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- Crypto Saving Expert Newsletter - Issue 135
Crypto Saving Expert Newsletter - Issue 135
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Good afternoon! Bitcoin has taken a sharp dip, falling below the $90,000 mark - its lowest level this year. The market reacted swiftly, with fear driving a wave of sell-offs as uncertainty has taken hold. Will this be a short-term shakeout or the start of a bigger correction? Let’s take a deep dive into what’s happening behind the scenes with bitcoin and the broader Web3 market. 👇
This week's issue will feature technical analysis of bitcoin, Solana, and Ethereum, as well as important dates and key news stories.
Table of Contents
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Bitcoin Loses Its Footing
Bitcoin has plummeted below $90,000, hitting its lowest level in months amid growing uncertainty surrounding the near future.
Bitcoin
Bitcoin has dropped to its lowest point this year as it lost the $90,000 level.
The reaction was aggressive, and bitcoin sold off as fear covered the market.
From here, a sweep of $85,000 could occur to wipe out all existing liquidity below. Still, a reclaim of the range low, and this would be looked back on as another liquidation event.
Bitcoin Weekly
The weekly chart provides a stark outlook. Bitcoin must record a swing failure pattern (SFP) this week of the low it has swept to offer any form of positive outlook.
If it doesn’t, the price could cascade to the downside rapidly, back down towards the previous range high for an S/R test.
Ethereum
Ethereum is also at a critical point. It is currently testing support, which is vital for it to hold.
However, if it breaks below, ETH will enter a do-or-die scenario, falling into the last high time frame regions before the structure turns highly sour.
Still, the price is holding where it is, and ETH could bounce back towards resistance.
Solana
Solana has been the weakest of the three assets.
SOL has tested the first of two possible bounce zones. If it fails to build momentum here, $125 on the daily chart is the line in the sand Solana must defend.
The price will be challenged by flipping $160 back to support. However, if it can, a rally back above $200 becomes possible.
Fear & Greed Index
The Fear and Greed Index has dropped into Extreme Fear, scoring just 25 as investors are unsure of what the future holds for bitcoin and the broader market.
This is the first time the Index has dropped into Extreme Greed for a long time. However, fears could quickly be eradicated if bitcoin recaptures $91,000.
Important Dates
Thursday 27 February, 13:30 UTC - Gross Domestic Product (GDP)
The GDP demonstrates the monetary value of all US goods, services, and structures. The GDP is a critical measurement of the economy's strength as it demonstrates economic growth or slowdown.
The GDP is forecasted at 2.3%, with the previous data the same.
Friday 28 February, 13:30 UTC - Core Personal Consumption Expenditures (PCE)
The US Bureau of Economic Analysis releases the core PCE data, which measures the average amount of money consumers spend monthly in the economy.
PCE is released in two formats: month-over-month and year-on-year. The data also removes volatile products, such as energy and food.
The year-on-year data is forecast to come in at 2.6%, with the previous data at 2.8%.
Gainers
Losers
Bybit Fully Recovers $1.4bn in Stolen Ether, CEO Confirms
Bybit's CEO Ben Zhou confirmed that the exchange has fully replaced the $1.4bn in Ether stolen by North Korea's Lazarus Group. A new proof-of-reserve audit is set to verify client assets.
In a significant development for the cryptocurrency industry, Bybit CEO Ben Zhou announced on 24 February that the exchange has fully restored the $1.4bn in Ether (ETH) that was stolen during a massive hack on 21 February. This breach, which shook the crypto community, was attributed to the North Korean hacker group Lazarus, known for its high-profile cyberattacks.
Zhou assured Bybit users in a social media post that the platform's client assets are now fully backed, with a 1:1 ratio maintained through the use of a Merkle tree. A soon-to-be-published proof-of-reserve report will confirm this claim, offering transparency and peace of mind to Bybit customers.
The $1.4bn Hack: How It Happened and Bybit's Swift Response
The hack, one of the largest in crypto history, saw Lazarus steal a substantial portion of Ether from Bybit. Blockchain analytics firm Lookonchain estimated that Bybit received 446,870 Ether, worth around $1.23bn, to cover the loss. This amount came from a combination of loans, whale deposits, and purchases, making up nearly 88% of the stolen funds.
Bybit-linked wallet addresses played a critical role in recovering the stolen Ether. One such wallet, identified as "0x2E45...1b77," purchased 157,660 ETH, valued at $437.8m, from well-known crypto investment firms like Galaxy Digital, FalconX, and Wintermute. Additionally, another $304m worth of Ether was likely acquired through centralised and decentralised exchanges using a separate wallet, "0xd7CF...A995."
