Ethereum breaks out vs. Bitcoin: Why one trader says ETH/BTC looks ‘absolutely insane’

Ethereum is breaking out against Bitcoin and traders are turning bullish on ETH/BTC and altcoins.

Ether (ETH) price is seeing green in its Bitcoin (BTC) pair on April 21, reaching the highest levels since early February. Given the technical breakout of ETH/BTC, traders are beginning to expect a strong rally in the foreseeable future.

During the first two weeks of April, ETH was outperformed by Binance Coin (BNB), the native token of Binance Smart Chain.

The high transaction fees on Ethereum coupled with the high user activity on Binance Smart Chain led BNB to gain momentum against Ether.

However, in the past few days, ETH price has started to rally against both Bitcoin and BNB, the first and third largest cryptocurrencies in the global market, respectively. 

Why is ETH rallying against Bitcoin?

In the past 24 hours, led by Ether, the altcoin market gained against Bitcoin, causing the Bitcoin Dominance Index to fall to 50.7% on CoinMarketCap, the lowest level since summer 2018.

ETH/BTC 4-hour price chart (Binance). Source: TradingView.com

One main reason why the altcoin market is rallying is because altcoins generally saw sharper drops than BTC following the Coinbase listing.

Hence, when Bitcoin began to consolidate and stabilize, altcoins started to see a relief rally, led by Ethereum and BNB's momentum.

After the futures market recovered, following over $10 billion worth of liquidations on a single day, the appetite for risk-on assets within crypto also likely rose.

This drove the demand for Ethereum, BNB, Dogecoin (DOGE), and many other cryptocurrencies with relatively high volume and valuation.

In the near term, traders say that the breakout of the ETH/BTC pair could lead to a broader parabolic rally, particularly for altcoins. 

A pseudonymous trader known as "Crypto Capo" expressed optimism towards ETH's breakout against BTC. He said:

"$ETH/BTC is going to redefine the concept of parabolic."

Similarly, a cryptocurrency derivatives trader NekoZ said that ETH is showing strong momentum, which would likely spill over to altcoins.

The trader noted:

"Love the reaction we are having so far. Should carry nicely into the week and build momentum around alts."

Another respected cryptocurrency derivatives trader known as "Bluntz" said that ETH/BTC looks "insane" after a massive capitulation event.

A capitulation event refers to a scenario when an asset's price bottoms out after a sharp drop. 

Bluntz emphasized that ETH is demonstrating a double bottom chart, which in technical analysis often points toward a short-term trend reversal. 

He wrote:

"ETH double bottom on 4h, and ETH/BTC looks absolutely insane again. Wow that was the greatest capitulation event I can remember for a long time. Even i capitulated most of my lev trades."

On-chain data is also bullish

According to the data from CryptoQuant, the amount of ETH being staked in the Ethereum 2.0 deposit contract is rising.

Total value staked in eth2. Source: CryptoQuant

This decreases the circulating supply of ETH on exchanges, which should put upward pressure on the price of ETH.

The increase in fees, which is verifiable through on-chain data, also indicates that activity continues to rise on Ethereum despite the already high fees.

Aftab Hossain, an Ethereum and investor, said:

"Ethereum / DeFi has focused heavily on infrastructure, which BSC was able to copy and centralize to make it faster with an incentive to focus on integrated UX i think cheaper L2 tx's will enable for greater scaling and will allow for critical smart contract wallet innovation."

Binance Smart Chain and other layer ones have been performing strongly against Ethereum, but the release of Eth2 and layer two solutions could make Ethereum more compelling for casual users in the months to come. 

Bad omen? US dollar and Bitcoin are both slumping in a rare trend

Bitcoin struggles to regain momentum despite the dollar falling to a seven-week low.

The price of Bitcoin (BTC) was struggling to stay above $56,000 on April 20, which whale clusters pinpointed as a crucial short-term price level.

Yet, the U.S. dollar index (DXY) has continued to fall in recent weeks, dropping to its lowest point in seven weeks to 90.85.

Bitcoin (blue) vs. DXY (orange) Source: TradingView

Why is this a concerning trend?

Alternative stores of value in the likes of Bitcoin and gold are priced against the U.S. dollar. Hence, when the dollar drops, the value of Bitcoin should theoretically increase, as BTC trades against the dollar.

In recent days, however, Bitcoin has performed poorly following the highly anticipated public listing of Coinbase.

The trend is concerning because the probability is higher for Bitcoin to see an uptrend when the dollar is declining, as shown by the inverse relationship in the chart above.

But in recent days, Bitcoin has been having a hard time remaining above a key whale cluster level at $56,000, which indicates that there is heavy selling pressure on BTC, particularly as the price is struggling to rebound above the 50-day moving average (the green line in the chart below). 

BTC/USD 1-day candle chart. Source: TradingView

Moreover, some analysts say the dollar may see a relief rally. If this occurs, it should create a less favorable environment for Bitcoin to regain its momentum.

In a note to clients obtained by CNBC, Commerzbank strategist You-Na Park-Heger said that the eurozone's vaccine optimism and the Federal Reserve's firm stance on inflation likely drove the dollar's decline.

While this put an immense amount of pressure on the dollar in the short term, Park-Heger said that the trend could possibly change in the weeks to come.

She said:

“The economic recovery in the U.S. might drive up inflation expectations further, fuelling rate hike speculation. The news situation in the euro zone in connection with corona might change again as uncertainty remains high."

But not everyone agrees that the dollar will resume its uptrend. Credit Agricole researcher Valentin Marinov, for example, said that the attractive yields in alternative markets are putting pressure on the dollar.

Marinov explained:

"Indeed, the USD rally is all but distant memory by now and the currency's underperformance seems to reflect the apparent divergence in the outlook between the slumping UST yields and the rather perky bond yields elsewhere. This is almost the exact opposite of the moves we saw in March."

10T Holdings co-founder Dan Tapiero also expects more downside for the dollar, stating that its bear market hasn't even started. 

In any case, the futures market and high leverage appear to have a more immediate impact on Bitcoin's price, while a weakening dollar should continue to be a bullish factor for BTC in the medium to long term.

Things might change for Bitcoin in the near term

In the short term, Bitcoin could get a boost from some bullish news and regain technical momentum. For example, Venmo's support for Bitcoin and Ether (ETH) saw its price bounce back to $56,000.

BTC/USDT 4-hour price chart (Binance). Source: TradingView

Starting April 20, over 70 million customers will be able to buy, hold and sell crypto directly within the Venmo app as the feature gets rolled out over the next three weeks.

Additionally, WeWork announced it will be accepting cryptocurrency payments and holding them on its balance sheet.

In the foreseeable future, this renewed momentum could allow Bitcoin to regain its footing after a week of rare underperformance in tandem with the dollar. 

Bitcoin technicals sour as price dives under $54K and two critical whale clusters

Whale cluster analysis suggests that both hodlers and whales were responsible for the latest sell-off.

Bitcoin has dropped below $54,000 on April 20 while whale clusters suggest that the key areas for BTC to reclaim in the short term are $56,274 and $55,172.

The cryptocurrency market began to drop once again after an initial relief rally on Monday. Bitcoin dropped from $57,400 to sub-$54,000, losing the $55,172 whale cluster support level.

Bitcoin whale clusters. Source: Whalemap

In the near term, it is crucial for Bitcoin to rally above $55,172 and reclaim it as a support level. Otherwise, it is at risk of testing the $51,000 macro support area.

Why are whale cluster support areas important?

Whale clusters form when whales or high-net-worth investors purchase or sell a significant amount of Bitcoin.

Since whales tend to purchase Bitcoin at an area they previously bought at to defend their position, whale clusters are often a positive indicator of strong support areas

Analysts at Whalemap, a data analytics platform that tracks whale activity, noted that there is a lot of whale volume at $58,000.

In the short term, with $58,000 acting as an area of interest, the analysts said $56,274 and $55,172 are the key near term levels to watch.

The analysts said:

"A lot of whale wallet volume was happening at around $58k. This should be an area of struggle for Bitcoin. $56,274 and $55,172 are currently important supports that have to be respected for uptrend's continuation.

If Bitcoin does not reclaim $56,274 and continues to decline, it would mean that whales are not adding to their existing positions.

If this is the case, the $51,000 macro support level would be at risk of being tested once again, as Cointelegraph previously reported.

The $51,000 level is critical because if that breaks, it would cause the higher low structure of Bitcoin to break down, which may put the entire Bitcoin bull market in danger.

"These are the key levels to look out for right now," Whalemap analysts added.

There was an accumulation at the current level but if 55k does not hold we could easily go down to 47,438 where a strong support level is located.

Both whales and hodlers responsible for sell-off

On April 18, the price of Bitcoin fell sharply from the $60,000 mark to nearly $50,000 on the day's lowest point.

According to the analysts at Whalemap, it weren't just long-time holders that sold, but also whales and high net worth investors.

They wrote:

"Since Whalemap allows to track where the HODLer coins are coming from we can check that the coins transacted yesterday were originally purchased after the halving in 2020. Checking the whale outflow map shows that the HODLer coins moving yesterday were actually not just HODLers but also whales since the bubbles are in the same locations."

Based on this trend, it is difficult to speculate whether Bitcoin would see a major rally in the near term and resume its uptrend once more. 

BTC/USD 1-day price chart (Bitstamp) with key levels. Source: TraderXO

Several notable traders shared a similar sentiment. Pseudonymous trader, "Trader XO," said that while he is not bearish he does sees the potential of a deeper retracement.

He said:

"BTC Currently no position. Wouldnt say no to a deeper retracement around the 0.5 - 0.705 fib levels. Not bearish - Just wanting a better buying opportunity."

Bitcoin traders are eyeing these price levels as BTC rebounds from weekend crash

Bitcoin is recovering, and traders are pinpointing $57,000 and $60,300 as the key short-term price levels to watch.

The price of Bitcoin (BTC) is recovering after a strong sell-off during the weekend caused by cascading liquidations in the futures market.

BTC/USDT 15-minute price chart (Binance). Source: TradingView.com

Traders are pinpointing three levels as the critical price areas to watch in the short term: $51,200 as the major support, $60,300 as the important resistance, and $57,000 as the near term area of interest for sellers.

It is critical for Bitcoin to reclaim $57,000

Although the price of Bitcoin dropped to as low as around $50,000, the market structure itself does not look largely concerning, according to a pseudonymous trader known as TraderKoz.

Bitcoin wicked to sub-$50,000, but it recovered quickly to around $53,000 and has sustained above $56,000 since.

Bitcoin price chart with key levels. Source: TraderKoz

Referring to the chart above, the trader said:

“You know, if this wick wasn’t quite as long because of all the cascading liquidations... it would actually be some really clean PA.”

In the near term, it is important for Bitcoin to rise and hold above $57,000. If BTC’s price stabilizes at these levels, it would confirm that the weekend crash was a purely technical and futures market-driven correction.

Popular pseudonymous trader Rekt Capital also emphasized that the macro support remains at $51,200. Bitcoin recovered quickly as soon as it dropped to the low $50,000 area.

Therefore, Bitcoin will confirm a higher low structure if it continues to recover in the short term and does not drop below $51,200.

A higher low structure forms when the most recent Bitcoin low is higher than the previous low point.

The trader explained:

“Last time #BTC dipped into the low-$50000s was four weeks ago Then, $BTC dipped to ~$50200 before reversing Recently, BTC dipped to the low-$50000s again This time, BTC dipped to ~$51200 before reversing BTC bottomed $1000 higher on this dip. That is a Higher Low.”

