Last week, the digital asset market faced an unexpected blow. On December 3, the cryptocurrency market in South Korea experienced a short-term crash due to the declaration of martial law in the country. This event negatively impacted the global market, which suffered significant losses, reports correspondent from the business information center Kapital.kz.
South Korean President Yoon Suk-yeol announced in his televised address: “I am declaring martial law to protect the free Republic of Korea from the threat of communist forces in North Korea and to eliminate the disgusting anti-state elements supporting the North Korean regime.” In light of this news, most trading pairs with the Korean won showed a sharp decline. The price of Bitcoin on the largest local exchange, Upbit, dropped below $71,000, while the stablecoin USDT reached a low of $0.89. The Upbit Market Index, which reflects the overall dynamics of the top 30 assets on the Upbit exchange, fell by 13.2%. During this period of uncertainty, all cryptocurrency exchanges in the country quickly suspended operations, making trading nearly impossible. The declaration of martial law meant transferring the functions of the civilian government under military control, suspending parliamentary activities, and introducing a number of other restrictions. According to BBC, this decision is linked to disagreements between the ruling party and the opposition regarding the state budget for the upcoming year.
The global cryptocurrency market remained resilient, although some analysts warned of potential corrections that would have occurred regardless of the events in Korea. Technical analyst Ali Martinez believes that recent patterns on the Bitcoin chart could indicate a possible reversal of the upward trend and an impending price correction. On December 3, he noted that a bearish “head and shoulders” pattern had formed over the last seven days, often signaling a trend change. According to his forecast, this could potentially lead to a decrease in Bitcoin's price to the level of $90,000. Earlier, Ali Martinez pointed out the overall decline in on-chain activity, including a decrease in the number of active addresses, transaction volumes, and actions by large holders. The analyst stated: “We need an increase in these metrics to confirm the continuation of the upward trend.”
The author of the bestseller “Rich Dad Poor Dad” and entrepreneur Robert Kiyosaki noted that since the price of Bitcoin has “stuck” below the $100,000 mark, it could drop to $60,000. He expressed his intention to buy more Bitcoin if the price falls. He predicts that by 2025, the asset's price will stabilize around $250,000. The investor emphasized: “At this stage, what matters more is not the price, but the amount of Bitcoin purchased. I need to buy more.” Analyst Willy Woo responded that breaking the $100,000 mark “is likely to happen.” However, he mentioned that if a crash occurs, the next support level would be $70,000, and the market might enter what is called the “altcoin season.” Analysts from Glassnode added that this phase is already gaining momentum. The average number of active addresses in the Solana network reached 18.6 million, which is 40 times higher than Ethereum's figure of 0.47 million. However, the current season may differ significantly from the previous one. Founder and CEO of CryptoQuant Ki Yong Joo stated that the upcoming alt season will be atypical. He emphasized that the key factor for the segment is trading volumes not paired with Bitcoin, but against fiat currencies and stablecoins, as their liquidity better reflects market growth. However, the main drivers of Bitcoin's growth have been institutional investors, and these participants are not looking to exchange Bitcoin for other assets and, moreover, primarily operate outside of cryptocurrency exchanges. This makes capital redistribution from Bitcoin less likely, as altcoins traditionally depend on trading platforms and require a flow of funds from new retail investors, noted the head of CryptoQuant. Ki Yong Joo added: “Don’t get me wrong; I am optimistic about altcoins. However, I want to emphasize that only selected ones will attract new capital. An alt season will come, but not for everyone. Not every coin will reach its previous peak.”
An example of such selectiveness in growth was the situation with Ripple. On December 2, the price of XRP reached a seven-year high of $2.78, pushing the Solana stablecoin out of third place by market capitalization. XRP experienced a daily growth of 27.8%. Over the past 14 days, the asset appreciated by 105.5%, and over the month — by 365.8%. The positive dynamics were influenced not only by expectations of a leadership change at the SEC and the possible cessation of legal proceedings against Ripple but also by the statement of the candidate for the position of “crypto czar” of the U.S., Christopher Giancarlo. He believes that the agency will ultimately withdraw the lawsuit. The market also anticipates an expansion of the crypto-ETF list, including products related to XRP. On November 1, 21Shares submitted the corresponding application to the Securities and Exchange Commission. It will face competition from WisdomTree. Earlier applications were submitted by Canary Capital and Bitwise. An additional driver for growth was the hopes for the potential launch of the stablecoin RLUSD by the company in early December. According to insiders at FOX Business, Ripple notified the NYDFS about the upcoming token registration. In August, justifying the need for this initiative, Ripple referred to Bernstein analysts' forecast of segment capitalization growth to $2.8 trillion in the coming years. Analysts from CryptoQuant warned investors of potential risks. The last time after a similar sharp rise, the price of XRP corrected by 17%. According to Coinglass, the open interest in XRP futures reached an overheated size of about $3.99 billion, while a week ago this figure was $2.34 billion.
Not only Ripple demonstrated activity in the market; Ethereum also saw an increase. In the last week of November, $270 million flowed into cryptocurrency investment funds. Positive dynamics have continued for the eighth consecutive week, although significantly weakened compared to mid-month. However, considering the influx since the beginning of the year, it reached a record $37.3 billion.
MicroStrategy, adhering to its traditions, continued to purchase Bitcoin despite the overall price increase. The company's founder, Michael Saylor, reported the acquisition of an additional 15,400 BTC. According to a report to the U.S. Securities and Exchange Commission, the company purchased the cryptocurrency for approximately $1.5 billion at an average price of $95,976. The return for the last quarter was 38.7%, and for the year — 63.3%. At the time of writing, MicroStrategy holds 402,100 BTC worth about $23.4 billion ($58,263 per coin). Funds for purchasing additional BTC were obtained from the sale of 3.7 million company shares on the stock market.
Against the backdrop of rising prices, old Bitcoin holders have become more active. On December 1, an unknown user moved 11 BTC (~$1.07 million at the time of writing) after 11.6 years of inactivity. This transaction was highlighted by the Whale Alert service, which monitors large transfers. On November 30, another holder, who had not shown activity for over 11 years, transferred 13 BTC (~$1.26 million) to another wallet. In 2013, when these assets were acquired, the coin's price was around $5,850. On the same day, Whale Alert recorded a transfer from a larger investor: an unknown entity sent 429 BTC (~$41.7 million) after 10.9 years of inactivity. Experienced holders moved their assets to decentralized exchanges to maintain anonymity. CryptoQuant analyst Alex Adler noted that large players holding over 1,000 BTC “are not in a hurry” to sell their coins. According to on-chain data, the average daily influx from whales to exchanges is just over 5,000 BTC.
As a result of the seven-day reporting period, the total capitalization of the cryptocurrency market approached the psychological mark of $3.5 trillion, even despite the events in South Korea. As of the evening of Wednesday, December 4, 2024, it stood at $3.44 trillion, which is 7.84% higher than the values recorded at the end of the previous reporting period.
1. Bitcoin (BTC). As of the evening of Wednesday, December 4, 2024, the price of Bitcoin was $95,447, having increased by 2.90% over the past seven days. Bitcoin continued to show an upward trend, strengthening its position in the market. The market capitalization of BTC increased to $1.888 trillion, confirming its dominant influence on the market. Bitcoin's share of the total capitalization decreased by 2.5 percentage points to 54.8%. Despite some volatility, the price of BTC managed to stay above $95,000, indicating strong support and interest from large institutional investors.
2. Ethereum (ETH).