This week, cryptocurrency prices have declined each day, with Bitcoin dropping to $26,570 by late Thursday. It started the week at just around $28,000 but has since dropped about 5% in value. And while it has recovered a bit each time, the largest cryptocurrency by market cap hasn’t been able to hold on to its recovery, with prices going even lower than the previous day.
At the time of writing, Bitcoin has been trading at $26,753 while Ether is exchanging hands at $1,547 after dropping even lower today to $1,540. ETHBTC, meanwhile, is currently at 0.05779, up from 0.0567 yesterday.
Ether shed the gains seen from a rally earlier this year as Ethereum whales divested their holdings, having already redistributed over 5 million ETH worth over $8.5 billion.
This trend is corroborated by data from on-chain analytics firm Santiment, which shows that Ethereum’s largest holders have been offloading their holdings since early this year. Meanwhile, Santiment noted that 8.51% of ETH is currently sitting on exchanges, and the ten largest wallets away from exchanges hold a whopping 39.22M ETH.
Additionally, at current prices, a whopping 80.33% of ETH supply is out of money, meaning these holders bought the second-largest cryptocurrency at a higher price than it is right now. In fact, most ETH holders bought the crypto asset between the $1,520 and $1,620 range.
Just recently, the Ethereum Foundation also sold 1,700 Ether for $2.73 million worth of USDC in their largest single transaction of the year through the DEX Uniswap. With that, the Foundation has sold a total of 2,262 tokens so far this year, with most sales coming ahead of cryptocurrency market dips, as per on-chain monitoring service Spot On Chain.
The Ethereum Foundation still has more than $500 million worth of ETH, along with over $340,000 worth of wrapped Ether (WETH), $38,000 of DAI, and $9,700 worth of BNB, as well as various other altcoins.
Unlike Ether, Bitcoin’s long-term investors are busy buying the cryptocurrency, contributing to market illiquidity, as per Glassnode data. The HODLer net position change metric, which shows long-term investors or wallets with a history of holding coins for at least 155 days, have been accumulating 50,000 BTC worth $1.35 billion per month. With this, the total number of BTC held by long-term holders has reached a new peak of over 14.859 million BTC, amounting to 76% of its circulating supply.
The lack of attraction towards ETH can also be seen in the less than $1.5 million trading volume recorded by Ethereum futures ETFs collectively launched last week in the US. In contrast, the first BTC futures ETF, ProShares’ BITO, recorded over $1 billion in trading volume on its inaugural day, which made its debut in October 2021. Moreover, the net inflow into ETH futures ETFs was less than 2% of what BITO attracted.
Bitcoin Driving the Crypto Market
The crypto king, Bitcoin, continues to show weakness amidst the worsening scenarios in the Hamas-Israel conflict, a situation that has shattered investor confidence in riskier assets. This downturn aligns with expectations: during geopolitical uncertainties, traders often predict a dip as investors pivot away from volatile assets like traditional stocks. Instead, they gravitate towards safe havens like gold, dollar, and oil—assets that have indeed seen prices rise by as much as 6% in the past week.
If we look at the S&P 500 index, it was trading at its highest 2023 level at just above 4,600 in late July, up from a nearly 3,800 low in mid-March. Over the next month, the S&P 500 index dropped to about 4,340 but soon recovered to 4,540. The next leg downward sent the index to 4,215 earlier last week. But since then, it has spiked and is now at 4,377, still not much far off from the 4,810 peak in the last week of 2021.
Both Nasdaq and the S&P 500 are currently on a four-day winning streak along with the bonds. The 10-year US Treasury yield has lowered to 4.56% after closing at 4.80% last Friday. This comes as producer prices (PPI) in the US increased more than expected in September. Also, from the minutes of the most recent FOMC meeting, it was evident that most members anticipate one more rate hike before the end of the monetary tightening cycle.
This is unlike the crypto market, where Bitcoin’s attempt to break the $28,000 level over the weekend had traders taking profit that sent the prices lower.
So, while appetite is recovering in the traditional markets, crypto is experiencing weak price action. Despite this, billionaire investor Paul Tudor Jones still believes in Bitcoin along with gold amidst extensive geopolitical risks and rising US debt levels and interest payments.
Meanwhile, former hedge fund manager and host of CNBC’s Mad Money, Jim Cramer, continued with his bearish stance on crypto, saying, “I can’t go out with bitcoin (BTC) because I can’t be in something where Mr. Bitcoin is about to go down big.” Cramer said back in June 2021 that he had sold most of his BTC holdings following China’s crypto mining crackdown.
Talking about mining, a JPMorgan report this week highlighted the Bitcoin mining industry’s pivotal moment. With a backdrop of a record hash rate and the looming halving—which stands to threaten revenues and profitability—the approval of a spot BTC ETF might spark a significant rally. The bank currently values the opportunity the halving presents at about $20 billion, given today’s prices. Yet, this event, anticipated for the second quarter of the upcoming year, has potential ramifications: it might affect profitability, with a substantial 20% of the network hash rate projected to be at risk.
Besides JPMorgan, another institution, Standard Chartered Bank, expects the halving in April 2024 to “help lift all boats,” including Ether, to hit $4,000 by the end of next year.
But this is just the beginning, as according to the bank’s report, Ethereum has the potential to reach $8,000 by the end of 2026, which will act as “a stepping stone” to the bank’s “structural” valuation estimate of $26,000-$35,000.