Additionally, analysts at Santiment noted that BTC recovered rapidly immediately after the funding rate of Bitcoin on BitMEX went negative.

This indicates that significant organic buyer demand emerged when selling pressure started to amp up in the derivatives market, which would support the argument for a short-term trend reversal as long as Bitcoin remains above $57,000.

The analysts wrote:

“The #BitMEX funding rate for #Bitcoin went negative (more contracts betting against $BTC’s price rising than contracts betting in favor) this weekend for the first time in 3 months. As is often the case, the price bounced right as the #FUD settled in.”

Will the relief rally continue?

There were large deposits made to exchanges when the price of Bitcoin dropped, adding to the selling pressure.

But, as pointed out by Bitcoin Jack, a cryptocurrency derivatives trader, exchange withdrawals or outflows exceeded the deposits nevertheless.

He said:

“April 15, 16 and 17th $BTC saw ~482K addresses deposit to exchanges Same period ~220K addresses were withdrawn to from exchanges & net positive outflow recorded Many tiny hands in -> fewer bigger hands out Confirmed by short term holder SOPR capitulation.”
Number of Bitcoin addresses withdrawing from exchanges. Source: Glassnode

As long as exchange withdrawals are on par or higher than exchange deposits, the technical momentum of Bitcoin is not at risk of losing steam in the near term.

Binance Coin regains 20% in a day: Why is BNB seeing such a strong recovery?

BNB price rallied by more than 20% in the last 24 hours due to several key reasons.

The price of Binance Coin (BNB), the native cryptocurrency of Binance and Binance Smart Chain, rallied by more than 20% in the last 24 hours.

BNB/USDT 15-minute price chart (Binance). Source: Tradingview.com

The swift recovery comes after a market-wide correction on April 18, during which major cryptocurrencies including Bitcoin (BTC) and Ether (ETH) saw a sharp decline.

ETH price, for instance, declined from $2,400 to as low as $1,900 in a sudden pullback as Bitcoin plunged below the $60,000 support level to as low as $52,000.

Overheated futures market gets a reset

The market saw a steep pullback in a short period because the futures market was extremely overheated.

Over $10 billion worth of cryptocurrency positions were liquidated on a single day, with Bitcoin accounting for over $5 billion of it.

 Since the drop was more technical than fundamental, and it was a cascade of liquidations that caused the pullback, the market pared most of the losses relatively quickly

It was also evident that the futures market led the correction because the price of major cryptocurrencies was trading lower in the futures market than the spot market.

Adam Cochran, a partner at Cinneanhaim Ventures, explained:

"I think what we saw was a cascade of tightly wound retail positions on a weekend market, get toppled, but somewhere along the line, there was a matching book fail that caused stop-losses to not get hit and when that happened it put a massive $63M position in jeopardy.”

He added that the liquidation of a $63 million position shocked the market, which put even the major cryptocurrencies at risk of a speedy drop.

Cochran added:

"That $63M position getting liquidated is what put the market in major jeopardy, but by that time there was already degraded performance issues connecting to Binance and spiking gas fees. So there was very little way for anyone to backstop or arbitrage that liquidation.”

BNB fundamentals remain strong

After the initial futures market-driven drop, cryptocurrencies with strong fundamentals began to recover first.

While Bitcoin and Ether rebounded relatively quickly by 12% and 15% from their respective lows , BNB outperformed both BTC and ETH within the past 24 hours in its recovery.

The strong performance of BNB stems from two positive catalysts: the record $600 million BNB burn by Binance and the uptrend of Binance Smart Chain metrics.

On April 16, Cointelegraph reported that Binance burned $600 million worth of BNB in the first quarter of 2021, which reduces the circulating supply and suggests the exchange generated at least $750 million in quarterly profit.

Moreover, Binance CEO Changpeng Zhao emphasized yesterday that the Binance team has no plans to sell their BNB holdings, 40% of the total supply, in a likely dig at Coinbase insiders reportedly selling $5 billion worth of COIN shares last week. 

Hence, when the market started to recover, BNB saw a stronger rally possibly as a result of a delayed response to the $600 million burn.

Atop the token burn, the daily number of transactions on Binance Smart Chain surpassed 5 million.

Binance Smart Chain number of transactions. Source: Bscscan.com

Since BNB is also the native token of the Binance Smart Chain blockchain network, rising user activity positively affects the value of BNB, contributing to its recovery.

Traders were ready to buy the dip

A pseudonymous trader known as "Altcoin Psycho" stated that traders were ready to buy the dip in the altcoin market.

He said:

"Traders were ready to buy the dip. Was anticipating a market dip all week, yet I got lazy and did a bad job positioning myself for success. Had 10+ alts on my list, only set bids for eth. Thankfully experienced minimal drawdown tonight, but still really played this opportunity poorly. Good learning lesson here."

The quick inflow of capital into the altcoin market shortly after the dip led many altcoins to recover swiftly, which likely catalyzed BNB's upsurge.

Peak fear? Bitcoin funding rates crash to lowest levels in 7 months

The funding rate of Bitcoin dropped to a level unseen since September 2020, signaling fear in the market.

The funding rate of Bitcoin (BTC) has dropped to levels not seen since September 2020 as the price of Bitcoin plummeted below $52,000 on April 18. Quant trader and analyst Lex Moskovski says it shows fear has returned to the market.

According to the data from Glassnode, the average Bitcoin futures funding rate across all exchange dropped to as low as around -0.03% on Sunday

What is funding rate and why does it dropping matter?

Bitcoin futures exchanges use a mechanism called "funding" to achieve balance in the market.

The way the mechanism works is simple: if there are more longs or buyers in the market, the funding rate rises, and vice versa.

As such, when the funding rate turns negative, it means the majority of the market is short-selling Bitcoin, indicating fear in the market.

Moskovski said:

"Wow, it's been a long time since we've seen funding this negative. Fear."
Bitcoin futures perpetual funding rate. Source: Glassnode

Earlier this week, Bitcoin was hovering at around $64,000 in anticipation of the Coinbase public listing. At the lowest point of the day on April 18, BTC dropped to as low as $50,000.

From the day's highest to lowest point, the price of Bitcoin dropped by almost 15% against the U.S. dollar.

The market sentiment can change so quickly because many traders use high leverage across major exchanges.

During the Coinbase public listing week, the funding rate of Bitcoin was stable at 0.1% to 0.15% on top futures exchanges like Binance and Bybit.

This shows that many traders were aggressively longing or buying Bitcoin, making the futures market incredibly overheated.

When this happens, the incentive to short sell Bitcoin massively increases and it puts the market at risk of a big cascade of liquidations.

BTC/USDT 15-minute price chart (Binance). Source: Tradingview

Will Bitcoin recover soon?

There has been speculation over the past 48 hours that the abrupt drop in the hash rate of the Bitcoin blockchain network led to the price drop.

On April 16, major Chinese mining facilities and pools saw outages after China's Xinjiang region experienced blackouts.

Consequently, the hash rate of Bitcoin dropped quickly thereafter, leading to concerns that it would hinder the market sentiment around BTC.

However, Adam Cochran, a partner at Cinneanhaim Ventures, said that the Bitcoin hash rate dip likely did not cause the price of BTC to drop. He said:

"The idea that a power outage last night in a mining region in China led to the dip in $BTC is utter nonsense, just like the spurious correlation graphs above. But even worse, when you run the math *there is no correlation* If someone is confident in a correlation and has enough data to make a graph, ask them for the receipts. If they have no idea how to run a regression test, then they don't actually know if its correlated or not."

If the Bitcoin price drop was not caused by fundamental factors but rather was purely technical as a result of an overcrowded futures market, the case for a swift recovery strengthens.

In the short term, it is favorable for Bitcoin to remain at around the $56,000 support area, as the futures market finds composure and the funding rates stabilize.

Bitcoin dips under $60,000 — What’s pulling down BTC price?

The price of Bitcoin suddenly dropped below $60,000 days after the Coinbase public listing.

The price of Bitcoin (BTC) declined below $60,000 on April 17 after a strong rally throughout the past week in anticipation of the Coinbase public listing on Nasdaq.

However, after the COIN listing, which is the ticker of the Coinbase stock, the cryptocurrency market started to correct.

BTC/USDT 1-day price chart (Binance). Source: TradingView.com

An expected Bitcoin sell-the-news drop

Coinbase's public listing brought significant attention to the cryptocurrency market. It marked the first public listing of a major cryptocurrency exchange, leading to high institutional demand.

As a result, the cryptocurrency market rallied leading up to the listing with BTC price hitting new all-time highs above $64,00. However, it was almost expected to see Bitcoin and Ether (ETH) drop after the fact, considering the tendency of cryptocurrencies to sell off after a major event.

Another major factor that contributed to the drop in price was the relatively high funding rates for longing Bitcoin. This, alongside strong technical resistance at $64,000-$65,000 were the likely reasons that BTC tested $60,000 support after the hype around Coinase's listing began to fade. 

Bitcoin funding rates. Source: Bybt.com

Meanwhile, the $60,000 level is an important price point for Bitcoin because it took roughly a month for BTC to break out above it.

Hence, it is important for Bitcoin to hold the $60,000 area to maintain the bullish market structure heading into next week.

Traders predict what would likely come next

At the same time, cryptocurrency traders are mixed regarding where Bitcoin will go with its new weekly candle.

For instance, Cantering Clark, a popular cryptocurrency derivatives trader, said that the market isn't necessarily bullish nor bearish, based on options data.

The Bitcoin options market open interest is ranging. Source: Bybt.com

Instead, Clark noted that the options market trend shows that Bitcoin would likely see sideways actions, which would mean consolidation at around $60,000. He wrote:

"50k and 80k strikes highest contract/notional for $BTC I think these writers will be happy and I am still in the same opinion that the end of April - May begins the shift that makes Bitcoin a less favorable long. No breakout, just range and rotation."

In the long term, traders are still optimistic about Bitcoin. A pseudonymous trader known as "Crypto Capo" noted that based on historical trends, Bitcoin has broken out of a range that goes back 1,000 days.

The trader emphasized:

"Now some $BTC technical analysis. Bitcoin has broken out of an accumulation range of over 1000 days. This usually results in long extensions. Currently, the increase over the previous ATH is only 200%."

Is Bitcoin becoming the ‘Google’ of crypto as BTC market cap nears new milestone?

Bitcoin is nearing the market capitalization of Google, but why is this an important trend to observe?

Holger Zschaepitz, a market analyst at Welt, emphasized that Bitcoin (BTC) is nearing the valuation of Google, as it heads toward $1.5 trillion in market capitalization.

Currently, as of April 17, the market cap of Bitcoin is hovering at around $1.12 trillion as the entire valuation of the crypto market remains comfortably above $2 trillion.

What is the similarity between Bitcoin and Google?

The similarity between Bitcoin and Google that Zschaepitz pointed out is that both have dominance in their respective sectors.

Bitcoin vs. Google market cap. Source: Bloomberg, Holger Zschaepitz

Bitcoin has the strongest network effect in the cryptocurrency market, accounting for more than 51% of the global cryptocurrency market.

Google has dominance over the search engine market and has a massive share of the video-sharing and streaming sector with its ownership of YouTube.

Zschaepitz wrote:

"The Exponential Age: Thanks to network effects, the value of #Bitcoin is increasing and w/$1.159tn has almost reached the stock market value of a classic network share #Google which is worth $1.5tn."

Whether Bitcoin's dominance over the cryptocurrency market would be sustained over the long term remains in question, due to the rising valuation of Ethereum and layer-one blockchain networks.

