.5% month-to-date (MTD) versus the crypto market's 9.35% gains.

Ethereum’s native token, Ether (ETH), continues its multimonth downtrend against Bitcoin (BTC) in March, rising 5.5% versus the latter’s 19.5% gains on a month-to-date timeframe.

Bitcoin overshadows Ethereum amid banking crisis

As of March 23, the ETH/BTC pair was down about 9% month-to-date to 0.0633 while staying on course to record its worst month since September 2022, when it fell 11.75%.

From a fundamental perspective, traders preferred Bitcoin over Ether, hoping it would protect them from the ongoing banking turmoil in the U.S. and other parts of the world. The narrative gained momentum in recent weeks as Wall Street investors like Cathie Wood see Bitcoin as a potential “flight to safety” asset.

As a result of the growing speculation, Bitcoin outperformed traditional assets after March 8, when signs of trouble appeared at Silicon Valley Bank. In doing so, BTC also fared better than the altcoin market combined, including Ethereum.

ETH paints bullish fractal vs. BTC

However, from a technical perspective, Ethereum is positioned for a comeback versus Bitcoin.

Arbitrum developers announced an airdrop of its governance token, ARB, to eligible users and DAOs on the Ethereum Layer-2 platform. An average user received around 625 ARB tokens, which corresponds to around $625 to $1,250, according to pre-launch trading prices and popular estimations.

The prospect of earning free money has instilled excitement around users looking to hunt the next airdrop opportunity. The airdrop farming activity also benefits the protocols by attracting liquidity and usage to the platform. The strategy is working well for both protocol developers and users.

Moreover, the team's sale of a protocol’s token invokes securities laws, inducing significant legal risk for the developing teams. Thus, it is reasonable to assume that future protocols will use the same strategy to decentralize their protocols.

Here are five potential airdrop opportunities for this year.

zkSync Era

zkSync Era is a Layer-2 rollup on Ethereum based on the zero-knowledge (ZK) proof technology. Experts, including Ethereum co-founder Vitalik Buterin, have argued that zk-based EVM-compatible rollups could be a game-changer technology with high scalability and throughput, leading to mass adoption.

Ether's price (ETH) reached $1,400 on March 10, which proved to be a bargain as the cryptocurrency rallied 27.1% until March 21, at the time of writing. However, the three reasons that supported the price gain, including correlation with tech stocks, its increasing total value locked and its deflationary token economics, all suggest that the path to $2,000 is set in stone. 

There are numerous explanations for Ether's 19.4% decline over the past six months. The Shanghai hard fork upgrade was delayed from March to early April and after Shanghai, Ethereum's roadmap includes the "Surge," "Verge," "Purge," and "Splurge" updates. In reality, the longer these intermediate steps to achieve scalability take, the greater the likelihood that competing networks will demonstrate efficacy and possibly establish a competitive advantage.

Another potentially concerning issue on the minds of investors is the real chance of price impact when validators are finally able to unlock their 32 ETH deposits following the completion of the Shappela hard fork. While it is impossible to predict how many of the 16 million ETH currently staked on the Beacon Chain will be sold on the market. There is a compelling argument in favor of the transition to liquid staking platforms, as they can use liquid staking derivatives on other decentralized finance networks without sacrificing their staking yield.

Traders could construct a narrative based on regulatory uncertainty, especially after SEC Chairman Gary Gensler's September 2022 statement that proof-of-stake cryptocurrencies could be subject to securities laws. In February 2023, the SEC reached an agreement compelling the cryptocurrency exchange Kraken to cease offering crypto staking services to U.S.-based clients and the exchange also paid $30 million in disgorgement.

Correlation versus application-focused tech companies

To understand why Ether gained 15% in less than three days after briefly trading below $1,400 on March 10, traders must switch from a price-based analysis to a market capitalization comparison. On March 10, Ethereum’s market cap closed at $175 billion.

Bitcoin (BTC) saw heavy volatility on March 22 as the United States Federal Reserve hinted that it might stop interest rate hikes.

Powell on rates: “‘May’ and ‘some’ instead of ‘ongoing’”

Data from Cointelegraph Markets Pro and TradingView showed sharp moves both up and down for BTC/USD as the Fed hiked by an anticipated 25 basis points.

During a press conference, Fed Chair Jerome Powell appeared to play down the ongoing U.S. banking crisis and its aftermath while hinting that the day’s interest rate hike may be the last.

In prepared remarks, Powell said that the Fed believes that “events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes.”

“It is too soon to determine the extent of these effects, and therefore too soon to tell how monetary policy should respond,” he stated.

Cardano (ADA) rallied to its best price level in a month as cryptocurrency investors prepared for the Federal Reserve’s looming interest rate decision.

Fed boosts appetite for cryptocurrencies like ADA

On March 22, ADA’s price surged by as much as 4.58% to $0.388, its highest level since Feb. 24. This bucked the trend as the total crypto market capitalization underperformed the Cardano token, dropping 0.4% on the same day. 

All eyes are on the Fed meeting on March 22 as chairman Jerome Powell tries to balance his anti-inflation campaign with a flurry of sudden banking collapses.

The Federal Reserve’s intervention to safeguard regional banks with emergency lending measures and hopes that it would be less hawkish in the future has helped top-ranking crypto assets rally in March, including Cardano.

ADA’s price is up by a decent 4% month-to-date versus top coin Bitcoin’s (BTC) 20% gains in the same period.

