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US crypto executive order looms — 5 things to watch in Bitcoin this week

A lack of bullish momentum leaves Bitcoin wanting this week as macro clouds gather on the horizon.
Bitcoin (BTC) starts a new week with a bang — but not in the right direction for bulls.A promising weekend nonetheless saw BTC/USD…



A lack of bullish momentum leaves Bitcoin wanting this week as macro clouds gather on the horizon.

Bitcoin (BTC) starts a new week with a bang — but not in the right direction for bulls.

A promising weekend nonetheless saw BTC/USD attract warnings over spurious "out of hours" price moves, and these ultimately proved timely as the weekly close sent the pair down over $1,000.

At $37,900, even that close was not enough to satisfy analysts' demands, and the all-too-familiar rangebound behavior Bitcoin has exhibited throughout January thus continues.

The question for many, then, is what will change the status quo. 

Amid a lack of any genuine spot market recovery despite solid on-chain data, it may be an external trigger that ends up responsible for a shake-up. The United States' executive order on cryptocurrency regulation is due at some point in February, for example, while exact timing is unknown.

The Federal Reserve is a further area of interest for analysts, as any cues on inflation, interest rate hikes or asset purchase tapering could significantly impact traditional markets, to which Bitcoin and altcoins remain closely correlated.

With frustrating times characterizing the first month of 2022, Cointelegraph takes a look at the state of the market this week.

We've identified five things worth considering when working out Bitcoin's next moves.

Bears "hammer" down on BTC weekly close 

Even the meagre gains into the weekly close were a short-lived reason to celebrate for Bitcoin bulls this Sunday.

Midnight UTC saw an immediate rejection candle sweep in, with BTC/USD diving to $36,650 on Bitstamp.

As noted by trader, analyst and podcast host Scott Melker, strong volume accompanied the move, underscoring the unreliable nature of weekend price action when it comes to building a position.

As several other sources said last week, Melker reiterated that $39,600 needs to be reclaimed for a more bullish outlook to prevail.

Just as uninspired by the weekly candle was fellow trader and analyst Rekt Capital, who in a fresh Twitter update said that BTC "continues to struggle with $38,500 resistance."

"This is the area BTC needs to Weekly candle Close above to ensure upside beyond ~$39,000," he added.

With a disappointing performance behind it, Bitcoin is thus back in the same old range — one which some warn could yet result in a retest of lower levels.

"Personally looking forward to any opps to compound if we trade this 29-40k range for long," popular trader Pentoshi confirmed.

The trip to highs around $38,600 meanwhile succeeded in raising previously negative funding rates on derivatives as sentiment swiftly changed from expecting further downside to expecting a bullish continuation.

The reversal, however, sent funding rates broadly back into negative territory, with most hovering just under neutral at the time of writing.

BTC funding rates chart. Source: Coinglass

Can S&P 500 upend worst month since March 2020?

While Bitcoin's monthly close is not yet slated to bring any surprises, stock markets may nonetheless provide some last-minute relief.

With futures up pre-session Monday, the S&P 500, with which Bitcoin has displayed growing positive correlation in recent months, is heading for its worst monthly performance since March 2020.

The S&P is down 7% this month, echoing the jittery start to the year for Bitcoin, as Fed policy begins to bite enthusiasm which accompanied unprecedented liquidity provision at the start of the Coronavirus pandemic.

S&P 500 1-hour candle chart. Source: TradingView

While the Fed is now tight-lipped over the timetable for rate hikes which should follow the turning-off of the "easy money" spigot, closer to home, another problem for Bitcoiners is on the horizon.

The Biden administration's upcoming executive order on crypto, ostensibly moved forward to February, could put the cat among the pigeons once again in terms of already battered sentiment.

The specter of the Infrastructure Bill remains for many a market participant, and further disadvantageous treatment of the crypto phenomenon would be seriously unwelcome from a country now hosting the lion's share of the Bitcoin mining hash rate.

According to a report from Bloomberg last week, the order should focus on the "risks and opportunities" crypto affords.

The plans have already seen "multiple meetings" with officials, with the aim seemingly to unify government regulatory approaches to the crypto sphere.

Old hands age well

Behind the scenes, the more comforting trend of seasoned Bitcoin hodlers clinging to their assets continues to play out.

Data from on-chain analytics firm Glassnode this week confirms that the number of coins that last moved between five and seven years ago has reached an all-time high.

That cohort of coins now totals 716,727 BTC.

Bitcoin supply last active five to seven years ago vs BTC/USD chart. Source: Glassnode/ Twitter

At the same time, January in fact saw an overall decrease in Bitcoin exchange reserves despite price losses. As per Glassnode data, major exchanges are down around $243 million this week alone.

Previously, Cointelegraph reported on the ongoing depletion of exchanges' BTC holdings. 

Separate figures from CryptoQuant, which track 21 major trading platforms, further confirm that balances are at their lowest since 2018.

Bitcoin exchange balance vs. BTC/USD chart. Source: CryptoQuant

GBTC dives to record 30% discount

Things aren’t going so well for the Grayscale Bitcoin Trust (GBTC).

