Pre-halving volatility continued to dominate the crypto market on Tuesday as prices reversed course from Monday’s spike, leading to Bitcoin (BTC) plunging below $69,000 while altcoins faced significant declines.

Stocks also trended lower for most of the trading day, with investors waiting on the sidelines ahead of tomorrow’s Consumer Price Index (CPI) report, which is expected to provide insights into the potential trajectory of U.S. interest rates. Currently, the market anticipates a 57% chance of a rate cut in June and a 74% likelihood of a cut in July.

Despite this, a rally into the close managed to lift the S&P and Nasdaq out of negative territory, while the Dow finished flat.

Data from TradingView indicates that Bitcoin has been on a downtrend since reaching its peak at $72,800 on Monday, experiencing a 6.82% decline to reach a low of $68,200 on Tuesday afternoon. However, dip buyers subsequently pushed it back above $69,000, and at the time of writing, BTC trades at $69,030, marking a 3.75% decline over the past 24 hours.

Market analyst Bloodgood commented on the current macro environment, describing it as oscillating between hope for a perfect soft landing and fears of inflation, with sentiment appearing to lean towards the bearish side recently.

He highlighted the significance of tomorrow’s CPI release and cautioned about potential surprises regarding inflation, advising caution, especially for those with leveraged positions.

Regarding Bitcoin, Bloodgood noted a lot of indecision lately but expressed confidence in the bulls’ control due to the upward drift and higher lows being printed. However, he emphasized the challenge at the current All-Time-High, slightly above $73,700.

Bloodgood also touched on the unusual aspects of this bull market cycle, including the attention garnered by memecoins and the ongoing rise of gold. He urged traders to focus on the current chart rather than relying on fractal patterns or previous cycles to predict future movements.

In conclusion, Bloodgood suggested that capital might rotate towards technically impressive projects later in the cycle, despite the current dominance of memecoins.

According to Michaël van de Poppe, founder of MN Trading, Bitcoin is likely to trade sideways and consolidate in the near term until sometime after the halving.

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After Bitcoin soared to its March all-time high above $73,000, profit-taking by long-term holders has started to decrease, as per a recent report from Glassnode.

While Bitcoin’s March all-time high prompted significant profit-taking by long-term holders, this activity has begun to taper off, the Glassnode Insights report noted on Tuesday.

Typically, profit-taking, especially by long-term holders, intensifies around all-time high breaks but has been cooling down in recent weeks, according to the report.

The balance of assets between long-term Bitcoin holders and new demand indicates that the current market is entering the early stages of a euphoria or price discovery phase. However, historical analysis suggests that such phases are prone to price corrections, with drawdowns exceeding 10% being common, and many surpassing 25%.

Since Bitcoin’s all-time high in March, there have been only two significant corrections of around 10% or more, the report highlighted.

The upcoming Bitcoin halving is currently a major driver of market speculation. Sunny Lu, Founder of VeChain, emphasized how regulatory developments would impact Bitcoin’s trajectory post-halving.

Comparing the current cycle to the previous one, Lu highlighted the impact of regulation on pivotal price moments. Regulatory actions have been instrumental in driving significant price movements since the last halving in May 2020.

Lu pointed out that the approval of spot Bitcoin ETFs in March of this year triggered the latest price peak, following previous peaks after the Coinbase IPO in April 2021 and the approval of Bitcoin futures ETFs in November of the same year.

He emphasized a shift in focus from solely considering supply dynamics to broader macroeconomic factors in understanding the halving’s impact. The evolving narrative now encompasses not only the halving’s mathematical effect on supply but also macro forces influencing prices.

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Worldcoin, the digital identity and cryptocurrency project led by OpenAI CEO Sam Altman, is introducing new features to bolster personal data protection and enhance age verification processes.

On April 9, Worldcoin unveiled two updates: the option to unverify World IDs through permanent iris code deletion and the introduction of in-person age verification checks.

World ID holders now can unverify their World ID, which acts as a digital passport verifying an individual’s humanity using “orbs,” devices that scan users’ eyeballs to confirm their authenticity.

Unverification of the World ID involves the permanent deletion of the user’s iris code, a numerical representation of their unique iris texture, ensuring that individuals can only verify one World ID.

Upon deletion request, the user’s World ID becomes invalid. To prevent fraud, a six-month “cool-off” period is mandated, ensuring individuals cannot immediately re-verify their humanness.

After the cool-off period, users’ iris codes are permanently deleted and rendered unrecoverable.

The development of Worldcoin’s unverify option involved collaboration with third-party privacy and security experts, including the Bavarian State Office for Data Protection Supervision (BayLDA), serving as Worldcoin’s lead supervisory authority in the European Union.

The second update introduces in-person age verification checks to ensure the platform’s accessibility exclusively to individuals aged 18 years and above.

This update incorporates on-site age verification checks at all orb locations prior to World ID verification. Third-party personnel will conduct the verification before granting entry to the venue.

Worldcoin spokesperson stated, “Worldcoin has always required that individuals be a minimum of 18 years old to obtain a World ID,” emphasizing that users have been prompted to confirm their age in the app, aligning with the practices of widely used applications.

