Analyst explains how ADA could continue its rally as Cardano’s “Shelly” arrives

Cardano’s ADA has done extremely well in 2020 in terms of price action.

As reported by CryptoSlate previously, crypto research firm Messari found that ADA is the best-performing smart contract coin, rallying 150 percent higher this year. For context, BTC is up by ~25 percent since the start of the year.

Stepping back even further, the altcoin is still up by thousands of percent from its ICO, as noted by crypto data analyst Vivek. It’s up 3,300 percent, to be exact.

Yet, an analyst says that the Cardano blockchain’s native cryptocurrency will rally even further in the weeks ahead.

ADA in an upward trend: technicals show why

According to Nik “Altcoin Trader” Patel, an author and technical analyst, technicals show that “Cardano continues to look bullish, finding support in [an important] area.”

The analyst shared the image below on Jun. 29. Patel’s chart indicates since ADA held the trendline support formed at the March lows and since it held $0.0738, it is primed to rally in the weeks ahead.

In reference to the chart, he wrote:

“Looking at the daily, trendline support has remained rock solid since March capitulation, and resistance continues to be turned to support. I am expecting continuation of the rally to follow, with $0.11 as the next area of trouble.”

Cardano (ADAUSD)
Cardano (ADAUSD) price chart from Nik Patel. Current as of Jun. 29

To reach $0.11 from current prices, ADA will need to gain nearly 20 percent from where it sits as of the time of this article’s writing.

Patel’s analysis comes as other analysts are flipping bullish on Bitcoin. This is important to Cardano as the two cryptocurrencies have a 180-day correlation of 0.85, data from Coin Metrics suggests.

For one, Rafael Schultze-Kraft, the CTO of blockchain analytics firm Glassnode, revealed 12 on-chain statistics revealing an increase in the popularity of the “HODL” mentality.

The takeaway is that this is “long-term extremely bullish” for Bitcoin and the rest of the cryptocurrency market by extension. This is due to the fact that the more HODLing there is, the less potential sell pressure there is.

Aligned with Cardano’s bullish fundamentals

Patel’s optimistic outlook about ADA aligns with the fundamental case for the cryptocurrency.

According to a Jun. 30 forum post from Tim Harrison, a communications director for Input Output (IOHK), the Shelly upgrade for Cardano is finally here:

“We will be rolling out Shelley soon. This will not just be a critical time in the history of blockchain technology, but a shift in how we leverage technology for the betterment of everyone, everywhere.”

To celebrate this launch, IOHK and other partners are hosting a summit largely focused on Shelly, this year’s Cardano Virtual Summit, that will allow the public to “learn more about the upgrade.”

Shelly is important to Cardano as pundits expect it to dramatically increase the usability of the network, leading to increased adoption and higher ADA prices.

The post Analyst explains how ADA could continue its rally as Cardano’s “Shelly” arrives appeared first on CryptoSlate.

“Perfect Storm” of Technicals Indicates Bitcoin May Plunge After Hitting $9,500

After holding the low-$9,000s for days on end, Bitcoin has attempted to break out over recent hours. The cryptocurrency trades at $9,250 as of the time of this article’s writing, having established a local peak at $9,300.

Technical analysis, unfortunately, confirms that BTC may soon see a rejection.

Bitcoin Could See a Strong Rejection at $9,500: Here’s Why

There’s a perfect storm of technical factors suggesting that Bitcoin will sustain a rejection at $9,500.

A cryptocurrency trader shared the chart below on July 1st in an attempt to convey this sentiment. It shows that within a few dozen basis points of $9,500, there is a large confluence of technical resistance levels. These include but are not limited to:

  • A daily pivot level
  • June’s volume-weighted average price
  • The four-hour 200 simple moving average
  • The price Bitcoin traded at on June 1st.
  • A descending trendline that marked three distinct highs over the past month.
  • The 61.8% Fibonnaci retracement of the $10,500 highs.

Image

Important Bitcoin levels analysis from trader "Coiner-Yadox" (@yodaskk on Twitter). Chart from TradingView.com

The fact that so many technical resistance levels currently exist at $9,500 suggests that a sell-off will take place once this zone is reached.

Only adding to the chance that takes place, Bitcoin is also facing down a sell wall in that region.

As reported by NewsBTC previously, the same analyst observed that there was over $10 million worth of sell orders on Binance right at $9,500. It is unclear if those orders are still there, yet there are many traders online identifying $9,500 as a point at which Bitcoin’s micro-rally will reverse.

Image

BTC chart over the past few days with order book dominance indicator from trader "Coiner-Yadox" (@yodaskk on Twitter)

One analyst implied that Bitcoin reaching $9,500 will confirm his bearish macro sentiment.

He wrote: “I don’t want any correction, I want to see price continue to extend into $9,500 on BTC. It would play into my macro thoughts if this happens.”

This comes shortly after the same analyst suggested that Bitcoin is likely trading in a high time frame pattern of “distribution” predicting a drop under $7,000.

What Happens if BTC Crosses $9,500?

With $9,500 clearly being an important level for Bitcoin, what will happen if the cryptocurrency crosses and secures that level?

According to some, it would confirm that more upside is likely.

One trader shared that Bitcoin is currently cleared to move lower, though his opinion will change if $9,500 is flipped into support.

“This is the current path that PA could be looking to take, buyers defended the initial breakdown in high 8000’s range which is a good start, next level to test is $9250… To flip to a bullish bias $9500 needs to be flipped into support on a daily timeframe.”

Image

Bitcoin price analysis by trader Cactus (@TheCryptoCactus on Twitter). Chart from TradingView.com
Photo by Michael Rogers on Unsplash
Charts from TradingView.com
Price tags: xbtusd, btcusd, btcusdt
"Perfect Storm" of Technicals Indicates Bitcoin May Plunge After Hitting $9,500

Industry Executive Doubles Down: Bitcoin Will Hit $50,000 in 2020

bitcoin
After a strong rally from the March lows, Bitcoin has stopped trending higher. For the past two months, the cryptocurrency has been caught in a 15% range that it has barely deviated from. The consolidation has been met with assertions by analysts that BTC has lost its momentum. One trader asserted on June 30th that the key Ichimoku Cloud indicator showed “weakening bullish momentum.” Yet many investors in the industry remain optimistic. One industry executive went as far as to say that he thinks Bitcoin is on track to hit $50,000 in 2020. Bitcoin Could Rally to $50,000 in 2020: Nexo CEO In May, Nexo co-founder Antoni Trenchev said that Bitcoin was on track to hit $50,000 in 2020. He made his prediction while BTC was surging, testing $10,000 as it attempted to set new year-to-date highs. Despite the recent consolidation, he remains bullish. In a recent interview with Bloomberg’s Joana Ossinger at BlockDown, a digital crypto conference, Trenchev conveyed why he remains bullish. Core to his bull case is BTC’s strict supply of 21 million coins: “You can’t have the President of the United States tweeting out that the money supply, the total number of Bitcoin should be expanded from 21 million. You just can have that. Bitcoin is this perfect structure, which has all the right principles. And those once formulated, stipulated, put into code, they remain unchanged of any human intervention.” Trenchev argued that this simple supply cap is what draws so many retail and institutional investors to the industry. He added that with “almost $8 trillion” printed by central authorities over recent months due to the pandemic, Bitcoin and gold should do really well. “So yes, I’m sticking to my prediction of 50K until the end of the year. I appreciate that it is a bold statement, but the fundamentals are there and the momentum is shifting there as well,” Trenchev concluded to the Bloomberg journalist. Others Are Bullish, But Not That Bullish There are many others expecting Bitcoin to rally even higher in 2020, but most don’t think $50,000 is possible. They don’t think that’s possible in such a short time frame, anyway. Bloomberg came out with an extensive report on the crypto market at the start of June. In it, senior commodities analyst Mike McGlone suggested that Bitcoin could hit $20,000 this year and maybe $28,000 if the right trends align. McGlone attributed this prediction to the fact that Bitcoin looks structurally similar to BTC at the last halving. The cryptocurrency trending as it did after the last halving will result in a year-end price of around $20,000. The analyst also noted that with a growing correlation with gold, growing adoption of Bitcoin by institutions, and a spike in on-chain usage, BTC is likely to appreciate. Something, in fact, would “need to go wrong” for the asset not to do so, McGlone concluded. Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Industry CEO Doubles Down: Bitcoin Will Hit $50,000 in 2020

The Last Time This Metric Was This Low, Bitcoin Bottomed at $3,200

The past two months have been a confusing time for Bitcoin investors. The cryptocurrency has traded between a rock and a hard place, barely deviating from the range lows of $8,500 and the highs of $10,000.

BTC is so indecisive that analysts have noted that a textbook volatility indicator has reached multi-month lows. Citing other indicators, others have argued that volatility is even at multi-year lows.

The Bitcoin bull case recently gained strength with an unexpected observation from a cryptocurrency technician.

Related Reading: A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

Bitcoin Bottomed in 2018 Last Time This Happened

Over the past few years, the Grayscale Bitcoin Trust (GBTC) has become increasingly important to the crypto market. Latest data suggests that Grayscale now holds around two percent of all Bitcoin in circulation. This is a figure that increases every few weeks as the firm continues to raise capital.

According to one trader, the investment vehicle has become so important that it may be signaling points at which BTC bottoms.

Because GBTC cannot be directly redeemed for BTC, there is a premium between the trust’s shares and the value of coins that backs the trust. The premium may indicate when Bitcoin bottoms, the trader suggested.

He shared the image below, which shows Bitcoin’s macro price action in relation to the premium of the trust over the spot price of Bitcoin. Whenever the premium is low, BTC seemingly bottoms out:

“This guy wrote an interesting thread about GBTC and pointed out that the GBTC premium seems to always be low when $BTC bottoms out. It looks like it’s true. Premium is always higher when market goes parabolic, premium is low when market bottoms out.”

