Bitcoin Hovers Over $41K as Memecoin, Ordinals Frenzy Clogs up Blockchains

Bitcoin [BTC] opened the trading week marginally higher, trading above $41,000. Ether [ETH] was also up slightly, trading above $2,100.

Data from Coinglass have been $103.5 million in liquidations of token-tracked futures in the past 12 hours, and $95 million of them have been longs, or bets on higher prices. Of the $103.5 million in total liquidations, $33 million in bitcoin positions were liquidated, with $29 million of those being long bitcoin positions.

Lucy Hu, a Senior Analyst with Hong Kong-based digital asset management firm Metalpha says the broader market continues to hold up quite well despite the recent Ledger hack with rate cuts on the horizon and things like ordinals driving more interest in bitcoin.

“The massive Ledger hack did swing some sentiment in the DeFi space and raises important questions on wallet security," she said in an email interview. “Besides, the stellar rise of Bitcoin Ordinals continues to fuel enthusiasm for Bitcoin miners, who have been heavily rewarded. We expect the long-term growth momentum of Bitcoin to remain on track."

Predictions still optimistic

Despite bitcoin’s current correction phase, end-of-year predictions for 2024-2025 still remain optimistic, especially when compared to last year's dour predictions of $10-12k bitcoin.

In a recent end-of-year report, Woo Network targets a $75K price point for BTC for “early 2024.” Bitwise, has a similar price target, with the fund predicting that bitcoin will trade above $80,000.

“Spot bitcoin ETFs will be approved, and collectively will be the most successful ETF launch of all time," Bitwise also predicted. "Coinbase’s revenue will double, beating Wall Street expectations by at least 10x."

Memecoins clogging up Layer-1s

Gas fees are spiking on Ethereum and many layer-1 chains, such as Avalanche, as dozens of new meme coins flood the market.

Avalanche has generated $5 million in fees over the last 24 hours, while Ethereum, with its significantly larger market cap, has generated $13.52 million.

Arbitrum and Optimism have also seen a large spike in gas fees during the last week.

Some of these layer-1 tokens declined faster than bitcoin or ether, with AVAX down 6% and Solana’s SOL token down 4%.