Despite data showing the reemergence of institutional interest in Bitcoin in January, demand for the industry’s flagship BTC investment product continues to wane.

According to data from on-chain analytics firm Coinglass, last week saw GBTC trade at its biggest ever discount relative to the Bitcoin spot price.

GBTC premium, holdings, marker price chart. Source: Coinglass

This discount to net asset value (NAV) — the fund’s BTC holdings — used to be a premium investors paid for exposure, but now, the tables have long turned.

On Jan. 22, new entrants were technically able to buy GBTC shares at nearly 30% below the spot price on the day.

As Cointelegraph reported, GBTC has faced a rapidly changing environment in recent months, thanks to a combination of price action and the launch of exchange-traded funds (ETFs). GBTC itself is due to become a spot-based ETF — but only with U.S. regulatory approval.

Precising the situation, on-chain analyst Jan Wuestenfeld said that in spite of the discount, GBTC did not necessarily represent a way for institutional investors to profit from “easy money” in the long term.

“Yes, if you believe it will be converted into a spot ETF at some point, but there are also the fees to consider and also that you don't really hold the keys,” he said as part of a Twitter debate at the weekend.

Not so fearful after all?

Trustworthy or not, something is happening to Bitcoin on-chain sentiment this week.

Related: Top 5 cryptocurrencies to watch this week: BTC, LINK, HNT, FLOW, ONE

After spending almost all of January in the depths of “extreme fear,” accompanied by a revisit of rare lows seen only a handful of times, the Crypto Fear & Greed Index is finally looking up.

On Sunday, the Index exited the “extreme fear” zone — a reading between 0 and 25 — for the first time since Jan. 3.

Fear & Greed uses a basket of factors to determine overall market sentiment, and its range highs and lows have accurately depicted extremes in price.

That a more positive mood may finally be entering is a welcome signal for analysts, but as ever, all depends on whether such a recovery is sustainable and remains uninterrupted by external surprises.

The party proved to be fleeting, as the weekly close hammer candle sent readings back into "extreme fear."

Nonetheless, with brief trip to 29 — “fear” — the Index thus avoided the dubious honor of spending the longest-ever amount of time in the “extreme fear” zone since it was created in 2018.

Crypto Fear & Greed Index. Source:

The fickle nature of sentiment overall, meanwhile, was not lost on veteran trader Peter Brandt, who at the weekend poked fun at how perspectives have changed since the price correction began.

With the all-time highs in November as a focal point, Brandt described the latter half of 2021 as the "Laser Greed Era."

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Ferrari to accept crypto payments in the US

Ferrari’s decision to accept cryptocurrency payments was driven by market demand and dealer requests, with numerous clients investing in digital currencies.



Ferrari’s decision to accept cryptocurrency payments was driven by market demand and dealer requests, with numerous clients investing in digital currencies.

Ferrari will accept cryptocurrency payments for its luxury sports cars in the United States due to customer demand. The carmaker also plans to accept crypto payments in Europe.

According to an Oct. 14 report from Reuters, Ferrari’s chief marketing and commercial officer, Enrico Galliera, confirmed the intentions of the luxury car brand. Ferrari’s choice to accept cryptocurrency payments was driven by market demand and dealer requests, with numerous clients, including crypto-savvy young investors, having invested in digital currencies.

Although Galliera didn’t specify the number of cars Ferrari expects to sell via crypto payments, he reportedly stated that the carmaker’s strong order portfolio is fully booked until 2025. Ferrari aims to test this expanding market to connect with potential buyers beyond its usual clientele. The luxury automaker plans to introduce cryptocurrency payments in Europe by the first quarter of 2024 and expand to other crypto-friendly regions after.

For its initial phase in the U.S., Ferrari has reportedly partnered with major cryptocurrency payment processor, BitPay. This collaboration enables transactions in Bitcoin (BTC), Ether (ETH) and USD Coin (USDC).

Galliera confirmed that there will be no additional fees or surcharges when using cryptocurrency, as BitPay will promptly convert cryptocurrency payments into conventional fiat currency for Ferrari’s dealers, ensuring they are shielded from cryptocurrency price fluctuations.

BitPay will also verify the legitimacy of the digital currency, ensuring it does not originate from illicit activities, money laundering or tax evasion.

Related: Madeira announces creation of Bitcoin business hub for innovation

Many large corporations have hesitated to adopt cryptocurrencies due to their price volatility and associated transaction impracticality. Among these companies is Tesla, the electric vehicle manufacturer, which initially started accepting payments in Bitcoin in 2021. However, CEO Elon Musk suspended this payment method due to environmental concerns.

Magazine: The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report

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Caroline Ellison wanted to step down but feared a bank run on FTX

Former Alameda CEO Caroline Ellison recognized she wasn’t doing a good job months before the company filed for bankruptcy, but Sam Bankman-Fried persuaded…



Former Alameda CEO Caroline Ellison recognized she wasn’t doing a good job months before the company filed for bankruptcy, but Sam Bankman-Fried persuaded her to stay.

