Bitcoin Falls Below $21,000; Genesis nears bankruptcy filing; Bitzlato founder arrested

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Genesis Global Capital, the institutional crypto brokerage whose lending unit halted client withdrawals following the failure of FTX, is setting the stage for a bankruptcy filing, according to reports.

This article originally appeared on Crypto Markets Today, CoinDesk’s daily newsletter diving into what’s been happening in today’s crypto markets. Subscribe to receive it in your inbox every day.

Bloomberg reported that Genesis was in confidential negotiations with various creditor groups, with the company warning that it could seek bankruptcy protection if it fails to raise capital.

The bloc reported that Genesis was in talks with creditors over a pre-packaged bankruptcy plan, which would mean the two parties would reach a restructuring agreement before any filings. The agreement would then become final in bankruptcy court.

Since the collapse and bankruptcy of crypto exchange FTX in November, Genesis had been scrambling to raise new capital or strike a deal with creditors.

The company’s institutional lending unit had been forced to suspend redemptions and new creations following the FTX implosion, and along with parent company Digital Currency Group (DCG), it had come under increasing pressure to repay $900 million in blocked deposits. (DCG is also the parent company of CoinDesk.)

Late last year, Genesis retained investment bank Moelis & Company to help explore options.

(CoinDesk)

Bitcoin (BTC) and ether (ETH): The largest cryptocurrency by market value recently fell below $21,000, coinciding with the US Department of Justice’s ongoing announcement of major international action on application of cryptocurrency. Earlier on Wednesday, BTC hit its highest level since mid-September, trading as high as $21,602 before falling to the $20,700 level. It was down 2% for the day. Ether was recently trading down 3% at $1,532.

Stocks closed after the latest producer price index (PPI) measured business input costs, suggesting inflation continued to ease in December. The Dow Jones Industrial Average (DJIA) fell 1.8%, while the tech-heavy S&P 500 and Nasdaq Composite fell 1.5% and 1.2%, respectively.

The story continues

Optimism (OP): The native Ethereum-based Layer 2 network token fell from $1.80 to $1.50 on Wednesday. The price of the tokens recently returned to around $1.79, down 5%. Despite the price drop, transactional activity on Optimism has steadily increased as the scale kicks off in recent weeks, outpacing rival activity at Arbitrums, which has fallen nearly 50% since its peak of november.

Shiba Inu (SHIB): SHIB jumped 20% earlier on Wednesday, with Nansen reporting heavy trading on decentralized and centralized exchanges. He had recently fallen back to a 7% lead.

CoinDesk Market Index (CMI)

987.47

35.5 3.5%

Bitcoin (BTC)

$20,775

533.9 2.5%

Ethereum (ETH)

$1,530

49.9 3.2%

S&P 500 daily close

3,928.86

62.1 1.6%

Gold

$1,907

0.6 0.0%

10-year Treasury yield

3.38%

0.2

BTC/ETH Price by CoinDesk Indices; gold is the COMEX spot price. Prices from around 4 p.m. ET

Crypto Market Analysis: Bitcoins Improve Health Possibly Thanks to ‘Dr. Copper’

By Glenn Williams Jr.

Both bitcoin and copper are showing technically increased momentum. The Relative Strength Index (RSI) for each is 75 and 77, respectively. Cautious technical traders will likely notice that RSI readings above 70 may indicate that an asset is overvalued and primed for a potential price decline.

Current readings of the Commitment of Traders (COT) report offer a disconnect, however. The weekly COT report, showing participants’ holdings in the futures markets, can provide clues about investor sentiment.

The most recent COT report shows commercial users of copper are net short of the asset, reflecting concerns about upcoming price declines. In contrast, institutional BTC holders are net on the asset, according to the most recent report.

If the correlations hold, a drop in copper prices could come with a pause in the recent rise in BTC.

Bitcoin and copper 1/18/23 (TradingView)

Read the full technical take here.

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