However, the major difference between Bitcoin and the rest of the market is that there is clear institutional demand for BTC as a store of value due to its unrivaled blockchain network computing power and therefore, security and trustlessness.

Hence, investors generally view Bitcoin as a hedge against inflation and the de facto reserve cryptocurrency.

In January, JPMorgan strategists wrote that Bitcoin could rise to as high as $146,000 as it competes against gold as a store of value.

The strategists said:

“This long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term. The reason is that, for most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class.”

Traditional financial institutions are also acknowledging the importance of Bitcoin's network effect and its dominance in the crypto market as the go-to store of value.

Where is the price of Bitcoin heading from here?

In the foreseeable future, the sentiment around Bitcoin remains mixed after the public listing of Coinbase.

Following the listing of COIN, there is speculation that it could mark the top of the crypto market.

However, most on-chain data and market indicators such as funding rates do not necessarily suggest that a blow-off top is near.

For instance, popular crypto trader known as "Crypto Capo" said:

"I read many people saying that funding is high, not only in Bitcoin, but also in altcoins. This is relative. If we compare the current funding levels with those of the top of 2017, we see that they are low levels, taking into account that the price is three times higher. Also, the current trend is led by spot trading, and not by derivatives."

Meanwhile, key on-chain metrics also suggest that Bitcoin price is still far from the bull market top. On the contrary, BTC price may easily reach six figures, as forecast on the popular stock-to-flow model, and even go as high as $400,000, according to Bloomberg analysts. 

Is DeFi yield appetite rising again? Enso raises $5M as YFI hits new highs

Enso raises $5 million from top funds and YFI price hits a new record high as the demand for DeFi yield rises.

The appetite for DeFi is rising again as blue chips are rallying and yield-earning strategy-sharing platforms, like Enso, are on the rise.

Enso, a platform where users can share yield-earning strategies, raised $5 million on April 13 from top U.S. venture capital firms including Polychain Capital and Multicoin Capital.

Synthetix (SNX) founder Kain Warwick, Aave founder Stani Kulechov, Dfinity COO Artia Moghbel, and other prominent angels took part in the round.

The high-profile fundraising round comes as Yearn.finance (YFI) achieved a new all-time high above $50,000.

Why is the demand for yield-earning protocols rising?

Protocols like YFI are seeing significant demand once again as DeFi blue chips start to rally off of Bitcoin (BTC) and Ether (ETH) hitting record highs.

The appetite for high-risk and high-return plays is clearly increasing, as the cryptocurrency market as a whole enters price discovery.

YFI tops yield TVL rankings. Source: Defillama.com

The term price discovery refers to a technical trend when the price of an asset or the valuation of a market hits a new all-time high.

From late February to mid-March, the total value locked (TVL) of DeFi asset management protocols dropped off quite significantly from $4.3 billion to $2.7 billion.

However, since late March, the DeFi asset management sector began to see renewed momentum, driving demand to protocols like YFI where users can earn yield on their assets.

YFI/USDT 1-day price chart. Source: TradingView.com

Naturally, the resurgence of asset management and yield-earning strategies in DeFi led to a spike in venture capital interest.

Enso, for example, recently raised $5 million from a round led by leading venture capital firms like Polychain Capital Multicoin Capital, whose assets under management (AUM) exceed a billion dollars.

Enso allows users to access alpha yield farms, batch yield farms, batch AMM purchase, flash swaps, collateralization, and restructuring, which allows users to maximize how they earn yield across various protocols.

Spencer Applebaum, an associate at Multicoin Capital, which was praised by top fund managers like Three Arrows Capital CEO Su Zhu for being one of the top performing funds in recent months, particularly emphasized how Enso allows users to easily tap into various DeFi yield-earning strategies.

Applebaum said:

“We’re extremely excited to back Connor, Gorazd, and the rest of the Enso team as they work to open up DeFi asset management by removing whitelists and curation, and enabling composability with all DeFi networks. Enso is fully customizable and enables anyone to become a fund manager with the click of a button.” Spencer Applebaum, associate at Multicoin capital.

The rising interest towards yield-generating protocols, like YFI, and yield strategy-sharing platforms, such as Enso, indicate that there is a large demand for yield in the current market landscape.

Has DeFi summer arrived?

Whether the growing demand for yield-earning platforms and protocols would mark the beginning of the "DeFi summer" remains to be seen.

Atop the strong technical momentum major DeFi tokens have seen, the general sentiment around DeFi has been overwhelmingly positive as of late.

Citibank released a paper on April 16 entitled "Future of Money" and in it, described the benefit of DeFi to other fund managers. 

The recognition of the momentum and the necessity of DeFi by traditional financial institutions could be the catalyst to enable the second wave of capital inflow into the DeFi market in the next few months.

Record $600M BNB burn suggests Binance made $750M in profit in Q1

Binance burned $600 million worth of BNB in Q1 2021, which means Binance possibly made over $750 million in profit.

Binance Coin (BNB) saw its 15th burn to date on April 16. According to on-chain data, Binance burned nearly $600 million worth of BNB tokens.

Historically, Binance has burned around 20% of the exchange’s profits. But in the last burn, Binance burned much more than 20%, and the exact percentage of the burn remains uncertain.

BNB fundamentals keep improving

Sam Bankman-Fried, the CEO of FTX, one of the top cryptocurrency futures exchanges alongside Binance, estimated that Binance possibly generated $1 billion in revenue in the first quarter of this year.

By contrast, the total lifetime profits of Coinbase — which was listed on Nasdaq this week — are estimated to be somewhere between $780 million and $1.3 billion.

Bankman-Fried, commonly known as SBF, said:

"So, TL;DR, with a factor of ~1.5 or so uncertainty: Binance, Q1 2021: a) $1B rev, $750m profit --> $4B rev, $3B profit run-rate b) Blended average fee rate ~0.016% on trades c) They're making it really clear that burn only goes until 100m tokens, but 60% of rev until then."

Although Binance burned 20% of the exchange's profit in the past, it is possible that Binance burned 70%-80% of the profit in its latest burn.

Considering this trend, SBF said that the $600 million burn could equate to around $750 million in profit. 

He added:

"Based on the original specs, BNB was going to burn 20% of profit. Based on this update, it's now unclear what they'll burn, but maybe something like: 80% of profit (up to 100m tokens, and nothing after that. Binance burned $600m of BNB for Q1. That would roughly imply $750m of profit. If we assume $1B of revenue, given their $6T of volume in Q1, that implies an average fee rate of 0.016% or so."

Since March 27,  the price of BNB rallied 180% from $233 to as high as $640.

The rally closed the gap between BNB and Ether (ETH), with BNB now comprising over a third of Ethereum's market capitalization.

The strong uptrend of BNB was influenced by the strong performance of Binance and its derivatives exchange, but also the upward trajectory of Binance Smart Chain.

In recent months, Binance Smart Chain saw a significant increase in daily transaction volume.

According to BSCScan, the blockchain explorer for Binance Smart Chain, the blockchain network saw the number of daily transactions rise from around 380,000 in late January to over 4.7 million as of April 16.

Binance Smart Chain transaction volume. Source: BSCScan

Since BNB is the native token of the Binance Smart Chain and it is actively used on platforms like Pancakeswap as a means to stake in various pools, the demand for BNB has continuously risen.

Binance Smart Chain's momentum continues

According to Coingecko, BNB had the best performance to date with a 710% gain in the first quarter.

BNB/USDT 1-day price chart (Binance). Source: TradingView.com

Analysts at Coingecko attributed this upsurge to Binance Smart Chain emerging as an alternative to Ethereum due to the high gas fees on the Ethereum network.

The analysts said:

"Ethereum-Killer tokens outperformed both $BTC and $ETH Airplane departure $BNB had the best performance (+710% gain), followed by $ADA (+555%) and $DOT (+294%) This coincides with the rise of @Binance Smart Chain #BSC as a response to high gas fee on #Ethereum."

Balancer (BAL) price soars to new all-time high: What’s driving the rally?

BAL, the token of the popular automated market maker Balancer, has reached an all-time high due to two major catalysts.

BAL, the native cryptocurrency of Balancer — a popular automated market maker (AMM) utilized by many decentralized finance (DeFi) users to trade cryptocurrencies — surged to new record highs above $70 on April 15.

BAL/USDT 1-day price chart (Binance). Source: TradingView

There are two key reasons behind the uptrend of BAL, namely the buzz around the Coinbase public listing and the resurgence of DeFi blue chips.

What is the Coinbase and Balancer hype?

On April 14, Adam Cochran, partner at Cinneamhain Ventures, said he believes BAL would likely be one of the primary beneficiaries of the Coinbase listing.

Cochran said:

"My theory is that most of Coinbase's new millionaires will be heavily repurchasing back into crypto over the next 72 hours. While I think most CB assets will pop, there is one asset that I think will out perform over the next month from CB and that is $BAL.”

The theory is based on a survey he ran with Coinbase employees worldwide leading up to the public listing.

According to Cochran, he received 108 responses from Coinbase employees on which asset they will likely buy in the next month.

Cochran said that outside of the major blue-chip assets, BAL was the main pick among the employees.

He wrote:

"I got 108 responses from employees world wide, asking them questions about their personal views of crypto. The main question being what assets they'd buy in the next 30 days. This graph tells us a number of interesting things, but I want to zoom in. The graph is sorted by market cap, and you'll notice right at the very end, nestled among low marketcap projects is $BAL. It's by far the lowest marketcap of any mainstream, working and bluechip product."

Some questioned the focus on Balancer in the Twitter thread given that major cryptocurrencies, like Bitcoin (BTC), Ether (ETH), Uniswap's UNI, and Compound's COM had much higher interest from the surveyed employees.

Regardless, Balancer did see significantly higher purchase interest from employees among the mid-cap DeFi tokens.

Coinbase employee survey. Source: Adam Cochran

Investors are generally optimistic about BAL

Lex Moskovski, chief investment officer of Moskovski Capital, said that BAL might benefit considerably from the public listing of Coinbase.

Compounding on Cochran's theory, Moskovski emphasized three key points that could further bolster its momentum. He explained:

"BAL may benefit considerably. To add to Adam's point: - They also have a incentivised BAL pool on-chain making building positions in size easier - As a previously active community member I can assert that the team a superb - BAL lacks awareness which the IPO will bring."

On April 15, Balancer also announced a partnership with Gauntlet, which would maximize liquidity provider returns through dynamic trading fees. 

Additionally, VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for BAL on April 14, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. BAL price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score flipped green right before April 15 as the price of BAL began to rebound. Within 10 hours, the price of BAL rose to a new record high.

The combination of the excitement around the survey data, BAL price technicals of entering price discovery, and the Gauntlet partnership were likely the main factors behind its rally.

3 reasons Dogecoin is up 123% this week, hitting $0.10 for the first time

DOGE, the native cryptocurrency of Dogecoin, rose 123% in the past seven days as the altcoin market saw a resurgence in momentum.

The price of Dogecoin (DOGE) has rallied by more than 123% this week, hitting a new all-time high of $0.13 on strong technical momentum.

DOGE/USDT 4-hour price chart (Binance). Source: TradingView.com

It has been competing against Chainlink’s LINK for the top-10 spot, with both cryptocurrencies hovering at around $17 billion in market capitalization.

There are three major reasons why DOGE saw a steep climb over the past seven days. These include Elon Musk’s tweets, the resurgence of altcoins and the positive sentiment around crypto in general.

