Crypto Market Faces Turmoil
Bitcoin dropped below $57K.
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This week, we examine the downturn in market prices accompanied by widespread FUD (fear, uncertainty, and doubt) among the general public. How current holders are doing and some of the factors contributing to the dip. Additionally, we investigate the announcement of a highly anticipated token airdrop EIGEN from Eigenlayer, which led to some disappointment among the community.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Since the introduction of Runes, Bitcoin transaction fees have significantly decreased, though they continue to be slightly higher than those of Ethereum, which is an unusual occurrence.
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
Bitcoin dropped below $57K.
The crypto rally of 2024 encountered turbulent conditions this week, with economic uncertainties and increasing global instability exerting pressure on various markets. On Wednesday, Bitcoin traded between $57K and $59K after the Federal Reserve revealed plans to keep interest rates stable in response to last month’s persistent inflation data. As anticipated, the Federal Reserve opted not to lower interest rates during Wednesday’s meeting, maintaining them at two-decade highs of between 5.25% and 5.5%.
BTC concluded April with a loss of over 12% — marking its first monthly decline since August 2023.
- IntoTheBlock’s IOMA price indicator reveals that currently, only 37.37% of holders within this +/-15% price bracket are in profit.
- Large “in the money” clusters highlight key price ranges on the blockchain where a significant number of addresses had been purchased earlier and would realize a profit if sold.
The influx of new capital into U.S. bitcoin ETFs has decreased — this exerts downward pressure on the broader crypto markets.
- In January, the introduction of Bitcoin ETFs in the U.S. provided a substantial boost to the crypto markets, contributing to BTC reaching a new all-time high.
- Six new products holding BTC and ETH were launched in Hong Kong, but their impact was notably less pronounced.
- To put it in perspective, on their first day, these ETFs collectively recorded approximately $12.7 million in trade volume. In contrast, the U.S. ETFs achieved around $4.6 billion on their debut day.
The EIGEN Airdrop
On Monday the Eigen Foundation announced that 15% of the initial 1.67 billion EIGEN tokens will be reserved for the community and distributed over several “seasons.” Early users who accumulated “points” will receive the first 5% of those reserved tokens through an airdrop.
Over 12,412 withdrawal requests — details of the airdrop have generated widespread disappointment, resulting in the restaking protocol receiving withdrawal requests.
- Residents from several countries including the U.S., Canada, China, and Russia, as well as users who interacted with the system via a VPN, will not be able to claim their tokens.
- Disappointment further escalated when users discovered that the EIGEN token would not be transferable initially.
- Since EigenLayer has a seven-day withdrawal processing period, the impact of these withdrawals will only become apparent in the coming weeks.
In conclusion, the crypto market faced volatility with Bitcoin prices falling and the lower than expected impact of new Hong Kong ETFs. Additionally, frustrations grew with EigenLayer’s EIGEN token launch due to restrictive policies and non-transferability, leading to a spike in withdrawal requests. Current events underscore a period of turbulence and discontent in the crypto market, particularly due to controversial token rollouts and fluctuating prices.
