Good Morning Crypto Enthusiasts!

Glad to have you back for another edition of the UseTheBitcoin.com newsletter.

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Now that the bills are paid, were diving right into the top headlines!

📰 News Highlights:

📉 Bitcoin's Rollercoaster: A Wild 20-Minute Ride Under $41K! 🎢(Link) (Link) (Link) (Link)

Bitcoin took us on a rollercoaster ride, plunging 6.5% in just 20 minutes, wiping nearly a week of gains and slipping below the $41,000 mark on December 11.

The sudden drawdown, from $43,357 to as low as $40,659, sent shockwaves through the market. But fear not, as Bitcoin showed resilience, rebounding slightly to $41,960 at the time of publication.

Ether, the crypto sibling, wasn't spared either, experiencing an 8.9% dip in the same timeframe, stabilizing later at $2,233. The domino effect extended to other major assets like BNB, XRP, and Solana. This flash crash resulted in over $270 million worth of long positions getting liquidated, with BTC's open interest taking a hit of $1.2 billion, currently standing at around $17.9 billion.

What caused this crypto rollercoaster? As it happened just after Wolf of All Street’s Scott Melker cheekily remarked about Bitcoin closing its eighth green weekly candle, adding, "When correction, sir?" 

This event marks Bitcoin's most significant single-day decline in over a month, challenging the recent upward trend fueled by expectations of SEC-approved spot Bitcoin ETFs and speculations around the U.S. Federal Reserve cutting interest rates in 2024. As we brace for more crypto twists, analysts are eyeing inflation data and the final Federal Open Market Committee meeting of 2023.

🚀 Fidelity's Crypto Ascent: Spot Bitcoin ETF on the Horizon! 🌌 (Link)(Link)

The crypto universe is abuzz as financial giant Fidelity engages in discussions with the U.S. Securities and Exchange Commission (SEC) about its spot Bitcoin exchange-traded fund (ETF) application.

In a strategic move reminiscent of Blackrock, Fidelity is exploring the in-kind creation model for its Wise Origin Bitcoin Trust ETF. The recent meeting between Fidelity's officers and the SEC delved into Cboe BZX’s proposed rule change for listing and trading shares of the Wise Origin Bitcoin Trust.

The in-depth discussion showcased the intricate processes of the "in-kind create" and "in-kind redeem" flows, shedding light on Fidelity's innovative approach. Investors eagerly await the SEC's decision on spot Bitcoin ETFs, with Fidelity and Blackrock aligning on the "in-kind create model."

If approved, predictions hint at a substantial inflow of over $2.4 billion into these investment products in the first quarter of the next year. As the crypto landscape evolves, large asset managers and financial advisors are poised to make significant moves, signaling a potential transformative phase for the industry.

🌐 Global Crypto Summit: U.S., South Korea, Japan Tackle North Korean Crypto Heists! 💼(Link) (Link)

In a high-stakes trilateral meeting, national security officials from the U.S., South Korea, and Japan convened to discuss North Korea's crypto thefts and its nuclear and ballistic missile programs.

The meeting, held in Seoul, covered a spectrum of issues, including regional crises, ballistic missile defense data sharing, and the use of cryptocurrency by North Korea to fund its illicit weapons of mass destruction (WMD) programs.

The collaboration aimed to address the growing concerns about North Korea's involvement in cyber thefts, with Lazarus Group, a hacking entity tied to North Korea, allegedly stealing over $600 million from Axie Infinity's Ronin Bridge.

The U.S. Treasury Department's Office of Foreign Asset Control (OFAC) has been actively sanctioning entities and individuals linked to crypto transactions supporting North Korea's weapons program. As the three nations pool their efforts, the meeting marks a crucial step in combating illicit crypto activities on the global stage.

🔍 U.S. Government's Crypto U-Turn: AML Rules Axed from Defense Bill! 🤯(Link)

In a surprising twist, the U.S. government has removed two crucial Anti-Money Laundering (AML) provisions from the National Defense Authorization Act (NDAA) related to cryptocurrency. The provisions outlined a meticulous review system and reporting mechanisms for crypto activities to combat illicit practices. 

The first provision mandated coordination between the U.S. Secretary of the Treasury and regulators to establish a risk-focused examination system for crypto at financial institutions.

The second provision targeted anonymous crypto asset transactions, focusing on crypto mixers and tumblers. The removal of these provisions raises questions about the U.S. government's stance on crypto regulation and oversight. 

This development comes after significant deliberations in Congress, with senators proposing amendments to address money laundering concerns in the crypto space. As the regulatory landscape continues to evolve, the crypto community awaits further clarity on the U.S. government's approach to AML issues in the digital asset realm.

