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Binance Controversy Continues As Experts Warn Of Serious Fallouts Due To FUD

Binance rumors were the all-dominant topic last week after the FOMC meeting. Rumors of insufficient proof of reserves and the pullback from accounting firm Mazars, allegations of a bank run and insolvency, as well as CZ’s interview on CNBC have dragged the Bitcoin and crypto sentiment and prices down.

Charles Edwards of Capriole Investments pointed out in a Twitter thread that this “FUD is really bad for the industry,” pointing out that there is “nothing” backed by data that is legitimately worrisome, “but when fear is great enough, it doesn’t matter.”

“If current withdrawal rates continue, expect more exchanges to go down – not from poor practices – but bankruptcy,” Edwards contended.

Is The Binance FUD “Thinly Veiled Xenophobia”?

The analyst suggests that all exchanges are being hit extremely hard by current market conditions. They have to deal with a price drop of more than 80%, a drop in trading volumes of more than 90% and a reduction of reserves by more than 50% “due to irrational panic.”

As Edwards analyzes, even the U.S. exchanges Coinbase, Gemini and Kraken have been hit badly. They are currently experiencing a 60% drop in their Bitcoin reserves over the past year.

Bitcoin US exchange reserves

Addressing Bitcoin maxis, in particular, Edwards said:

I love Bitcoin. But the maxis screaming for cold storage only, don’t realize that if everyone actually went to cold storage, your precious Bitcoin price would approach $0. Influencers spreading FUD are literally damaging the industry & their net worth just to pump engagement.

At the same time, Edwards emphasized that his opinion on Bitcoin has not changed. He said the current price movement is largely fueled by panic. Still, Edwards spoke from the heart of many crypto enthusiasts when he turned to Changpeng Zhao and said:

And CZ, let’s stop dilly dallying and put this issue to bed with a _real_ audit.

Edwards was joined by market analyst Alex Kruger, who denounced the people who view bank runs as healthy stress tests. Those people “clearly haven’t thought this through. When funds leave, trading activity diminishes, and so do trading fees. And then, many funds never come back.”

Ryan Selkis, the founder of Messari, claimed much of the Binance FUD is “thinly veiled xenophobia.” Selkis also added: “I’m all for the stress test on deposits and think it’s bad that such a high percentage of volumes runs through a single exchange. I also don’t love the tone of some of the critiques. Sorry!”

Notably, on-chain analytics firm CryptoQuant recently conducted an analysis of Binance’s reserves. The company’s data shows that the amount of BTC Binance said it held as liabilities at the time the PoR report was conducted is consistent with CryptoQuant’s reserve data.

Why Doesn’t Binance Take A Big Four Auditor?

In Friday’s much-discussed interview on CNBC, Binance CEO Changpeng Zhao said that “Big Four” auditing firms are currently unable to conduct an audit for a cryptocurrency exchange. The hosts then countered that Coinbase is working with Deloitte.

Blockworks was told today by a Binance spokesperson that the “Big Four” audit firms – famously Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers – are “not currently prepared” to conduct a proof-of-reserves audit for a private crypto company.

As reported by the news outlet, the spokesperson went on to say that Binance is going ahead with the Merkle tree proof of reserves to show that its assets exist on the blockchain. However, the exchange is still looking for a partner to verify the proof of reserves:

We have reached out to multiple large firms […] and we are still looking for a firm who will do so.

At press time, the Bitcoin price was at $16,734.

Bitcoin BTC USD 2022-12-19

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Binance Coin Facing Massive Sell Pressure? Mithril Team Wants 200,000 BNB Back

In an announcement today, Binance declared that based on recent reviews, it has decided to delist the Mithril (MITH), Tribe (TRIBE), Augur (REP) and Bitcoin Standard Hashrate Token (BTCST) tokens on December 22, 09:00 (UTC) and cease trading on all trading pairs.

As stated in a blog post about the matter, Binance periodically reviews the standards for a listing on the exchange. If a token no longer meets that standard, “we will conduct a more thorough review and potentially delist it,” Binance declared.

Factors in the review include the team’s commitment to the project, volume and quality of development activity, trading volume and liquidity, stability and security of the network from attacks, and stability of the network.

Will The MITH Team Be Able To Dump 200,000 Binance Coins (BNB)?

The Mithril team responded to the notice, disclosing that as part of the MITH listing, they had to pay a deposit of 200,000 BNB to Binance, which has not yet been returned.

On behalf of the Mithril community, we ask CZ to return this deposit so that Mithril may continue to operate.

The Mithril team wrote via Twitter that it has a long history of working with Binance since 2018 as the first token listed on the BNB Beacon Chain (BEP2) network. Furthermore, the team behind MITH claims that it has donated to Binance Charity and collaborated on other Binance initiatives based on partnerships and informal requests.

Since Binance “unilaterally decided” to end the partnership, the Mithril team is asking for the return of the 200,000 BNB deposit. However, it is not clear at this time whether the request is justified.

At press time, CEO Changpeng Zhao had not yet commented on the matter. It is yet to be seen whether the Mithril team has a legal entitlement against Binance based on the contractual provision. Likewise, it also remains to be seen if the Mithril Team will dump the 200,000 BNB on the market in a single swoop.

Crypto Community Slams Mithril

Supportive words for Binance and harsh criticism towards Mithril are coming from the Twitter crypto community. The tenor: the team has not delivered work for a long time, the last tweet is from January 2021, the website is not active and there is no whitepaper.

Mithril says it is a decentralized social media platform on the Ethereum blockchain. It is designed to integrate with new and existing social media networks to reward content creators for contributions to the network.

At press time, BNB was trading at $264.80. Following the Binance speculations and FUD over the last few days, BNB is underperforming in the market. While BTC (+5%) and ETH (+3.8) are recording gains over the last seven days, BNB is down 7% in the same timeframe.

Binance BNB USD 2022-12-15

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Bitcoin Price Poised To Continue Its Rally As Whales Turn Bullish After 14 Months

The bitcoin price has seen a minor rally ahead of yesterday’s FOMC meeting and has held relatively strong despite the hawkish outlook from the US central bank.  A look at the daily chart of BTC shows that the price managed to hold above $18,600. After an exuberant euphoria following the release of CPI data, bitcoin seems ready for a consolidation phase for now.

In the daily chart, the bitcoin price was rejected at $18,220. Therefore, it seems likely that bitcoin will go through consolidation for now and look for a higher low. The support area to hold is currently at $17,200 to $17,400.

Bitcoin BTC USD_2022-12-15

Are Bitcoin Whales Signaling A Trend Reversal?

As on-chain data provider Santiment writes in an analysis, bitcoin’s fundamentals are looking extremely strong. Santiment pays particular attention to the shark and whale addresses, which hold between 100 and 10,000 BTC and are a notoriously important indicator of future price trends.

Santiment reports that shark and whale addresses have spent $726 million buying BTC in the last 9 days. In addition, 159 new addresses with a value between 100 and 10,000 BTC have been added in the last three weeks.

In total, there are currently 15,848 addresses holding between 100 and 10,000 BTC. In comparison, there are currently 43.46 million smaller bitcoin addresses, which means that sharks and whales account for 0.0364% of the total BTC addresses.

