Bitcoin falls below $21,000; Genesis is about to file for bankruptcy; Bitzlato founder arrested

Genesis Global Capital, the institutional crypto brokerage firm whose lending unit halted customer withdrawals after FTX’s failure, is reportedly laying the groundwork for a bankruptcy filing.

This article originally appeared in Crypto Markets Today, CoinDesk’s daily newsletter covering what’s happening in today’s crypto markets. Subscribe to get it in your inbox every day.

• Bloomberg reported that Genesis is in confidential negotiations with various groups of creditors, with the company warning that it could file for bankruptcy protection if it can’t raise capital.

• The Block reported Genesis is in talks with creditors about a ready-made bankruptcy plan, which would mean the two sides would reach a restructuring agreement before filing. The deal would then become final in the bankruptcy court.

• Since the collapse and bankruptcy of crypto exchange FTX in November, Genesis had struggled to raise fresh capital or reach an agreement with creditors.

• The firm’s institutional lending unit had been forced to suspend redemptions and new originations as a result of the FTX implosion and – along with parent company Digital Currency Group (DCG) – had come under increasing pressure to clear $900 million of blocked deposits. (DCG is also CoinDesk’s parent company.)

• Late last year, Genesis hired investment bank Moelis & Company for option scouting assistance.

(CoinDesk)

Bitcoin (BTC) and Ether (ETH): The largest cryptocurrency by market value recently fell below $21,000, coinciding with an upcoming announcement by the US Department of Justice of a major international cryptocurrency enforcement action. Earlier 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 recently traded down 3% to $1,532.

Stocks closed after the latest Producer Price Index (PPI) – a measure of input costs by companies – suggested inflation had slowed further in December. The Dow Jones Industrial Average (DJIA) fell 1.8%, while the S&P 500 and the tech-heavy Nasdaq Composite fell 1.5% and 1.2%, respectively.

The story goes on

Optimism (OP): The native token of the Ethereum-based Layer 2 network fell from $1.80 to as low as $1.50 on Wednesday. The price of the token recently settled around $1.79, down 5%. Despite the price drop, Optimism’s transaction activity has been steadily increasing over the past few weeks, outpacing competitor Arbitrum’s activity, which is down nearly 50% since its peak in November.

Shiba Inu (SHIB): SHIB was up as much as 20% on Wednesday, with Nansen reporting strong trading on both decentralized and centralized exchanges. More recently, it had fallen back to a 7% rise.

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%

Treasury yield 10 years

3.38%

▼ 0.2

BTC/ETH prices per CoinDesk indices; Gold is the COMEX spot price. Prices from approximately 4:00 p.m. ET

Crypto Market Analysis: Improving Bitcoin’s Health Could ‘Dr. Copper’

By Glenn Williams Jr.

Both bitcoin and copper are technically showing increased momentum. The Relative Strength Index (RSI) is 75 and 77, respectively. Cautious technical traders will likely note that RSI readings above 70 can indicate that an asset is overpriced and braced for a possible price decline.

However, recent readings on the Commitment of Traders (COT) report offer a break. The weekly COT report, which shows holdings by participants in the futures markets, can provide an indication of investor sentiment.

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

If correlations hold, a drop in copper prices could be accompanied by a pause in BTC’s recent bullish move.

Bitcoin & Copper 01/18/23 (TradingView)

Read the full technical take here.

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