Bitcoin moves sideways to $23,000

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Bitcoin (BTC): The largest cryptocurrency by market value was recently trading at $23,000, up 0.4% in the past 24 hours. Total bitcoin options volume on Deribit rose to $4.25 billion last week, the highest point since Sam Bankman-Fried’s FTX exchange went bankrupt in the second week of November.

Stocks closed mixed as traders continued to process the latest round of fourth-quarter earnings reports from companies such as General Electric. The Dow Jones Industrial Average (DJIA) rose 0.31% while the tech-heavy S&P 500 and Nasdaq Composite fell 0.07% and 0.27%, respectively.

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.

CoinDesk Market Index (CMI)

1,077.84

12.1 1.1%

Bitcoin (BTC)

$22,874

101.5 0.4%

Ethereum (ETH)

$1,594

39.1 2.4%

S&P 500 daily close

4,016.95

2.9 0.1%

Gold

$1,939

+11.6 0.6%

10-year Treasury yield

3.47%

0.1

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

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Binance, the world’s largest crypto exchange by trading volume, mistakenly kept collateral for some of the crypto assets it issues in the same wallet as funds belonging to its clients, Bloomberg reported Tuesday, citing an unidentified Binance spokesperson.

The exchange has issued 94 so-called Binance-peg tokens (B-Tokens), and the reserves of almost half of them are stored in a cold wallet called Binance 8, Bloomberg said. The wallet contains more tokens than necessary for the number of B-Tokens issued. Because the tokens are meant to be backed 1:1, the excess indicates the collateral is mixed with client tokens, according to Bloomberg.

Collateral assets have already been moved into this wallet by mistake and referenced accordingly on the B-Token Proof of Collateral page, the spokesperson told Bloomberg. Binance is aware of this error and is in the process of transferring these assets to dedicated collateral wallets. Assets held with the exchange were and continue to be backed 1:1, the spokesperson said.

When collateral is pooled and used for trading, it is blocked, and clients or asset holders may not be able to withdraw if the pool is reduced, said Laurent Kssis, crypto trading advisor at CEC. Capital, in a note to CoinDesk.

This essentially means there is no asset segregation between client funds and collateral used, Kssis said. This could prevent the owner(s) from withdrawing due to lack of funds or liquidity by the exchange.

The story continues

(CoinDesk Research)

Ether (ETH): ETH slipped 0.8% to recently trade at $1,615. Ether has turned deflationary again, with nearly a quarter of ETH burned resulting from non-fungible token swaps over the past seven days, according to data from ultrasound.money.

Moving on to on-chain data, remember the Wormhole network exploiter who stole 80,000 ETH last year? He reappeared this week. According to data from Etherscan, the miner traded 95,360 ETH worth around $157 million on decentralized financial aggregator OpenOcean, then traded smaller amounts of capital through multiple DeFi protocols on Monday.

Axie Infinity (AXS), dYdX (DYDX), and Aptos (APT): AXS, DYDX, and APT have recently shown signs of strength in token unlocks, which are normally viewed as a bearish event. The AXS token jumped 40% on the prospect of $64 million in previously locked tokens, while the DYDX token rose 64% to rally this month despite an upcoming token unlock on February 2. APT has followed a similar trend, up 262% this year.

By Glenn Williams Jr.

Bitcoin and Ether’s trading range has started to narrow as the two largest cryptocurrencies by market capitalization seek to establish new areas of support. After last week’s 8% and 5% gains, the price movement of BTC and ETH has yet to exceed a percentage point in the past four days.

BTC rose 0.4% on Saturday, fell slightly on Sunday, and edged up 1% and 0.09%, respectively, in the first two days of this week. Ether traveled the same way during the same period.

Bitcoin’s chart implies fresh support levels forming near $22,900. The Volume Profile Visible Range (VPVR) tool shows increasing levels of activity and price agreement at this brand. Often these are called high volume nodes and can indicate where the market considers an asset to be fairly priced, at least for now.

(TradingView)

Read the full technical take here.

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