Bitcoin (BTC) may “take out shorts” to crack $30,000 during the day’s key United States macroeconomic policy updates, analysis says.

As bets pile up over how BTC price will react to the Federal Reserve’s decision on interest rates, $30,000 is in sight — but a drop to below $20,000 is not off the table.

Trader plans $30,000 profit-taking

Bitcoin is hours away from what popular trader Crypto Tony calls “one of the most anticipated” Fed meetings ever.

The Federal Open Market Committee (FOMC) will decide on how to tweak baseline interest rates on March 22, amid suspicions that the ongoing U.S. banking crisis has disrupted policy.

From ongoing rate hikes forecast just last month, markets are now considering the chances that the Fed will pause the cycle, data from CME Group’s FedWatch Tool shows.

Bitcoin’s price broke above the February 2023 highs of $25,200 after U.S. inflation data was in consensus with the market expectation. The potential fallout of the global banking system further promoted Bitcoin investment as a non-correlated global hedging instrument similar to gold in March. The correlation between gold and Bitcoin (BTC) has been rising since the start of the month.

However, institutions have become net sellers of Bitcoin in 2023, which raises some red flags. Bitcoin whales — wallets holding between 10 BTC and 10,000 BTC — have not participated in the current rally. It appears that retail investors are mainly driving the uptrend. The divergence between whale and retail investment could cause a short-term pullback in Bitcoin prices.

Institutions are forced BTC sellers, says analyst

Institutional crypto asset flows data from CoinShares reveals the largest two-week sell-off from investment funds since March 6. The outflows have erased the positive inflows for this year, with the net year-to-date flow equalling negative $177 million.

CoinShares’ data tracks the portfolio of global institutional funds with digital asset exposure, including Grayscale, CoinShares XBT, 21Shares, Purpose and 3iQ.

James Butterfill, CoinShares’ head of research, notes in the report that the flows “may be driven, in part, by the need for liquidity during this banking crisis, a similar situation was seen when the COVID panic first hit the market in March 2020.”

Bitcoin (BTC) headed to new nine-month highs after the March 21 Wall Street open as a crucial Federal Reserve interest rate decision loomed.

Bitcoin price climbs despite conservative Fed view

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $28,500 on Bitstamp.

The latest in a succession of multi-month highs, the latest BTC price action precedes what promises to be a volatile day for markets.

The Fed will announce how far — if at all — it will hike its baseline interest rate on March 22, with a pause in the hiking cycle seen as a boon-in-waiting for risk assets.

“Heavily interested to see the outcome of tomorrow,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, wrote in part of a Twitter update.

Developers from the Arbitrum Foundation announced the launch of Arbitrum DAO and its native governance token, ARB, on March 16. Eligible users and developers will receive 12.75% of the token’s total supply of 10 billion on March 23, when the token will be deployed. 

Speculation around ARB began soon after the token launch announcement on OTC desks, derivatives exchanges and spot exchanges via IOUs (I Owe You).

BitMEX launched the derivatives contract for ARB June futures on Monday around 11 p.m. EST. The futures contracts were trading at around $1.30 at the time of writing, implying that traders are betting that ARB’s price will be near this amount by June’s end.

The futures contract allows speculators to bet on the token’s price and Arbitrum airdrop receivers to hedge their holdings. Eligible ARB holders can buy a short futures contract to sell ARB tokens at a specific amount, protecting them against the downside in the token’s price post-launch on Thursday.

Some private Discord and Telegram OTC desks are witnessing active trading of ARB tokens for prices between $1 to $1.50. This trade is executed via a transfer of ownership of Ethereum wallets that are eligible for ARB airdrop.

The price of Bitcoin (BTC) surpassed $28,000 on March 21, but according to two derivatives metrics, traders aren't very ecstatic after a 36% gain in eight days. Looking beyond Bitcoin’s stellar performance, there are reasons why investors are not fully confident in further price upside The recent rescue of Credit Suisse, a 167-year-old leading Swiss financial institution, is proof that the current global banking crisis might not be over.

On March 19, Swiss authorities announced that UBS had agreed to acquire rival Credit Suisse in an "emergency rescue" merger in order to avoid further market-shaking turmoil in the global banking sector. The transaction could benefit from more than $280 billion in state and central bank support, which is equivalent to one-third of Switzerland's GDP. Unfortunately, there is no way to portray this agreement as reassuring or as a sign of strength from financial institutions, including central banks.

The same can be said for the emergency credit lifeline provided by the U.S. Treasury to protect the banking sector and increase FDIC reserves. The "Bank Term Funding Program" (BTFP) launched on March 12 marked a return to Fed liquidity injections, reversing the trend initiated in June 2022, when the Federal Reserve began monthly asset sales.

The global banking crisis prompted the Federal Reserve to abandon its inflation-control policies

By lending $300 billion in emergency funds to banks, the Fed completely reversed its strategy to curb inflation, which has been above 5% year-over-year since June 2021, whereas the target is 2%. This strategy, known as tightening, included increasing interest rates and reducing the $4.8 trillion in assets the Federal Reserve accumulated from March 2020 to April 2022.

On March 20,First Republic Bank (FRB) saw its credit ratings downgraded further into junk status by S&P Global, adding to the stress in the United States' regional banks. According to the risk agency, the lender's recent $30 billion deposit infusion from 11 large banks may not be enough to solve the FRB's liquidity problems.