Bitcoin Rally Faces Doubts After Weekend Drop

The Breakdown First Five - Wednesday, April 17, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Liquidity Issues 

As crypto enthusiasts flocked to Dubai for Token 2049, the desert city suffered a catastrophic flood. Conference goers are massively underwater and rental cars are being abused more than usual. Dubai is not built for flash floods so infrastructure has ground to a halt. The conference is still going ahead at this stage. Explanations included climate change, cloud seeding gone awry or simply that crypto is haram and evokes the wrath of god.  

4. Powell Punts Rate Cuts

In his first public comments since the latest round of hot inflation data, Fed Chair Jerome Powell has suggested rate cuts might not happen this year. Markets have now pushed back the potential first rate cut into September at the earliest and pricing shows a lack of certainty it will arrive by December. Stocks responded with a mild sell off while 2 year rates touched 5% for the first time since November. 

3. Upbit Limits Transactions

A problem with compliance software will force Upbit to limit deposits and withdrawals above 1 million won (~$721). The Korean exchange announced the discontinuation of use of a travel rule compliance tool provided by Ten&Ten, with transactions becoming limited from Monday. The issue could further dampen spirits among the Korean crypto community. In Q1, the Korean Won was the most traded fiat pair, surpassing US dollars. 

2. OKX Executives Depart

A pair of veteran executives have left OKX according to sources. Tim Byun, the Head of Global Government Relations and Wei Lan, the Head of Product, have both reportedly left the company. This compounds with the departure of Global Compliance Chief Patrick Donegan in January after just six months on the job. It’s hard not to see the similarities to last year’s exodus of Binance executives.

1. Is The Bitcoin Rally Over?

This weekend’s drawdown has damaged sentiment, but could it really be over already? Industry leaders are rallying around the flag, calling for the bull run to continue after the halving. There’s plenty of hopium anywhere you look, from on chain indicators to a flush out of leverage. However most analysis leans heavily on cycle theory, Bitcoin will go up because Bitcoin has always gone up. Could this cycle be different?