The increase in shark and whale addresses is the fastest growth in 10 months, according to Santiment. Remarkably, this comes at a time when market sentiment is at its lowest in a long time following the FTX bankruptcy and Binance FUD.

In the chart below, Santiment shows the behavior of the largest bag holders of BTC, USDT, USDC, BUSD and DAI. And as can be seen, all lines have been rising massively recently, while the BTC price has continued to fall.

Bitcoin data by Santiment

As Santiment elicits, the big players have been slashing and dumping their bitcoin holdings for the past 14 months. Prices have fallen in lockstep with these dump-offs. Now, however, there are signs of a reversal in the trend:

However, we may be seeing a turnaround now. Not necessarily with prices just yet… but at least with whales finally accumulating rather than dumping.

Whales Stock Up Their Dry Powder

The bitcoin metrics are not the only things pointing to a turnaround, but also the stablecoin movements. “[W]e have just seen massive sudden jumps in the key $100k to $10m USDT and BUSD wallets worth $100k to $10m,” Santiment said.

Key Tether addresses have accumulated $817.5 million (+7%) more purchasing power in the last 3 days, and BUSD key addresses have accumulated $104.9 million (+9%).

Thus, according to Santiment, there are good reasons to expect the final weeks of 2022 to be bullish, though further crypto-intrinsic issues and macroeconomic headwinds could dampen the joy.

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Toncoin (TON) Shoots Up 50% In 7 Days – This Telegram Feature Cranks Up Demand

Toncoin (TON) is currently outperforming all other cryptocurrencies in the top 100 by market capitalization on a weekly basis. With a price increase of around 50% within the last seven days, the token is the undisputed leader, followed by Stacks (+16%) and Bitcoin SV (+14%).

Over the last 24 hours, Toncoin is writing a whopping 21% gain. While it was trading at $1.86 on Sunday, the cryptocurrency was trading for $2.86 at press time.

In the last 24 hours alone, the trading volume has skyrocketed 83%, to $95.4 million. On the daily chart, TON is thus approaching its all-time high of $3.26.

Toncoin/USDT on OKX

A Reason For The Skyrocketing Price Of Toncoin

The reason for the recent pump of the Toncoin could be a feature of Telegram, which was announced last week.

Pavel Durov himself, the founder and head of the popular messenger, introduced a feature for Telegram that allows users to buy an anonymous phone number with the token and create an account with it.

Related Reading: VanEck’s Bitcoin Prediction Stands At $10K-$12K By Q1 2023

On December 07, the Telegram Messenger team launched the sale of virtual numbers with the +888 prefix, which exist as collectible on the The Open Network blockchain.

Users can log in to the Fragment platform with the TON blockchain-backed anonymous numbers and enjoy “ultimate privacy.”

Fragment is a decentralized auction platform founded by Durov. It sells the anonymous numbers compatible only with Telegram. Purchases are transacted on the platform using The Open Network Telegram token.

Related Reading: Senator Lummis Claims Pouring Retirement Funds In Bitcoin Is Still A Good Idea

These numbers can then be used to chat completely anonymously, but not to call or register with third-party services.

In addition, purchased numbers can be stored in a regular Toncoin wallet, transferred to other users, and offered for sale on marketplaces, just like any other NFT on the The Open Network blockchain.

+888 8 888 Is The Most Popular Telegram Number

Some numbers are so popular that they are auctioned on Fragment for over $100,000. The most popular number is +888 8 888, for which 38,290 TON, the equivalent of about $103,000, are currently being bid.

The auction runs for a little more than six days.

The Open Network is the brainchild of the Telegram development team, which was forced to abandon the blockchain solution due to pressure from the U.S. Securities and Exchange Commission (SEC) in June 2020.

The SEC forced Telegram to pay $1.2 billion in raised funds back to investors and pay an $18.5 million fine to settle the SEC charges.

Since then, the TON ecosystem has evolved as a standalone ecosystem and regularly integrates innovations into the Telegram messenger.

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VanEck’s Bitcoin Prediction Stands At $10K-$12K By Q1 2023

VanEck is one of a handful of companies that continues to fight for the approval of a Bitcoin Spot ETF. The U.S. investment management firm received a resounding rejection from the U.S. Securities and Exchange Commission in November 2021 after a three-year battle.

Just six months later, on June 24 of this year, VanEck reapplied for approval of a physically-backed Bitcoin ETF all over again. The SEC’s decision is currently pending.

Despite this support, the investment firm has made a bearish prediction for BTC into the first quarter of 2023. Matthew Sigel, head of digital asset research at VanEck, shared this assessment in a recent media presentation.

BTC Price Could Drop To $10,000

“Looking ahead, Bitcoin could test $10,000-$12,000 as Bitcoin miner bankruptcies increase due to the drop in Bitcoin value and increasing electricity costs,” VanEck predicts.

The investment firm believes that many miners will be forced to restructure or merge in order to find capital during difficult times. As Siegel explained, the mining industry is in a tremendous stress situation.

We have an index which tracks the publicly traded companies in this sector; the median market cap is now below $200 million, and every one of these companies is burning cash, trading well below book value.

In recent months, BTC has traded like a risk asset, Siegel said. What is surprising to the company, however, is its sensitivity to higher interest rates.

VanEck sees one reason for this in policy responses to inflation in developed countries, which have capped energy prices and expanded sanctions against Russia. This has been a difficult proposition for Bitcoin mining, Sigel elaborated.

Still, VanEck is optimistic that the BTC price could rebound to $30,000 in the second half of 2023 as inflation declines. Looking further, the investment firm points to the halving in 2024, an event that traditionally drives up BTC’s value.

Bitcoin Miner Capitulation In Full Swing

As NewsBTC reported, the second Bitcoin miner capitulation within one cycle has already started two weeks ago. Charles Edwards of Capriole Investments reported on November 28 that the hash ribbons had confirmed the start of the capitulation.

Glassnode’s latest “Bitcoin miner net position change” data shows that miners have sold aggressively in the last two weeks, to an extent that historically has only been higher in early 2021.

Bitcoin miner net position

Historically, miner capitulation has lasted an average of 48 days, so an end to the selling pressure could be foreseeable by mid-January 2023. However, this is not in line with VanEck’s Bitcoin prediction, which foresees a longer bear market.

Despite the fact that miners have clearly given up their BTC holdings in the last week, the interesting thing about this currently is that the price of BTC is showing an upward trend.

Bitcoin BTC USD_2022-12-14

At press time, BTC was trading at $17,882, with today’s FOMC meeting starting at 14:30 ET very likely to have a significant impact on price action in the coming weeks.

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Bitcoin Price Breaks Above $18,200 – CPI Data Comes In Better Than Expected

The first of two key events in a historic week for Bitcoin and financial markets worldwide is in the books.

While the CPI release was today at 8:30 ET, the last FOMC meeting of the year is scheduled to take place tomorrow featuring a new dot plot. CPI and FOMC coincide this week for the first time in a while, making it blockbuster week for Bitcoin.

And drum roll! The Bureau of Labor Statistics released the November figures for the Consumer Price Index (CPI) and Core CPI a few minutes ago.

