Binance founder (richest Chinese person for a period of 2021) sentenced to four months in prison: Former Binance CEO Changpeng Zhao (CZ) was sentenced by a judge to four months in prison after admitting to violating US anti-money laundering laws while operating the exchange. The sentence was significantly lower than the minimum 3-year prison sentence expected by the Department of Justice.
It is worth noting that the former Binance CEO resigned due to charges brought against him and his cryptocurrency exchange in the fourth quarter of 2023. Moreover, CZ has pleaded guilty to the charges, and part of the plea agreement requires him to give up his position as the head of the Binance exchange. Binance, in turn, must pay a fine of up to $4.3 billion. This reduced his sentence, which is usually punishable by up to 10 years in prison for the charges alleged. But with only 4 months in prison, the sentence looks relatively light in comparison to the sentencing of FTX founder Sam (25 years).
As explained in a previous article, “Bitcoin must hold the next support level between $60,000 and $61,500 in the coming days, otherwise Bitcoin will lose its major support level for two months and could fall to test $56,000 to $58,000 or even $52,000 to $53,800.” - Currently, the price of Bitcoin is $57,500.
Bitcoin has been range-bound for 9 weeks now and this move just dropped to the bottom of the range. Now we wait and see if it will bounce on the fourth retest or try to break below the next support level of $55,500-56,000 low range.
Data shows that there are several buy walls in the order book of Binance, the exchange with the most liquid Bitcoin trading, with prices as low as around $50,000. Each yellow line represents an order of at least 200 BTC, or about $11.5 million.
The risk of miner capitulation is rising and profits are being squeezed. If the price of Bitcoin continues to correct downward in the next few days and lasts for several weeks, large miners will face the risk of having to liquidate a large amount of Bitcoin to hedge themselves.
If the price decline lasts for more than a few days or weeks, miners run the risk of having to shut down operations entirely, retire unprofitable machines, and sell more Bitcoin to stay afloat. Hash Ribbons are our go-to indicator for when this happens. When the 30-day moving average of Bitcoin hashrate falls below the 60-day moving average, it’s a sign that miners are capitulating.
Bitcoin’s cyclical nature has little to do with other influences, but the reason this pullback is insignificant is because it is insignificant compared to Bitcoin’s previous bull market pullbacks. This pullback is lower than any we have experienced so far in this bull run, and is comparable to the pullbacks observed at the start of the past 4 Bitcoin bull runs. Either this will be Bitcoin’s smallest bull run to date and the second shortest in duration, or we have plenty of room to run.
If you ask me, I personally don’t want to see Bitcoin go back to the $50,000 price level, especially if altcoins start to suffer and see a -50% price drop. So, after these months of uptrend, it’s already hard to give back some of the gains, and no one wants to go through any moment of that long bear market again.
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Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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