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## Crypto Daily Digest: BTC Support Level May Be Between $30,000 to $35,000, AltLayer is About to Launch Airdrops
Yesterday, Arthur Hayes posted that the first argument for <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s recent sharp decline was the outflow of funds from the Grayscale Bitcoin Trust Fund (GBTC). This statement is false because when you calculate the net amount of funds flowing out of GBTC against the funds flowing into newly listed spot Bitcoin ETFs, the result is a net inflow of $820 million as of January 22.

The second argument is that the trend of Bitcoin predicts that the Bank Term Financing Plan (BTFP) will not be renewed. This event will not be positive, because the Federal Reserve has not yet lowered the interest rate to the level that pushes the yield of 10-year US treasury bond bonds to the range of 2% to 3%. I believe that the cessation of BTFP will lead to a small financial crisis and force the Federal Reserve to stop talking, prompting Yellen to start cutting interest rates, reducing QT, and/or restoring printing money through quantitative easing (QE).

Hayes continued, "Earlier in an article, I thought Bitcoin would fall before the BTFP renewal decision on March 12th. I didn't expect it to happen so quickly, but I believe Bitcoin will find a local bottom between $30,000 and $35,000. As the S&P index (SPX) and New York Stock Exchange (NDX) plummeted due to the small financial crisis in March, Bitcoin will rise because it will be ahead of the Federal Reserve's rate cuts and printing rhetoric ultimately turning into action to press the 'Brrrr' button."

Regarding its trading strategy, Hayes stated: "Bitcoin has retreated 30% from its approved ETF high of $48,000 to $33,600. Therefore, I believe Bitcoin's support level is between $30000 and $35,000. That's why I bought $35,000 of exercise put options on March 29, 2024. I also sold my trading positions in <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> and Bonk at a slight loss. If BTFP really won't renew, once Bitcoin falls below $35,000, I will start buying at the bottom."

Bitwise Chief Investment Officer Matt Hougan posted on the X platform stating that strictly speaking, this is not ETF led selling. ETFs are net buyers of Bitcoin (including GBTC). This is a sell-off triggered by ETF expectations. The market preempted the approval of ETFs by buying a large amount of spot Bitcoin and Bitcoin derivatives. The market had previously anticipated that the net inflow of funds into ETFs would be greater than what we have received so far, and the market is now canceling this bet. Just as the market overestimates the short-term impact of ETFs, it also underestimates the long-term impact.

In addition, Hougan also forwarded and agreed with David Lawant, the research director of FalconX, that "the two main drivers of net <a href="/price/flow-flow" target="_blank" class="blog_inner_link">Flow</a> in spot BTC ETFs (GBTC losing over $500 million, while IBIT and FBTC inflow of hundreds of millions of dollars per day) will gradually decrease. Although GBTC will dominate in the short term, IBIT and FBTC will dominate in the medium/long term."

According to data from research institutions, the US Bitcoin spot ETF saw a net outflow of $487 million in funds on the 8th day, with a cumulative inflow of $602 million over the past 8 days. On the 8th day, GBTC's net outflow of funds was $515 million, with a cumulative outflow of $3.963 billion within 8 days.

Yesterday, dForce founder Yang Mindao tweeted that Mr Gox will unlock 200000 Bitcoins in the next two months to pay creditors, and the PayPal fiat currency channel has already begun payment. In addition, the expected halving of Bitcoin in April 2024 will reduce the annual supply by 160,000 coins.

JPMorgan Chase stated in a recent research report that the launch of Bitcoin spot ETFs may disappoint investors in 2024. The SEC approved spot Bitcoin ETFs last month, which is widely expected to herald a new era for cryptocurrencies, with mainstream funds expected to flow into this field.

But according to a report by JPMorgan Chase, "What we are concerned about is that any disappointing performance could weaken the enthusiasm to drive a rebound, given people's enthusiasm for spot ETFs and the accompanying influx of new funds into the crypto ecosystem." The bank pointed out that Bitcoin prices have come under pressure, falling below $40,000, "the enthusiasm for spot ETFs may further fade, leading to price declines, reduced trading volume, and reduced ancillary revenue opportunities for companies such as Coinbase."

After the popularity of Bitcoin spot ETFs faded, the focus of market attention gradually shifted to <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> ETFs.

Fox Business journalist Eleanor Terrett revealed that ETF issuers, investment management firms, and sources close to the SEC have different views on the potential approval schedule for Ethereum spot ETFs. A source said that at this moment, the SEC's position is to "forcefully reject," but there are currently "some internal obstacles" to this idea.

A BTC spot ETF issuer applying for ETH spot ETFs expressed confidence that the approval and smooth launch of Bitcoin spot ETFs will force the SEC to approve Ethereum spot ETFs. Some people also say that the listing of ETH futures ETFs and BlackRock's record of obtaining ETF approval makes them believe that Ethereum spot ETFs may be launched by the end of summer.