Last time the premium was this low was in December 2018, when Bitcoin bottomed at $3,200. The cryptocurrency rallied 300% in the six months that followed.

The premium also saw a strong dip during the crash to $3,700, though it didn’t drop as far as it has now.

Image

Macro BTC price action with GBTC premium over spot market indicator. Chart from TradingView.com; chart made by Byzantine General (@Byzgeneral on Twitter).

Grayscale’s Massive Inflows

Tangentially related to the analyst’s observation, Grayscale has reported extremely strong inflows over recent months. This may signal to the market that long-term investors are accumulating.

As reported by technology analyst Kevin Rooke, Grayscale added 19,879 BTC to its Bitcoin Trust in a single week while miners produced 7,081 coins.

Image

BTC added to GBTC since halving vs. BTC mined since halving graph from Kevin Rooke (@Kerooke on Twitter).
Related Reading: Crypto Tidbits: BTC At $9k, Grayscale Ethereum Trust, Cryptocurrency & PayPal
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Chart from TradingView.com
The Last Time This Metric Was This Low, Bitcoin Bottomed at $3,200

Libra Partner Bison Trails Just Announced Support for Ethereum 2.0

Over the past few weeks, Ethereum as a network has seen a spike in transactions and active users.

Just days ago data from Santiment indicated that the number of daily active addresses passed a two year high. Simultaneously, the number of daily confirmed transactions ticked past 1,000,000, making many think back to the 2018 bubble.

Fees, though, have responded in kind, reaching a multi-year high.

Enter Ethereum 2.0, an upgrade slated to dramatically change how the network operates.

Related Reading: A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

What is Ethereum 2.0?

In short, Ethereum 2.0 is a new iteration of the blockchain that will cast aside Proof of Work (mining) and the current virtual machine for a new system.

The new system will be based on Proof of Stake, which removes miners from the equation, sharding, and other technologies. In doing so, the speed, transaction throughput, and decentralization of the network will be increased. The amount of power Ethereum consumes will also be reduced.

At the March 2019 Ethereum Asia Supermeetup in Hong Kong, Vitalik Buterin said the following on the upgrade:

“[It is] a way to bring technical improvements, like PoS and sharding, together to improve the Virtual Machine, Merkle Trees, the efficiency of the protocol, and a whole bunch of small technical things that you have never heard of.”

It’s important to know that due to the changes being implemented, transitioning to Ethereum 2.0 is an arduous process.

It’s so arduous that technically speaking, there will be two blockchains running at the same and data will be transferred over in a multi-year process.

Bison Trails Backs Upgrade

To help ease the transition, firms are springing to provide products that allow one to interact more easily with Ethereum 2.0. One such firm is Bison Trails, a Libra Association partner that announced “support for Eth2” on July 1st.

According to the announcement, the firm will be offering a “suite of enterprise products.” These products will “make it easy to interact with the Beacon Chain, stake ETH, and automatically manage validators, validator clients, and beacon nodes.”

Bison Trails will also help its clients automatically manage their infrastructure in relation to Ethereum 2.0:

“Bison Trails’ autoscaling software will manage customers’ infrastructure automatically, as network requirements change and customers choose to add more validators. This innovation will enable Bison Trails’ customers to continue earning rewards without the hassle of manually managing participation.”

It is unclear which firms currently are looking for a service like this. Yet, it is important to point out that there may be individuals and exchanges incentivized to migrate to Ethereum 2.0 due to staking rewards.

Related Reading: Crypto “Reserve Currency,” Tether (USDT) Hits a $10 Billion Market Cap
Featured Image from Unsplash
Price tags: ethusd
Libra Partner Bison Trails Just Announced Support for Ethereum 2.0

Libra Partner Bison Trails Just Announced Support for Ethereum 2.0

Over the past few weeks, Ethereum as a network has seen a spike in transactions and active users.

Just days ago data from Santiment indicated that the number of daily active addresses passed a two year high. Simultaneously, the number of daily confirmed transactions ticked past 1,000,000, making many think back to the 2018 bubble.

Fees, though, have responded in kind, reaching a multi-year high.

Enter Ethereum 2.0, an upgrade slated to dramatically change how the network operates.

Related Reading: A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

What is Ethereum 2.0?

In short, Ethereum 2.0 is a new iteration of the blockchain that will cast aside Proof of Work (mining) and the current virtual machine for a new system.

The new system will be based on Proof of Stake, which removes miners from the equation, sharding, and other technologies. In doing so, the speed, transaction throughput, and decentralization of the network will be increased. The amount of power Ethereum consumes will also be reduced.

At the March 2019 Ethereum Asia Supermeetup in Hong Kong, Vitalik Buterin said the following on the upgrade:

“[It is] a way to bring technical improvements, like PoS and sharding, together to improve the Virtual Machine, Merkle Trees, the efficiency of the protocol, and a whole bunch of small technical things that you have never heard of.”

It’s important to know that due to the changes being implemented, transitioning to Ethereum 2.0 is an arduous process.

It’s so arduous that technically speaking, there will be two blockchains running at the same and data will be transferred over in a multi-year process.

Bison Trails Backs Upgrade

To help ease the transition, firms are springing to provide products that allow one to interact more easily with Ethereum 2.0. One such firm is Bison Trails, a Libra Association partner that announced “support for Eth2” on July 1st.

According to the announcement, the firm will be offering a “suite of enterprise products.” These products will “make it easy to interact with the Beacon Chain, stake ETH, and automatically manage validators, validator clients, and beacon nodes.”

Bison Trails will also help its clients automatically manage their infrastructure in relation to Ethereum 2.0:

“Bison Trails’ autoscaling software will manage customers’ infrastructure automatically, as network requirements change and customers choose to add more validators. This innovation will enable Bison Trails’ customers to continue earning rewards without the hassle of manually managing participation.”

It is unclear which firms currently are looking for a service like this. Yet, it is important to point out that there may be individuals and exchanges incentivized to migrate to Ethereum 2.0 due to staking rewards.

Related Reading: Crypto “Reserve Currency,” Tether (USDT) Hits a $10 Billion Market Cap
Featured Image from Unsplash
Price tags: ethusd
Libra Partner Bison Trails Just Announced Support for Ethereum 2.0

Fund Manager Challenges Bitcoin Price Model Predicting $100k By 2021

Bitcoin price
If you’ve been involved in Bitcoin or crypto over the past year, you likely have heard of “PlanB.” He is a pseudonymous quantitative Bitcoin analyst that works as an institutional investor in Europe by day. PlanB is best known for the Stock to Flow (S2F) model. The model suggests that the value of BTC and other precious assets can be related to their level of scarcity, or “flow.” Many have adopted PlanB’s analysis as the key to cryptocurrency investing. Yet there are some challenging it, including the chief investment officer of Strix Leviathan, a crypto fund focused on research and algorithmic trading. Bitcoin Stock to Flow Model Basics Early last year, PlanB released his first work: “Modeling Bitcoin Value with Scarcity.” In that piece, the analyst suggested that both gold and silver are valuable due to their scarcity. PlanB then argued that Bitcoin, which is also similarly hard to produce as precious metals, has that same characteristic. Using the stock-to-flow ratios of Bitcoin, silver, and gold, PlanB attempted to illustrate there is a relationship between these assets’ level of scarcity and their value. “Stock” is an asset’s above-ground supply and “flow” is the annual growth of that stockpile. The graph below is what he first came up with. The original iteration of the model found that assuming the model holds true, BTC will trade at $55,000 after the halving in May. Updated iterations suggest a price of ~$100,000 by 2021.  BTC S2F chart (original edition). Source: “Modeling Bitcoin Value with Scarcity” by PlanB For some context, Bitcoin rallying to $100,000 would mark a ~1,000% rally from current levels. The model quickly gained steam after it was revealed. Blockstream CEO Adam Back, who thinks BTC will hit $300,000 in the next five years, said: “It’s just a back tested curve fit to historic data, affirmed by co-integration stats test. What’s not to believe? More interesting is interpreting why, given good fit. It does seem logical that rate of supply halving, other things being equal, would tend to drive up price.” It’s a “Chameleon Model”: Fund Manager Despite the support of the model from Back, other executives, and the crypto diaspora, some are pushing back. Nico Cordeiro, the CIO of Strix Levithan, released a report on June 30th entitled “A Chameleon Model – Why Bitcoin’s Stock-to-flow Model is Fatally Flawed.” He found that gold’s stock-to-flow ratio over the past century has seemingly had no effect on or relationship with its price. The investor also noted that from a pure numbers standpoint, the fact that the model predicts a Bitcoin price in excess of $200 million in 2045 makes it illogical. Cordeiro joins Alex Krüger, an economist closely following the crypto industry. The investor once said : “People using S2F to predict BTC may as well be using the moon cycles to predict BTC. […] The S2F analysis is interesting. But the S2F model is useless for predicting price, as the underlying assumptions of the model are not met. Now and always.” Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Hedge Fund CIO Challenges Bitcoin S2F Model Predicting $100k By 2021

Hoskinson: Cardano (ADA) can “leap frog” Bitcoin decentralization by 100 times

Bitcoin was predicated on being a decentralized technology. And this is true: there are nodes, developers, users, exchanges, and firms all around the world using and influencing the protocol.

However, Ethereum co-founder Charles Hoskinson says that his newer project, Cardano may soon eclipse some aspects of Bitcoin’s decentralization by 100 times.

Cardano can eclipse Bitcoin decentralization?

Speaking to crypto media firm Altcoin Buzz in a Jun. 27 interview, Charles Hoskinson said that Cardano can “easily” outpace Bitcoin in terms of the decentralization of mining nodes:

“We can leap frog them there. We have already, on the IT end, demonstrated 100 times more decentralized then Bitcoin Core nodes — their mining nodes. We can beat them easy there as well.”

To Hoskinson’s credit, he did take time to compliment Bitcoin’s decentralization in terms of decision making and development; the cryptocurrency founder was largely criticizing the flagship crypto’s mining model.