The expectation for CPI was 7.3% CPI (0.3% MoM), up from 7.7% (0.4% MoM) in October. Core CPI was expected at 6.1% (0.3% MoM), and was 6.3% (0.3% MoM) the previous month.

The new numbers for November read as follows: CPI fell 0.6% and was 7.1% in November. Thus, the CPI comes in 0.2% better than expected.

Core CPI was 6.0 % in November, falling by 0.3% from the previous month. Compared to the prediction, Core CPI is 0.1% below expectation.

Already in the run-up to the print, the bulls pushed the Bitcoin price up in anticipation of positive data. The price stood at around $17,550 before the announcement.

After the release, the price reacted extremely bullish to the news along with the S&P 500. The latter is currently breaking out of a year-long downtrend.

At press time, BTC was up almost 6% within the last 24 hours and was trading at $17,907. With a local high of $18,209, the price was rejected at the 2-month high of November 11 for the moment being.

Bitcoin BTC USD 2022-12-13

What Will The Federal Reserve Do With The Data?

Prior to the CPI data release, the market was forecasting a rate hike of 50 bps with a 72% probability, according to the CME FedWatch tool. This is compared to a 28% probability of a 75 bps hike.

Within the next few hours, it remains to be seen how this rate will shift due to the CPI print. At press time, however, the probability of a 50 basis point jumped significantly to 79.4%, according to the CME FedWatch tool.

Today’s CPI print has thus further increased the probability for 50 bps tomorrow.

As NewsBTC reported, JP Morgan published an analysis before releasing the CPI data, according to which it gave the highest probability (50%) of a CPI print of 7.2% to 7.4%. As it turns out, JP Morgan was almost spot on with this assessment.

JP Morgan assigned only a 15% chance to the 7.1% outcome and predicted that this could mean increases of 4% to 5% for the S&P 500.

Goldman Sachs forecasts that today’s CPI print could mean a 2% to 3% increase for the S&P 500.

However, ultimately the FED will decide tomorrow what to do with the CPI data. As NewsBTC reported, it will also publish the dot plot, which reflects the central bank’s long-term expectations and outlook.

So whether the rally will find a continuation or abruptly stop will depend on whether the FED plays along.

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JPMorgan Says S&P 500 Can Soar Over 10% Today – Will Bitcoin Follow?

Today and tomorrow are probably the most important days of the year for the Bitcoin and crypto market. Today’s release of the Consumer Price Index (CPI) will possibly be the key for the coming weeks and months.

At 8:30 ET, the CPI for November will be released. Tomorrow, Wednesday at 2:00 PM ET, the Federal Open Market Committee (FOMC) will announce its interest rate decision for December.

Following that, Federal Reserve Chairman Jerome Powell will address the press at 2:30 p.m. and provide the rationale for the decision and the updated forecast for inflation and interest rates (dot plot).

If CPI comes in better than expected today, there will likely be a rally for risk assets like Bitcoin. If the CPI falls short of expectations or even rises, it could mean a rude awakening for BTC investors – at least this seems to be the market consensus.

Expectations for today’s CPI are 0.4% lower than the previous month, when it came in at 7.7%. As a result, the projected CPI is at 7.3%.

JPMorgan Draws Possible Scenarios

Meanwhile, banking giant JPMorgan published an analysis that CPI inflation below 6.9% could trigger a massive rally in traditional trading markets.

Given Bitcoin’s correlation with USD markets and the S&P 500 in particular, this could likely have a beneficial impact on the BCT price. In total, JPMorgan has mentioned six possible scenarios.

The most likely and expected outcome with a 50% chance is a Y/Y CPI between 7.2% and 7.4%. This would lead to a modest rally in the traditional markets, according to JPMorgan, and would likely have a positive impact on the Bitcoin and crypto markets.

However, as the market heavily hinges on expectations, it remains to be seen whether the majority of market participants have not already priced this in.

As the second most likely scenario with a probability of 25%, JPMorgan considers a CPI between 7.5% and 7.7%, which would mean only a slight drop or stagnation of inflation.

According to the banking giant, this would cause the S&P 500 to plummet massively, by 2.5% to 3.5%.

The Bullish Scenarios For Bitcoin

Furthermore, JPMorgan assigns a 15% probability to the bullish scenario of CPI landing at 7.0% to 7.2%, which could mean a 4% to 5% rally for the S&P 500.

The banking giant gives the most bullish scenario, a CPI of 6.9% or below, only a 5% chance. But then the S&P 500 could see a legendary rally of 8% to 10%. As Bitcoin is the higher beta, this could mean double-digit gains for Bitcoin.

Bitcoin BTC USD 2022-12-13

At press time, BTC investors seemingly remained on the sideline, awaiting the CPI announcement. BTC stood at $17,168.

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Bitcoin Bottom Or More Pain? Here’s What BitMEX Founder Arthur Hayes Thinks

Arthur Hayes, the co-founder of crypto derivatives platform BitMEX and Bitcoin pioneer, has spoken out about the current state of the market in an interview with Scott Melker.

Despite the threat of a looming recession in the U.S., Hayes believes Bitcoin is in a bottom phase. According to him, the origin of the boom-and-bust cycle is the rampant monetary policy.

“If we take a step back and look at why BTC went up so high because [… ] the biggest economy in the world printed the most money they’ve ever done. Obviously a lot of money flowed into crypto,” the BitMEX founder said.

The excess needs to be reversed now. Notably, it also contributed to the “behavior of Sam Bankman-Fried, FTX, Kyle, Zhu and all of the centralized money platforms. All bankrupt and insolvent.”

Bitcoin Bottom Is In

Looking forward, this is the key bottom indicator for Hayes as “pretty much everyone who could go bankrupt has gone bankrupt”.

Remarkably, the collapsed entities sold Bitcoin and Ethereum first, indicating the health of the market. By contrast, “dog and shitcoins” are still left on their balance sheets because they are super illiquid, Hayes noted.

He added, “if you look at Alameda’s balance sheet, there’s no BTC on there. They sold Bitcoin as they were going bankrupt. The shitcoins are left.”

That’s another reason why BTC will be ringing the bell for the end of the bear market, while some altcoins will remain depressed, Hayes asserted:

[Bitcoin is] the most pristine and most liquid asset, and that’s why it will lead us off the bottom too. And obviously the shitcoins will follow. But there’s a lot of bags held by bankrupt companies who need to liquidate them.

But at least for Bitcoin, I am very confident that the largest, most irresponsible entities have sold all the Bitcoins to diamond hands.

In the addendum, the BitMEX founder went on to say that he can’t prove that all the BTC held by these failed entities were sold during the crashes, but it looks like it.

In his recent blog post, Hayes added that he currently sees no reason why people should not hold Bitcoin unless they have a “pressing need for fiat money.”

The Real Test For BTC Will Come In 2024/2025

Looking further into the future, the BitMEX founder believes BTC will bounce back next year as the U.S. treasury and bond market will become dysfunctional sometime in 2023 due to the Fed’s tighter monetary policy.

At that point, Hayes expects the Fed to fire up the money printer. Then, Bitcoin and all other risk assets will skyrocket. However, Bitcoin will serve as an indicator and will decouple from the S&P500 beforehand.

