#108 On-chain Insights by IT Tech - Week 51 Highlights & Bitcoin Analysis
Key Insights Into Bitcoin’s Pullback, Stablecoin Liquidity Trends, and Institutional Market Dynamics
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Table of contents:
Partnership with WymienBitcoina.pl
Crypto Weekly: Top 10 News
Current market situation
Performance Analysis: BTC vs Memecoins
Correlation between USDT and USDC market caps and Bitcoin price
Join Zoomex – The Best Non-KYC Exchange with an Exclusive Bonus
Coinbase Premium Index Signals Institutional Sell Pressure Amid Bitcoin Pullback.
Paid newsletter subscription - support content development
Newsletter issue summary and forecast
1. Partnership with WymienBitcoina.pl
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2. Crypto Weekly: Top 10 News.
1. EU Crypto Exchanges Delisting USDT - European cryptocurrency exchanges are preparing to delist Tether's USDT by December 30, 2024, in response to the EU's Markets in Crypto Assets (MiCA) regulation. This action is due to USDT not meeting the criteria for issuers to be authorized as e-money institutions within the EU, potentially impacting market liquidity. Exchanges like Binance, Crypto.com, Kraken, KuCoin, MEXC, and Bitget have so far continued to list USDT on their EU platforms, but the full implementation of MiCA on December 30, 2024, might lead to further decisions on delisting if compliance isn't achieved by then.
2. Bitcoin ETFs Record Massive Outflows - There have been significant outflows from U.S. Bitcoin ETFs, with one day seeing a record $671.9 million exit. However, despite these outflows, some interpret this as a sign of market bottoms, and BlackRock's Bitcoin ETF has seen rapid asset accumulation.
3. Trump's Crypto Project Buys ETH - Donald Trump's cryptocurrency project, World Liberty Finance (WLFI), has increased its Ethereum holdings by buying 759 ETH for $2.5 million in USDC during a market dip. This has brought their total ETH holdings to around 16,400 ETH, valued at approximately $53.73 million.
4. CoinDesk Editorial Independence in Question - Concerns have arisen about CoinDesk's editorial independence after the dismissal of senior editors, including the Editor-in-Chief, following the retraction of an article about Justin Sun. This has sparked discussions on the integrity and future of CoinDesk.
5. SEC Approves Bitcoin-Ethereum ETFs - The SEC has approved hybrid Bitcoin-Ethereum ETFs from Hashdex and Franklin Templeton, marking a significant integration of cryptocurrencies into traditional finance. This approval is amidst other notable crypto events like the withdrawal of a lawsuit by Crypto.com against the SEC.
6. Bitcoin Rebounds to $100K on CPI Report - Bitcoin has shown resilience, rebounding to $100K, influenced by a favorable CPI report, indicating continued investor interest despite market volatility.
7. Weekly Market Movements - Bitcoin soared past $100K but experienced a crash to $93K after hawkish comments from the Fed. Ethereum also saw gains, reclaiming $4,000 with record ETF inflows.
8. Layer-1 and Layer-2 Developments - Significant updates and launches in the blockchain space, including Sonic Layer-1 mainnet launch and the Avalanche9000 upgrade, alongside growth in Layer 2 scaling solutions like zkSync.
9. Ripple's RLUSD Green Light - Ripple has received regulatory approval for its RLUSD stablecoin, potentially shaking up the stablecoin market.
10. Legal and Regulatory Shifts - Various legal actions and regulatory changes, including lawsuits against crypto projects like Hawk Tuah memecoin, and legislative moves like El Salvador scaling back its crypto initiatives.
3. Current market situation.
Bitcoin experienced its largest pullback in recent months, while Ethereum’s price correction exceeded -15%. Once again, I sold part of my ETH holdings at $4,025 before the dump and started rebuying in the $3,400 to $3,105 range. Taking profits on ETH and altcoins proved to be the right move. Some positions have already been repurchased, allowing me to hold more tokens for the same dollar amount.