Whether or not the Cardano Foundation, Input Output, and other organizations working on the blockchain can deliver on this promise for decentralization remains to be seen, though.

As Hoskinson mentioned, once you get to the point where there are billions of transactions and millions of active users, full-scale decentralization becomes hard due to the size and bandwidth of blockchain data.

The purported China risk in Bitcoin and crypto mining

When people say that Bitcoin mining is centralized, they often mention or are referencing China.

They say this is logical: effectively all crypto mining machines are made in the country, the companies that run mining pools are largely Chinese, and a majority of mining farms are located in China.

Some reports, like the occasional one done by CoinShares, estimates that around two-thirds of all Bitcoin mining activity takes place within Chinese borders.

As Ripple’s CEO Brad Garlinghouse once explained to CNN:

“China controls the Bitcoin blockchain. There are four miners in China that represent the 60%+ of mining capacity and 80% of mining capacity is based in China for Bitcoin and Ether.”

Bitcoin podcaster Eric Savics has echoed the concern, writing earlier this year that the Chinese government could theoretically influence the fate of many cryptocurrencies if they took control of the mining sector.

Some, however, beg to differ. Adamant Capital founder Tuur Demeester responded to Garlinghouse’s comment on Bitcoin’s purported centralization with the following comment:

“This is why studying Bitcoin’s history is so important. Chinese miners _tried and failed_ to control the Bitcoin blockchain in 2017 (B2X hard fork), but in reality never changed one iota of the code. Also, a mining pool =/= a miner, and only ~60% of total hashrate is in China.”

The post Hoskinson: Cardano (ADA) can “leap frog” Bitcoin decentralization by 100 times appeared first on CryptoSlate.

As S&P 500 Flips 3,000 Into Support, Bitcoin’s Bull Case Grows

Despite a worsening pandemic, geopolitical turmoil, and more, Bitcoin and the S&P 500 have fended off secondary declines after March’s liquidity crash.

At least for the time being, BTC holds above $9,000 and the leading stock index remains above 3,000 points. Both measures have held their respective levels for more than a month.

With the S&P 500 holding strong, Bitcoin also stands to rally.

Related Reading: An Infamous Bitcoin Whale Just Resurfaced — and He’s Got a Bone to Pick

S&P 500 Secures 3,000, Boosting Bitcoin Bull Case

In early June, the S&P 500 saw a strong rejection at what many saw as a key level: 3,200. That level was cited by many analysts on social and media and on certain mainstream media outlets as a level of importance.

Yet an analyst says that stepping back, the American equities market is seemingly still bullish.

Referencing the chart below, they wrote:

“Well that definitely surprised me. No major pullback and we have reclaimed our major resistance. This is bullish imo, not much else to say. We may pullback deeper into our (now) major support, but ultimately I think this level will hold and we will see new ATH soon.”

Image

S&P 500 analysis by Bitcoin trader "Credible" (@CredibleCrypto/Crediblestocks on Twitter). Chart from TradingView.com

The analyst’s sentiment is largely predicated on the fact that the 3,000 psychological and technical level remains intact.

Bitcoin will benefit if the S&P 500 rallies higher due to the correlation between these markets.

JP Morgan strategists observed that since March, “Cryptocurrencies have traded more like risky assets like equities—a significant change relative to the prior couple of years.”

BitMEX’s chief executive Arthur Hayes has observed a similar correlation, at least on the downside. In April, he wrote:

“Bitcoin will be owned unlevered. Could the price retest $3,000? Absolutely. As the SPX rolls over and tests 2,000 expect all asset classes to puke again.”

Not Everyone Is Convinced

Although there is this sentiment, not everyone is convinced that the S&P 500 — and Bitcoin by extension — is on solid footing.

The chief investment officer at Minneapolis-based Leuthold Group recently said the following to Bloomberg on the potential for a 20% drop:

“The bulls could be proved right in that the March 23rd low holds, but you could lose a lot of money in a drawdown here… You could still very easily have a drop of 20% from the peak we made on June 8th. Very easily.”

This is a sentiment that has been echoed by Scott Minerd, the global CIO of Guggenheim Investments. Minerd said in an interview that with stocks intrinsically overvalued while there are technical warning signs on the charts, the S&P 500 could drop off to 1,600.

With the S&P 500 and Bitcoin correlation holding strong, any collapse in the stock market may kickstart another BTC bear trend. But assuming the Federal Reserve’s commitment to “unlimited” monetary easing continues, a drop could be rapidly reversed.

Related Reading: Crypto Tidbits: Bitcoin At $9k, Grayscale Ethereum Trust, Cryptocurrency & PayPal
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Price tags: xbtusd, btcusd, btcusdt, spx 
Charts from TradingView.com
As S&P 500 Flips 3,000 Into Support, Bitcoin Could Benefit: Analyst

As ETH Fees Remain High, Trader Reminds Community “Ethereum Hasn’t Won Yet”

ethereum
If you’re one to focus on transaction fees, it’s been a tough past few weeks for Ethereum. The network has been subject to an influx of adoption over recent weeks. Santiment, for instance, has reported the highest daily active address count in over two years. Similarly, the daily number of confirmed Ethereum transactions recently surpassed one million. Ethereum transaction fees have skyrocketed as a result. According to data shared by Tradeblock, the cost of transacting on the network is at multi-year highs: “With the rise in DeFi apps, majority of which are built on Ethereum, ether gas fees hit recent highs, meaning transaction costs across the network have risen in order for timely transactions to occur.” Ethereum proponents are currently mixed over how developers should respond. Some say that the high fees are a good thing, as they imbue ETH with more demand and accentuate Ethereum’s strong fundamentals. Others say high fees are a crucial issue that needs to be solved as soon as possible. “Ethereum Hasn’t Won Yet” Even after a strong pullback from the local highs, transaction fees remain unbearable to many. Agreeing with many other users, the Head of Business Development at Kraken’s futures division, Kevin Beardsley recently wrote: “I have spent $14 on ETH gas fees to transfer/lock my $15 into @CurveFinance and I’m earning a princely $0.079 in weekly $SNX rewards. I’ll break even in just 177 short weeks! (not including gas to close contracts.” Some stakeholders don’t seem to be proactive in mitigating high fees as fast as possible. One commenter said that “there’s no point in raising the gas limit to try and lower fees. Blocks are going to get filled right back up due to large financial incentives on-chain.” Others have been silent on fees, seemingly indicating a “this is fine” attitude. Scott Lewis, the co-founder of Concourse Open Community, says that this attitude and complacency may be dangerous. The trader and industry executive wrote in a comment published June 30th: “Overall the Ethereum community is wayyyyy too overconfident about people paying high gas fees if reasonable alternatives exist. Watching Ethereum overtake Bitcoin has been fun. Watching the Ethereum community fall for the same overconfidence trap that befell Bitcoin is scary. Like… wake up. [it] hasn’t won yet.” That’s to say, Lewis thinks the community may be somewhat naive thinking that retail investors won’t opt for alternative platforms should transacting ETH become too expensive. What Are the Solutions? In the short-term, the best way Ethereum can begin to combat the fast(er) and cheap(er) transactions of other chains is through layer 2 solutions. Like Bitcoin has the Lightning Network, Ethereum has its own networks built on top of the mainchain. Kelvin Koh, a partner at the Spartan Group, recently identified Skale Network as a viable layer 2 solution for Ethereum. There are others, though Skale is a solution to a pertinent problem that just launched. Timely launch for Skale Network as Ethereum is badly in need of layer 2 solutions to alleviate network congestion and high fees. https://t.co/boZIc40eeS — SpartanBlack (@SpartanBlack_1) July 1, 2020 In the longer run, a successful transition to Ethereum 2.0 — a new iteration of the network focused on latency and throughput — may amend the fee concerns for good. Featured Image from Shutterstock Price tags: ethusd As ETH Fees Remain High, Entrepreneur Says "Ethereum Hasn't Won Yet"

Key Indicator Says Bitcoin’s Momentum Is Weakening: Where Will BTC Head?

Bitcoin has been stuck in the $9,000s for the past two months, trading between $8,500 and $10,000 for weeks on end.

While the cryptocurrency has maintained the $8,500 support level on multiple occasions, a key indicator shows that the bullish momentum is weakening.

Related Reading: Crypto Tidbits: BTC At $9k, Grayscale Ethereum Trust, Cryptocurrency & PayPal

Bitcoin Has “Weakening” Bullish Momentum: Analyst

According to Brave New Coin analyst Josh Olszewicz, the Ichimoku Cloud indicator shows that Bitcoin has “weakening bullish momentum” due to the consolidation:

“Cloud still shows weakening bullish momentum. If you are bearish, you want an e2e to 7.1. If you are bullish, you want a TK cross recross above Cloud  with a $13k target.”

Olszewicz added that he thinks BTC is currently in an “awkward spot” that is disallowing him from taking “either position with conviction.”

Image

One-day BTC price chart with Ichimoku Cloud. Chart from TradingView.com; chart made by Josh Olszewicz (@CarpeNoctum on Twitter).

Two Factors Could Upset the Bitcoin Bull Case

Olszewicz is indicating that per his technical analysis, Bitcoin is trapped in no man’s land. Fundamentals, instead, may give insight into which way the cryptocurrency will head next.

Although there has been increased “HODLing” by Bitcoin investors, there are three factors that threaten to send BTC lower:

  • Selling by miners: On-chain analyst Cole Garner reported last week that miners have withdrawn a large amount of Bitcoin to exchanges. This implies that miners want to liquidate a portion of their holdings as soon as possible due to potential downside.
  • Selling by PlusToken: Spencer Noon reported that more than $450 million worth of Ethereum, EOS, Bitcoin, and XRP have moved from PlusToken-owned addresses. Other analysts have reported that some of the funds are slowly being siphoned into exchanges, presumably to be liquidated.
  • A dropping S&P 500: Finally, a retracement in the S&P 500 could lead to a retracement in the price of Bitcoin. This is due to a correlation that has formed between the asset classes, which has been observed by JPMorgan and Goldman Sachs analysts. Guggenheim Investments’ global CIO Scott Minerd and Jeremy Grantham are among the analysts expecting a strong move lower in the S&P 500.
Related Reading: Uber & Robinhood Angel Investor: 99% of Crypto Projects Are Garbage

CME Traders Bet on Downside

Importantly, institutional investors trading the CME’s Bitcoin futures expect a move to the downside.