Moreover, the BitMEX founder does not expect the true test for Bitcoin, a recession, until 2024 or 2025 when he forecasts a “generational collapse” to happen.

“Hopefully it’s better than the 1930s, but depression-like. And then the question is, can Bitcoin outperform the 10-year treasuries and really high inflation?”, Hayes said.

Until then, the dollar and BTC markets will be correlated. Whether Bitcoin is truly an inflation hedge and will show any usefulness remains to be seen then. “That’s the real test”, Hayes concluded.

At press time, BTC was recording a small loss of 1,1% over the last 24 hours. The price stood at $16,973.

Bitcoin BTC USD 2022-12-12

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Bitcoin Drops Below $17,000 Pre-CPI And FOMC – Scenarios To Prepare For This Week

A week could not be more important for Bitcoin and the broader crypto market! On Tuesday, at 08:30 ET, there will be the release of the Consumer Price Index (CPI).

Just one day later, on Wednesday, December 14 at 14:00 ET, the Federal Open Market Committee (FOMC) will hold its last meeting of the year. For the fourth time this year, there will be an updated forecast for inflation and interest rates (dot plot).

Generally, there is a simple base case scenario: if the numbers are better than expected, there will be a rally for risk-on assets like Bitcoin. If the CPI falls short of expectations, Bitcoin could face a new bear market low.

Did Bitcoin Overreact To The PPI?

To assess how likely both scenarios are, it is also worth looking back at the recent producer price index (PPI) release. The PPI was higher than expected.

However, expectations were relatively high. The core PPI was forecast at 7.2% in October, but actually fell to 6.7%, a 0.5% month-to-month decline.

The core PPI November forecast was 5.9%. In reality, though, the PPI came in at 6.2%. While this looks bearish at first, it really wasn’t. This still represented a 0.5% decline month-over-month.

The PPI shows the same story. The value fell for two consecutive months, 0.5% and 0.6%. The expectation was a 1.1% decline in one month, which was extremely unrealistic.

The markets’ projected target was an extremely low number, and the failure to meet that expectation was, in a sense, an overreaction. Inflation has continued to fall significantly, just less than less than expected.

Ultimately, expectations were a bit out of touch with reality. In addition, the PPI is fundamentally more volatile than the CPI, and also fluctuates seasonally. With the Christmas and gift-giving season, fluctuation is not uncommon.

A Game Of Expectations

So what are the expectations for the CPI? CPI fell 0.5% in October to 7.7%, while 8.0% was predicted. Tuesday’s expectations are now 0.4% lower. The forecasted CPI is 7.3%.

Core CPI is expected at 6.1%, which would represent a 0.2% decline. The October reading was 6.3%, while the expectation was 6.5%, creating a positive surprise.

The forecast for the CPI and the Core CPI are thus much more moderate and less unrealistic than for the PPI. Unlike the PPI, there are no extremely high expectations.

Even a “small” surprise could be enough to turn the market bullish. In a best-case scenario, we see a number of around 7% for the CPI on Tuesday.

Moreover, a renewed drop in the CPI could confirm that inflation peaked. If the CPI falls for the sixth month in a row, fears of a second wave of inflation would also be allayed for now.

All Eyes On The FOMC Meeting

Last but not least, the CPI numbers will be quite crucial for the FOMC decision on Wednesday. The market has priced in a 78% probability that the Fed will slow the pace of rate hikes to 50 basis points at that meeting.

However, the words spoken at the FOMC press conference are likely to be even more important, as well as the forecasts of updated economic projections.

For the first time since September, the market will see an updated dot plot, an extremely important piece of information, as NewsBTC reported.

Banking giant ING, meanwhile, laid out some potential scenarios that could put the market in risk-off or on mode. ING’s base case is that the Federal Reserve will hike rates by 50 bps, with 5% end 2023.

As the monetary policy works with long & varied lags, ING expects a slowdown in future rate hikes, and clear cuts in 2024. This scenario could provide the bulls with the powder they need to start a rally.

ING FOMC Meeting predictions for risk on assets like Bitcoin

At press time, the Bitcoin price dropped to $16,920 in Monday morning trading in Asia.

Bitcoin BTC USD 2022-12-12

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Ethereum: On-Chain And Social Metrics Reveal Bulls Vs. Bears Battle – Who’s Winning?

Ethereum (ETH) has failed to rise above key resistance at $1,300 despite rising around 4% over the past 24 hours. At press time, the second largest cryptocurrency by market cap was trading at $1,289.

As the trading volume shows, the bulls and bears have woken up again. In the last 24 hours, the trading volume was $6.4 billion, which is about 31% higher than the previous day.

Ethereum ETH USD 2022-12-09

Ethereum On-Chain And Social Metrics Show Uncertainty

Analysis company Santiment has conducted an analysis of bullish and bearish signs in on-chain and social data for Ethereum and the result is mixed.

A bullish argument is made by Ethereum’s shark and whale addresses. As Santiment writes, just as with Bitcoin, the ETH millionaire addresses gave up much of their supply while conditions looked poor.

However, this circumstance has fundamentally changed recently. A month ago, large ETH addresses started accumulating Ethereum again. Since November 7, Ethereum addresses holding 100 million to 1 million coins have accumulated 1.36% of the total supply and 2.09% more ETH overall (than before).

Social volume, on the other hand, looks bearish. As with the majority of all cryptocurrencies, the number of discussions on Ethereum is decreasing, but this seems normal for a bear market.

As Santiment notes, this is not necessarily a bad thing when the weak hands leave the market. What is negative, however, is that “there is so little talk about Ethereum compared to other top assets.”

At the same time, this could also turn into a bullish argument if bullish whales can drive the price higher with little resistance, thus significantly affecting the general market sentiment.

Currently bearish is also the MVRV (average trading return of addresses). The average return among long-term (365-day) addresses still indicates a “lot of pain.”

However, based on an emerging long-term uptrend in the MVRV, the metric could also be moving into bullish territory.

Extremely bullish is the remaining supply of Ethereum on exchanges. This is at a 4-year low of 12.1% of total supply. Thus, the metric clearly points to a nascent bottom that is forming.

Sides Are Still Polarized

In contrast, funding rates (perpetual contracts) are neutral. Neither the bulls nor bears can prevail on this metric at the moment. ETH funding rates have been too flat to swing in either direction since the FTX implosion.

In terms of realized gains/losses, the bears are clearly winning at the moment, according to Santiment’s analysis. Given the recent surge in the Ethereum price, there is currently a lot of short-term profit-taking.

Ultimately, Santiment summarizes:

Overall, Ethereum’s on-chain and social metrics are about as mixed as the crowd’s perspective is. […]Long-term? […] Ethereum is very likely closer to its upcoming 3-year low vs. its 3-year high. But are we at maximal pain? Probably not yet.

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Upcoming FOMC Meeting Is The Most Important Ever For Bitcoin – Watch Out For The Dot Plot

With the Bitcoin price posting a small gain of over 1.5% over the last seven days, the market is in for a blockbuster next week.

The release of the Consumer Price Index (CPI) on December 13, Tuesday at 08:30 AM ET, will once again be “the most important CPI ever”.

