Bitcoin is losing momentum, while altcoins are showing support

05.09.2023

Dear traders,

The market is still slow, and there is significant selling pressure; we could expect a continuation of the drop.

Jake
TOP Trader

BTC is falling into the mid $25,000 support zone and could continue with a bigger drop.

ETH retraced to a major support level at $1,630, and there is a possibility of it filling the wick down to $1,500. It remains in a precarious position before a potential larger pushback.

XRP dropped back to the $0.5 support level and needs to hold it; otherwise, a bigger drop may be in store.

LINK is experiencing a significant pullback toward the $6 support level and is losing strength for a larger push upward. Despite diminishing momentum, any price below $7 offers an attractive buying opportunity.

SOL broke above $20 after bullish news regarding VISA card payment. There is a substantial likelihood of a larger pullback in the coming days.

EOS has fallen below the $0.6 support level and is losing momentum for a larger push upward. It remains an appealing option for long-term investment.

LTC has dropped below the $65 support level and is losing momentum, with a high likelihood of a larger breakdown.

DXY broke bullish above the 104.3 resistance and needs to hold above it on a daily basis for a big bullish breakout.

Crypto/stock daily news:

BlockFi and Celsius are two big crypto banks that are on the brink of collapse. (Like the Lehman Brothers or Bear Stearns during the 2008 crash on Wall Street).
And just like Wall Street, they may need a bailout (or further damage will be done to the whole market). But it’s not the government stepping in. It’s the free market stepping in to cut deals on these distressed assets.
Celsius had raised $850m+, had 3m+ customers, and held over $17b of assets.
They stopped customer withdrawals weeks ago.
But have no fear, Goldman Sachs is here. Over the weekend, rumors broke that Goldman is trying to raise $2b with the help of other investors to buy out the assets from Celsius’ balance sheet.
If Celsius were to file for bankruptcy, this would allow Goldman & Company to swoop in and buy the crypto assets at a big discount.
The Trader JAKE Take: This could actually be huge for two reasons…
1) Goldman buying out the assets could resume withdrawals for customers waiting to take out their funds
2) Bringing a blue-chip name like Goldman into crypto is big for crypto’s brand.
BlockFi had raised $1.3b, had 225,000+ customers, and held over $3b of assets.
They started delaying withdrawals last week causing customers to freak out.
Then they received an offer from FTX to help out – a $250m line of credit.
But apparently, it came with fine print… if accepted, the deal would basically wipe out early equity investors’ stakes in the company.
And now some of those early investors (Morgan Creek, the fund co-founded by friend of the Milk Road, Anthony “Pomp” Pompliano) are trying to raise $250m to put together a better deal than FTX’s.
The bottom line:
1) BlockFi could take FTX’s offer. This would immediately give BlockFi funds to pay back their depositors. This puts customers over shareholders.
2) Or wait to see if investors can give a better offer. This would help shareholders maintain their stake, but it’s currently unclear what that means for customer deposits.
The Trader JAKE Take: It’s not an easy decision, but whatever path they take – we believe the customer deposits should come before shareholder equity (and we’re not alone).

Graph of the day

The number of Bitcoins held on centralized exchanges has dropped to the lowest level since 2018, according to Glassnode. (Yellow line)
After seeing Terra, Celsius, and BlockFi all fail at letting customers easily withdraw their assets… people are moving coins off of centralized exchanges in fear of it happening again.