As reported by NewsBTC previously, CME futures data shows that institutions have cumulatively been building a net short position. One trader shared the image below, which shows that accounts with the tag “institutional traders” are cumulatively shorting 2,038 of the CME’s BTC futures contracts.

Image

BTC price chart with CME's Commitment of Traders report data. Chart from TradingView.com; made by Byzantine General (@Byzgeneral on Twitter).
Featured Image from Shutterstock
Price tags: xbtusd, btcusdt, btcusd
Key Indicator Says BTC's Momentum Is Weakening: Where Will BTC Head?

Analyst Who Predicted Bitcoin’s 2018 Bottom: Altcoins May Plunge in 2021

ethereum altcoin
It’s been an incredibly strong year for altcoins thus far. Versus Bitcoin, many have outperformed. As reported by Bitcoinist previously, the small-cap, medium-cap, and large-cap altcoin indexes from crypto exchange FTX have outperformed Bitcoin since the start of 2020. Bitcoin vs. low-cap, mid-cap, and large-cap altcoins chart shared by cryptocurrency trader Ceteris Paribus (@Ceterispar1bus on Twitter). Yet a prominent analyst expects this trend to reverse in 2021. He went as far as to say that Bitcoin dominance — the percentage of the crypto market made up of BTC — could surpass 2019’s highs. Bitcoin Dominance Could Surge in 2021: Analyst According to a trader, Bitcoin dominance has the potential to surge to 86% heading into the end of 2021/start of 2022.  The analyst attributed this sentiment to Elliot Wave, which is a type of technical analysis suggesting that markets move in predictable waves/cycles due to investor psychology. The trader that shared this sentiment is the same one that, months before it did, predicted Bitcoin would bottom at $3,200 in 2018. Bitcoin dominance analysis by crypto trader @SmartContracter (Twitter handle). Chart from TradingView.com Altcoins Could Outperform in the Short Run While the analyst does expect altcoins to strongly underperform Bitcoin in 2021, he shares a different sentiment from a shorter-term perspective. According to a different chart he posted in the same message, Bitcoin dominance is likely to fall into October of this year. The chart suggests a retracement of Bitcoin dominance to 60%. “BTC dominance with a clear breakdown and now retest as we saw in late 2019 indicating alt outperformance.” The chart shows that the measure recently moved below a crucial uptrend, suggesting a move to the downside will follow suit. Bitcoin dominance analysis by crypto trader @SmartContracter (Twitter handle). Chart from TradingView.com The analyst isn’t the only one expecting this. Prominent blockchain fund Pantera Capital released a June report outlining how altcoins could outperform Bitcoin moving forward. “We believe that we’re currently in the early innings of a new crypto bull market cycle that should run until at least mid-2021. With proper selection, one can outperform BTC with a diversified portfolio including both large caps like BTC and ETH and small to mid-cap alts even in the early innings of a bull market.” Pantera’s co-CIOs attributed this sentiment to the fact that along with better technology, there are now protocols supporting “real-world financial use cases.” “We’re a major proponent of BTC and believe a non-sovereign digital currency is inevitable. But we’re also focused on protocols that are enabling real world financial use cases and believe that most value will accrue to these assets on a long-term basis compared to utility/payment tokens.” The short to medium-term strength of altcoins against Bitcoin may also be supported by the booming decentralized finance sector. “DeFi,” as this crypto industry is known, has seen strong adoption over recent months due to new technological innovations, incentives, and a search for yield. Featured Image from Shutterstock Price tags: Charts from TradingView.com Analyst Who Predicted Bitcoin's 2018 Bottom: Altcoins May Plunge in 2021

Crypto “Reserve Currency,” Tether (USDT) Hits a $10 Billion Market Cap

Weeks ago, NewsBTC reported that the market capitalization of leading crypto stablecoin Tether (USDT) was on track to $10 billion. This week, after a large minting of coins, the milestone was reached.

Related Reading: A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

Crypto’s “Reserve Currency” Hits $10 Billion Market Cap

According to Messari analyst Ryan Watkins, the market capitalization of USDT passed 10 billion on June 30th. It is the third cryptocurrency currently in this 10-figure range.”

At the start of the year, the market capitalization of the asset was closer to $4.5 billion. And at the start of 2019, the figure was well under $3 billion.

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Chart of USDT's market capitalization shared by Messari analyst Ryan Watkins, a former investment banker.

Some see USDT’s market cap growth as a sign of increasing interest in cryptocurrency.

Because USDT can be easily transacted into Bitcoin, Ethereum, and others, firms/large traders can theoretically mint the asset via Tether. After that, they can send the coins to exchanges to be traded for the asset.

Though, this goes the other way: Paolo Ardoino said in a podcast that during March, traders that couldn’t liquidate their coins into fiat opted for USDT instead. Ardonio is the CTO of Tether and Bitfinex.

The Compound Effect on Tether

USDT’s market capitalization may also be benefiting from growth in decentralized finance, specifically the Compound protocol.

Compound is an Ethereum-based money-market protocol that allows investors to borrow and make money by lending out cryptocurrencies. The platform supports assets from Ethereum and Basic Attention Token to stablecoins like DAI and USDT.

Due to a number of variables, USDT has quickly become one of the most popular coins on the platform.

At one time last week, Compound reported that there was more than $150 million worth of USDT deposited in the protocol.

This is but a fraction of the total supply cap. But the increase in demand for the stablecoin may have spurred investors enough to send money to Tether and receive USDT in return.

Importance to Crypto Industry Grows

With USDT’s market capitalization surmounting $10 billion, its importance to this industry becomes even more pronounced.

Qiao Wang,  an ex-Messari executive and analyst in the space, recently said the following:

“3 companies that, if something catastrophic happened to them today, would cause a tsunami in these markets: Silvergate, crypto banking; Tether, reserve currency of crypto; and Genesis, primary venue of liquidity for crypto loans.”

Its market capitalization may only be around 4-5% of the entire crypto market. Yet USDT accounts for a large portion of the volume and on-chain value, with more and more exchanges and other service providers adopting it.

Related Reading: Uber & Robinhood Angel Investor: 99% of Altcoin Projects Are Garbage
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Price tags: xbtusd, btcusd, btcusdt
Crypto "Reserve Currency," Tether (USDT) Hits $10 Billion Market Capitalization

Ethereum yield farming change could “sharply break” DAI’s $1 peg: analyst

The past few weeks have seen so-called “yield farming” gain popularity throughout the Ethereum ecosystem. Yield farming, in short, is the act of maximizing the yield one makes via decentralized finance (DeFi) applications.

So far, yield farming has arguably been a good thing for the Ethereum blockchain. Blockchain analytics firm Santiment reported on Jun. 29 that the number of daily active Ethereum addresses just hit a two-year high, somewhat shy of the all-time high.

Yet a proposed change to the Compound DeFi protocol purportedly threatens to upset the stability of the DAI stablecoin and the MakerDAO ecosystem.

And that isn’t good for the DeFi ecosystem.

What’s yield farming?

Before we get into the details, some background: in the middle of June, leading money-market DeFi protocol Compound publicly released their native token, COMP.

COMP is an Ethereum-based governance token that allows its holders to influence the direction of the protocol. But that isn’t what’s interesting about it. What’s interesting is that it can be “mined” by users of Compound by lending or borrowing cryptocurrency.

This system is effectively the origin of yield farming.

Compound may soon change how COMP is mined — and DAI could be affected

Yet, yield farming is set to change.

Last week, a user revealed a COMP distribution patch that will change how the token is distributed. As it’s somewhat complicated, the long and short of the change is that it is implemented, it will remove leverage from yield farming while also aiming to more equally distribute the altcoin.

According to Cyrus Younessi, a risk analyst at Maker (the team behind MakerDAO), this change could have a disastrous effect on the stability of the DAI stablecoin, algorithmically pegged to the U.S. dollar.

As it stands, DAI has been largely kept out of the yield farming equation due to the low yields offered when using this market (image below).

DAI interest rate
Compound’s DAI interest rate model, shared by Cyrus Younessi

Yet with the patch, which has been unanimously agreed on by COMP holders, Younessi believes that DAI will become one of the most important assets to Ethereum yield farmers.

“Due to the high APY for COMP farming (circa ~70-100% APY), there is a chance (likelihood, even) that we see an unprecedented demand for Dai. Much of the natural supply for Dai could also be locked up in COMP farming, thinning out sell-side orderbooks.”

That’s to say, DAI could lose its peg to $1. Younessi further explained that DAI could break its “peg sharply,” forcing the cryptocurrency further off its peg as DAI demand explodes due to the Compound’s incentive structure.

If the stablecoin had a high price and little liquidity on exchanges, the DeFi ecosystem is threatened. Crypto fund Parafi Capital wrote after the DAI peg broke after March 2020’s crash:

“DAI remains very thinly traded across both centralized and decentralized exchanges… As shown on Black Thursday, a lack of DAI liquidity can have damaging effects on MakerDAO and the broader DeFi ecosystem.”

With Compound incentivizing users to take DAI off exchanges and use it to yield farm, liquidity dries up, prices are likely to rise, and a series of second-order effects appear for Ethereum users.

There’s a reason why Adam Cochran, a partner at MetaCartel Ventures and a professor at a computer science-focused college in Canada, called DAI “DeFi’s biggest risk.”

