The Daily Blurt - January 31

On-chain metric prints first buy signal for Bitcoin since 2019

An on-chain metric, the Profit and Loss (PnL) Index by CryptoQuant, is signaling a Bitcoin buy signal for the first time since 2019. The PnL Index, which measures the profitability of the Bitcoin market, has crossed above its 365-Day Simple Moving Average after a prolonged spell below it. This is seen as a positive sign for Bitcoin, with the last time the Index broke above its 365-Day SMA being in 2019 a few months after the market had bottomed.

Several on-chain and technical indicators are also flashing bullish signals, including a growing list of metrics tracked by Glassnode, 6 on-chain metrics including the Accumulation trend score and the Realized price, and the widely followed Bitcoin Stock-to-Flow pricing model. The latter suggests that Bitcoin is in the beginning stages of a near-three-year bull market, with its next big surge expected after the next halving in 2024.

However, the crypto market is still facing macro headwinds, particularly with the Fed policy announcement this week. Although the money markets are pricing in 50 bps in further rate hikes, multiple macro strategists have noted a significant risk that the Fed's resolve to continue raising interest rates and holding them at elevated levels for some time may be underestimated. A lack of major support levels ahead of the Fed policy announcement and the possibility of the Fed signaling more than 50 bps in rate hikes could send prices lower in the short term.

SBF’s bail sponsors to be named following court ruling

A U.S. federal judge has ruled in favor of news organizations seeking to reveal the identities of the two unnamed co-signers of the $250 million bail bond posted for FTX founder Sam Bankman-Fried. Bankman-Fried was arrested and charged with fraud and other crimes. Judge Lewis Kaplan determined that the names of the bail sureties are traditionally public information, as they voluntarily entered into a highly publicized criminal proceeding.

The ruling will be held until Feb. 7, in case of appeal, and Bankman-Fried's lawyers had argued that the names should be kept confidential for security reasons. Bankman-Fried has pleaded not guilty to eight charges, including money laundering, and his trial is set for October. FTX's lawyers have also asked the bankruptcy court to allow them to issue subpoenas to former top executives and advisors, including Bankman-Fried's family members, as they may have crucial information for the recovery of funds.

Elon Musk hints at future crypto payment system for Twitter

Twitter CEO Elon Musk has reportedly instructed developers to build the platform's payments system with the capability to support cryptocurrencies in the future. The payments feature is set to initially only support fiat currencies. Twitter has been teasing the introduction of a payments feature for some time as part of Musk's plan to make the platform an "everything app."

The company has started the process of applying for state-based regulatory licenses in the US, with the hope of completing the process within a year. "Twitter Payments LLC" has already registered with the US Treasury Department's Financial Crimes Enforcement Network (FinCEN), which would allow it to process payments. In a recent Twitter Space event, Musk talked about connecting bank accounts to Twitter profiles and incorporating debit cards for facilitating money transfers. Following regulatory approval in the US, Twitter will look to gain approvals internationally.