The Impact on Ether Price and Bybit's Financial Health
In the aftermath of the hack, Ether's price dropped by over 7%, dropping from $2,831 to $2,629 within seven hours.
Despite the hack, Bybit's reserves remain intact. Hacken, a third-party proof-of-reserve auditor, confirmed that Bybit's total assets, which currently sit at $10.9bn according to data from DefiLlama, exceed its liabilities.
This reassurance highlights Bybit's ability to weather the storm and continue operating without compromising customer funds.
Bybit's Transparent Approach: What’s Next for Clients and Investors
Bybit's efforts to recover from this unprecedented breach have demonstrated the platform's commitment to transparency and security. With the upcoming proof-of-reserve audit, users will have access to verifiable data confirming the exchange’s financial stability. Bybit’s swift action in replenishing stolen assets and its ongoing efforts to maintain a 1:1 backing for client holdings underscore the platform's reliability in a volatile market.
While the hack itself may have caused temporary disruption, Bybit's ability to recover swiftly and restore trust in its user base is a testament to the exchange’s resilience. As the crypto industry continues to face challenges, Bybit's proactive measures set an important precedent for exchanges around the world.
The End of Bitcoin? Quantum Computing Takes Leap Forwards
Discover how Microsoft's Majorana 1 quantum computing chip could accelerate the race to a quantum-resistant Bitcoin—and what quantum computing means for crypto security.
Microsoft’s latest breakthrough in quantum computing is turning heads in the crypto world.
With the debut of its new quantum computing chip, Majorana 1, questions are mounting about the future security of bitcoin. Bitcoin exchange River has hinted that this development might speed up the timeline for making bitcoin resistant to quantum attacks.
Microsoft’s Majorana 1 Chip: A Game Changer for Crypto Security
On 19 February, Microsoft introduced its new quantum computing chip, Majorana 1, joining a growing list of tech giants pushing the boundaries of quantum technology. Not long ago, Google made headlines with its quantum chip, Willow.
According to a 20 February post on X by River, while a fully crypto-threatening quantum breakthrough is still many years away, the new chip could potentially shorten that timeline.
“The Majorana 1 chip is far from that scale now, but could reach the 1 million mark by 2027-2029 [...] When run for several days to weeks, a 1-million qubit QC could potentially crack Bitcoin addresses via a long-range attack.” — River
River’s insight underscores the urgency of addressing potential vulnerabilities in bitcoin’s cryptographic defences. Even if the quantum threat remains a decade or more away, preemptively developing quantum-resistant solutions is crucial for digital currencies' long-term security.
The Debate: Is the Quantum Threat Overblown?
Critics of the quantum threat argue that while the notion of quantum computers cracking bitcoin’s cryptography is fascinating, it is far from imminent.
Some believe that any quantum computer capable of such feats would first target traditional financial institutions, which manage assets on a vastly larger scale. Statista estimates that banks worldwide held over $188tn in assets as of 2023, dwarfing Bitcoin’s current market capitalisation of around $3.2tn.
Notable cryptographers like Adam Back maintain that we still have decades before post-quantum cryptographic methods become necessary.
Research in this field is already yielding promising advances, such as more compact, secure signature schemes that could be integrated into bitcoin’s protocol. Bitcoin advocates, including Adrian Morris and Preston Pysh, stress that while the quantum threat is taken seriously, practical solutions, like BIP-360, are already under discussion for transitioning Bitcoin to a quantum-resistant framework.
What is Quantum Computing and How Might It Affect Bitcoin?
Quantum computing represents a revolutionary leap from traditional computing. Instead of using classical bits, quantum computers use quantum bits (qubits), which harness the phenomena of superposition and entanglement. This allows them to perform certain calculations exponentially faster than conventional computers.
How Quantum Computing Works
Superposition: Unlike a classical bit that exists as either 0 or 1, a qubit can exist in a combination of both states simultaneously.
Entanglement: Qubits can be interlinked such that the state of one qubit can depend on the state of another, no matter how far apart they are.
Potential Impact on Bitcoin
Bitcoin’s security is built on public key cryptography. A sufficiently powerful quantum computer could, in theory, derive private keys from public keys, thereby compromising wallet security. However, current quantum systems are far from achieving this level of computational power. Experts agree that while quantum computing poses a potential future threat, the technology is still in its infancy.
In parallel, advancements in quantum computing may also drive improvements in cryptographic methods. The same breakthroughs that enable faster computations could be harnessed to develop post-quantum cryptography, cryptographic algorithms resistant to quantum attacks.
This dual-use nature of quantum technology means that while it might one-day challenge bitcoin’s current defences, it could also help fortify the network against future threats.