The post Ethereum yield farming change could “sharply break” DAI’s $1 peg: analyst appeared first on CryptoSlate.

Signal That Marked Start of Bitcoin’s 2015 Bull Run Just Hit a New High

Bitcoin price
With Bitcoin being range-bound for nearly the past two months, it’s been easy for investors to revert to a bearish mindset. Nothing shows this as well as the funding rates of BTC futures markets, which are now neutral-negative instead of positive. Key on-chain metrics, however, suggest that the start of the next bull run is imminent. Key Bitcoin Indicator Hits Fresh All-Time High The percentage of BTC in circulation that has not moved in over a year has just reached a new all-time high of 62%. That’s according to on-chain analyst Philip Swift, “Bitcoin 1yr HODL new ATH!! We have reached a new all-time high, with 62% of bitcoin not moving on-chain for at least 1 year. Strong hands from hodl’ers! Such high levels of HODL’ing have been present at the start of previous Bitcoin bull runs,” Swift wrote on the matter. This is important as this metric reaching high levels is what marked the start of previous bull runs. When BTC was trading at ~$500 at the start of 2016, the one-year HODL metric hit 61% before falling as Bitcoin rallied to $20,000. Bitcoin 1 year+ HODL Wave indicator from on-chain analyst Philip Swift (@PositiveCrypto on Twitter) Glassnode’s chief technical officer Rafael Schultze-Kraft has corroborated this trend of many Bitcoin investors “HODLing.” As reported by Bitcoinist, the on-chain analyst observed a confluence of other signals indicating Bitcoin investors are “HODLing” rather than selling. Along with the “HODL Wave” indicator, Schultze-Kraft observed the following: The amount of BTC held by exchange wallets has dropped dramatically over the past few years. “The average Coin Days Destroyed (= transacted #bitcoin volume times number of days since coins were last moved) per year has been decreasing and is at its lowest level since 2016.” This purportedly shows the existence of more long-term holders. Addresses deemed HODLers are building their positions, not selling their coins. Glassnode data suggests that approximately 90% of all days in 2020 have seen HODLers accumulate. 1/ A thread showing 12 charts that illustrate #Bitcoin investor confidence and increased HODLing behavior. Spoiler: This is long-term extremely bullish. (data @glassnode) Let's dig in 👇 — Rafael Schultze-Kraft (@n3ocortex) June 26, 2020 Far From the Only Sign The strong “HODL” mentality of Bitcoin investors isn’t the only bullish sign that Swift has observed. In May, Swift was one of the first to observed that the Puell Multiple entered a macro buy zone. The Puell Multiple is a metric that is the SD value of BTC issued per day over the one-year moving average of the same figure. Chart of The Puell Multiple over time from on-chain analyst Philip Swift’s website, LookIntoBitcoin.com Similar to the HODL Waves, the multiple then reached a region that has marked the start of previous bull runs. Swift says that the fundamentals agree with his bullish sentiment. He wrote earlier this month: “With mega money printing and growing unrest about (financial) freedoms around the world, dips below the 2yr MA (green line) are increasingly unlikely IMO,” he remarked, referencing how the recent “boring” price action looks exactly as BTC did at the start of previous parabolic bull runs.  Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Signal That Marked Start of Bitcoin's 2015 Bull Run Just Hit a New High

Despite Brutal Rejection at $10.5k, Bitcoin Uptrend Has “Strength”: Analyst

At the start of June, Bitcoin suddenly surged towards and past $10,000. The cryptocurrency rallied so far and so fast that $123 million worth of short positions on BitMEX were liquidated within an hour.

Investors were understandably bullish. One Wall Street veteran shared a chart expressing his sentiment. It showed that BTC had broken past a technical downtrend that formed after the $20,000 all-time high. Others shared in the sentiment, saying that the move was the start of a big bull run.

Yet as fast as the cryptocurrency rallied, it crashed, rapidly falling under $10,000 just a day later.

Despite the rejection, analysts remain bullish. One trader has said that from a macro perspective, Bitcoin is still in a strengthening uptrend.

Related Reading: An Infamous Bitcoin Whale Just Resurfaced — and He’s Got a Bone to Pick

Bitcoin In a Strengthening Uptrend? Analyst Weighs In

It’s been easy to flip bearish after Bitcoin’s rejection at $10,500 earlier this month.

That price level has marked a number of crucial highs over the past year for the leading cryptocurrency.

The “Xi Pump” in October of 2019 topped at nearly that exact level, leading to a multi-month correction to $6,400. Also, the early-2020 rally that ended in February also abruptly ended at $10,500.

Yet Eric “Parabolic” Thies is arguing that Bitcoin remains in a macro uptrend.

He shared the chart below on June 29th. It shows BTC’s one-month price action with so-called Heikin-Ashi candles, which are normally used to observe trends.

Per Thies, with June about to close with a wick higher than May’s, Bitcoin is signaling “trend strength.”

He added that should “July open green, traditional Heikin Ashi-based trend reading suggests the third candle to be trend confirmation and strong continuation to the upside.”

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BTC price chart shared by Eric “Parabolic” Thies, a crypto analyst. Chart from TradingView.com 

Thies’ latest analysis comes shortly after he noted that two long-term bullish technical signals are imminent.

He noted that the one-month Chaikin Money Flow and Stochastic RSI indicators suggest that “your time to buy Bitcoin below $10k is limited.” The indicators last looked as they did now prior to the 2016-2017 bull run that took BTC from the hundreds to $20,000.

Bitcoin price chart shared by Eric "Parabolic" Thies, a crypto analyst.

Bitcoin price chart shared by Eric “Parabolic” Thies, a crypto analyst. Chart from TradingView.com 

Fending Off the PlusToken & Miner Threat

Bitcoin will have to fend off two big pools of selling pressure, though, if it is to head higher.

Those are the ~$450 million recently moved by the PlusToken scam operators and Bitcoin miners.

DTC Capital’s Spencer Noon reported that the operators of the scam are moving coins, with some moving to mixers and exchanges to presumably be sold:

“This week the following #PlusToken funds have been on the move to exchanges and new addresses for mixing: – 22k BTC ($203m USD) – 789k ETH ($183m) – 26m EOS ($68m) – 20m XRP ($4m). The big question: can the crypto markets absorb this volume or are we headed lower?”

Blockchain analytics firm Glassnode has also reported that miners are withdrawing more coins to exchanges than they have in a year.

Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Despite Brutal Rejection at $10.5k, Bitcoin Uptrend Has "Strength": Analyst

Ethereum Active Address Count Hits 2-Year High, Yet ETH Is Still Bearish

ethereum
Ethereum’s price is more than 80% below its all-time high above $1,400. Yet this bearish price performance on a macro scale has not stopped users from flooding to the network. Data suggests that usage of the network is starting to reach the highs seen at the peak of 2018’s bubble. ETH’s price is unlikely to follow, though, analysts say. Number of Active Ethereum Addresses Spikes The latest blockchain data shows that Ethereum users are shrugging aside the indecisive price action. Blockchain analytics firm Santiment reported on June 29th that the number of addresses interacting with the network has reached two-year highs. “The number of daily addresses interacting with $ETH has spiked in the past 24 hours to a 2-YEAR SINGLE DAY HIGH of 486,000 addresses! The last time Ethereum’s address activity was this high was on May 5th, 2018,” Santiment wrote in reference to the data seen below. Number of daily active addresses on Ethereum from blockchain analytics firm Santiment (@Santimentfeed on Twitter). Prominent ETH proponent Anthony Sassano shared data from another firm in Santiment’s sector, Glassnode, suggesting the same. It seems that the growth in the Ethereum network is due to decentralized finance (DeFi). Due to extremely high yields offered by ETH-based protocols in the finance field, there have been many users wanting to capitalize on these trends. Coins related to DeFi have also spiked, with analyst Taha Zafar sharing that many altcoins on Ethereum are up hundreds of percent in recent weeks.  These trends are likely drawing in users from across the crypto space looking to profit while Bitcoin and ETH effectively flatline. ETH’s Price Still Bearish Despite this on-chain growth, the cryptocurrency is purportedly in a bearish state. One trader recently shared the chart below, suggesting that if Ethereum slides slightly lower, it could plunge to $120. That would mark a 55% correction from current prices. Image Courtesy of AMD Trades. Chart via TradingView.com Another analyst shared that ETH’s four-hour chart is “inches away” from printing a bearish trend signal. Should this take place, this will be the first instance of this happening since March 10th, just days prior to the crash to $85. There are also some fundamentals that may be threatening the cryptocurrency’s price outlook.  As reported by Bitcoinist, the recent spike in usage of the network has been met with high fees. Former Messari executive Qiao Wang, who is also a notable crypto analyst, said that Ethereum could be “dethroned” by a competitor: “So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.” I've changed my mind after using a dozen of Defi platforms. So long as ETH 2.0 is not fully rolled out, there's an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX. https://t.co/vXAAFET3YK — Qiao Wang (@QWQiao) June 28, 2020 Featured Image from Shutterstock Price tags: ethusd, ethbtc Ethereum Active Address Count Hits 2-Year Highs, Yet ETH Is Still Bearish

Ethereum users continue to accumulate despite DeFi hack, ETH 2.0 uncertainty

It’s been a boring past few weeks in the crypto markets. As CryptoSlate has covered, Bitcoin, Ethereum, and a majority of altcoins have effectively flatlined.

Yet data shows that investors, at least investors in ETH, are shaking off the uncertainties in the markets, accumulating as fast as they can.

Ethereum investors continue to stack millions worth of the crypto

According to blockchain analytics firm Glassnode, the number of Ethereum addresses holding over one coin recently reached a new all-time high of 1,074,282 addresses. This metric has seen consistent growth since the start of the year.

Glassnode ETH accumulation
Graph of the number of Ethereum addresses holding over one ETH from Glassnode. Current as of June 28th.