I consistently stick to my plan by taking profits at specific levels, as no one can perfectly time market tops or bottoms. During corrections, weak hands tend to sell off—a concept I’ve often highlighted in my posts on X. These moments in a heated bull market are for accumulating, not panic selling.
This is why it’s always crucial to keep stablecoins in your portfolio. Remember: money makes more money.
The Bitcoin Fear & Greed Index now stands at 73, showing a slight decline from its previous level of 80. This suggests a moderation in market sentiment, shifting from extreme greed to a more cautious bullish outlook. While the sentiment remains optimistic, the decline may indicate growing market uncertainty or profit-taking. Traders should remain vigilant for potential short-term corrections amidst ongoing market dynamics.
Bitcoin’s market dominance currently stands at 58.70%, marking a slight increase as altcoins show signs of consolidation. Meanwhile, TOTAL2, representing the total market capitalization of altcoins excluding Bitcoin, has declined by -13.10% to $1.35 trillion, reflecting a notable outflow of capital from the altcoin market.
This decline in TOTAL2 suggests that funds are rotating back into Bitcoin or exiting the market, potentially signaling a cautious sentiment among investors. The recent shifts highlight a potential cooling off in altcoin momentum, with Bitcoin regaining some strength in the broader cryptocurrency market.
4. Performance Analysis: BTC vs Memecoins
Performance Analysis: BTC vs Memecoins – December Insights.
1. Recent Pullback in Memecoins:
Over the past week, the Memecoins index has shown a sharp decline, underperforming Bitcoin significantly. This reflects a rotation of capital back to more stable assets like Bitcoin, likely driven by profit-taking or reduced risk appetite in the altcoin market.
2. Bitcoin’s Stability Amid Decline:
While Memecoins faced a notable drop, Bitcoin has maintained a relatively stable price range, consolidating after recent all-time highs. This resilience indicates
Implications for Investors:
• Short-Term Outlook: Bitcoin’s stability amidst the Memecoins decline reinforces its position as a leading market indicator. As Memecoins cool off, Bitcoin may consolidate further, providing a foundation for the next potential rally.
• Risk Management: For Memecoins investors, the recent pullback is a reminder of the importance of timing and diversification. These assets thrive in euphoric conditions but face sharp corrections when sentiment shifts.
The latest pullback in Memecoins underscores the speculative nature of this asset class and highlights Bitcoin’s role as a stabilizing force in volatile market phases. Investors should monitor Bitcoin’s consolidation levels closely, as its performance will likely guide the broader market trend. Meanwhile, caution is advised in the Memecoins market, as it remains highly reactive to sentiment-driven fluctuations.
5. Correlation between USDT and USDC market caps and Bitcoin price.
Rising stablecoin market capitalization (USDT and USDC) typically correlates with increasing Bitcoin prices, indicating higher market liquidity and demand.
Conversely, declining stablecoin market capitalization often signals increased crypto selling and lower liquidity, potentially leading to Bitcoin price decreases.USDT Daily Market Cap Change (in million USD):
• 2024-12-21: -673.94M USD
• 2024-12-20: +94.45M USD
• 2024-12-19: +28.32M USD
• 2024-12-18: +43.32M USD
• 2024-12-17: -141.95M USD
• 2024-12-16: +255.79M USD
Net USDT Market Cap Change (16-21 Dec 2024): -393.01M USD
This data highlights a significant withdrawal trend, dominated by the outflow on December 21 (-673.94M USD), which erased the cumulative inflows from earlier in the week. The small inflows on December 18-20 (+28.32M, +43.32M, +94.45M USD) were not enough to counterbalance the significant outflows, suggesting a bearish sentiment or reduced liquidity in the market.