Altcoin market rallies strongly with positive sentiment

Throughout the past week, many of the “OG” altcoins, such as XRP, Tron (TRX) and Stellar (XLM), saw massive rallies following Bitcoin’s (BTC) upsurge to a new all-time high above $64,000.

XRP, for example, broke above $1.5 for the first time in over three years, showing that profits from Bitcoin and Ether (ETH) are possibly cycling into altcoins in the short term. 

Kelvin Koh, a partner at Spartan Group — one of the largest DeFi-focused funds in Asia — explained that this trend happens periodically because quant funds trade the convergence between Bitcoin and altcoins.

Koh noted:

“The reason this happens periodically is because there are a bunch of quant funds out there that play the convergence trade between $BTC and a handful of liquid alts. Whenever there alts look cheap relative to $BTC, they pile in. When they look expensive, they rotate back to $BTC. No fundamentals involved so don’t try too hard to rationalize the moves. This strategy has proven effective over time and there are enough managers playing this that it becomes self-fulfilling and keep recurring.”

The general increase in the momentum of the altcoin market played a major role in fueling Dogecoin’s overall momentum throughout the past few days.

Technical traders have echoed a similar sentiment about the strong rally of altcoins over the past week.

However, another well-known cryptocurrency trader Loma said that the fundamentals surrounding most altcoins haven’t changed.

Therefore, if traders trade altcoins that are breaking out based on technical analysis but disregard the technical aspect of it, there is a high chance of the trade becoming unsuccessful.

The trader explained:

“Friendly reminder that the fundamentals on most of these fossil coins are identical to what they were months or even years ago. As an altcoin trader, if you entered a trade off TA but disregard TA for FA somewhere in that trade, you’re more often than not.. fucked.”

Elon Musk tweets about DOGE

In addition to the technical momentum of altcoins, which directly fueled the uptrend of Dogecoin, Musk tweeted about DOGE on Thursday once again.

Musk wrote, “Doge Barking at the Moon” with a meme that hints at higher DOGE prices. The price of a cryptocurrency can easily skyrocket when a public figure or well-recognized influencer tweets about a less liquid altcoin, and this time was no different

Despite Musk’s affection for Dogecoin, Tesla has invested solely in Bitcoin, however, adding approximately 48,000 BTC currently worth $2.5 billion to its balance sheet while directly accepting BTC for its electric vehicles. 

Garry Tan’s 2013 investment of $300K in Coinbase is now worth $2.4B

Prominent angel investor Garry Tan invested $300,000 in Coinbase in 2013 and with today's COIN listing it's now worth $2.4 billion.

Garry Tan, a prominent angel investor and the founder of Initialized Capital, was one of the first investors to provide seed funding to Coinbase eight years ago. 

Less than a decade later, and after today's highly anticipated Nasdaq listing for Coinbase's COIN stock, Tan's 2013 investment of $300,000 into Coinbase is now worth $2.4 billion.

Coinbase debuted on the Nasdaq on April 14 at $381 per share, making it one of the most hyped listings in the U.S. stock market of the year.

How did $300,000 become $2.4 billion?

In 2013, when Tan invested in Coinbase, it was unclear whether Bitcoin would be recognized as a global asset and an established store of value.

At the time, there were not many reputable exchanges, and the few that existed were often hacked. Tan's investment took place before the monumental Mt. Gox hack that saw billions of dollars worth of BTC stolen.

Even after launch, Coinbase was not always in an uptrend. According to Coinbase co-founder Fred Ehrsam, from 2014 to 2017 the company faced numerous hardships. 

Ehrsam said:

"Over time, crypto grew, and so did the company. A simple #Bitcoin wallet evolved into individual and institutional products to support a blossoming cryptoeconomy. 2 nerds who met on the internet (yes, @brian_armstrong and I met on @reddit ) turned into a company of 1000+. There was serious hardship. In the 3 years between 2014 and 2017, the outside world thought crypto was dead. Over a third of employees left. Yet crypto kept building. @ethereum came on the scene and showed that crypto native applications were possible, opening up a whole new world of possibilities."

Even if the listing fails to impress, Coinbase has alluring financials

Coinbase is the first publicly listed major cryptocurrency exchange in the U.S. stock market and its availability on Nasdaq now provides mainstream investors with exposure to the crypto sector. Even if the listing fails to impress on day one, the company still has strong financials and user metrics.

Coinbase made $1 billion in the last quarter and has more users than every financial institution in the U.S. apart from JPMorgan, making it a highly compelling trade for investors in the traditional financial market.

What will happen to Bitcoin price as Coinbase goes public?

The highly anticipated public listing of Coinbase stock is leading Bitcoin and Ether to rally, but what will happen afterward?

Bitcoin (BTC) and Ether (ETH) have continually surged toward record highs, causing the futures market of Bitcoin to see a substantial increase in volume and open interest. The term “open interest” refers to the total sum of active trades in the Bitcoin derivatives market. Currently, the open interest of the Bitcoin futures market is hovering at historic highs, currently $27.43 billion.

Following the Coinbase listing, traders and investors generally anticipate the uptrend of Bitcoin and Ether to continue. But there are also short-term bear cases due to various factors such as a potential “sell-the-news” scenario and an overheated futures market.

The bull case for post-Coinbase listing

According to Adam Cochran, partner at Cinneamhain Ventures, Bitcoin should theoretically be at $70,000 going into the Coinbase listing. The investor said that the reason behind BTC’s gradual uptrend is the use of heavy leverage in the Bitcoin futures market, causing BTC to drop when the derivatives market gets overheated.

High leverage can cause short-term drops to occur because when there is a significant percentage of highly leveraged buy orders or longs in the market, the funding rate increases. Funding is a mechanism used by Bitcoin futures exchanges to achieve balance in the market.

When there are more buyers in the market, the funding rate increases. When the funding rate rises, buyers have to compensate short-sellers with a portion of their position. Since buyers have to pay sellers every eight hours to keep their positions open, it becomes less attractive to long Bitcoin, making it vulnerable to a drop. Cochran said:

“It’s crazy that we hit a new $BTC ATH the day before Coinbase lists, and kicks off 6 months of new roll outs, upgrades and institutional adoption with ETFs, etc. And it *STILL* doesn’t feel like we’ve got feverish 2017 levels of mania and FOMO yet. It just feels...on track?”

He further added: “The only reason $BTC isn’t at $70k already is because the retail-kiddies don’t know how to use leverage without getting mega-nuked at every all time high.”

Despite the price of Bitcoin hovering at an all-time high, the relative strength index is lower than where it was during the 2017 peak of the previous bull run. When the price of Bitcoin violently dropped in a short period, its RSI was at around 95. Currently, the RSI is at 92, which is lower than the tops of both the 2017, 2013 and 2011 rallies.

PlanB, the creator of the Stock-to-Flow indicator — which predicts Bitcoin will likely reach $200,000 — said that BTC would have to rally toward $92,000 to hit an RSI of 95. The analyst said: “#Bitcoin is looking strong at RSI 92.”

The price of Bitcoin is strongly rallying in anticipation of Coinbase’s public listing. Investors and traders generally believe that the cryptocurrency market will continue on an upward trajectory post-Coinbase listing, mainly due to the strong momentum of the market. However, there are some who believe that the listing of the stock, which will trade under the ticker “COIN,” will mark a temporary top for cryptocurrencies.

On-chain data also suggests that Bitcoin is in a favorable position to see a broader rally. Elias Simos, protocol specialist at Bison Trails, said that the supply of Bitcoin among addresses that hold 100 to 1,000 BTC has hit an all-time high. This indicates that the number of high-net-worth investors holding Bitcoin is increasing. He stated:

“The supply of $BTC in addresses that hold between 100 and 1k of the coin has hit an all time high! This growth has come at the expense of both the cohorts right below (1-100) and above (1k-10k). The reshuffling continues unabated.”

Atop the technical and fundamental strong points of Bitcoin heading into the Coinbase public listing, the general sentiment around the event remains overwhelmingly positive. Nic Carter, a long-time Bitcoin investor and researcher, said COIN is gearing up to be one of the most explosive public listings in the history of the United States stock market:

“As COIN gears up to be the most explosive public listing in history; GBTC eyes GLD for the title of largest commodity tracker; and BTC exceeds the value of the monetary base of the Pound Sterling; Take a minute to let it sink in. Then get back to work.”

Although a big part of the interest comes from the fact that the stock market is seeing the first debut of a major U.S. crypto exchange, Coinbase’s financials have impressed investors in the traditional financial market. Anthony Pompliano, a noted Bitcoin investor and co-founder of Morgan Creek Digital, pointed out in early April that Coinbase made more in revenue in the previous 90 days than it did in all of 2020.

The bear case following the Coinbase listing

The primary bear case surrounding the Coinbase listing remains the high probability of a “sell-the-news” drop in the cryptocurrency market. Atop this, there is a chance that buyers will rush into COIN, possibly selling Bitcoin, Ether and other major cryptocurrencies in the process.

Mohit Sorout, partner at Bitazu Capital, also emphasized that he believes the final leg of the Bitcoin bull market is approaching, based on historical trends. He said, “Truth be told I seriously think we’ve entered the final leg of this $btc bull market. To be clear, final leg could be 2-3 weeks or even more. Price could reach 200k or even more who knows. Just don’t make irrational life decisions based on unrealized PnL.”

On top of the possibility of a peak approaching for the cryptocurrency market, the funding rate of the Bitcoin futures market is at around 0.11% on average. The default funding rate of Bitcoin is 0.01%, so this is 11 times higher. Hence, the likelihood of a flush correction in the short term remains relatively high.

Analysts say Coinbase listing represents a ‘watershed’ moment for crypto

Analysts say the impact of Coinbase listing on the Nasdaq will be overwhelmingly positive as it is the bridge legacy investors will use to tap into crypto.

Coinbase, the top cryptocurrency exchange in the United States will soon be a publicly listed company once its COIN stock launches on the Nasdaq stock exchange on April 14.

Generally, the sentiment around the listing has been overwhelmingly positive from both the crypto and traditional financial markets. With the date fast approaching, analysts have been issuing a variety of perspectives related to how the listing could impact Bitcoin and altcoin prices.

Coinbase rally, crypto top?

As Cointelegraph previously reported, Coinbase is technically not conducting an initial public offering (IPO).

Instead, the exchange is directly listing on the Nasdaq, bypassing the need to work with investment banks which are often costly for businesses.  

Despite the lack of involvement of investment banks in the process of listing Coinbase, there is significant hype around COIN.

While speaking CNBC's Squawk Box on April 12,  Jim Cramer said:

"You gotta buy Coinbase when that deal comes, even though it’s a $100 bilion deal, this has become common knowledge that there are many companies that are going to switch. MicroStrategy has always been the leader, so others would want to follow."

There are several reasons why investors in the traditional financial market are optimistic on COIN.

Most notably, the two main factors are: getting exposure to the crypto market without owning cryptocurrencies and the lucrative business model of Coinbase.

According to Ben Lilly, the co-founder of Jarvis Labs: 

"Coinbase is the watershed moment in terms of legitimizing some valuations you see in crypto, particularly around DEXs who have a tiny fraction of the amount of employees and opex that a Coinbase or ICE has. Crypto is an asset with incredible volume and diversity, which is poised to grow even more. Coinbase showcases how profitable exposure to this market can be. Also, I expect a wave of MA and VC activity on the heels of this as private investors will be asking their fund managers for exposure to this space."

John Street Capital, a venture capital and financial researcher, noted that Coinbase is massively profitable with an annual revenue of $1.8 billion.

Atop the compelling financial report and revenue, the user base of Coinbase is much larger than Cash App and Venmo. 