Just one day later, on December 14, Wednesday at 2:00 PM ET, the final Federal Open Market Committee (FOMC) meeting of the year will take place. Remarkably, FED members will release their updated forecasts for inflation and interest rates (dot plot) at the meeting.

A Blockbuster Week

The dot plot is released only four times a year – in March, June, September, and December – and presents the FOMC’s economic projections, which look at GDP, unemployment rates, and inflation for the coming months as well as over the longer term.

Within the dot plot, each member of the Committee publishes its view of potential interest rates over the longer term.

For investors, this is extremely useful information as it allows market participants to see if the consensus path for longer-term interest rates is changing.

The markets, as well as Bitcoin investors, will therefore be eagerly watching the inflation forecasts for next year, as well as the interest rate expectations for 2023 and 2024.

As economic journalist Colby Smith wrote in November, the September dot plot showed most officials favored a slowdown to 50 basis points in December.

The question for next week will be whether the Fed, led by Powell, will put into play a slower rate hike pace of 25 basis points (bps) or even a pivot.

A Year-End Rally for Bitcoin?

These two events could be the “last remaining hurdles” for a year-end rally for Bitcoin, QCP Capital wrote in an analysis.

However, a higher-than-expected consumer price index and a tighter stance by the Federal Reserve could derail that rally, as was seen in the April and August reversals.

On the other hand, further disinflation could lead many to seek a continuation of the rally through the end of the year, according to QCP Capital’s analysis. It goes on to say that the question markets now face is where inflation will bottom.

Even if 2% inflation is out of reach next year, will it fall low enough such that the Fed will have room to cut rates while keeping real rates positive?

Therefore, one key market theme for next year will be the shift from ‘peak inflation’ to ‘trough inflation’.

This is another reason why the dot plot is of paramount importance. As the last two releases show, Powell has stuck relatively strictly to projections regarding interest rates. Thus, the dot plot could reveal some insights into Powell’s thoughts about a pivot.

If the new data matches CPI expectations, it would be the fifth consecutive monthly decline. After peaking at 9.1% YoY in June. Next week’s reading could be even the lowest since January.

Will Powell Follow His Words

Given Powell’s recent comments to the Brookings Institute on November 30, it is also likely that the FED will stick to the script and raise the policy rate by only 50 basis points to 4.5%, reinforcing bullish sentiment in the market.

If the CPI even comes in below expectations, markets could frontrun the Fed’s decision and trigger an end-of-year rally. In any case, next week will provide blockbuster volatility in the Bitcoin and crypto markets.

Investors should pay close attention to the release of the FED’s dot plot.

At press time, Bitcoin was trading at $17,228, showing signs of strength ahead of the FOMC meeting.

Bitcoin BTC USD 2022-12-09

Bitcoin price, 4-hour chart. Source: TradingView
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XRP Price Bucks Market Trend As Whales Move 161 Million Tokens

The XRP price is currently bucking the general market trend and is recording a small gain of around 2% over the last 24 hours. What is noticeable are massive movements by whales over the past few hours.

The cryptocurrency market is on shaky ground given the macroeconomic headwinds and the still not fully digested shock from the FTX collapse.

However, XRP investors don’t seem to care at the moment. On the other hand, data suggests that possibly whales have played their part in this development.

XRP Whales Surface

As the popular cryptocurrency tracker Whale Alert reports, a total amount of 160.6 million XRP was transferred over the past 24 hours. One transaction in particular is causing quite a stir.

According to WhaleAlert, Ripple transferred 50 million XRP from one of its wallets to an unknown wallet. The transaction is currently the subject of a heated debate, with some believing that Ripple may sell some of the XRP they hold.

An analysis using Bithomp shows that the cryptocurrency was moved to another wallet of the company (RL18-VN), which is normally used to move or sell the token outside the company.

In addition, whales transferred 35.6 million tokens from Bitstamp to an unknown wallet, as well as 40 million XRP worth about $15.3 million to the European exchange Bitstamp.

The Bitso exchange is one of Ripple’s oldest On-Demand Liquidity (ODL) partners, covering one of the most important payment corridors in Latin America: U.S.-Mexico.

The Bitstamp whale is linked to the U.S. exchange Bitrex, from where the transfer was made.

Remarkably, these whale transactions follow an even much larger series of transactions totaling 4.1 billion XRP yesterday, Wednesday. According to WhaleAlert and Bithomp, these tokens were transferred from Bittrex to Uphold, divided into 10 transactions with a maximum size of 500 million units.

The reason behind the transfer is unclear, though it does not look like the transaction was made by an individual.

XRP/USD Shows Strength

At press time, the XRP price was sitting at $0.3859. The 24-hour trading volume currently hovers around $712 million.

With a market cap of $19.4 billion, XRP remains the seventh largest cryptocurrency.

In the 4-hour chart, the price of the token has managed to continue its uptrend after the FTX crash. Yesterday, the price marked a new higher low, confirming the uptrend.

For the moment, the most important resistance zone remains the area between $0.41 and $0.42. However, at the current price, XRP is still below the 50, 100 and 200 simple moving averages (SMAs).

For the bulls, it will be important to defend the uptrend line in the coming days.

XRP USD 2022-12-08

XRP price confirming its uptrend, 4-hour-chart. Source: TradingView
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Data Suggests Ethereum Layer-2 Tokens May Experience Explosive Upside

While the Ethereum network and its users continue to suffer from the high fees of the layer-1 blockchain, various layer-2 (L2) solutions are stepping into the spotlight to solve the problem.

As analyst Miles Deutscher explained, citing data from Dune Analytics, layer-2 scaling solutions saw monumental growth in 2022. “I expect this trend to continue in 2023 and beyond,” Deutscher commented.

Ethereum gas L2

Ethereum gas spent to settle L2 transactions. Source: Twitter

Blockchain analytics firm Nansen also released data today showing the growth of layer-2 solutions. Specifically, Nansen referred to Abritrum.

“Arbitrum season is in full swing,” wrote a researcher at Nansen. According to their data, transactions on L2s are increasing significantly, while transactions on Ethereum are decreasing. A clear divergence can be seen.

Arbitrum

Ethereum L1 vs. Arbitrum. Source: Twitter

Regarding Arbitrum, the Nansen researcher writes that the number of daily active addresses averaged 50,000 to 70,000 in November and December. A few months ago, from July to September, the average was 15,000 to 20,000.

With the recent Nitro upgrade, Arbitrum has once again massively lowered its average gas price for a transaction. While the average fee was $0.35 before Nitro, it has dropped to $0.08 afterwards. This represents a reduction of almost 75%.

However, although Arbitrum’s network usage is skyrocketing, there is no token yet. So far, there is also a lack of an official announcement regarding an Arbitrum token.

Rumors have it that Arbitrum will launch its token by the first quarter of 2023 at the latest. The ticker is supposed to be either ARBI or ARB.

The Leading Ethereum L2 Solution

As NewsBTC reported yesterday, Polygon (MATIC) currently holds the leading position when it comes to successful Ethereum L2 tokens. The project has entered partnerships with major brands such as Starbucks, Mercedes, Meta, Reddit, eBay, Disney, and Adobe, among others.

