Crypto Labs Market Watch for Apr. 2nd
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1. Bitcoin resets bull market BTC price metrics as April dip passes 7%
BTC price action may be upsetting for leveraged longs, but Bitcoin market observers are finding reasons for optimism.
Bitcoin is resetting multiple key metrics as the BTC price drop flushes out leverage.
Bitcoin RSI returns to key support
Data shows BTC/USD currently acting around $66,000 after falling 5% in a single hourly candle.
Bitcoin may be down 7% in April, but a retest of support is already having a cathartic effect on overheated markets.
As reported, with the latest drop came a major liquidation event — one which, at the time of writing, totaled $400 million for Bitcoin and altcoins combined.
With it, per data from monitoring resource CoinGlass, funding rates started turning negative.
“Prices are pushing lower, and funding rates plummet as a result,” popular trader Jelle commented in a post on X.
2. NFTs are like nightclubs, crypto is a volatile religion: NFTStats, NFT Collector
Crypto is the most volatile religion in the world, says renowned NFT Statistics guru Sam Gellman.
Sam Gellman, aka NFT Statistics, aka punk9059, is a prominent figure in the NFT space, known for his ability to create charts and provide valuable insights into volatile markets.
In 2023, Gellman worked for Proof and hosted the “Proof Daily Countdown,” a 10–15 minute all-you-need-to-know show that resonated well with true believers of NFTs.
With the recent acquisition of Proof and Moonbirds, Gellman has joined the team at Memeland, reuniting with Ray Chan, someone he’s known for the last 12 years.
His journey into NFTs started in the mania of 2021 when a handful of Gellman’s TradFi friends urged him to look into CryptoPunks. After some initial resistance, Gellman fell down the rabbit hole and has hardly come up for air since.
“During Covid, they started really aggressively recommending CryptoPunks. I thought the first three or four of them were idiots, and then when the fifth person said it, I started to get FOMO,” says Gellman.
3. Digital asset inflows recover, but ETF activity is slowing down
Despite a net positive flow into the crypto market, spot Bitcoin ETF demand seems to have slowed down since its peak in the first week of March.
Digital asset inflows into crypto investment products turned positive in the past week, with net inflows of $862 million compared to net outflows of $931 million a week prior.
However, the popularity of spot Bitcoin exchange-traded funds seems to be cooling down. The daily trading volume of exchange-traded funds (ETFs) has dropped to $5.4 billion, 36% less than its peak of $9.5 billion recorded in the first week of March.
Bitcoin topped the digital asset flows with $863 million in inflows aided by ETF demand, with spot BTC ETFs recording $1.8 billion in inflows compared to $965 million in outflows from the Grayscale Bitcoin Trust (GBTC).
Grayscale’s ETF continues to see massive outflows nearly three months on from the approval of the products in the United States on Jan. 11.
Continuous outflows from GBTC have put significant selling pressure on BTC prices over the past three weeks.
4. BNB Chain puts up $1M reward to attract memecoin devs
Participating memecoins must have at least one security audit and open-source the project on BscScan.
Smart contract blockchain BNB Chain is attempting to attract memecoin developers amid the explosive growth of meme tokens within the crypto ecosystem.
In an announcement showed, BNB Chain said it is allocating up to $1 million to reward eligible developers deploying their memecoin projects in the network.
The company highlighted that this was part of its efforts to “accelerate the growth of the memecoin landscape” within BNB Chain.
Interested developers can apply to participate in the network’s “Meme Innovation Campaign” and deploy their tokens on the network during the campaign period, which will last from April 10 to May 9.
According to BNB Chain, the competition allows its community members to innovate creatively. It wrote:
“Taking place at the intersection of creativity, Web3 culture, and innovation, the campaign is about empowering creators, both seasoned developers and newcomers, to use blockchain technology to bring their ideas to life.”
While the competition seems simple, some requirements may be challenging to achieve. Participants need a minimum trading volume of $2 billion for their memecoins to qualify for the lowest reward. Meanwhile, memecoins with over $30 billion in trading volume can qualify for the $1 million prize.
5. Bitcoin 5% flash crash leads to $165M in leveraged crypto liquidations
Leverage traders are nursing losses of over $165 million, as the price of Bitcoin tumbled 5%.
A sudden 5% drawdown in the price of Bitcoin on Tuesday has seen traders with leveraged exposure to Bitcoin and other cryptocurrencies rack up over $165 million in losses in less than two hours.
Bitcoin plunged 5% from $69,450 to as low as $65,970 in less than 30 minutes in early hours on March 2 UTC, per TradingView data.
According to data from Coinglass, Bitcoin’s sharp wick down saw more than $165 million in leveraged positions wiped out, with just over $50 million in Bitcoin longs and more than $40 million in Ether longs accounting for the bulk of that figure.
6. Vitalik Buterin shares the next steps for Ethereum Purge
The Purge will introduce history expiration via EIP-4444 to limit the amount of historical data stored.
Ethereum co-founder Vitalik Buterin has shared the next steps for protocol simplification and node resource load decreases, known as the Purge.
The Purge is a key stage in the Ethereum transition that involves the removal of old and excess network history and simplifying the network over time.
Aside from reducing historical data storage, this stage also significantly lowers the hard disk requirements for node operators and the technical debt of the Ethereum protocol.
Buterin noted that introducing Ethereum improvement proposal (EIP)-6780 during the Dencun hard fork eliminated most of the “SELFDESTRUCT” code functions, which simplified the protocol by removing complexity and adding new security guarantees.
Buterin said that after the EIP-6780 implementation, each Ethereum block would have a higher number of storage slots due to the clearance of certain SELFDESTRUCT functions. Buterin hopes that a new EIP will completely eliminate the SELFDESTRUCT code in the future.
Crypto Labs Team
April 2nd, 2024
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