Notably, there has also been growth in the number of addresses holding over 32 and 100 coins, but some of this growth is a byproduct of PlusToken’s Ethereum mixing.

Ethereum’s recent setbacks: DeFi hack, high fees, ETH 2.0 uncertainty

The strong accumulating habits of ETH investors comes in spite of a number of setbacks that are taking place.

For one, an Ethereum-based decentralized finance protocol named Balancer was just exploited on the weekend for $500k in ETH and altcoins such as LINK. The attacker leveraged an exploit in how the protocol implemented a deflationary cryptocurrency.

This marks the first hack in an era where DeFi is quickly becoming crypto’s hottest trend, with a growing market influence and a swelling user count.

Tangentially related, Ethereum users have had to deal with extremely high fees over recent weeks. Former Messari executive Qiao Wang says that these fees could threaten Ethereum’s efficacy as the foremost smart-contract blockchain.

Referencing a personal experience he had with the blockchain and transactions, he wrote:

“So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.”

There’s also uncertainty about ETH 2.0. BitMEX’s research division argued that due to the complexity of the upgrade, there are likely to be some delays.

“Ethereum 2.0 is exceptionally complicated. With so many committees, shards and voting types it seems reasonably likely that something will go wrong and that there will be significant further delays.”

The bigger picture

Presumably, investors are casting aside these short-term setbacks and are taking a look at the bigger picture.

Namely, the picture around ETH becoming more viable as an investment once Ethereum 2.0, EIP-1559, and other improvements become implemented, which will lead to increased adoption and more monetary like properties for the asset. 

The post Ethereum users continue to accumulate despite DeFi hack, ETH 2.0 uncertainty appeared first on CryptoSlate.

If any of these 3 crypto firms collapse, a “tsunami” will ensue: analyst

Bitcoin and other cryptocurrencies may be predicated on decentralization, but the industry still has entities and assets that are of systemic importance.

According to an ex-Messari executive and analyst in the space, there are three companies that, “if something catastrophic happened to them today, would cause a tsunami in crypto markets.”

These companies aren’t exchanges but three firms that act as the ‘Wall Street’ and ‘Federal Reserve’ of the crypto industry, so to say.

This is a breakdown of each company/service, their importance, and the potential impact on the market if “something catastrophic” were to happen.

Silvergate: The biggest crypto bank

Due to the nascency of crypto and blockchain, many Wall Street banks are hesitant to serve companies, especially if they actively deal with Bitcoin.

Enter Silvergate, a publicly-listed bank that is focused on being “as innovative as the entrepreneurs” they serve. The company has existed since 1988 but has largely pivoted to offering financial services to the digital currency industry

Silvergate clients include Bitstamp, Paxos, BlockTower Capital, Polychain Capital, amongst hundreds of others.

Notably, Silvergate may be becoming less important to this space as time goes on.

The systemic risk in Silvergate’s theoretical collapse is that a majority of the most recognizable crypto firms (exchanges, blockchain foundations, etc.) may be unable to operate with banking services, especially when it may be hard to get services through other banks.

JPMorgan was revealed last month to be offering banking services to Coinbase and Gemini. This could mark the start of the end of the tacit “crypto ban” enforced by Wall Street banks:

Galaxy Digital’s Michael Novogratz noted:

“The JPM announcement that they will provide banking services to Coinbase and Gemini is…recognition that the future will include crypto currencies, digital assets, and blockchain based systems.”

Tether: The reserve currency of the crypto market

Each financial market has a reserve currency. In most cases, like with American equities and commodities, that reserve currency is the U.S. dollar.

Funnily enough, it’s somewhat of the same for the crypto market. That’s to say, Bitcoin is becoming increasingly less like the reserve currency of all cryptocurrencies.

Due to it being widely adopted by exchanges and service providers, Tether’s USDT has quickly become a reserve currency for the market.

Data suggests that Bitcoin has $16 billion in volume in the past 24 hours while USDT touts $18 billion in daily volume — a small difference, sure, but one that becomes more pronounced on other days.

Even in terms of on-chain volumes, blockchain analytics firms have come out with reports indicating that there is now more value transacted through stablecoins (mainly USDT) than through Ethereum.

USDT’s importance is derived from the crypto asset being pegged to the U.S. dollar by reserves. Because it’s “stable,” it is used by traders and institutions in the space that value that stability.

When you want to “cash-out” of Bitcoin, Ethereum, or altcoins but want to easily be able to buy back in, you buy USDT or another stablecoin. If one wants to benefit from the speed, borderless, and digital nature of blockchain transactions but avoid volatility, stablecoins are a good bet.

Over recent months, USDT has begun to wield even more influence, with its market cap now nearing $10 billion.

No one really knows what would happen if Tether, but USDT disappearing would mean the loss of the most important asset in crypto.

Genesis: The foremost cryptocurrency loan provider

Finally, Genesis. Genesis is an institutional digital currency lender, which also offers over-the-counter trading services through an affiliated company.

By offering crypto loans, the company serves market-makers, speculators/traders, and firms that need money to expand or need capital for other uses.

The company’s client list isn’t known yet as of the end of Q1, it reported $6 billion in originations, making it the ostensible leader in its market segment.

Its theoretical collapse would decrease the availability of capital to the aforementioned groups of firms.

The post If any of these 3 crypto firms collapse, a “tsunami” will ensue: analyst appeared first on CryptoSlate.

Bitcoin May Hit $10,500 “Sooner or Later,” Boosting Case for Upside

bitcoin price
It’s been a tough past few days for Bitcoin traders. After holding ~$9,400, the cryptocurrency temporarily slipped under $9,000 on the weekend. In the process, dozens of millions of BitMEX longs were liquidated. Yet an analyst has asserted that there’s a high likelihood BTC revisits $10,500. Bitcoin then surmounting that level may lead to even greater gains, with some calling for “new highs.” Bitcoin Could Soon Revisit $10,500 According to a pseudonymous trader with tens of thousands of followers, there is a “liquidity pool” at $10,500 that Bitcoin will likely retest. He said that this is likely to happen “sooner or later” due to assets’ natural propensities to trade where this is liquidity. “Macro BTC context: still think we’re heading towards $13K mid term. Massive liquidity pool around 10.5k, price tends to visit those sooner or later.” Macro BTC analysis by trader “SalsaTekila” (@Salsatekila on Twitter). Chart from TradingView.com Once (or if) Bitcoin reaches $10,500, it will need to break and hold $10,500 on a relatively high frame to confirm further upside. One commentator said in early June: “BTC very close to exploding. Break above $10,500 would break an over 2 year symmetrical triangle, 11 month broadening wedge, 8 month horizontal resistance.” The importance of $10,500 has been further echoed by Fundstrat Global Advisors’ Rob Sluymer. He said: “Next directional move on tap for BTC’s as bull-bear convictions are about to be tested. Bears can point to the downtrend at 10-10.5K. Bulls have the long-term uptrend (200-week sma) at their back and the past week’s resilience as BTC’s quickly rebounded from its 200-dma.” Fundamentals Support Bull Case The fundamentals support the bull case. First and foremost, there has been mass Bitcoin accumulation over recent weeks and months by both retail and institutional traders. Blockchain analytics firm Glassnode has reported that long-term Bitcoin investors have been silently accumulating over the past few months. Around 90% of the days in 2020 have such entities been accumulating, per their data. Secondly, gold has seen an extremely strong performance for it being a $10 trillion asset class. Since the start of 2020, the precious metal is up approximately 15%, nearing its all-time highs set after 2008’s Great Recession. Gold rallying is fuel for Bitcoin to rally, according to analysts like Mike McGlone at Bloomberg. The commodity analyst said in a recent report: “Increasing companionship with gold is a Bitcoin-price tailwind, in our view. At the highest-for-longest 52-week correlation and beta ever vs. the metal, the first-born crypto should continue to advance for reasons similar to gold, fueled by unprecedented global central-bank easing.” Finally, Bitcoin miners continue to support the network despite the block reward halving. This has resulted in a macro indicator called the “Hash Ribbons” moving closer to printing an elusive buy signal seen at the start of the 2016-2017 bull run. Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Bitcoin May Hit $10,500 "Sooner or Later" — And That's Big for the Bull Case

A “Huge” Bitcoin Move Is Imminent as Price Stalls in the Low-$9,000s

While Bitcoin has seen its fair share of short-term volatility, on a macro scale the cryptocurrency is still consolidating.

The below chart from Blockroots founder Josh Rager, a crypto trader, displays this well. The chart shows that over the past ~seven weeks, BTC has been effectively trapped between $8,500 and $10,000. Each breakout has failed to lead to a follow-through.

Bitcoin

Chart of BTC’s price action over recent months by Josh Rager (@Josh_rager on Twitter). Chart from Tradingview.com

Yet the consolidation is reaching a breaking point: volatility indicators show that any day now, Bitcoin will finally move out of the range. And considering the length and magnitude of this consolidation, it could be “huge.”

Related Reading: A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

Bitcoin Could Soon See a Massive Move, Analysts Say

According to the analysts at Bitcoin Bravado, a crypto research group, a “huge” move in these markets is coming:

“BTC volatility is currently at historic lows as traders wait for a sign regarding where the next move is heading. […] Any time Bitcoin volatility gets this low, it usually means something huge is on the way. […] Suffice to say, the window for placing your bets is quickly narrowing.”

This is surely the case.

One trader shared the chart below late last week, showing Bitcoin’s price action since the start of 2019.

On the bottom of the chart is the Bollinger Bands Width indicator, which tracks the width of the bands. The Bollinger Bands is basically an advanced volatility indicator signaling important price points and when an asset is expected to move.

As can be seen, the width of the bands is reaching a level not seen since February of this year. That was just weeks prior to Bitcoin dropping by 60% in literally half a month.

Image

Bitcoin price chart over the past one and a half years with volatility indicator (Bollinger Band Width). Chart from TradingView.com; shared by Byzantine General (@Byzgeneral on Twitter).