In fact, Coinbase has the biggest user base out of all financial institutions in the U.S. with the exception of JPMorgan. The researcher wrote:

"The @coinbase team announced 1Q21 data including revenue of ~$1.8B, adj EBITDA of $1.1B, NI of $730-$800M, trading volume of $335B & assets on the platform of $223B (11.3% of cryptoasset market) with 56M users Run-rate of $7.2B in revenue / $4.4B in EBITDA / $3.0B of NI. The 56M user # is bigger than @CashApp & @Venmo and significantly larger than @RobinhoodApp & @eToro . That's greater than every bank not named $JPM."

Although some traders believe crypto could reach a top after the Coinbase listing, the market sentiment building up toward the listing is highly positive.

When asked about the significance of the Coinbase listing, Ben Lilly said: 

You always need that bridge. How legacy markets value a company that operates in crypto is that bridge. Now legacy investors can walk across the bridge and realize it’s an untapped ocean of investable assets. They might not invest right away, but their framework for how to value something gets easier."

Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, also said the Coinbase "IPO" could boost Bitcoin to $70,000. He said:

"Coinbase IPO May Boost #Bitcoin to $70,000, Like #Tesla to $60,000 - The lowest 30-day volatility since October indicates Bitcoin is ripe to exit its cage and bull-market continuation is favored for the next $10,000 move. Similar to Tesla's equity-wealth allocation to Bitcoin.."

How did Galaxy Digital perform when it listed in Canada's stock exchange?

Another crypto firm that went public in the past year is billionaire investor Mike Novogratz's Galaxy Digital.

Since Galaxy Digital listed in Canada's stock exchange, its stock rose by more than 20-fold

Galaxy Digital stock price. Source: Yahoo Finance

Although the business model and the market capitalization of the two companies at launch are massively different, this shows that there i interest in publicly-listed crypto-focused companies at launch, which would likely reflect on COIN's value.

Bitcoin breaks new all-time high above $63K: What are traders saying?

The price of Bitcoin broke above $63,000 to hit a new all-time high, and traders are mixed in the short term.

The price of Bitcoin (BTC) reached a new all-time high at $63,478 on Tuesday on Binance. 

The market sentiment around Bitcoin and Ether (ETH) is overwhelmingly bullish, but the short-term sentiment remains mixed.

Analysts use the term “price discovery” when the price of an asset reaches a new all-time high.

On Tuesday, the price of Bitcoin entered price discovery, surpassing its record high as it made its way above $62,000.

When an asset enters price discovery, two scenarios could emerge: It becomes overbought and sees a severe correction, or it sees stronger technical momentum and rallies further.

While the momentum of Bitcoin is evidently strong, traders are mixed in the near-term trajectory of BTC.

Scott Melker, a cryptocurrency derivatives trader, said that the four-hour price chart of BTC has started to enter into overbought territory.

“Hidden bullish divergence printed a couple of candles ago, signaling continuation and invalidating the bear div. 4-hour RSI has finally reached overbought, let’s see how deep it can push.”
Bitcoin price chart with divergence. Source: Twitter

Atop the technical indicators show that Bitcoin could be overbought in the short term, while the futures market also remains extremely overcrowded.

Bendik Norheim Schei, the head of research at Arcane Research, said that the three-month premium on BTC futures contracts is reaching 50%.

BTC futures annualized rolling 3-month basis. Source: Twitter

Premiums in the futures market indicate whether the derivatives market is overheated with buyers. If the premiums are high, the risk of a severe sell-off as a result of investors taking profit increases.

“This is insane. Annualized 3-month basis (premium on BTC futures contracts) approaching 50%. 50%.”

Final leg of the bull rally?

According to Mohit Sorout, the founding partner of Bitazu Capital, there is a chance that Bitcoin is in the final leg of its uptrend. He said:

“Truth be told I seriously think we’ve entered the final leg of this $btc bull market. To be clear, final leg could be 2-3 weeks or even more. Price could reach 200k or even more who knows. Just don’t make irrational life decisions based on unrealized PnL.”
Pi cycle top indicator. Source: Twitter

However, there is also a strong possibility that Bitcoin does not top out like it did in 2017. Rather, it could range and consolidate for a long time after it peaks, similar to gold in its early days.

Binance Coin reaches 37% of Ethereum’s market cap: 3 reasons why BNB is soaring

Binance Coin, the native cryptocurrency of Binance Chain, has been surging with a massive uptick in transaction volume.

Binance Coin (BNB), the native cryptocurrency of Binance Chain and top digital asset exchange Binance, is starting to close in on Ether (ETH) in market capitalization. 

As of Monday, BNB is valued at $87 billion at the price of just under $600. The valuation of Ether is hovering at around $246 billion, which is 2.8 times larger than that of Binance Coin.

The technical momentum of BNB has been so strong that it briefly surpassed the volume of the BTC/USDT pair on Binance.

This trend is significant because Tether (USDT) is the biggest stablecoin in the global market, and the BTC/USDT pair is one of the most liquid trading pairs in crypto.

Why is Binance Coin surging so hard?

Binance Coin has been rising due to the three key reasons: an overall uptick in the popularity of Binance Smart Chain, strong technical momentum and the gap between BSC and Ethereum projects.

Binance Smart Chain transaction volume. Source: BSCScan.io

In recent weeks, the transaction volume on Binance Smart Chain has tripled the volume of the Ethereum blockchain.

Particularly in Southeast Asia, the usage of Binance Smart Chain has been rising, according to Coin98, the biggest venture capital firm in Vietnam that is building a DeFi ecosystem targeted at Asia.

Considering that the price of BNB was much lower than Ether until late March, this discrepancy between BNB and ETH likely made BNB a compelling trade.

There is also a big gap in valuations between the Ethereum DeFi ecosystem and Binance Smart Chain, which has been fueling a large portion of the demand for BSC projects.

This has caused the value of BNB to rapidly rise over the past two weeks, while ETH has been relatively stable at just over $2,000.

A journalist who covers crypto in China known as “Wu Blockchain” explained:

“BNB broke through an astonishing $600, but Ethereum’s Fees fell to its lowest point in a month. Although the transaction volume of BSC is 3x that of Ethereum, the two are not in a competitive relationship. The top 10 addresses of BNB hold more than 88%, and Eth is 20%. The future of Ethereum depends on the upgrade of EIP-1559 and 2.0. The only two things Binance needs to worry about are the government suppression and hackers.”

Traders foresee BNB to undergo a more explosive rally in the foreseeable future if it breaks out against Bitcoin.

Kaleo, a pseudonymous cryptocurrency trader, said:

“$BNB breaking above this level on the $BTC pair could lead to the type of explosive momentum needed to actually close in on $1,000.”
BSC/BTC 1-day price chart (Binance). Source: TradingView.com, Kaleo

Will the capital rotate back into Ethereum?

However, Kelvin Koh, the managing partner at Spartan Group — one of the largest DeFi-focused funds in Asia — said that for now, he expects the capital to rotate back into Ethereum as BSC projects near the valuation of ETH equivalents.

He emphasized that there is a huge valuation gap between BSC and Ethereum projects. This gap could be making BSC projects compelling to the market. He said:

“BSC is having its own DeFi summer....so much alpha to be discovered in BSC ($XVS, $CAKE). If you are wondering why Ethereum DeFi coins are lacklustre, it’s because of the huge valuation gap that still exists between the BSC coins and ETH equivalents. Until this gap closes, money isn’t rotating back to ETH DeFi coins.”

Why is XRP seeing a monster rally when Ripple is worth just $3B on the secondary market?

Ripple is reportedly trading at a $2 to $3 billion valuation but its XRP holdings are worth around $70 billion.

The equity of Ripple, the company that builds the infrastructure around XRP — the digital asset used by networks like RippleNet to process cross-border payments — is reportedly trading at $2 to $3 billion in the secondary market.

Yet, the XRP holdings of Ripple, are reportedly worth $70 billion, which is many times higher than the valuation of the firm's equity.

Michael Novogratz, the billionaire cryptocurrency investor and the CEO of Galaxy Digital, said:

"Ripple equity is ‘trading’ in secondary market at $2-3bn valuation. The $XRP on their balance sheet is worth approx $70bn. One price seems wrong. If $XRP price is saying settlement coming, the equity is crazy cheap. If not, the token seems expensive. Thoughts?:

So is XRP undervalued? Not exactly

According to Leonidas Hadjiloizou, a long-time cryptocurrency researcher, XRP that is locked in Ripple's balance sheet are in escrow are likely not priced into Ripple's equity.

As such, these holdings are not accessible until they start unlocking, which might not be priced in the value of the firm's equity.

He said:

"Well, $62 bn of the XRP in Ripple's balance sheet is locked in escrow. At the same time, Ripple's XRP sales are the ones under attack from the SEC so the market probably hasn't priced in Ripple's XRP holdings since they are in limbo right now."

In December 2017, the Ripple team explained that the XRP holdings in Ripple's escrow unlock by one billion XRP per month for 55 subsequent months.

The team said at the time:

"The escrow consists of independent on ledger escrows that release a total of one billion XRP each month over the next 55 months. This provides an upper limit on the amount of new XRP that can be brought into circulation. The amount of XRP actually released into circulation will likely be much less than this."

Theoretically, the value of Ripple's equity would be considered undervalued if the amount of XRP on the firm's balance sheet unlocks and the price of XRP does not drop.

The question on the discrepancy between the value of Ripple's equity and the amount of its XRP holdings started to emerge as the price of XRP started to rally above $1, despite an ongoing lawsuit with U.S. Securities and Exchange Commission (SEC).

XRP/USD 1-day price chart (Bitstamp). Source: TradingView.com

Since April 1, the price of XRP rallied from $0.57 to as high as $1.49, by around 160%.

What is behind the XRP rally?

Throughout the past two weeks, the main catalysts for the 160% rally came from victories in the company's legal battle. Ripple lawyers were granted access to internal SEC discussion history regarding cryptocurrencies, and a court denied the SEC the ability to disclose the financial records of two Ripple execs, including CEO Brad Garlinghouse.  

Another reason may be the convergence trade between Bitcoin (BTC) and altcoins, particularly as BTC sees sideways price action, allowing alternative cryptocurrencies to rally and catch up. 

Kelvin Koh, the managing partner at Spartan Group, one of the largest DeFi-focused funds in Asia, said that large quant funds try to trade the convergence between Bitcoin and major altcoins.

Hence, the trend of capital moving into altcoins and back into Bitcoin occurs periodically. Koh wrote:

"The reason this happens periodically is because there are a bunch of quant funds out there that play the convergence trade between $BTC and a handful of liquid alts. Whenever there alts look cheap relative to $BTC, they pile in. When they look expensive, they rotate back to $BTC. No fundamentals involved so don’t try too hard to rationalize the moves. This strategy has proven effective over time and there are enough managers playing this that it becomes self-fulfilling and keep recurring."

Orakuru, a new Binance Smart Chain oracle, debuts with multiple audits

Orakuru, an oracle protocol on Binance Smart Chain, recently completed a successful token sale on the fundraising platform KickPad.

There was significant demand for the project early on, with the Bonus Private B round getting filled within 26 seconds over two blocks.

Merely days after the launch of the ORK token, Orakuru has announced multiple audits of the protocol.

Orakuru is one of the first oracles on the Binance Smart Chain

With Orakuru being one of the first oracles on Binance Smart Chain, which is rapidly growing as a major DeFi ecosystem, its focus on delivering quality audits to the community is important.