Future Prospects and Conclusion
Microsoft’s Majorana 1 chip indicates that the quantum race is heating up. Though a quantum computer capable of breaking bitcoin’s cryptography is not around the corner, the potential timeline has been nudged closer.
The crypto community is already exploring solutions like BIP-360 to transition bitcoin to a quantum-resistant structure, ensuring that vulnerabilities are addressed before they become an immediate threat.
As quantum computing continues to evolve, its interplay with blockchain technology will be one of the most critical areas to watch. Whether quantum advancements will ultimately pose a significant risk to bitcoin or instead empower a new era of cryptographic security remains an open and exciting question for the future of crypto.
Morning Crypto Briefing: Bitcoin Crashing, Market in Critical Area
Bitcoin plunged below $90k as market stagnation continued. Analysts warn of a potential drop to $70k amid ETF outflows and macro uncertainty. Get the latest insights in today’s morning briefing.
Bitcoin (BTC) has fallen below the crucial $90,000 mark, with analysts from crypto exchange Bitfinex warning that the cryptocurrency remains at a “critical juncture” after nearly 90 days of range-bound trading.
BTC has been trading between $91,000 and $102,000 for the past three months, but a lack of momentum has led to further declines.
In the past 24 hours, bitcoin has dropped over 6%, reaching its lowest price since late November. The broader crypto market also took a hit, losing over 8% of its total value, plummeting from $3.31tn to $3.02tn.
Market Liquidations Top $1bn The sudden drop in bitcoin’s price triggered a cascade of liquidations, with a staggering $1.35bn wiped out across the market in the past day, according to CoinGlass.
Breakdown of Liquidations:
● Long Bets Liquidated: $1.25bn
● Short Bets Liquidated: $93.72m
● Bitcoin Long Liquidations: $523.07m
The most significant single liquidation occurred on Binance, where a trader saw their $20.80m trade wiped out.
With BTC struggling to gain momentum, traders should prepare for increased volatility in the coming days.
ETF Outflows and Macroeconomic Uncertainty Pressuring BTC Bitcoin’s price is not just suffering from internal market dynamics. Analysts point to increasing correlation with traditional markets, where the S&P 500 has dropped 2.3% and the Nasdaq Composite has fallen 4% in the last five trading days.
Additionally, institutional demand for Bitcoin ETFs has slowed significantly, with spot Bitcoin ETFs seeing $552.5m in outflows over the course of last week, with the outflow streak now standing at five days, the longest since November.
Yesterday’s outflow from the ETFs hit $517m, almost matching the outflow noted over the whole of last week in a single trading day. Fidelity’s Wise Origin Bitcoin Fund took the brunt of the outflow, recording a drop of $247m worth of bitcoin. BlackRock’s IBIT also saw a large outflow, with $159m leaving the ETF.
As ETF outflows accelerate, the market could see increased selling pressure.
Arthur Hayes Predicts Bitcoin Could Plunge to $70k BitMEX co-founder Arthur Hayes has also sounded the alarm, suggesting bitcoin could drop as low as $70,000 if large hedge funds unwind their positions in spot BTC ETFs.
According to Hayes, many hedge funds took a long position in Bitcoin ETFs while shorting CME futures, exploiting the “basis spread” arbitrage trade.
What Happens If the Spread Shrinks?
1️ Funds sell IBIT shares to lock in profits.
2️ They buy back CME futures to cover shorts.
3️ This selling pressure causes bitcoin’s price to drop further.
4️ A feedback loop begins, intensifying the downturn.
US Economic Concerns Add to Crypto Uncertainty Bitcoin is also facing macro-driven uncertainty, with new data from the University of Michigan’s Consumer Survey revealing that consumer sentiment dropped 10% in February, its lowest in 15 months.
Additional Pressures on the Market:
● Inflation fears are rising, slowing down economic confidence.
● President Trump’s proposed 25% tariffs on Canada and Mexico could add to inflationary concerns.
● Disinflation progress over the past two years is at risk of being undone by economic policies.
With market sentiment weakening, crypto investors are bracing for further volatility.
Key Takeaways From Today’s Briefing ● Bitcoin’s price drops below $90k, marking a key support level.
● Crypto market loses $300bn, falling 8% in 24 hours.
● ETF outflows hit $517m, signalling weakening institutional demand.
● Arthur Hayes warns BTC could plunge to $70k if hedge funds unwind their trades.
● US macroeconomic concerns and inflation fears are rising, impacting market sentiment.
What’s Next?
With Bitcoin’s price at a critical level, traders are watching key support at $89k. If BTC fails to hold, further downside to $70k is possible.
Stay tuned for more updates, and trade cautiously in these volatile market conditions!
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