Institutional Traders Are Betting on Downside 

With Bitcoin primed to see a massive move, investors have begun to stack their chips to try to capitalize on the impending move.

According to CME futures data, institutions have been building a net short position throughout this consolidation.

One trader recently shared the image below, which shows that entities deemed “institutional traders” are cumulatively shorting 2,038 of the CME’s BTC futures contracts.

Image

Bitcoin price chart with CME's Commitment of Traders report data. Chart from TradingView.com; made by Byzantine General (@Byzgeneral on Twitter).

This is notable as this group of traders has historically predicted downswings.

For instance, near the top of February’s rally, institutional traders started to build a Bitcoin short position via the CME. And prior to the launch of Bakkt, this group did the same.

Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
A "Huge" Bitcoin Move Is Imminent as Price Stalls in the Low-$9,000s

Ethereum Fees Just Hit a Multi-Year High, But There Are Solutions

The past few weeks have seen Ether stall in terms of price action, with the cryptocurrency trading between $210-240. Not the same can be said about Ethereum’s underlying blockchain activity.

Due to a perfect storm of events, the number of users of the network has skyrocketed.

Blockchain analytics firm Santiment reported last week that the number of new ETH addresses created a day surpassed 100,000:

“Ethereum’s network growth metric has rapidly been on the rise since the beginning of 2020, creating 237% more addresses yesterday than it did on Jan 1, 2020 (and ~+200% accounting for rolling averages now vs. then).”

A similar trend of growth has been seen in the daily count of transactions.

Below is a chart from Etherscan showing that the number of transactions on Ethereum is starting to near 2018’s all-time high. Late last week, there were over 1.1 million transactions in a single day; the all-time high is around 1.37 million transactions in a day.

Graph from Etherscan of the number of daily transactions

This spike in usage hasn’t come without a cost, unfortunately.

Ethereum Fees Recently Hit Multi-Year Highs

According to data shared by Tradeblock, the cost of transacting on Ethereum has hit highs not seen in over two years:

“With the rise in DeFi apps, majority of which are built on Ethereum, ether gas fees hit recent highs, meaning transaction costs across the network have risen in order for timely transactions to occur.”

Tradeblock’s data indicates that the cost of “gas” reached 120 Gwei, almost double the 70 Gwei highs of 2017/2018’s bull market. Cross-referencing TradeBlock’s data to that of Etherscan, it can be said that at 120 Gwei, fees were the highest since February 2016.

Anecdotal evidence has corroborated this trend.

As reported by NewsBTC, the Head of Business Development at Kraken’s futures division, Kevin Beardsley, wrote last week:

“I have spent $14 on ETH gas fees to transfer/lock my $15 into @CurveFinance and I’m earning a princely $0.079 in weekly $SNX rewards. I’ll break even in just 177 short weeks! (not including gas to close contracts.”

Beardsley is but one of many saying that it cost them in excess of $10 to send a single transaction.

Solutions Coming to the Fore

It should come as no surprise that there are moves being made to mitigate Ethereum’s high transaction fees

There are currently attempts to raise Ethereum’s gas limit, thus allowing for more transactions. This, in turn, should decrease the fees one pays to transact on the network.

Another solution is Ethereum Improvement Proposal 1559, proposed by blockchain founder Vitalik Buterin and others. The proposal suggests that the current fee model is “inefficient and needlessly costly to users.”

The solution: “a mechanism that adjusts a base network fee based on network demand, creating better fee price efficiency and reducing the complexity of client software needed to avoid paying unnecessarily high fees.”

In the long run, there’s also Ethereum 2.0 — a sweeping upgrade intended to change how the blockchain works from a fundamental level. That upgrade is expected to dramatically increase the number of transactions possible.

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Ethereum Fees Just Hit a Multi-Year High — and Users Aren't Happy

Data: Ethereum, Chainlink, Cardano are still up thousands of percent since ICO

It’s been a tough past few years for many crypto altcoins.

Consider Bitcoin dominance — the percentage of the cryptocurrency market’s value made up of BTC. That metric is up to 66 percent from the ~35 percent lows set at the peak of 2018’s crypto bubble.

Bitcoin dominance
Bitcoin dominance chart from TradingView.com

The poor performances of altcoins are even more striking when you look at it from an asset-to-asset level.

Ethereum now trades at $230, down nearly 85 percent from its all-time high. XRP is down more than 90 percent from its all-time high above $3.00. And that’s just two assets out of many.

Yet there remain a few altcoins that are actually in the green on a macro scale, strongly outperforming even Bitcoin.

Despite the crypto crash, there are some ICOs that have yielded thousands of percent

According to data compiled by crypto data analyst Vivek, there are multiple ICOs, such as Cardano and Binance Coin, that have strongly outperformed Bitcoin over recent years, despite the altcoin crash.

Comparing the price of a number of altcoins at ICO to their current prices, he gave the following information:

  • Ethereum is the best-performing ICO with a 77,800 percent gain
  • NEO comes in second with 5,200 percent
  • In third is Chainlink, up 4,800 percent from ICO.

And so on and so forth.

Importantly, for most of the crypto assets listed except Chainlink, their  gains from ICO were even higher at the peak of the 2018 bull market.

The days of parabolic altcoin gains may be gone — mostly gone, anyway

Although it’s nice to look back on these gains, the days of ICOs and altcoins rallying tens of thousands of percent are most likely gone. Well, at least mostly gone.

This can be attributed to the fact that many investors have largely woken up to the fact that many altcoins, especially those launched in 2017/2018, are intrinsically worthless and thus have been poor investments. 

Jason Calacanis — an angel investor in Robinhood, Trello, Uber, and other tech giants — recently said that he’s bearish on a large majority of cryptocurrencies:

“Historically, 99% of crypto projects are garbage run by unqualified idiots, delusional but below average founders or grifters… the 1% that are not, could change the world. I’m waiting for that 1% to deliver their product so I can talk to their customers.”

As a pertinent aside, Calacanis said in 2019 that he thought Bitcoin was going to crash to $500-0. Yet he has since changed his tune, telling Morgan Creek‘s Anthony Pompliano that he may be interested in allocating some of his wealth to Bitcoin.

Calacanis’ sentiment has been echoed by others, including stock trader Steve Burns and Kevin Rose, a general partner of True Ventures. Both have also said that 99 percent of the crypto market is “garbage” and on its way to $0.

The post Data: Ethereum, Chainlink, Cardano are still up thousands of percent since ICO appeared first on CryptoSlate.

Analyst Who Predicted 2018’s $3k Bottom Says Bitcoin Looks “Cooked”

Bitcoin cooked
Save for a few blips here and there, Bitcoin has more or less tracked equities over recent months. The below image from Charles Edwards, a digital asset manager, shows this correlation quite well.  Bitcoin chart with S&P 500 overlay from Charles Edwards, a digital asset manager. The correlation between crypto and the S&P 500 has also been tracked by analysts at JP Morgan. The strategists at the bank said that “Cryptocurrencies have traded more like risky assets like equities—a significant change relative to the prior couple of years.” According to the trader that predicted at which point Bitcoin would bottom in 2018, this correlation could result in a BTC decline. Bitcoin Is “Cooked”: Analyst Says There’s a sentiment spreading amongst investors in Bitcoin that the recent stagnation is bullish. Investors touting this theory cite Wyckoff schematics — charts on patterns observed by the late technical analyst Richard Wyckoff. Specifically, they point to Wyckoff Re-accumulation schematics, which are patterns seen in the middle of an asset’s uptrend. A textbook “Wyckoff Re-accumulation” trading range/pattern from Google, by Professor Hank Pruden Yet, the recent price action may be anything but that. Six months prior to Bitcoin bottoming 2018’s bear market at $3,150, an analyst speculated that $3,200 would be the bottom price. That same analyst now says that “Equities and BTC both look cooked. This is not re-accumulation, sorry.” This comment is in line with his previous analyses of Bitcoin. Attached to the chart below, which predicts BTC will fall towards the mid-$7,000s before rebounding, he wrote: “It’ll be time to buy btc when all the “relax guys, its still ranging” people admit this is distribution and turn bearish.” Bitcoin analysis by @SmartContracter on Twitter. Chart from TradingView.com The S&P 500 Is Reaching “Bubble” Territory Core to his thesis is that the S&P 500 is also bearish, not just Bitcoin. According to multiple analysts, that assertion is correct to make. The chief investment officer at Minneapolis-based Leuthold Group told Bloomberg that a 20% drop could take place in the weeks ahead. Doug Ramsey said on the matter: “The bulls could be proved right in that the March 23rd low holds, but you could lose a lot of money in a drawdown here… You could still very easily have a drop of 20% from the peak we made on June 8th. Very easily.” There have also been bearish thoughts shared by Jeremy Grantham, a stock analyst that predicted three previous stock market tops. He recently told CNBC that a potential “bubble” is forming as market conditions get “crazy.” This comment was made in reference to the relative overvaluation of companies compared to where valuations were earlier this year. "This is really the real McCoy," says legendary investor Jeremy Grantham on whether the recent rally is a sign of a bubble to come. "This is crazy stuff." pic.twitter.com/XetUBqqPBk — CNBC's Closing Bell (@CNBCClosingBell) June 17, 2020 Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Analyst That Predicted 2018's $3k Bottom Says Bitcoin Looks "Cooked"

There’s Over $10M Preventing Bitcoin From Breaking Past $9,500

Bitcoin has made an attempt at recovering the losses it incurred late last week. On Sunday, the cryptocurrency rallied as high as $9,200 as buyers stepped in and shorts were squeezed.

Yet order book data indicates that BTC may have a tough time rallying any further.

Related Reading: A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

Over $10 Million Worth of Asks at $9,500

According to a crypto trader, traders on Binance have made a stand at $9,500-9,550. According to order book data from the exchange’s Bitcoin/U.S. equivalent market, there is over 1,300 BTC worth of orders at that level.