According to Geoff Kendrick, the head of the bank’s digital assets research, Ethereum’s use case evolving to cover gaming and tokenization in addition to NFTs and DeFi should add “significant demand.”
“Importantly, this should provide ‘proof of concept’ examples in which real-world industries come on-chain to exploit the benefits of Ethereum over their existing setups,” said Kendrick, adding, “We expect significant developments on these fronts by 2025-26.”
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LOOM Continues to Defy Broad Crypto Market Sentiment
In the short-term, the crypto market is feeling “fear,” with the crypto fear and greed index having a reading of 45. However, altcoin LOOM has been seeing a lot of traction, with its price surging more than 400% in the past month as it hit $0.220 on Thursday.
During this period, the total crypto market has more or less stayed the same. In fact, the crypto market cap has moved sideways since mid-August, in the $1 trillion to $1.15 trillion range. But despite this overall stability, not all individual assets have fared well.
Currently, the market capitalization of crypto stands at $1.082 trillion. This is noteworthy, considering many altcoins have plummeted, losing as much as 25% of their value in the past week. Specifically, coins like RUNE, XRD, MNT, RLB, CFX, RPL, GALA, CRV, and APT have registered significant double-digit declines.
At the time of writing, LOOM is trading at $0.2133, up 10% in the past 24 hours while managing $200 mln in trading volume. With that, the LOOM price has risen 338% over the past year. However, the price is still nowhere near its May 2018 all-time high (ATH) of $0.7725. In fact, during the 2021 bull market, the crypto asset only peaked at $0.2567, and the current price remains roughly 15.5% below this recent high.
This price action isn’t the latest development either for LOOM, but the movement wasn’t as strong as it is now. LOOM started the year at around $0.039, from where it gradually made its way to $0.092, an increase of 135% in value. But soon, the price went close to the level where it started the year and remained subdued until mid-September, when the ongoing rally started.
Now, for LOOM price, the 2021 high of $0.2567 and 2018 ATH of $0.7725 are two major levels ahead of it. Since the price broke out from a long-term descending resistance trendline at the beginning of October, there really isn’t much resistance for the crypto asset.
If the bulls persist, the crypto asset’s price can also break into the top 100 cryptocurrencies by market capitalization. However, if the LOOM holders take profit and bears get in control, the price can fall severely and may not find support until $0.120.
Notably, the recent momentum in LOOM’s price follows announcements by major exchanges: Binance Futures stated it would launch LOOM perpetual contracts on Oct. 11 at 14:30 (UTC) with up to 10x leverage, a move mirrored by LBANK. For LOOM, Binance Futures supports multi-assets mode, allowing users to trade the LOOMUSDT perpetual contract across multiple margin assets.
Binance is the world’s largest cryptocurrency exchange, which saw its spot market share drop to 34.3% in September from 38.5% the previous month and 55.2% in January, while its derivatives market share fell from 53.5% in August to 51.5% in September, according to data compiled by researcher CCData.
This development came after Binance halted another zero-fee promotion last month while it’s embroiled in lawsuits by the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). Binance, founder Changpeng Zhao, and its US operations are all fighting the charges in court.
Late last month, the LOOM token also received a liquidity boost from a listing at cryptocurrency exchange Gate.io, which saw $496 million in spot trading volume over the last 24-hour period, as per CoinGecko.
During that time, the ratio of LOOM tokens on exchanges also dropped by 5.9% to 14.9% in just a few days. As the supply of tokens available to be sold on trading platforms declines, the supply shock supports the uptrend in the price of LOOM, that is, if demand remains unaltered or rises.
Besides all this, rising prices tend to attract investors and traders, which tends to further boost price increases, creating a feedback effect.
Click here to learn all about investing in Loom Network (LOOM).
A Look at Loom Network
LOOM is the native cryptocurrency of the Loom Network, which is used to secure the network’s mainnet, called Basechain.
Basechain is a Delegated Proof of Stake (DPoS) blockchain where validators and delegators stake their LOOM tokens to collectively uphold the network’s security.
LOOM holders earn a portion of these rewards by delegating to validators, whereas validators and delegators earn rewards from block generation, dApp hosting fees, and Transfer Gateway fees. The token has a fixed supply of 1 billion and is used for staking, transaction fees, and bonding.
Most importantly, LOOM is used by developers to pay for decentralized applications (dApp) hosting on Loom Network. Here, developers pay a flat monthly fee to host their dApps on Loom so that their users don’t have to pay any transaction costs.
Loom Network is a multichain interoperability platform that was launched in early 2018. And then, in early 2021, the team launched the new LOOM token contract to Ethereum Mainnet.
The network is optimized for scaling high-performance dApps and has integrations to Bitcoin, Ethereum, Binance Chain, and Tron, with EOS and Cosmos coming soon. These integrations allow developers to integrate assets from all major chains and offer their dApp to users on all platforms simultaneously after building it just once.
Loom Network has also created CryptoZombies, a resource for learning to build Ethereum DApps.
Click here to learn all about buying Loom Network (LOOM).
Overall, the crypto market continues to be volatile amidst the risk-averse attitude among investors due to geopolitical conflict. But long-term holder accumulation, upcoming halving, and a spot Bitcoin ETF approval present a hopeful picture for crypto’s future.
With Bitcoin showing weakness, altcoins face the danger of an even bigger sell-off. That means, while LOOM price is enjoying upward momentum, in contrast to the broad crypto market, once bears take hold, it might be hard for LOOM to hold onto these gains as well. Now, it remains to be seen just how far north LOOM goes before the market sentiments catch up to it!