Sandeep Nailwal, co-founder of Polygon, revealed yesterday that the zkEVM mainnet “is coming soon”. With the implementation, Polygon will reach a massive milestone.

Once the zkEVM mainnet comes online, there could be an explosion of dApps on Polygon. Zero-knowledge cryptography will enable privacy and minimize data volumes to make transactions for smart contracts even more efficient.

BitDAO And Optimism

Another emerging L2 project is BitDAO, which is backed by the exchange Bybit. About a week ago, the project had announced the soft launch of Mantle, a modular Ethereum Layer-2 solution with separate execution, finality and data availability layers.

A public test network is scheduled to go live in 2023. It will serve as the core of BitDAO and use BIT as a token.

Optimism also has a token. The L2 Ethereum scaling solution was first introduced in June 2019, and the public mainnet was launched in December 2021.

The OP token’s airdrop took place in June 2022, with nearly 249,000 registered Optimism users receiving the newly launched token. Remarkably, the project’s mainnet is currently hosting the largest decentralized exchange, Uniswap V3.

At press time, the ETH price was sitting just above crucial support in the 4-hour chart.

Ethereum ETH USD 2022-12-08

ETH price, 4-hour chart. Source: TradingView
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Bullish News For Polygon! zkEVM Mainnet Is Coming Soon, Says Co-Founder

Polygon, an Ethereum layer-2 solution, has recently seen massive hype due to notable partnerships with major brands such as Starbucks, Mercedes, Meta, Reddit, eBay, Disney, and Adobe, among others.

And the team led by Sandeep Nailwal, co-founder of Polygon, continues to work hard to keep that hype going. Via Twitter, Nailwal shared a massively bullish news today. He wrote:

zkEVM passing 99.5% of Ethereum test vectors putting Polygon zkEVM at extremely high EVM-equivalence.

This is also reflected in the dev experience where 1000s of solidity smart contracts have been deployed on zkEVM without any changes whatsoever. Running towards mainnet soon!

Narwal referred to David Schwartz, who is the project lead of the Polygon Hermez team. Schwartz announced in this thread that Polygon’s zkEVM is making tremendous progress.

“Currently, we are passing 99.5% of Ethereum test vectors that apply to our type-3 implementation (9,650+ tests passed),” wrote the project lead of team Hermez.

Polygon zkEVM is a complete EVM-equivalent L2 zk-rollup Ethereum scaling solution. On it, users have deployed more than 3000 smart contracts without friction or transformation.

“Their dApps work seamlessly, with over 20K transactions,” Schwartz added, further explaining that the test network zkProver has provided more than 12,000 complete proofs of validity for these arbitrary user transactions.

This Is Why The zkEVM Is Such A Big Deal For Polygon

Layer-2 scaling solutions for the Ethereum blockchain have seen a gigantic growth in transactions in 2022. And the trend is projected to continue.

Meanwhile, Polygon has established itself as one of the leading scaling solutions. Of all the solutions, Polygon has forged the most notable and largest partnerships to grow the Ethereum ecosystem.

And the zkEVM. a zero-knowledge Ethereum Virtual Machine (zkEVM), could further cement this position for Polygon.

The zkEVM is operating zk rollups. This smart-contract technology bundles transactions from the Ethereum ecosystem and sends them to the Ethereum mainnet as a single transaction.

In this context, the zero-knowledge cryptography is both a privacy measure and a data minimization measure. A zero-knowledge proof makes it possible to retain full security without revealing the data necessary to do so.

Remarkably, the Polygon zkEVM maintains full Ethereum compatibility. Until now, zk rollups with full Ethereum compatibility were deemed difficult to program. In this respect, the development of Polygon is a major milestone.

Once the zkEVM mainnet comes online, there could be an explosion of dApps on Polygon. And the price of MATIC could profit big time from it.

However, at press time, MATIC was trading at $0.88, following the broader market sentiment.

PolygonMATIC USD 2022-12-07

MATIC price, 1-day chart. Source: TradingView
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Continued Upswing Of VIX Signals Doom For Bitcoin; But Friday Will Be Crucial

As NewsBTC reported, the VIX experienced a trend reversal last Friday which could be significant for Bitcoin as well.

The VIX volatility index shows traders the expected range of fluctuation of the S&P 500. Remarkably, there is an inverse correlation between the VIX index and the S&P 500. A rising VIX index usually means falling prices for the S&P 500, and vice versa.

Rising VIX Threatens Bitcoin Bulls

The VIX dropped below the level of 19 on Friday, a mark that has been highly significant over the last year.

In August, the last time the VIX was this low, it subsequently rose above 34, dragging the S&P 500 down 15%. Bitcoin also experienced a significant downtrend, driven by its correlation with the S&P 500.

On Monday, BTC bounced off horizontal resistance at $17,400 and fell below $17,000 as VIX initiated its trend reversal with a stellar market open.

VIX 2022-12-07

VIX. Source: TradingView

Yesterday, however, Bitcoin bulls initially appeared to have the upper hand. While the S&P saw another 1.4% plunge, the BTC price remained relatively stable at $17,000.

However, in the last few hours, BTC registered a retracement of around 2% and $350. At one point, BTC fell to $16,691 after the VIX continued its uptrend and rose to a level of 22.46. At press time, the Bitcoin price stood at $16,828.

Investors should pay attention to the VIX. If the VIX sees another rise today, the BTC bulls could lose steam. Then, the support zones at $16,600 and $16,300 are going to be key.

Bitcoin BTC USD 2022-12-07

BTC price, 4-hour chart. Source: TradingView

Will Friday Provide A Foreshadowing For Bitcoin?

So, given Bitcoin’s high correlation with the S&P 500, another drawdown could be imminent. However, the VIX should not be used as the only indicator. The VIX relies on expectations based on past events.

In addition, the VIX cannot account for sudden, unexpected events that may cause strong market reactions. Historically, it has always been the case that the VIX could not predict a bottom.

Key events are determinants of when a bottom is reached. However, since the VIX is calculated based on expectations, it cannot be a key to detecting a change in trend due to sudden events in the market.

And the all overshadowing event will be the next FOMC meeting of the US central bank on December 14, when the FED will decide on its further interest rate policy. Remarkably, the meeting will include a “summary of economic projections”.

But even before that, there are two extremely important data that make predictions about how the FED will act.

While the new inflation data in the form of the consumer price index (CPI) will be published on December 13, the producer price index (PPI) will already be published on Friday, December 9.

This will already provide an insight into how the CPI data might turn out. This is because the PPI serves as a leading indicator for the consumer price index.

When manufacturers face input inflation, increases in their production costs are passed on to retailers and consumers. Thus, the PPI could be trend-setting.

If the PPI and CPI continue to fall, at best more than expected, the chances of a Santa rally for Bitcoin are pretty high.

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Price Slump For Bitcoin Looming As VIX Rises Back Above 20

The Bitcoin price has currently stabilized strongly around the $17,000 mark. However, the price could face further headwinds in the coming days, as the VIX exposes.

The VIX is a real-time volatility index from the Chicago Board Options Exchange (CBOE). It was created to quantify market expectations of volatility.

In doing so, the VIX is forward-looking, meaning that it only shows the implied volatility of the S&P 500 (SPX) for the next 30 days.