Binance smart chain bsc
Binance Smart Chain (BSC) price since January 2021. Source: BNBUSDT on TradingView.com

Simply put, an oracle is a technology that allows a blockchain protocol or a platform to receive data through a smart contract.

For instance, for a DeFi project on Binance Smart Chain to receive price data of cryptocurrencies, they cannot call API requests from centralized databases.

Instead, DeFi protocols need to route through oracles to obtain data. Tellor explained the role of oracles in DeFi comprehensively in a column:

“An oracle is the thing that allows you to get that data into your smart contract. It either brings it on-chain for you to read from or pushes the data into your smart contract. Typically this is a third-party service or something that you do yourself manually — both of these are centralized. And it’s important to be clear that using a centralized method for your oracle defeats the entire purpose of building a DeFi product. If the oracle was corrupted, it could game the system and manipulate that data or choose to censor it for its own financial gain.”

Orakuru, specifically, asks external nodes to capture data, such as Binance Smart Chain price feeds and off-chain market prices.

This data then can be used by DEXs, prediction markets, insurance, lending and more then use the feeds to power their dApps on Binance Smart Chain.

orakuru
Orakuru’s use case. Source: Orakuru

State of audits from multiple auditing firms

Most recently, the team announced the completion of an audit from Solidity Finance. The team said:

We have a few notable audit results that demonstrate our confidence in DAO values, highlighting the importance of community trust. The mint feature and ownership-related functions are often recurring issues for new Defi ventures. These issues do not exist with Orakuru:
– No ownership-related functions exist.
– All tokens will be minted upon deployment.
– No mint functions are present, so the total supply cannot increase after deployment

Prior to that, Orakuru received a completed audit from Solid Group on April 7.

The team said at the time:

Multiple audits are crucial for DeFi projects because the risk of sophisticated exploits always exists with high-profile projects.

Both white hat and malicious hackers are consistently targeting in-demand projects to try to exploit potential vulnerabilities.

As such, the focus of Orakuru to receive multiple audits from various auditing firms remains a positive factor for the longevity of the project.

Explore all Binance Smart Chain project on CryptoSlate.

Disclaimer: CryptoSlate holds a financial position in Orakuru. CryptoSlate was given the opportunity to participate in the private sale of Orakuru in exchange for news, project analysis, and other types of coverage. CryptoSlate was not paid for this article.

The post Orakuru, a new Binance Smart Chain oracle, debuts with multiple audits appeared first on CryptoSlate.

Watch these key technical levels as Bitcoin price nears $61,800 all-time high

Bitcoin broke above $61,000 for the first time since early March and traders are turning bullish.

The price of Bitcoin (BTC) has surpassed $61,000 on April 10 for the first time in nearly a month. Following the breakout, traders are starting to look at new levels of resistance and support in the short-term as optimism returns to the market.

In the near term, besides the all-time high at around $61,800, there are three key Bitcoin price levels to observe: $61,188, $58,387 and $53,000.

BTC_USDT orderbook heatmap (Binance). Source: Material Indicators

As long as the price of Bitcoin stays above $58,387 and keeps attempting to break out above $61,188, it would likely see a new record high in the foreseeable future.

If Bitcoin breaks out to a new record high, traders also anticipate the altcoin market to pullback slightly for the time being, at least until BTC starts to stagnate after reaching a new high.

$58,000 flipping into support is critical for more upside

According to the pseudonymous trader "Rekt capital," the key for Bitcoin to cleanly reach a new all-time high in the coming days is to solidify $58,000 as a support area.

The $58,000 level is an important area because it marks the peak of the initial BTC rally to the $60,000 resistance level in mid-February, as shown in the graph below.

BTC/USD 1-day price chart (Coinbase). Source: Rekt Capital, TradingView.com

In technical analysis, when the price of an asset stabilizes above the previous peak, it is considered to be a very bullish sign.

The trader noted:

"BTC was able to still keep the red area even though it rejected from orange And in fact, the rejections from orange has been weaker Right now, BTC is pressing beyond orange [$58,000]. Turning orange into a support would bring Bitcoin very close to a new All Time High."

Raoul Pal, the CEO of Global Macro Investor, emphasized that the macro view of Bitcoin remains positive.

Pal emphasized that Bitcoin broke out of a three-month range, which indicates that BTC's technical momentum is starting to regain steam. He said:

"Kind of feels like a big deal to see BTC break a 3 month range and a wedge. It should create a powerful move to the upside. (Axis scrunched on chart to hint at the upside for dramatic effect."

A cryptocurrency derivatives trader "Cactus" also added that on-chain analytics are stronger than ever, considering that large BTC exchange outflows indicate accumulation among high-net-worth investors.

As Bitcoin rallies, beware of altcoin stagnance

Meanwhile, other traders are expecting the altcoin market to take a breather if Bitcoin enters price discovery once again.

Kaleo, a well-known pseudonymous trader, said that there is a high chance altcoins do not rally nearly as much as expected when the volume is sucked up by Bitcoin.

The trader explained:

"For those that are new, be careful being to deep into alts when $BTC is on the brink of price discovery. Profits from alts tend to flow back into Bitcoin. This doesn't mean the USD price won't go up, just that there's a solid chance it won't go up nearly as much."

In the short term, Bitcoin would likely outperform altcoins if it continues to rally, and the momentum would only shift to altcoins once BTC consolidates as it finds a new range after breaking new highs. 

The major Ethereum support area is $1,800 but weaker than Bitcoin‘s — Analyst

The buying support for ETH/USD near its record high appears to be weaker than Bitcoin’s.

The price of Ether (ETH) is hovering near its all-time high once again, while Bitcoin (BTC) is still far from surpassing its record high at $60,805.

But despite ETH demonstrating strong technical momentum and entering price discovery, on-chain analysis finds that its support is “narrower” than Bitcoin’s.

Simply put, ETH faces a bigger risk of seeing a deeper pullback than Bitcoin in the foreseeable future if the market turns around.

USD cost of Ether held since November 2020. Source: Chainalysis, Philip Gradwell

Why does Ether have a weaker support area than Bitcoin

Philip Gradwell, chief economist at Chainalysis, said that ETH’s price has narrower support near its record high compared to Bitcoin.

If the market corrects, the next major ETH support level, is around $1,800, Gradwell noted.

Based on the accumulation trend of ETH, Gradwell explained that the strongest level of demand is at $1,800. He said:

“The Ethereum price reached a new all-time high this week, but cost-curve analysis suggests the peak Ethereum price has a narrower base of support than the peak Bitcoin price, with the next strongest level of observed demand for Ethereum at $1,800.”

Gradwell used a data point called “the USD cost of Ethereum held” — which is similar to whale clusters for Bitcoin — to estimate at which price level investors accumulated ETH.

If the $1,800 support level gets broken and the market sees a sizable correction, the economist said that $1,500 is a “particularly strong” next level of support for ETH.

A drop to $1,500 would mean ETH would see a 30% drop from the current price of around $2,100. 

Historically, 30% pullbacks occur frequently during bull cycles, but in the recent cryptocurrency market uptrend, there has not been many 20%-to-30% pullbacks compared to the run-up in 2017.

Nonetheless, Gradwell emphasized that $1,500 is the macro support level for ETH in the short to medium term. He added:

“The ETH market has changed radically in recent months, with a significant increase in the cost of acquisition for over 50 million ETH, out of a total supply of 115M. Support at $1,500 is particularly strong, with 33.3M ETH acquired above this level at a total cost of $58 billion.”

One key reason ETH might have a narrower support base than Bitcoin could be the small number of long-time hodlers.

After the peak in 2017, Gradwell found that a small cohort of investors held ETH despite seeing major losses. 

The economist said that such a trend supports the concern that ETH has a weaker support base, at least relative to Bitcoin.

Traders expect ETH to continue rallying above ATH

In the short term, traders still expect ETH to see a broader uptrend despite the concerns for a narrow support base.

A pseudonymous trader known as Blunts said that based on the bottoming out formation on the four-hour chart, ETH would likely see another record high before BTC.

The trader said:

“Looks like that was the $eth low. At this rate eth will be at ath before btc.”
ETH/USD 4-hour price chart with key levels. Source: TradingView.com, Blunts

Atop the favorable technical market structure, according to Glassnode, the hash rate of the Ethereum blockchain network has hit a new all-time high.

Hence, both fundamentals and price technicals suggest that the momentum of ETH’s price has a good chance of sustainability in the near term.

Bitcoin exchanges just saw massive Tether stablecoin deposits

Is a broader rally forming for Bitcoin as sidelined capital makes its way onto exchanges?

Nearly half a billion in Tether inflows was recorded on April 8 across major Bitcoin (BTC) exchanges, based on Glassnode's data.

Considering that the inflows, the biggest since mid-March, coincided with a minor Bitcoin pullback, it indicates that buyers could be waiting to step in following BTC's price drop.

Stablecoin deposits into exchanges. Source: Glassnode

Is a broader Bitcoin rally brewing?

There are two major on-chain metrics that often signal a bigger Bitcoin rally is forming: BTC outflows and stablecoin inflows.

Stablecoin inflows occur when traders deposit their sidelined funds to exchanges to buy back into cryptocurrencies.

Meanwhile, large BTC outflows typically happen when high-net-worth investors withdraw their Bitcoin from exchanges to self-hosted wallets, which often suggests their intention to hold for the long term. 

In one hour, more than $476 million worth of stablecoin deposits were spotted on exchanges. According to Lex Moskovoski, the CIO of Moskovoski Capital, this demonstrates that there is no shortage of capital waiting to buy Bitcoin dips.

Moskovski said:

"$476M USDT deposited to exchanges in an hour yesterday to buy the dip. Every time we dip, there is no shortage of the cash on sidelines, it seems."

Stablecoins are seeing massive growth

On April 2, Bitfinex CTO Paolo Ardoino shared that the market cap of Tether, the largest stablecoin in the global market, has reached $42 billion in market capitalization.

In the following six days, the market cap of Tether (USDT) has added another $2 billion, showing strong momentum.

Since Tethers are essentially digital dollars that can be easily converted into Bitcoin and other cryptocurrencies, this uptrend suggests that the amount of sidelined capital in the crypto market is growing.

Theoretically, when there is a lot of sidelined cash in the market, it represents significant firepower to drive a new rally of major cryptocurrencies like Bitcoin.

When asked whether large USDT deposits could also mean that there’s a demand to cash out instead, Moskovski countered by saying that USDT deposited to exchanges typically represents an intention to buy. 

He explained

"Stable coins deposited on exchanges is for buying, mostly. Some part of it may be used for lending to leveraged traders [...]. Besides, it's bullish too as it highlights the demand for longs."

Meanwhile, data from CryptoQuant depicts a similar trend. The All Exchanges Stablecoins Ratio (ESR), for instance, which divides all Bitcoin reserves on exchanges by stablecoin reserves, is rising once again, suggesting that investors could be re-entering the market.

Stablecoins ratio. Source: CryptoQuant

3 reasons Enjin Coin price surged by over 30% in a single day

ENJ, the native token of the Enjin blockchain ecosystem, is up 31% in the last 24 hours, for three key reasons.

The price of Enjin, the native token of the blockchain gaming and NFT-focused project, has surged by more than 30% in the last 24 hours.

There are three major factors behind ENJ's strong short-term uptrend, namely the Coinbase listing, technical momentum, and the interest around JumpNet.

ENJ price chart since December 2020. Source: TradingView.com

Coinbase listing intensifies interest in Enji

The price of ENJ has been on a gradual uptrend throughout the past month ever since the project announced the release of Efinity and JumpNet.