In addition, CFTC believes that ETH is a commodity, coupled with Ripple's partial victory in court in trading <a href="/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a> in the secondary market, which will lead to a tough battle for Gensler. SEC Commissioner Hester Peirce stated that the agency does not want to repeat the same delay error on ETH ETFs. Eleanor Terrett concluded that if SEC staff delves deeper into the S-1 document, they will see some progress in the coming months.

In addition, Ethereum supply may be affected by the upcoming Denchun upgrade.

According to Luke Nolan, Ethereum research assistant at CoinShares, the upgrade to Denchun will enable L2 transactions to be sent to the Ethereum network through blobspace, which is an alternative to the current transaction calldata mechanism. Transaction calldata accounts for 90% of the Gas fees paid by Layer 2. But after the upgrade of Denchun, Layer 2 can use the new blobspace mechanism instead of publishing data through calldata, greatly reducing Gas costs.

Analysts say, "If it is expected that Layer 2 will gradually shift towards using the new blobspace mechanism, Gas prices may stabilize at lower levels, which means fewer Ethereum tokens will be destroyed, thereby affecting the growth of Ethereum supply."

Finally, let's take a look at AltLayer, a highly anticipated re-staking roll up in the market. Yesterday, AltLayer officially announced on Twitter, Discord, and Telegram that it will announce the ALT airdrop claim website. The claim period is from January 25 to February 25, 2024, with a total supply of 300 million ALT airdrops, accounting for 3% of the total supply.

35.47% of the 300 million ALT airdrops will be allocated to NFT holders, 37.07% will be allocated to Altitude Campaign participants, 13.05% will be allocated to EigenLayer re-staking users, 4.49% will be allocated to EigenLayer ecosystem partners, 9.92% will be allocated to Celestia stakers, etc. All airdrop snapshot times have been completed on January 17th at 20:00:11 Beijing time. Oh Ottie and OG Badge NFT holders in circulation, as well as AltLayer Altitude Campaigns participants, will also receive airdrops.

## Macro: Gold rebounds, Brad urges the Federal Reserve to cut interest rates as soon as possible
On Tuesday, the US dollar index rebounded significantly after testing the 103 level and briefly reached an intraday high of 103.81. However, it took back some of its gains during the US session and ultimately closed up 0.2% at 103.56; The 10-year US Treasury yield stabilized at the 4.1% mark and closed at 4.139%; The two-year US Treasury yield, which is more sensitive to the Federal Reserve's policy interest rates, closed at 4.378%.

Spot gold rebounded and rose to an intraday high of $2037.90 in the short term in the European market, but then gave up some of its gains and failed to stabilize above the 2030 level, ultimately closing up 0.37% at $2029.27 per ounce. Spot silver rose 1.57% to close at $22.44 per ounce.

International crude oil is on a roller coaster ride. WTI crude oil fell to an intraday low of $73.38 during the US session, but later regained some lost ground and climbed $75, ultimately failing to stabilize at this point, closing down 0.19% at $74.44 per barrel; Brent crude oil repeatedly returned to the $80 mark in the market, but still failed to stabilize above this level, ultimately closing down 0.29% at $79.63 per barrel. The US stock index closed down 0.25%, the Nasdaq rose 0.43%, and the S&P 500 index rose 0.29%.

Former Federal Reserve official Brad believes that if the Fed starts cutting interest rates too slowly, it may have to cut rates by 50 basis points at future meetings. He expects the Federal Reserve to start cutting interest rates before inflation reaches 2%, possibly as early as March.

In a recent interview with The Wall Street Journal's "Outlook for the Week" podcast, Brad predicted that the core inflation rate, excluding food and energy prices, would slow to around 2% by October, and the PCE would drop to 2.6% in November.

Brad emphasized the challenges facing the Federal Reserve and the importance of not delaying policy adjustments. He said that the Federal Reserve does not want to change its policy before the inflation rate reaches 2% in the second half of the year. If the inflation rate is between 2% and 2.5%, but the Federal Reserve has not yet adjusted policy rates, they may have to take action, such as lowering interest rates by 50 basis points at a meeting, which will be a difficult task.

In contrast, most economists surveyed by Reuters believe that the Federal Reserve will wait until the second quarter to cut interest rates again, with a higher likelihood of a rate cut in June than in May, and a lower expected rate cut this year than the current market expectations.

Reuters surveyed 123 economists, all of whom predicted that the Federal Reserve would keep interest rates unchanged at its next meeting, but most of the 86 respondents believed that rate cuts would start from the next quarter. Nearly 45% or 55 economists are betting on a rate cut starting in June, while 31 believe it will start in May. Only 16 believe it will be in March, while the rest predict it will only start in the second half of the year.



<div class="blog-details-info">
<div>Author:**Byron B.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>



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Arthur Hayes believes that BTC support may be between $30,000 and $35,000, and the recent market sell-off is due to excessive expectations of the impact of ETF approval.

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Daily News | BTC Support Level May Be Between $30K to $35K; Mt. Gox Will Unlock 200K BTCs in the Next 2 Months; AltLayer Will Soon Launch Airdrops