Market Trend｜Crypto Market Revealed a Mixed Bag, SBF Arrested In The Bahamas, ETH Gas Fees Has a Moderate Increase

While the previous week appeared to show the cryptocurrency market cruising along horizontal trading patterns, this week has revealed a mixed bag, whereby various currencies have shed upwards of 10%, while others have made minute gains. However, this week has offered a sense of poetic justice, with Sam Bankman-Fried apprehended for his involvement with the FTX crash. Yet, despite this positive occurrence, the devastating FTX crash continues to reverberate throughout the market and wreck havoc in its wake.

The Latest News

FTX Pleads For Permission To Sell Off Four Businesses

Since the devastating collapse of the cryptocurrency giant, FTX, the company has entered a phase of dissolution and the market appears to be coinciding. In a recent development in the progressive decline of the exchange, FTX officials have asked the court for permission to sell off four assumably solvent businesses, including Ledger X, before they continue to shed value in light of the collapse. Due to the negative reputation and press associated with the brand, businesses associated with FTX are suffering the repercussions of the former, despite not having a direct involvement with the collapse.




Providing the court grants the notion and stakeholders are in agreeance, FTX could begin the auctioning of the firms as early as the first quarter of 2023. With these businesses in good standing with regulators, it is anticipated that these firms could thrive under new management.




Bitcoin Slips Below $18,000 As Federal Reserve Raise Interest Rate

In what has already been a year filled with red candlesticks for Bitcoin, it has recently dipped below the $18,000 threshold as the Federal Reserve break the news that they are hiking interest rates by 50 basis points. However, despite this dip in valuation, Bitcoin is still trading above its 7-day SMA and maintaining its footing above this threshold despite the adversity of economic factors. Yet, this serves as a testament that despite Bitcoin in theory being an inflation-proof asset, the general sentiment of investors and businesses will be influenced by economic and political factors outside of the cryptocurrency world – thus negatively influencing the asset.

Prior to the news, Bitcoin was standing at a weekly high of $18,355, however, it quickly began to lose its footing and move beneath $18,000 and trade at an average of $17,400.



SBF Arrested In The Bahamas

The fallout of the FTX crash has thwarted the blockchain world with bankruptcies, business collapse, and an immovable bearishness. As many have left the blockchain world and the remaining collective has remained bearish, one thing stands clear among all within the community – that SBF needed to be apprehended. Having presumably fled to the Bahamas and tweeting a series of half-hearted apologies that shed little light on what occurred within FTX to result in such a substantial decline, SBF remained a free man until this Monday.

Authorities in the Bahamas arrested SBF on Monday morning and claimed that the US are likely to claim extradition as SBF faces a litany of charges from the Department of Justice, the Commodity Futures Trading Commission, and the Securities and Exchange Commission. As it currently stands, SBF faces two counts of securities fraud courtesy of the SEC, two counts of fraud courtesy of the CFTC, and eight other criminal charges courtesy of the Department of Justice (including, wire fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering).

Current Project Trends

Based on data provided by CoinMarketCap, a majority of the top-gaining projects across the past week have been DAOs, based on blockchain information, and those providing real-world utility (such as providing technology to various industries outside of finance). This is likely a result of the FTX collapse exacerbating concerns related to blockchain knowledge and security, hence why many may be investing in protocols committed to providing security, as well as those that grant them autonomy over the direction of the project, such as fund allocation and utility.

The Current BTC Trend
Bitcoin seemingly was demonstrating signs of recovery as it cleared the new resistance zone of $17,000 and soared above $18,000. However, as mentioned previously, due to the Federal Reserve hiking interest rates by 50 basis points, Bitcoin shortly plummeted below the $18,000 threshold once again. Considering an estimated $3 billion worth of futures contracts have been dissolved across the past two months, it comes as no surprise that across the past 24 hours the volume of BTC futures contracts on Binance, a primary provider of the former, has dipped notably below the $2 billion threshold. This serves as a reminder that Bitcoin is still in the bearish territory as the futures contract valuations serve as an indicator of market health and leverage. Currently, the sharp decline in fund allocation to Bitcoin futures contracts is at parity with levels recorded in July 2022, demonstrating a regression as a result of external market factors. As a result, this bearish indication may signal a progressive decline in Bitcoin’s valuation over the coming weeks, provided the futures market is unable to recuperate its losses.