ENJ started to see a large rally when Coinbase, the top U.S. exchange, announced it will allow users to trade ENJ, an event that was highlighted in Cointelegraph Markets Pro on April 7. 

VORTECS™ score (green) vs. ENJ price (white). Source: Cointelegraph Markets Pro

Additionally, the VORTECS™ score, exclusive to Cointelegraph, flipped green prior to the rally, as seen in the chart above. The VORTECS™ score is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements, and Twitter activity.

On April 8, Coinbase Pro announced:

"Starting immediately, we will begin accepting inbound transfers of 1INCH, ENJ, NKN, OGN to Coinbase Pro. Trading will begin on or after 9AM Pacific Time (PT) Friday April 9, if liquidity conditions are met."

A Coinbase listing typically serves as a major catalyst for alternative cryptocurrencies because it introduces the asset to the U.S. retail market.

The launch of JumpNet and Efinity is crucial

Enjin is also launching two crucial products in the upcoming months: Efinity and JumpNet.

Efinity is a gaming and NFT-focused blockchain that runs on Polkadot. Efinity would be the first blockchain network that is solely optimized for NFTs. Since there is significant hype around NFTs and the sector is rapidly growing, the interest in Efinity is also rising fast.

Peter Mauric, head of public affairs at Parity Technologies, said:

“Minting NFTs on legacy networks is expensive—financially and environmentally. Polkadot has been designed to solve these structural shortcomings, providing a platform for launching the kind of production-grade infrastructure Efinity represents for NFTs: cheaper for creators and cleaner for the climate.”

Atop Efinity, Enjin is also releasing JumpNet, which is a second-layer scaling solution for Enjin. 

JumpNet allows users to transact using ENJ on gaming platforms with faster and cheaper transactions, which is expected to improve the gaming experience in the Enjin ecosystem.

Mike Abundo, the committee chairman of the Philippines Fintech Association, said:

Good luck to the @Enjin community on the launch of JumpNet! JumpNet enables fast & free transactions for $ENJ & @Enjin game items. That means you could throw your favorite streamer a powerful @Enjin sword right when they need it in battle, then throw them $ENJ when they win.

Technical momentum is accelerating

According to the pseudonymous trader "Rekt Capital," ENJ is on the verge of seeing a "bull flag" structure against Bitcoin following the breakout on April 8.

The trader said:

"Despite the downside volatility, ENJ is still showcasing price-strength confirmation at this level Interesting to see if ENJ forms a Bull Flag around these levels, as price has been moving sideways along this local red support for weeks"
ENJ/BTC price chart (Binance). Source: TradingView.com, Rekt Capital

If the price of ENJ holds above the $2.5 support level, the probability of a broader rally would remain high in the near term.

Kimchi premium collapses: Short-term top signal or a reset for Bitcoin?

South Korea's Kimchi premium collapsed overnight, but it is likely not a sign of a short-term Bitcoin top.

The so-called Kimchi premium, which measures the premium of the Bitcoin (BTC) price in South Korea's cryptocurrency exchange market, plummeted overnight.

The premium declined from 22% to 15% within a matter of hours on April 7, and it is continuing to drop across major South Korean exchanges.

BTC Korea Premium index. Source CryptoQuant

A big pullback in South Korea's Bitcoin market

Overnight, as CryptoQuant CEO Ki Young Ju noted, the price of Bitcoin fell particularly hard on South Korean exchanges.

As the price of Bitcoin dropped, the Kimchi premium fell in tandem. But, since BTC price fell significantly harder on South Korean exchanges, the premium plunged quickly within a matter of hours.

Bitcoin falls hard on South Korean exchanges. Source: Ki Young Ju

There are two possible reasons why the premium dropped in the manner that it did.

First, traders from outside of South Korea might have found a way to successfully arbitrage the premium. One potential way this could happen is if traders from other Asian markets coordinate with whales in South Korea to sell BTC and withdraw on the same day.

Second, altcoins that were increasingly gaining momentum throughout the week severely corrected. As the capital from the altcoin market exited, traders might have also sold BTC and ETH, bringing down the large-cap cryptocurrencies.

Ki said:

"It seems someone finally figured out how to arbitrage this Kimchi premium opportunity. The trading volume in 30min time frame on @upbitglobal , the largest Korean exchange, was bigger than @Binance 's. This drop seems related to Kimchi pullback. One evidence of arbitrage: @BithumbOfficial , one of the largest exchanges in Korea, $BTC inflow mean has been increasing while all exchanges' is decreasing. It seems some whales are depositing BTC to Korean exchanges."

XRP, as an example, was consistently one of the most popular cryptocurrencies in the South Korean market throughout the past week.

As Cointelegraph reported, XRP broke out against Bitcoin, rising above $1 for the first time in over three years.

But, as altcoins like XRP fell, it is possible that the market sentiment around Bitcoin and Ethereum also worsened in the Asian market, bringing down the premium.

Is this a top signal?

When the Kimchi premium fell substantially in 2017, the price of Bitcoin plummeted by more than 50% within several days.

This time around, the price of Bitcoin dropped by 5% to $56,000 and has started to recover fairly quickly thereafter. 

The probability of the cryptocurrency market recovering in the short term remains high because there were large liquidations in the past 48 hours.

For example, a single XLM trade resulted in a liquidation worth $84 million. Given that well over $1 billion were liquidated in the last 24 hours, the crypto derivatives market is likely to reset.

BTC funding rates. Source: Bybt.com

The funding rate of Bitcoin across major futures exchanges was around 0.15% before the drop. This is 15-fold higher than the default 0.01%, indicating that the derivatives market was extremely overheated.

Though, as the chart above shows, the funding rates remain at relatively high levels, which suggests that the price may see more downside in the short term. 

XRP surpasses $1 for the first time since 2018: What’s behind the new rally?

XRP has surpassed $1 for the first time in 37 months as major cap altcoins are starting to follow Ethereum.

The price of XRP has surpassed $1 on April 6 for the first time since March 2018, putting its market valuation at around $47 billion.

Moreover, the fourth-largest cryptocurrency in the global market has broken out against the Bitcoin (BTC) pair, causing it to see significant technical momentum. 

XRP/BTC 1-month price chart (Bitstamp). Source: TradingView.com

Mostly a technical rally, not too much fundamentals

When XRP was hovering at around $0.75, cryptocurrency traders noted that XRP's market structure was bullish.

Cantering Clark, a cryptocurrency derivatives trader, said that XRP has all the technical components to rally. Since then, XRP rallied from $0.75 to over $1.

On April 6, Clark said:

"Not for nothing, $XRP technically has taken all necessary strides to be bullish. After the exchange delistings and write-off by most of CT, this essentially left the market short from both a positional and sidelined standpoint. This can move much higher."

Another well-known trader, recognized as "Kaleo," noted that XRP's breakout against Bitcoin is particularly optimistic.

After its breakout above $1, Kaleo explained that XRP is on the verge of breaking out of a 3-year downtrend against Bitcoin. He noted:

"$XRP / $BTC is about to break out of a 3+ year downtrend. Zero exposure here seems irresponsible. When this sh*tcoin starts to pump, it makes vertical moves (aka all at once for a burst). Still very early."
XRP/Bitcoin on Poloniex. Source: Kaleo, TradingView.com

Social volume is growing

Another catalyst behind XRP atop the technical momentum has been its growing social volume.

According to analysts at Santiment, a data analytics platform, the social volume of XRP has been growing rapidly in tandem with several other cryptocurrencies.

The analysts stated:

"Most #altcoins have been maintaining their upward trajectory to start the week, with no greater surge among top 100 assets than what we've seen from $STX, which is seeing a 5-month high in social volume. Other spikes include $XRP, $XTZ, $FTM, and $BTG."

If the technical structure of XRP remains intact and the social volume remains consistently high, the momentum of XRP could potentially take the cryptocurrency to the next major resistance area.

Technically, the next resistance level is at around $1.20 with a macro sell-wall at $2, dating back to December 2017.

Whale clusters suggest that this key Bitcoin level can trigger an explosive rally

Bitcoin whale clusters show $57,046 and $60,045 are the crucial support and resistance levels in the short term.

The price of Bitcoin (BTC) is attempting to break the $60,000 resistance level after more than a week of ranging.

Whale clusters show that $57,046 and $60,045 are the crucial support and resistance areas in the short term. 

In other words, the probability of a strong breakout in the foreseeable future would increase substantially if Bitcoin stays above $57,046 and continues to test $60,000 resistance.

Why whale clusters are important for Bitcoin

Whale clusters form when high-net-worth investors buy or sell Bitcoin at a certain price and do not move their holdings thereafter.

As such, a whale cluster support typically serves as a strong macro support area for Bitcoin because whales tend to buy more when BTC falls to a level where they initially bought BTC.

On the flip side, a whale cluster resistance area would likely hold up as a sell area because whales are more likely to wait until their breakeven price to sell their positions.

According to researchers at Whalemap, the two key resistance levels for Bitcoin in the near term are $60,045 and $61,062. On March 31, the researchers noted:

"$BTC is back. Bouncing perfectly from whale supports so far. This is a good sign: in bear trends, whale resistances work better than supports and vice versa for bull trends. Whale supports are back to business now which means the trend has shifted. April should be quite fun."
Bitcoin whale clusters. Source: Whalemap

Since then, the price of Bitcoin has been ranging and consolidating between the resistance level and the $57,000 support.

Based on this trend, the researchers added that this could be the calm before the storm, anticipating a spike in Bitcoin's volatility, which is currently at the lowest levels since November 2020. They wrote:

"The support resistance battle is intense. Levels from last week are working pretty well. Bitcoin is being capped by the $60,045 level pretty spot on. Is this the calm before the storm?

Traders' sentiment about Bitcoin is mixed

According to the pseudonymous trader known as "Byzantine General," the Bitcoin futures market is becoming extremely overheated. 

The derivatives market is surging while the BTC futures funding rate is consistently spiking above 0.12%.

On average, the default futures funding rate of Bitcoin is 0.01%, so the market is overheated by around 12-fold. The trader said:

"This looks pretty bad tbh. A good flush would be a blessing."
Bitcoin price chart with futures funding rate and volume. Source: TradingView.com, Byzantine General

A trader known as "NekoZ" stated that the technical market structure of Bitcoin on the 4-hour chart indicates that BTC could consolidate longer, but is not bearish in the near term.

The trader said:

"BTC - H4 I see no reason to be bearish on bitcoin 2 points I am adding to my long. As long as we keep showing higher lows, 0 reason to be worried."

Traders generally echo the sentiment that Bitcoin could see a minor pullback to reset from the overheating derivatives market, but the macro technical structure remains optimistic.

Ark Invest and JPMorgan expect Bitcoin to hit $130K-$470K

Top funds in the U.S. expect Bitcoin to hit anywhere between $130K to half a million in the long term.

JPMorgan expects Bitcoin (BTC) to reach $130,000, while Ark Invest anticipates the market valuation of BTC to surpass that of gold.

The optimistic macro prediction from both funds revolves around the scarcity of Bitcoin, which has buoyed its popularity as a safe-haven asset.

BTC/USD 1-day price chart (Binance). Source: TradingView.com

Why are both high-profile funds so optimistic in Bitcoin?

As Cointelegraph previously reported, the outlook of the U.S. dollar index is on the decline.

The fear of inflation and the increasing liquidity in the financial markets is causing reserve currencies, like the dollar, to depreciate.

Ark Invest, as an example, sees Bitcoin nearing $500,000 in the future considering that the fund expects it to surpass gold by market capitalization. Currently, the market cap of Bitcoin is roughly 10% of gold. 