USDC Daily Market Cap Change (in million USD):
• 2024-12-16: +249.79M USD
• 2024-12-17: +127.50M USD
• 2024-12-18: -222.57M USD
• 2024-12-19: +46.65M USD
• 2024-12-20: +167.47M USD
• 2024-12-21: +400.49M USD
Net USDC Market Cap Change (16-21 Dec 2024): +769.33M USD
Combined Stablecoin Market Cap Change (USDT + USDC): +396M USD
Conclusion:
The combined market cap of USDT and USDC grew by +396M over the period of 16-21 December 2024. This indicates a strong inflow of liquidity into the crypto market despite temporary outflows like USDT’s significant withdrawal of -673.94M USD on December 21. The consistent positive contributions from USDC (+769.33M USD) reflect increasing demand for stablecoins as a liquidity buffer, likely driven by market participants seeking safety during Bitcoin’s price volatility. This sustained inflow highlights growing confidence in the cryptocurrency ecosystem as a whole.
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7. Coinbase Premium Index Signals Institutional Sell Pressure Amid Bitcoin Pullback.
The Coinbase Premium Index measures the price difference between Coinbase Pro (USD pair) and Binance (USDT pair). High premium values may indicate strong buying pressure from U.S. investors on Coinbase.The negative Coinbase Premium Index indicates a bearish sentiment from institutional investors in the U.S. This aligns with Bitcoin’s recent pullback, suggesting profit-taking or reduced confidence in near-term price appreciation.
If this trend persists, further downward pressure on Bitcoin’s price could be expected. Conversely, a shift to positive territory might signal renewed institutional buying interest and price recovery.
Key Takeaway:
The Coinbase Premium Index highlights a bearish outlook among U.S.-based traders and institutions, contributing to Bitcoin’s price correction. Market participants should monitor this index closely for signs of reversal, which could provide early signals of a potential recovery.
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9. Newsletter Issue Summary:
1. Partnership with WymienBitcoina.pl
• A secure and trusted crypto exchange offering over 190 assets and exclusive savings with the code IT TECH.
2. Crypto Weekly: Top 10 News
• Key headlines include Bitcoin ETFs, Ethereum movements, MiCA regulations, and Ripple’s RLUSD approval, highlighting market developments and regulations.
3. Current Market Situation
• Bitcoin saw its largest pullback recently, while Ethereum faced over a 15% correction. Stablecoins remain critical for seizing market opportunities.
4. Performance Analysis: BTC vs Memecoins
• Memecoins underperformed Bitcoin as capital rotated back to stability, reinforcing Bitcoin’s position as the market leader during pullbacks.
5. Stablecoin Market Cap and Bitcoin Correlation
• Combined market cap of USDT and USDC increased by +1.02 billion USD, signaling market liquidity amid Bitcoin volatility.
6. Zoomex Partnership
• A non-KYC exchange with exclusive bonuses, offering privacy and low fees amidst MiCA regulatory changes.
7. Coinbase Premium Index Analysis
• Negative Coinbase Premium Index reflects bearish institutional sentiment, signaling potential near-term downward pressure on Bitcoin.
8. Paid Newsletter Subscription
• Gain exclusive charts, Telegram access, educational content, and early newsletter delivery with the $5/month subscription plan.
9. Newsletter Summary & Forecast
• Keep profits during pullbacks and monitor economic indicators for trading opportunities in the coming week.
Forecast for the Upcoming Week:
• Cautious Optimism: With the Bitcoin Fear & Greed Index at 73, market sentiment suggests cautious bullishness. However, recent outflows in USDT could signal liquidity challenges.
• Stablecoin Monitoring: Watch USDT and USDC market caps for shifts in liquidity that could impact Bitcoin’s price trends.
• Bitcoin Consolidation: Expect Bitcoin to consolidate near $97K while altcoin momentum continues to cool.
• Institutional Sentiment: Negative Coinbase Premium Index suggests further short-term sell pressure, but a reversal could indicate recovery.
Stay alert and monitor key indicators for better market insights. Track upcoming US and EU events for free using the Economic Calendar.
Remember to realise profits regularly.💡
This concludes this issue. I hope you have a pleasant end to your weekend and a great week ahead. Merry Christmas - take a rest and spend time with your family.
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This article reflects my personal views and is not investment advice. Cryptocurrency investments carry high risk. It includes mentions of WymienBitcoina.pl and affiliate links that may benefit the author.
Best regards
IT Tech