On the flip side, Bitcoin’s MVRV (market value to realised value) has remained relatively horizontal across the past week, bottoming at a 0.849 ratio and reaching a high of 0.896, down from a high of 0.85 the previous week. Considering the value remains below one, this signals that the Bitcoin market may be at a ‘possible market bottom’, indicating that taking a gradual long position may be a beneficial tactic in the current market climate, as Bitcoin is reportedly trading below its realised value. This demonstrates a more bullish prospect for the Bitcoin market and suggests that the current bearishness may remain for the time being, yet that recovery could be viable in the long term.


The State Of ETH Gas Fees
As of the 16th of December, there has been a moderate increase in the total gas used across the past week in comparison to the former, with the lowest figure attained on the 9th, totalling 108,331,369,174. The highest figure attained this week was 108,984,491,809, demonstrating the continuation of last week’s gas usage in the former portion of the past week.

As a result, Ethereum gas fee boundaries this week have remained relatively consistent. The low gas boundaries remained between 10-94 gwei, the average boundaries were between 10-96 gwei, and the high boundaries were between 10-98 gwei – demonstrating a vast disparity in gas fees across the past week.

Across the past 24 hours, the top ‘Gas Guzzlers’ according to Etherscan were Uniswap V3: Router 2 (with fees totalling $187,886.45 or 147.63 ETH), Seaport 1.1 (with fees totalling $165,978.58 or 130.74 ETH), and Uniswap V2: Router 2 (with fees totalling $146,966.10 or 115.76 ETH).

The estimated cost of transactions across the likes of OpenSea: Sale, Uniswap V3: Swap, and USDT: Transfer, has been suggested to be between $0.89 and $3.27, according to Etherscan.

The Current Macro Situation

CPI Data
According to data released on December 13th, the CPI has demonstrated that the current rate of inflation is at 7.1% y/y, as opposed to the previously forecasted 7.3% y/y. This suggests that the economic markets could be privy to recovery or bullish momentum in the coming months.

Unemployment Rate
According to the U.S Bureau Of Labor Statistics the current rate of unemployment in the USA sits at 3.7%. However, 45 surveyed economists have predicted that the unemployment rate will soar to a figure between 5.5% and 6.5%, with some suggesting that an increase to 7% could be possible, despite the Federal Reserve’s aims to stifle historic levels of inflation.

Additionally, 85% of the surveyed economists have predicted that the National Bureau of Economic Research will declare a recession by next year.

Federal Reserve Conferences
Contrary to the previously mentioned bullish CPI forecast, the recent Federal Reserve conference revealed that interest rates are brewing hiked by a further 50 basis points, thus intensifying the current rate of inflation. As a result, the likes of Bitcoin felt the aftermath of this revelation, as it began to fall through the $18,000 threshold. This interest rate increase suggests that the current period of inflation is far from over and that it could intensify in the coming months.

Notable Crypto Events
Currently, the soonest notable crypto and blockchain-focused events are set to occur in early January. These could perhaps shed light on how project leads intend to eye up development and recovery in light of the current bear market.

What Could Be Coming In The Week Ahead?

Based on the previous data and the current market climate, it remains possible that the overarching bearish sentiment may remain throughout the market as the FTX collapse continues to reverberate throughout each sector of blockchain. However, the fortunate arrest of SBF and FTX’s plan to sell four businesses could signal that this ordeal will be resolved and the market and those involved can begin to recover. However, with assets such as Bitcoin being hit by inflation, it is likely that the remainder of the market will follow along this similar bearish trajectory, contrary to the bullish CPI data release.



Author: Gate.io Researcher: Matthew Webster-Dowsing
* This article represents only the views of the researcher and does not constitute any investment suggestions.
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