The Winklevoss twins, who own over a billion dollars worth of cryptocurrencies like Bitcoin, outlined a similar thesis in the past.

In the new popular essay entitled "The Case for $500K Bitcoin," Tyler Winklevoss, the co-founder of Gemini, said:

"Today, the market capitalization of above-ground gold is conservatively $9 trillion. If we are right about using a gold framework to value bitcoin, and bitcoin continues on this path, then the bull case scenario for bitcoin is that it is undervalued by a multiple of 45. Said differently, the price of bitcoin could appreciate 45x from where it is today, which means we could see a price of $500,000 U.S. dollars per bitcoin."

Meanwhile, JPMorgan has set a more conservative target at $130,000, which is more realistic as a shorter-term target for Bitcoin, as it would put BTC's valuation at around $2.73 trillion.

Holger Zschaepitz, a market analyst at Welt, noted:

"JPMorgan sets $130k #Bitcoin target BUT the long-term risk-adjusted Bitcoin theoretical fair value of $130,000 would drop to between $24,000 and $30,000 based on current volatility ratios. Upside potential conditional on volatility of Bitcoin converging to that of gold. (via BBG)"

However, Zschaepitz noted that the long-term risk-adjusted price of Bitcoin could fall in the future, which is not accurately predictable because it is difficult to forecast the trend of volatility over time.

What do traders think

According to a pseudonymous trader known as Bitcoin Jack, the SOPR indicator forecasts some profit-taking could occur in the short term.

The SOPR indicator gauges how many BTC in the market are in profit and thus are vulnerable to a sell-off. The trader said:

"Pretty much filled out all specific area of interest on the volume profile to be ready for trend confirmation Trend confirmation expected soon, otherwise I think we will reset to another corrective structure that will last >1-2 weeks aSOPR indicates little profit taking ahead."

Fellow cryptocurrency trader Scott Melker emphasized that Bitcoin has performed well against the S&P 500 and the U.S. stock market, which still makes it favorable as a store of value. 

Bitcoin vs. SPX. Source: TradingView.com

Melker wrote:

"$BTC Vs. $SPX. Most assets have "risen" in value because the denominator is USD, which is depreciating. When you look at stocks vs. a deflationary asset, they look far less impressive."

As long as Bitcoin continues to outperform the U.S. stock market, from a risk standpoint, it would remain compelling for both retail traders and high-net-worth investors in the near to medium term.

Cryptocurrency market cap hits $2 trillion — Now worth as much as Apple

The combined market cap of all cryptocurrencies reaches $2 trillion for the first time.

The market capitalizations of all cryptocurrencies in existence surpassed $2 trillion on April 5, according to data from Goingecko, led by the impressive growth of Bitcoin (BTC), Ether (ETH) and other altcoins in 2021.

The cryptocurrency market as a whole has become approximately as valuable as Apple, the second biggest company in the world after Saudi Arabia's oil giant Aramco.

The milestone also comes less than three months after the cryptocurrency market surpassed $1 trillion for the first time back on Jan. 7 when the price of Bitcoin was around $33,000. 

Will the Ethereum and altcoin bull market continue?

In recent months, several major catalysts have fueled both Bitcoin and Ethereum to rally strongly to new all-time highs.

Financial institutions, like PayPal and Visa, are beginning to actively support cryptocurrencies as Bitcoin was leading the cryptocurrency market's uptrend.

In 2021, Bitcoin has faced several short-term corrections but has now consistently remained above the $50,000 for almost a month with low volatility compared to altcoins, preventing both ETH and the altcoin market from seeing a severe pullback.

In fact, Bitcoin's volatility has dropped to the lowest level since November 2020 as BTC price has been consolidating between $55,000 and $60,000 over the past few days.

Bitcoin Volatility Index (30-day average). Source: Bybt.com

In the same period, the price of ETH rallied and broke out against Bitcoin, reaching a new record high above $2,000.

A pseudonymous trader known as "Rekt Capital" attributed the strong performance of ETH to Bitcoin's consolidating under $60,000. He wrote:

"#BTC is still just consolidating inside this range It is this consolidation that has helped $ETH breakout to new All Time Highs #ETH is arguably leading the market whereas $BTC is trying to catch up Good sign so far is that orange resistance is struggling to reject #Bitcoin."
BTC/USD 1-day price chart (Coinbase) with key levels. Source: Rekt Capital, TradingView.com

Fund managers and investors in the crypto market are generally optimistic about the short to medium-term trajectory of cryptocurrencies.

Jonathan Habicht, a partner at Moonrock Capital, said:

"I know so many people who are just waiting to increase their $BTC $ETH and major Altcoin positions during larger dips and they are surely not the only ones. Bear market is not an option for the foreseeable future."

As long as the strength of the ETH/BTC pair remains intact and Bitcoin does not see a major sell-off, the cryptocurrency market's short-term outlook remains highly optimistic for April and into the summer.

Coinbase IPO buoying market sentiment

On April 2, Coinbase, the top U.S. cryptocurrency exchange, announced that the U.S. Securities and Exchange Commission (SEC) approved Coinbase's S-1 filing.

Coinbase is expected to be listed on the Nasdaq exchange on April 14, making it a publicly-traded company in the U.S. stock market. The company said:

"We’re happy to announce that earlier today, the SEC declared our S-1 registration statement effective and that we expect our direct listing to occur on April 14, 2021, with our Class A common stock trading on the @NASDAQ under the ticker symbol COIN."

The listing of Coinbase in the U.S. stock market would likely cause the demand for cryptocurrencies to increase because it would attract the eyes of investors in the traditional financial market.

Depending on the performance of the stock, it could also lead exchange tokens such as BNB, FTT, Huobi Token, SUSHI, UNI, and others to rally, mirroring the momentum of COIN.

At the same time, some analysts believe that Coinbase's IPO may bring major volatility if not downward price pressure on the cryptocurrency market as the date aligns with a big BTC options expiry date. 

Kimchi premium hits 11% — Is Bitcoin now in a 2017-esque retail stage of the cycle?

Is a surging premium in South Korea a top signal or a sign that the Bitcoin rally is only getting started?

The price of Bitcoin (BTC) is continuing to range between $56,000 and $60,000, as the so-called "Kimchi premium" is surging to yearly highs.

Kimchi premium forms when Bitcoin is trading at a higher price in South Korea over other major markets like the United States.

In 2017, the Kimchi premium surpassed 20%, causing Bitcoin to trade at around $24,000 in South Korea while it topped at nearly $20,000 in the U.S.

Korea Premium Index. Source: CryptoQuant.com

Last week, on March 29, this premium resurfaced, hovering at 6%, which has since climbed to around 11%.

Kimchi premium is at 11%, is this bad for Bitcoin?

The last time the Kimchi premium rose to an all-time high, the Bitcoin market topped and saw a violent correction almost immediately afterward. 

Although the premium suggests that the South Korean cryptocurrency market is showing signs of getting overheated, it is not high enough to mark a top. 

Ki Young Ju, the CEO of CryptoQuant, said that the premium is worrisome, but the fundamentals of Bitcoin look strong. 

The difference between this time and 2017, however, is that South Korea only accounts for 1.7% of the global Bitcoin market's trading volume.

As such, Ki explained that even if the South Korean market sees a pullback as a result of the rising premium, it would not have as big of an impact it had in 2017. He noted:

"$BTC fundamentals still look good, but the Korean bubble is worrisome to me. Shitcoins prices are skyrocketing, and Korean crypto trading volume has surpassed the national stock exchange (KOSPI). Even if the bubble collapses, the impact is unlikely to be significant since it's just 1.7%"

More importantly, unlike 2017, the ongoing Bitcoin rally has been led by institutions and high-net-worth investors, as demonstrated by the huge outflows from Coinbase.

But, one reason why many analysts are concerned about the overcrowded cryptocurreny exchange market in South Korea is that there is significant interest in newly-emerging crypto assets.

Instead of Bitcoin and Ether (ETH), cryptocurrencies with the highest volume on Bithumb, as an example, often are new altcoins that have been in existence for a couple of months.

High-net-worth investors are continuing to buy

Less than a week ago on March 29,  Ki emphasized that shorting Bitcoin is not the ideal trade as Coinbase Pro is seeing large outflows.

Bitcoin Coinbase Pro outflow. Source: CryptoQuant.com

Outflows from top exchanges typically suggest that institutional investors are buying Bitcoin and moving their holdings to self-hosted wallets.

Ki said at the time:

"Punting a short on $BTC now looks not a good idea. Less likely to go below 52k as institutions might have bought $BTC at that level."

Since then, Bitcoin has rallied by around 5% and has seen a relatively stable uptrend, possibly due to the U.S. dollar showing renewed signs of weakness.

Here’s why April may be the best month yet for Bitcoin price

U.S. dollar weakness is painting a bullish short term outlook for Bitcoin in April.

The U.S. dollar is starting to weaken once again as sellers are pushing the U.S. Dollar Index (DXY) downward, which could strengthen the momentum of Bitcoin (BTC) in the near term.

Alternative assets like Bitcoin and gold are priced against the dollar. Hence, when the DXY starts to drop, it often causes BTC to rally against the dollar.

BTC/USD (orange) vs. DXY (green). Source: Tradingview

Dollar's share of global reserves is dropping fast

According to Holger Zschaepitz, a market analyst at Welt, the U.S. dollar's share of global reserves is rapidly declining as countries like Russia are pursuing a de-dollarization strategy and opting for gold.

When the pandemic was declared in the first quarter of 2020, the demand for the dollar increased as investors fled to cash because it is the global reserve currency.

However, due to various factors including the presidential election and the negative outlook on COVID throughout last year, the dollar struggled to outperform other currencies like the Japanese yen and the Swiss franc.

Zschaepitz said:

"OOPS! Dollar in decline. While Dollar’s share of global reserves initially increased at start of pandemic, it has since decreased & now stands at just 59%—1.5pp decline QoQ & lowest since 1995. Part of decline due to depreciation, but also due to active USD selling."

If the decline of the U.S. dollar continues, there is a strong probability that Bitcoin will continue to rally in April.

Historically, April has been a strong month for Bitcoin throughout the past ten years, recording positive gains for five consecutive years since 2016.

Additionally, Danny Scott, the CEO of the Bitcoin exchange CoinCorner, said that the law of averages puts Bitcoin at $83,000 in April. He wrote:

"Law of averages gives #Bitcoin an $83,000 price target for April. Avg over 10 years in April +51%."

Miners appear to be accumulating Bitcoin

Atop the favorable macro factors for Bitcoin, Lex Moskoviski, the CIO at Moskoviski Capital, pinpointed that miners recently began ramping up their BTC holdings.

On a single day, miners added 4,380 Bitcoin, which the quantitative trader and investor described as a growing trend. He said:

"Miners started really ramping up their positions. 4,494 #Bitcoin stacked today on aggregate. Another 4,380 #Bitcoin stacked by miners yesterday. Looks like a trend, indeed."
BTC miner net position change. Source: Glassnode

When miners sell their holdings, Bitcoin typically sees a pullback as it can cause heavily leveraged orders in the futures market to see cascading liquidations

If miners are hoarding Bitcoin and stacking BTC with the expectations that the cryptocurrency will appreciate, it reduces the probability of a severe sell-off in the foreseeable future.

In the near term, whether Bitcoin remains above the $58,000 support area remains key. If it continues to consolidate above it, the chances of it seeing a strong breakout above the $60,000 resistance level greatly increases.