Altman launched Worldcoin in July 2023 intending to establish a “global financial and identity network based on proof of personhood.”

While receiving mixed reactions from the community, Worldcoin has faced scrutiny over concerns regarding centralization, privacy, and security. Governments, including the European Union and Kenya, have expressed skepticism and initiated investigations into Worldcoin’s operations due to privacy concerns.

Despite challenges, Worldcoin maintains its commitment to operating lawfully in all available locations and ensures compliance with relevant laws.

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Toncoin (TON) has overtaken Cardano’s ADA to claim the ninth position in market capitalization. With its recent surge, can Toncoin sustain its upward momentum and potentially surpass Dogecoin next?

Toncoin’s Ascendancy to 9th Place

Following a remarkable 13% daily price surge, Toncoin reached $6.65 by 1:45 p.m (UTC), securing the ninth spot among cryptocurrencies with a market capitalization of $23 billion, surpassing ADA’s $22 billion market cap, according to data from CoinMarketCap.

The rally coincided with TON Society developers allocating $5 million Toncoin to incentivize users for identity verification using palm scanning technology. This initiative aims to enable digital identity verification for Telegram users over the next five years, offering one million TON to participants in the proof-of-personhood program.

Toncoin’s increased traction has outpaced Cardano’s ADA, with TON witnessing a remarkable 135% surge over the past month, while ADA faced a 15% decline.

Zooming out, Toncoin has surged 183% year-to-date (YTD), contrasting ADA’s 1.30% YTD decrease.

Toncoin’s Initiatives for Growth

Toncoin initiated a $115 million community incentive program on March 20, allocating $38 million for token mining and user incentives, $22 million for airdrops, $15 million for The League developer ecosystem, and $40 million for liquidity pool boosts, aiming to stimulate user adoption.

In contrast, Cardano’s ADA saw subdued interest this year, with investor attention diverted towards Bitcoin exchange-traded funds (ETFs) and major blockchain upgrades such as Ethereum’s Dencun upgrade.

Sustaining Momentum: Toncoin vs. Dogecoin

Toncoin’s performance has eclipsed that of Dogecoin significantly. Toncoin surged 130% in the past month, while DOGE only recorded a 14.8% gain. Year-to-date, TON has surged by 177%, whereas DOGE’s price has increased by 108%, according to TradingView.

Toncoin’s utility within the Telegram messaging app offers a direct avenue for price appreciation with increasing user adoption, unlike Dogecoin, which relies primarily on speculative demand.

Concerns and Considerations

However, Toncoin’s token distribution could raise concerns among retail investors. Data from CoinCarp suggests that over 60% of Toncoin is held by the top 10 holders, while the 100 richest holders control 93% of the supply. This concentration of ownership may impact market dynamics and investor sentiment moving forward.

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With the Bitcoin halving approaching, traders are closely monitoring market dynamics, particularly professional traders, to gauge sentiment. Historically, the anticipation surrounding halving events has typically led to bullish sentiment in the months following rather than on the exact halving date. This is due to the delayed impact of reduced mining output on the market.

Bitcoin miners tend to accumulate rather than liquidate holdings daily, especially anticipating a bullish market, bolstered by Bitcoin’s 59% appreciation year-to-date in 2024. This expectation of market appreciation further tightens supply, potentially driving prices higher.

However, analysts caution against simplistic post-halving price surge expectations, noting Bitcoin’s price trajectory is influenced by various factors, including economic trends, investor risk appetite, monetary policies, and correlations with the stock market. Relying solely on historical halving patterns may be overly optimistic.

Neutral-to-bullish call options dominate the June 28 expiry, with professional traders turning to options strategies to leverage positions with minimal upfront deposits, avoiding direct liquidation risk found in futures markets.

Open interest for options expiring on June 28 at Deribit has reached $4.5 billion, showcasing a significant call-to-put options imbalance, with bullish positions outweighing bearish ones threefold. However, this perspective warrants deeper analysis, considering the cryptocurrency community’s tendency towards optimism.

While there are call options targeting as high as $140,000 and $200,000 for the June 28 expiry, some appear overly ambitious. Realistic call options open interest is around $2.72 billion, excluding bets on prices exceeding $90,000. Conversely, put options placed before Bitcoin’s surge over $50,000 have diminished the likelihood of profitability, with open interest in puts at $57,000 or higher at a scant $250 million.

Bitcoin’s unexpected performance surge, attributed to factors like the approval of a spot exchange-traded fund in the U.S., reduced inflation to 3%, and absence of a predicted global economic recession by June 28, caught bears off guard. Consequently, bearish scenarios tied to the Bitcoin halving seem increasingly unlikely.

Speculations about a “death spiral” due to reduced block rewards and decreased miner participation have been consistently debunked. Bitcoin’s network adjusts its difficulty every 2016 block, ensuring stability amid fluctuating hash rate levels.

In a hypothetical scenario where Bitcoin’s price drops to $47,000 by June 28, a 32% decrease from current levels, put options open interest would be $422 million, while calling options up to $46,000 account for a $670 million exposure, highlighting a market inclination towards neutral-to-bullish strategies for the Bitcoin halving, at least by the June 28 expiry.

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