Basically, if the VIX value goes up, the S&P 500 will likely go down, and if the VIX value goes down, the S&P 500 will likely remain stable or go up.

This is exactly what was seen yesterday. The VIX bounced up to 19, a level that was last seen in mid-August. As a result, the S&P 500 lost the weekly support area at 4040 and fell 1.8%. In August, the last time the VIX was this low, it rebounded, and the S&P 500 fell 15%.

Bitcoin Vs VIX 2022-12-06

VIX,1D chart Source: TradingView

The Importance Of The VIX For Bitcoin

Besides the VIX and the S&P 500, it is important to understand that Bitcoin, with higher beta, is highly correlated with the S&P 500. This means that the Bitcoin price is more sensitive to changes in the market in both directions.

As predicted by the VIX, BTC bounced off the $17,400 horizontal resistance yesterday and dropped below $17,000.

In October, when the VIX was down, and the S&P 500 was up, Bitcoin experienced a black swan event with the FTX collapse, after which BTC fell to $15,500. Thus, the Bitcoin price did not enjoy the momentum of the VIX.

At the moment, a possible reversal of the VIX at 19 could serve as a kind of sentiment barometer for the S&P 500 and Bitcoin for the next few weeks. The VIX is being compared to the 2006-2009 crash, a nasty outlook that would mean much lower prices.

Analyst Sam Rule writes that the recent BTC rally following stocks is occurring at a time when the VIX is depressed to a level of 20. Although there has been a massive industry leverage wipe-out in the crypto industry, the stock market has yet to experience such an event.

Given Bitcoin’s correlation with the S&P 500, this could mean another price drop, as Rule writes:

Is 25% drawdown from ATH all we’re getting in S&P 500 this cycle during the popping of the great everything bubble? Would you expect #BTC to bottom here if SPX scenario fell >40% from ATH in coming months?

SPX drawdowns from ATH 1 week

SPX drawdowns from ATH 1-week, Source: Twitter

Why VIX Has Limited Applicability To BTC

However, the VIX should not be used as the sole deterministic indicator of future market direction. Why?

The VIX relies on expectations set by past events rather than what will happen in the future. Investors are notoriously prone to irrational exuberance.

In addition, the VIX cannot account for sudden, unexpected events that can cause strong market reactions. However, these events are key to identifying a change in market direction, such as a bear market bottom.

Therefore, Bitcoin investors should also keep an eye on other factors, such as the upcoming decision by the U.S. Federal Reserve on further interest rate policy, further contagion effects in the crypto market, and other intrinsic factors, such as miner capitulation.

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Peter Schiff And Jim Cramer Present Their Doom Scenarios For Bitcoin, Cardano, XRP, Dogecoin

Notorious CNBC host Jim Cramer has once again made controversial predictions for Bitcoin and the crypto market in the latest episode of the show “Mad Money”. Cramer has made a name for himself on the crypto scene in recent years, but possibly to the extent that he wanted to.

Cramer’s mixed track record in crypto-analysis led to the creation of the “Inverse Cramer ETF,” a fictional exchange-traded fund that recommends the opposite of everything Cramer says.

Consequently, the crypto scene pays little credibility to the host’s predictions. Still, Cramer is not always wrong. In June, for example, he predicted that cryptocurrencies would continue to fall. He based this on the actions of the Federal Reserve.

Cardano, XRP And Dogecoin Going To Zero?

In the latest episode, the Mad Money host said that investors still have time to sell their crypto holdings. According to Cramer, the markets will continue to crash in 2023, so crypto investors should sell “before it’s too late.”

“You can’t just beat yourself up and say, ‘hey, it’s too late to sell.’ The truth is, it’s never too late to sell an awful position. And that’s what you have if you own these so-called digital assets,” Cramer said.

Specifically, Cramer predicted that Cardano (ADA), XRP, Polygon (MATIC) and Dogecoin (DOGE) could crash to zero. According to him, these cryptocurrencies are still highly overvalued, so those who hold them should sell them.

However, his reckoning with crypto didn’t end there. The moderator made serious accusations against Tether (USDT).

According to Cramer, the largest stablecoin in the crypto market could meet a fate similar to Luna’s TerraUST, which fell to zero in three days in May this year.

Tether, a so-called stablecoin that’s supposed to be kinda-sorta pegged to the dollar, still has a $65 billion market cap.

There’s still a whole industry of crypto boosters trying desperately to keep all of these things up in the air. Not too different from what happened with bad stocks during the dot-com collapse.

Remarkably, Cramer’s Bitcoin bear market low of $12,000, which he predicted in previous broadcasts, is still a long way off.

Peter Schiff Shares Bitcoin Prediction At $5,000

Cramer, however, is not the only Bitcoin critic spreading doom and gloom. Gold bug Peter Schiff has shared an assessment from Standard Chartered that Bitcoin is still overvalued at its current price of about $17,000.

According to the word-strong Bitcoin critic and multinational bank, BTC is at risk of another 70% crash in 2023. Standard Chartered claims Bitcoin could fall to $5,000 next year.

In a note entitled “The financial-market surprises of 2023,” Standard Chartered states that a negative surprise could be Bitcoin falling to US$5,000 next year.

Rising yields along with a slump in tech stocks will lead to an acceleration of the Bitcoin sell-off and cause more bankruptcies in the crypto world, according to the bank.

Goldman Sachs To Buy Up The FTX Mess

Despite all the dystopian predictions, however, there is also extremely bullish news today. As Reuters reports, Goldman Sachs is on the hunt for cheap crypto companies after the FTX collapse and plans to spend tens of millions of dollars to buy or invest in crypto companies.

Regardless of how the Bitcoin scene views this on ideological grounds, this should be a strong catalyst for maturation and progress for the institutional sector.

At press time, Bitcoin was trading at $16,967 and has lost its volatility again.

Bitcoin BTC USD 2022-12-06

BTC price, 4-hour chart. Source: TradingView
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Metaverse Token Axie Infinity (AXS) Suddenly Pumps 25% – What’s Happening?

AXS, the native token of Axie Infinity, has seen its price jump in recent hours. The project is a blockchain-based game metaverse in which players collect and breed digital pets called Axies that they can be used in a turn-based card game.

At one point, AXS rose to $8.82 after trading as low as $6.41 yesterday and has seen a 28% rally in recent hours. At press time, AXS was at $8.14, still recording a price pump of about 20% over the last 24 hours.

Over the last seven days, it’s up 25%. Today’s gain is accompanied by a massive surge in trading volume, which has grown to $295 million over the past 24 hours, up 750% from the day before.

Currently, Axie Infinity (AXS) has risen to the 52nd largest cryptocurrency with a market cap of nearly $812 million.

However, despite the massive pump, AXS is still one of the biggest losers of the bear market. AXS’ all-time high stand at $164.90 and was reached in November 2021. This represents a whopping 95% loss in value.

A look at the 1-day chart reveals that Axie Infinity has still not been able to break out of its downtrend channel. For this, a break above $9.00 would be required. If it fails, AXS would continue to move in bearish territory despite the recent pump.