Caroline Ellison wasn’t doing a good job leading Alameda Research in 2022, and she did not hide it. Excerpts from her personal notes shared as evidence by prosecutors in Sam Bankman-Fried’s trial revealed details about the trading firm’s struggles and its CEO’s desire to resign weeks and months before FTX collapsed.

Ellison spent over 10 hours testifying during Bankman-Fried’s trial this past week, notably entering through the front doors of the United States District Court for the Southern District of New York in Manhattan, joined by her attorneys. Ellison said she had not seen Bankman-Fried since the crypto empire failed in November 2022, but their communication had eroded months before.

In April 2022, their romantic relationship ended, and Caroline started avoiding meetings with Bankman-Fried even though they still lived in the same luxurious apartment in the Bahamas. Alameda’s growing liabilities with FTX and the breakup with Bankman-Fried made her consider leaving the company altogether.

“I feel like neither [Sam] Trabucco nor I have been doing a great job of pushing on stuff,” she wrote in the document to Bankman-Fried, which was shared as evidence during her cross-examination by the former FTX CEO’s defense counsel.

Bankman-Fried asked her to stay on, saying that her departure could create rumors about Alameda’s financial health, thus harming FTX’s credibility, so Ellison remained CEO.

Ellison joined Alameda as a trader in 2018. By 2020, she handled most of the company’s operations, while Bankman-Fried focused on his newly launched crypto exchange, FTX. In August 2021, she became co-CEO alongside Sam Trabucco, who stepped down a few months later, leaving her in charge of the company. In August 2022, Trabucco officially resigned as co-CEO.

Ellison was against creating FTX, she revealed. “I didn’t think of myself as ambitious before I started at Alameda, but I believe I became more ambitious” under Bankman-Fried’s incentive, she said.

As CEO, Ellison was in charge of handling Alameda’s crypto lenders. In mid-2022, after the Terra ecosystem failed, the company’s open-term loans stood at $1.3 billion. The market downturn drained liquidity from crypto assets, prompting Alameda’s lenders to demand loan repayments.

According to Ellison, Bankman-Fried instructed her to keep repaying creditors via Alameda’s line of credit with FTX. In other words, Alameda would use FTX’s customer assets to repay crypto lenders. At the time, its line of credit with the exchange stood at $13 billion.

As lenders demanded loan repayments and Alameda’s balance sheets, Bankman-Fried suggested Ellison use “alternative means” for presenting the company’s financials. In the following months, Ellison would create many additional versions of a balance sheet to deceive creditors.

Early in November 2022, an alternative version of Alameda’s balance sheet was leaked. Ellison was on vacation in Japan at the time, but she had to travel to FTX Hong Kong’s office to deal with the company’s crisis.

While the balance sheet data didn’t reflect the company’s reality, it was enough to spread rumors and trigger a bank run on FTX a few days later, exposing an $8 billion gap between the companies.

Having cooperated with the U.S. Department of Justice since December 2022, Ellison will soon receive her sentence regarding the seven counts of fraud and conspiracy to commit fraud she was charged with.

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ProShares prepares to launch unique Short Ether Strategy ETF

ProShares’ SETH ETF will start trading soon, following the first Ethereum futures ETFs by about two weeks.
ProShares introduced a trio…



ProShares' SETH ETF will start trading soon, following the first Ethereum futures ETFs by about two weeks.

ProShares introduced a trio of Ethereum futures ETFs in the recent weeks. Presently, the company is gearing up to provide a distinctive offering.

ProShares' Short Ether Strategy ETF (SETH) from the fund group is poised to commence trading shortly, following the debut of the initial Ethereum futures ETFs by about two weeks.

SETH, scheduled for listing on the NYSE Arca exchange, aims to achieve daily investment outcomes that mirror the inverse of the daily S&P CME Ether Futures Index performance, as indicated in a filing made on Friday, Oct. 13.

The fund does not engage in direct shorting of ether (ETH); rather, it seeks to capitalize on potential declines in the asset's value, as stated in the prospectus. On Friday, the price of ETH stood at approximately $1,540, reflecting a decrease of approximately 6% over the past week.

Screenshot of the ProShares SETH filing     Source: SEC

ProShares anticipates that the registration statement for SETH will become effective on Oct. 15 and plans to introduce the fund in early November, as reported by Blockworks.

However, the three existing ProShares ether futures funds — including two that invest in both ether and bitcoin futures contracts — debuted on Oct. 2 alongside similar products by VanEck and Bitwise.

The US Securities and Exchange Commission approved ether futures ETFs two years following the introduction of the initial bitcoin futures ETF, the ProShares Bitcoin Strategy ETF (BITO), which entered the market in Oct. 2021.

Related: SEC reportedly won’t appeal court decision on Grayscale Bitcoin ETF

ProShares continued its release of bitcoin futures ETFs with the Short Bitcoin Strategy ETF (BITI) in June 2022. As of now, BITO has accumulated around $850 million in assets, while BITI has approximately $75 million.

In August, Cointelegraph reported that Ether futures ETFs may be approved in October, causing an 11% spike in ETH prices at the time.

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