Bitcoin and top altcoins plummeted today, dragging the market deep into negative territory. The fallout followed the news that Do Kwon, co-founder of Terraform Labs, received a staggering 15-year prison sentence—the harshest imposed in crypto history. Ethereum hit a wall at $3,000 while exchange-traded funds (ETFs) suffered outflows of $19.4 million, even as venture capitalists moved cash into less conventional spaces.
Do Kwon’s sentencing hits LUNC hard
The sentencing of Do Kwon marks a significant moment in the crypto saga. His fraudulent activities ultimately led to the $40 billion collapse of Terra-Luna, and now analysts predict a further 45% dive in LUNC prices following the sentencing. While some may see the verdict as closure, it leaves a trail of unease among investors in shaky tokens, especially LUNC, which has already taken a beating.
Ethereum struggles for direction
Ethereum remains stalled at $3,000, unable to push above the hoped-for $3,400 despite market expectations. Yesterday, spot ETFs experienced significant outflows, with BlackRock’s ETHA slightly diverging from the trend and actually experiencing inflows, unlike Grayscale’s ETHE, which saw $14.4 million exit. While bulls aim for a wedge breakout, bears are eyeing the $2,800 support level. AI models suggest a mild recovery to $3,360 by early December, but the market sentiment, as measured by the Fear & Greed index, sits at a worrying 29.
- Changelly forecasts ETH to reach $3,329 by December 15, potentially peaking at $3,874 this month.
- ETH recorded weekly gains over 10%, yet the 50-day SMA at $3,510 poses a strong resistance barrier.
Bitcoin holders find reasons to buy
Bitcoin continues to face deepening challenges, even with the Fed implementing its third rate cut. Worries over quantum computing have catalysed comments from Vanguard, which referred to BTC as a “digital Labubu.” However, long-term holders have been steadily accumulating, with 75,000 BTC purchased over the last ten days. Spot taker cumulative volume delta (CVD) has switched to bullish, indicating renewed interest. Yet, the price could be poised for a breakout amid risks around the $90,000 mark, particularly as dormant Silk Road-era wallets stir back to life.
Venture capital finds opportunities
Despite the turmoil in the broader market, venture capital appears undeterred. Real Finance and LI.FI each raised $29 million, and TenX secured $22 million, while Hyperliquid Strategies announced a $30 million buyback plan aimed at boosting HYPE stock. This influx of capital is a reminder that savvy investors often seek new opportunities even in downturns.
Mixed fortunes for NFTs and altcoins
The NFT market saw a dip of 15%, totalling $64.9 million in sales, but Solana bucked the trend with a remarkable 44% surge in volumes. On the other hand, Polygon stumbled following the Madhugiri hardfork, and questions around its valuation have arisen due to declining transaction rates. XRP is under pressure, facing a potential 20% drop, despite Ripple achieving a conditional bank charter victory alongside Circle. Shiba Inu saw increased whale activity amid reserves depletion, suggesting a possible rebound, yet Cardano neared $0.50 lows while HBAR struggled at $0.12.
Progress in crypto adoption
Significant developments in regulatory acceptance have emerged, with Ripple and Circle receiving conditional national bank charters from the OCC—bolstering the legitimacy of stablecoins. The CFTC nominee’s commitment to branding America as the “Crypto Capital of the World” adds weight to these shifts. Additionally, YouTube’s incorporation of PayPal’s PYUSD for creator payouts and JPMorgan’s issuance of $50 million in commercial paper on a public blockchain further signal growing institutional interest. Meanwhile, World App has introduced encrypted chat and in-wallet payments, enhancing user experience.
Confidence shaken by exploits
In a worrying trend, wire fraud allegations emerged against ‘47 Ronin’ director Carl Erik Rinsch, while Espresso’s co-founder revealed a $30,000 loss due to a bug in a ThirdWeb contract. Despite turbulence, Zcash saw a 13% rise to $460, driven by dynamic fees and interest from Cypherpunk.
Price watch: Traders on the lookout
- ETH: Must hold $3,000 to stave off a drop to $2,800, but a breakout towards $3,400 is possible if resistance breaks.
- BTC: Long-term holders suggest a potential bottom, but remain alert to possible quantum threats or a bubble burst.
- XRP/SOL: Watch for cross-chain upgrades and significant ETF inflows ($1 billion for XRP), countering triangle breakdowns.
- Silver’s record highs coincide with rising treasury yields; critics like Peter Schiff remain vocal about Fed policies.
Traders are feeling the jitters as markets react to the Fed’s cuts, which have failed to ignite buying enthusiasm. Concerns about banks’ sluggishness are dampening global economic prospects. Yet, with venture capital shifting gears and traditional finance cautiously testing the waters, there may be hidden opportunities amid the chaos. Be ready—volatility is only just ramping up.