💡 Feature of the Day:

💫 Starknet's STRK Airdrop Steals the Spotlight! 🚀(Link) 

Starknet, the Ethereum layer-2 powered by zk-proof, is gearing up for a groundbreaking move – a massive airdrop of over 1.8 billion STRK tokens. The Starknet Foundation's plan involves distributing tokens through various initiatives to boost adoption and growth on its blockchain platform. The token, deployed on Ethereum in November 2022, is set to reward contributors and users for their transactions on the Starknet network.

The airdrop's centerpiece is the "provisions committee," tasked with allocating 900 million STRK tokens for a fair, decentralized, and transparent distribution.

The Foundation aims to incentivize not only contributions but also user transactions by offering rebates for transaction fees. The DeFi sector is also in focus, with a dedicated committee exploring strategies to enhance liquidity, trading volume, and overall growth of DeFi protocols on Starknet. As the crypto community awaits further details, this strategic move positions Starknet as a key player in shaping the landscape of Ethereum layer-2 networks in 2024.

🔍 Industry Insights: 

Don't Blow Your Crypto Life!  Avoid These 10 Beginner Mistakes [SOURCE] 

Investing in crypto can be exciting, but it's also a minefield for the unprepared. Before you jump in, take a deep breath and remember these 10 common mistakes that could blow up your crypto life:

1. Research Deficiency: Blindly jumping into an investment is a recipe for disaster. Take time to understand the technology, team, purpose, and market trends of each cryptocurrency before you commit.

2.  Fear and Greed: Letting emotions run wild is a sure way to lose your cool and your cash. Avoid panic selling when markets dip and resist the urge to buy into the latest hype without due diligence.

3. Overtrading Frenzy: Frequent buying and selling triggers transaction fees and can lead to impulsive, poor decisions. Stick to your strategy and avoid knee-jerk reactions.

4. Putting All Your Eggs in One Basket: Diversification is key! Don't put all your eggs in one crypto basket. Spread your investments across different assets to minimize risk.

5. Shiny Coin Syndrome: Be wary of coins with excessive hype or celebrity endorsements. They often lack substance and can leave you holding an empty bag.

6. Impatience is the Thief of Profits: Crypto markets are volatile, but don't let short-term fluctuations tempt you into rash decisions. Remember, Rome wasn't built in a day, and neither are crypto fortunes.

7. Ignorance is Not Bliss: Staying in the dark about regulations can lead to legal trouble. Familiarize yourself with the tax laws and reporting requirements in your country.

8. Phishing Bait:  Watch out for those who want to hook you into scams. Verify sources, be cautious of unsolicited requests, and never share your private keys.

9. Leveraging Up for Disaster: Leveraging can magnify both your gains and your losses. It's a risky game best left to experienced traders.

10. Blind Faith Holding: Holding onto a coin without a plan is like sailing the high seas without a map. Develop a clear exit strategy and don't be afraid to adjust it as circumstances change.

Investing in crypto requires education, caution, and a solid strategy. By avoiding these common mistakes and staying informed, you can navigate the volatile crypto world and emerge victorious. 

Remember, your financial future depends on it!

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🔍 Technical Analysis:

Just four days ago, our resident trading wizard at UseTheBitcoin.com issued a warning and highlighted that BTC had potentially reaching its market peak, this scenario unfolded precisely as he predicted.

BTC BEFORE

Today's Asia trading session witnessed a substantial $4,500 drop in BTC, marked by a bearish daily open and the formation of a wide Monday range.

The short-term market outlook remains uncertain, but attention is drawn to the next 20 days leading up to the eagerly anticipated ETF news on January 9-11. Whether it's an exit liquidity rally or a genuine bull run, the market's trajectory will be revealed in the coming weeks.

BTC AFTER

For now I have highlighted the analysis from a few days ago compared to today's price action.

ETH BEFORE

In our previous ETH analysis, we pointed out the possibility of altcoins experiencing an upward surge as BTC entered a distributive pattern.

True to that prediction, ETH took the lead in the rally last weekend, with tokens like AVAX, TIA, JTO, and others following suit. After a few weeks of anticipation, ETH finally showed signs of strength.

ETH AFTER

Despite the overall market downturn triggered by BTC's drop, a closer look at individual charts reveals that altcoins are displaying more resilience compared to BTC.

The provided images above illustrate the connections between our previous analysis and the current market conditions.

😂 Crypto Memes of the Day: 

And that’s it for this today!

Thanks for reading, see you all next week for Monday’s edition!

See you again tomorrow,
Jonathan Gibson
UseTheBitcoin.com