Axie Infinity AXS USD 2022-12-05

AXS price still caught in a downtrend channel, 1-day chart Source: TradingView

Fundamentals Of Axie Infinity Look Weak

Meanwhile, the fundamentals for Axie Infinity continue to look less than rosy. According to the data platform CryptoSlam, the sales volume of Axie Infinity has shrunk massively since the peak on November 3, 2021 at $40.8 million.

Since May, volume has been bobbing around below $500,000, though it was still close to $100,000 at the end of October. Yesterday, December 4, it was only $19,500.

Axie Infinity Cryptoslam

Axie Infinity sales volume data. Source: Cryptoslam

On Its Way To Decentralization

So what is driving the AXS pump? One reason could be the impending decentralization of the project.

The team published a blog post today. In it, they shared that a group of over 700 invested and influential community members have come together to shape the future of Axie Infinity.

The team said it wants to actively work toward an end state. In this state, “invested” community members are responsible for making decisions about resourcing the Axie Infinity ecosystem.

Currently, the project is still in the initial decentralization phase. However, important progress has been made recently as part of a step-by-step strategy, the blog post states.

As progress is made on the decentralization continuum, actions like council formation, resource allocation, on-chain voting, and treasury activation will be unlocked.

The ultimate goal is to give the collective the responsibility to advance self-organization. To this end, a collective of established community members of Axie Infinity, the “town builders,” was formed back in May.

In July, they decided to bring in a number of contributor electors to play a critical role in an initial pilot program for contributors.

In August, the town builders and contributor electors distributed applications for the contributors program. Each proposal submitted hundreds of applications.

After being elected town builders by the founding town builder team, the first 700 community members were selected today to participate in the first pilot “season” of Axie Contributors.

They will contribute to a newly created governance area on Axie Infinity’s Discord.

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Elon Musk Lifts Twitter Ban On Dogecoin Accounts; DOGE Pumps 7% – Here’s What Happend

Amidst all of the hustle and bustle surrounding the reorganization of Twitter and the revelations of the “Twitter Files,” Elon Musk took the time a few hours ago to fix a pressing problem for the Dogecoin community.

In recent days, Musk had declared war on the spam bots on Twitter. In doing so, the algorithm and the Twitter team may have been a bit too harsh.

Musk Stands By For The DOGE Community

Dogecoin founder Billy Markus wrote on Twitter that more than a dozen Dogecoin Twitter accounts were suspended last weekend, even though they were mainly just tweeting DOGE memes. Markus wrote that these accounts were unjustly suspended:

A whole bunch of accounts of people who, as far as I know, generally don’t do anything but tweet memes and positivity are being suspended. Pretty weird man.

Twitter CEO Elon Musk, who through a representative is part of the Dogecoin Foundation’s five-member advisory team alongside Markus and Vitalik Buterin, responded to the tweet within three hours.

Musk wrote that his Twitter team had been a bit too aggressive with the suspension of spam bot accounts. “Team was a bit too intense with spam/bot suspensions. Moving to chill mode,” Musk replied.

Dogecoin founder Markus then confirmed that the accounts have been reactivated “Welcome back Doge accounts. ty @elonmusk,” Markus added.

Remarkably, this wasn’t the only incident where Elon Musk showed his love for Dogecoin over the last weekend. According to Matt Wallace, Elon Musk was spotted on Saturday wearing a black Dogecoin t-shirt, displaying the mascot of DOGE, a Shiba Inu wearing a cowboy hat and sunglasses.

Dogecoin Price Pumps 7% After Musk’s Endorsements

The Dogecoin (DOGE) price initially showed no reaction to Elon Musk’s tweet. This is unusual, as Musk usually triggers a small or large rally with every tweet about the meme coin. However, nothing happened in the first hour after the tweet.

This has changed in the last couple of hours. The DOGE price rose to $0.1118 at one point, recording an increase of around 7.5% within an hour.

However, the FOMO quickly flattened out. DOGE was trading at $0.1076 at press time, still posting a gain of around 4% over the past 24 hours.

The move has bounced off the important $0.11 resistance zone again. For DOGE it is already the fourth rejection within the last month at this mark. The price had fallen below it on November 7.

To initialize a stronger upward movement towards the zone between $0.135 and $0.14, DOGE needs to overcome the key resistance at $0,11 in the 4-hour chart.

Dogecoin DOGE USD 2022-12-05

Dogecoin price rejected at $0,11, 4-hour chart. Source: TradingView
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Terra Classic Surges By 17%; Korean Prosecutors Seek Arrest of Co-Founder

With the implosion of the LUNA coin, the Terra ecosystem was devastatingly hit within a few days in May 2022. The successor, Luna Classic (LUNC), currently once again surged in price.

LUNC briefly rose to $0.00019439, registering a 20% price increase. At press time, the LUNC price showed a correction. However, LUNC was still at $0.00018 and showed a price increase of 11% over the last 24 hours.

Terra LUNC USDT

LUNC price, 4-hour chart. Source: TradingView

The background for the sudden pump was the fact that Binance destroyed more than 6 billion LUNC in the sixth batch of the Terra Classic token burn on Thursday. Binance sent $1 million worth of LUNC tokens to a dead address, wiping out 12.77 million LUNC.

With the current token burn, Binance has now destroyed nearly 20 billion LUNC tokens.

The leading crypto exchange introduced the Terra Classic (LUNC) burn mechanism for trading fees in September this year. It was a response to a LUNC community proposal.

All trading fees for LUNC spot and margin trading pairs are burned by Binance by sending them to the LUNC burn address. The specific amount of LUNC burned and the on-chain transaction ID are published each month.

With the token burn, the LUNC community aims to make the token deflationary by destroying tokens and thus reducing the overall supply.

According to the supply/demand theory, an increase in value occurs when the supply decreases and the tokens become rarer. For the moment, this seems to work quite well as LUNC has seen green daily candles on most occasions when the burn took place.

Terra Co-Founder Facing Arrest In South Korea?

In other Terra ecosystem news, Terraform Labs Pte. Ltd. co-founder Shin Hyun-Seung, also known as Daniel Shin, and seven other Terra employees are facing a court hearing in South Korea today.

The hearing from South Korean prosecutors is for the issuance of an arrest warrant for the eight individuals. To that end, hearings began today for Shin and the other Terra employees.

According to the Korea Times, Shin is accused of making illicit profits of over 140 billion Korean won, the equivalent of about $107 million, from the cryptocurrency LUNA.

He is accused of promoting the Terra stablecoin as a payment method despite multiple warnings from regulators and misusing the private data of Chai Corporation users to promote Terra Luna.

South Korean prosecutors accuse Shin and his partners of violating the Capital Markets Act and the Electronic Financial Transactions Act, as well as dereliction of duty.

Shin denies the charges, claiming that he sold over 70% of his LUNA holdings before the price spike. Also, he’s claiming that he still held a significant amount of LUNA during the May collapse.

A decision is expected either in the late Friday evening hours in South Korea or on Saturday.

Remarkably, Terra CEO, Kwon Do-hyung, better known as Do Kwon, is still on the run. South Korean authorities issued an arrest warrant for Do Kwon in September.

In October, his passport was declared invalid by South Korean authorities. Rumors have it that Do Kwon was in Singapore, Dubai and Europe in the meantime.