That’s to say, there is $10 million worth of sell orders at that region waiting to slow any rally. That is one of the biggest Bitcoin walls Binance traders have collectively formed in a few days, according to the charts.

Image

BTC chart over the past few days with order book dominance indicator from trader "Coiner-Yadox" (@yodaskk on Twitter)

Buyers on the Downside

Large sellers may be putting asks at the topside of Bitcoin’s price, but there are buyers to the downside.

As reported by NewsBTC previously, a trader observed that a “Bitfinex” whale has begun to stack long orders between $8,600-8,900.

This is pertinent as Bitfinex’s order book has been one of the most accurate directional indicators for BTC over the past few months. The book registered a series of strong buy orders in the $5,000s when Bitcoin traded there in April, then called the $10,400 top at the start of June.

Image

BTC price chart with order book dominance bands indicator shared by day trader "Jonny Moe" (@Jonnymoetrades on Twitter)

In a similar vein of news, Grayscale Investments has continued to add Bitcoin to its trust.

Technology analyst Kevin Rooke has made the observation over recent weeks that the company is adding more BTC its trust than BTC mined.

There is some that debate the validity of this figure.  Yet most agree that this fact alone suggests a growing institutional bid supporting the crypto market.

Bitcoin Bears Likely to Win

It might be bears that win this tug-of-war, though.

On-chain analyst Cole Garner said the following on June 24th about the details of Bitfinex’s order book data:

“More importantly, Bitfinex orderbook delta has been skewed massively to the sell side for almost six weeks.The birds-eye-view of BFX’s orderbook has been an accurate leading indicator of #Bitcoin’s next move nearly every swing for the past nine months.”

The “skewed” order book delta adds to a confluence of other bearish fundamentals he identified. These include an influx of withdrawals from miner wallets to exchanges, institutions building a net short position via the CME, and correlation with the S&P 500.

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Price tags: xbtusd, btcusd, btcusdt
There's Over $10M Preventing Bitcoin From Breaking Past $9,500

Rich Dad Poor Dad Author Promotes Bitcoin: “Federal Reserve Is Dead”

bitcoin price
There are many investors that are still hesitant to get involved with Bitcoin. They make comments like cryptocurrencies are hard to own, BTC is for criminals, and other sentiments along those lines. Yet a prominent financial educator and entrepreneur says that owning Bitcoin, silver, and gold is a wise decision. Here’s why he thinks so. Robert Kiyosaki: Got Gold, Silver, and Bitcoin? According to Robert “Rich Dad” Kiyosaki, an American entrepreneur and author, the “Federal Reserve is dead.” He cited the increase in so-called “zombie companies” and their respective debts, purportedly at $900 billion. Kiyosaki writes that the debt “zombies” have will pass $1.6 trillion next year, putting risk on the Federal Reserve. FED is Ded. Loans to Zombie CEOs cannot be paid back. In 2020 Zombies owe $900 billion with decling income. By 2021 Zombie debt to pass $1.6 trillion. Got gold, silver, Bitcoin? “Accept what ever comes to you woven in the tapestry of your destiny.” Marcus Aurelius. Take care. — therealkiyosaki (@theRealKiyosaki) June 28, 2020 To combat this trend, alongside a potential debt crisis and money printing, Kiyosaki has effectively prescribed Bitcoin, silver, and gold. He has mentioned those assets to his over one million followers ad nauseam over recent months. The “Rich Dad Poor Dad” author says that those assets are “real money” while the fiat money printed by Federal Reserve is “fake.” Kiyosaki isn’t only bullish on Bitcoin in spirit — he has a price target for the cryptocurrency. He wrote in May that BTC could hit $75,000 in the next three years while the two precious metals also perform well. Gold’s Booming — Bitcoin May Follow Kiyosaki’s poignant comments on the economy and its relation to gold and Bitcoin comes as the precious metal has rallied. As of the time of this article’s writing, gold trades for $1,770 — 15% higher than its price at the start of 2020. That’s also close to a new all-time high against the U.S. dollar, with the last one set after the 2018 recession. Analysts expect this trend to continue moving forward. CitiGroup was reported by Bloomberg to have raised its spot market forecast for gold prices, maintaining its “longstanding bullish bias.” Analysts at firms cited the “macro backdrop” of low-interest rates and “universal anxiety” about the pandemic. Bitcoin has the chance to follow gold higher, especially in this macro environment. That’s according to some prominent analysts. Paul Tudor Jones said in a research note titled “The Great Monetary Inflation” that Bitcoin is the “fastest horse in the race.” This was made in reference to the asset’s 21 million coin supply cap while other asset classes don’t have that benefit, even gold. Jones is a billionaire hedge fund manager largely regarded to be one of the world’s best macro analysts. Also touting this sentiment is Bloomberg’s Mike McGlone, a senior commodity strategist. He wrote in a recent report that with Bitcoin trading increasingly like gold, the latter rallying could boost the former: “Increasing companionship with gold is a Bitcoin-price tailwind, in our view. At the highest-for-longest 52-week correlation and beta ever vs. the metal, the first-born crypto should continue to advance for reasons similar to gold, fueled by unprecedented global central-bank easing.” Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Rich Dad Poor Dad Author Continues to Promote Bitcoin

There’s $100 million of BTC on the Ethereum network—and that’s “bearish” for Bitcoin

The past few weeks have seen Ethereum’s decentralized finance ecosystem explode. Due to a series of events, such as a search for yield, the launch of Compound’s COMP, amongst other trends, DeFi has seen an uptick of users.

Data shows that even some Bitcoin holders are wanting in on the DeFi craze, tokenizing their coins to get a foot in a door. But this is a controversial trend sparking responses from many corners of the crypto community.

What is tokenized Bitcoin?

Up until recently, DeFi has involved ETH, and ETH only.

This is largely due to how blockchains work: because most DeFi applications are based on the Ethereum blockchain, users and developers can only leverage assets based on that network.

This has meant that Bitcoin — largely regarded as the “reserve asset” of the cryptocurrency market — has mostly been not a part of the DeFi equation. 

Hence, developers have begun to create ways to “tokenize” one’s BTC. This means one can have a token representing their BTC on Ethereum or on other chains, allowing Bitcoin to be integrated into DeFi.

There are projects like Wrapped Bitcoin, tBTC, imBTC, among others, doing this.

Between the different tokenized BTC projects, there is now $100 million worth of the cryptocurrency based on Ethereum. This is a growth of over 100 times in just over 18 months, with Bitcoin holders being enticed to tokenize their BTC due to the yields they can earn by participating in DeFi.

Total BTC on Ethereum
“Total BTC on Ethereum” data point from Anthony Sassano

Ethereum proponents: it’s bearish for BTC

Ethereum proponents say that this trend is bearish for BTC and the underlying network.

The co-founder of EthHub, Anthony Sassano released a four-part thread speculating on this.

He explained that because you cannot pay transaction fees or stake WBTC/tokenized BTC, it will be a “second-class citizen” in comparison with ETH. Moreover, the act of tokenizing BTC purportedly makes the cryptocurrency “just another token/asset on Ethereum.”

As to why this is bearish for Bitcoin as a network, Sassano said that if users begin to purchase tokenized BTC instead of actual BTC, Bitcoin will “lose fee revenue/security.”

Bitcoiners don’t think this is a good idea

Many Bitcoiners were quick to rebut the ideas laid out in the thread, with many arguing that tokenized BTC is actually dangerous.

Unchained Capital’s Phil Geiger said that there is exactly “0 BTC” actually on the “built-on-quicksand” Ethereum:

“There is BTC that people have sent to addresses under someone else’s control in exchange for casino tokens, except the casino is made of Ikea materials built on quicksand and is sinking.”

Pseudonymous Bitcoin proponent “Grubles” also weighed in, writing that it is “interesting to see ETH maxis now celebrating BTC held with a single custodian.”

These two comments were made in reference to Wrapped Bitcoin’s design, which requires one wanting WBTC to deposit their tokens into BitGo, participate in KYC, then get their tokens.

There’s also was a tweet from the Bitcoin whale “joe007” published months ago.

Responding to a tweet from Eric Wall about WBTC, the pseudonymous trader said that by tokenizing one’s BTC via Ethereum, one is stupidly giving up the unmatched security of the Bitcoin blockchain. The comment, if this writer recalls it correctly, also included a few choice words.

The post There’s $100 million of BTC on the Ethereum network—and that’s “bearish” for Bitcoin appeared first on CryptoSlate.

A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

Ethereum’s budding decentralized finance ecosystem has gone parabolic over recent weeks.

The value of cryptocurrencies locked in DeFi applications has skyrocketed to $1.65 billion, 65% higher than this metric was just 12 days ago. Simultaneously, the number of users leveraging applications like Compound, Maker, and Synthetix has skyrocketed.

Unfortunately, a purported hack just took place that may temporarily slow DeFi’s growth.

$500k in Ethereum and Other Altcoins Stolen in Hack

Early Sunday afternoon, reports started to spread via social media that a DeFi hack/attack took place.

Word first spread via Telegram, according to The Block’s Steven Zheng. An admin of a Telegram group noticed that there was an issue with Balancer, a DeFi protocol focused on facilitating token swaps.

“Apparently someone drained a Balancer Pool made up of WETH and STA and got away with $500k worth of WETH,” Zheng wrote, becoming one of the first to spread news of this via Twitter.

Hours after Zheng’s tweet, the attack was confirmed by Ethereum-based decentralized exchange 1inch and Mike McDonald, co-founder of Balancer Labs. Balancer Labs is the entity that is behind Balancer’s development; the former is a company, the latter is an Ethereum-based protocol.

According to a breakdown of the situation by 1inch, Zhang was correct: more than $500,000 worth of Ethereum and other altcoins were drained during this attack.

The exchange’s research found that the attacker used a smart contract to manipulate the Balancer Pool so that it went into debt:

“These funds were used to swap WETH to STA token back and forth 24 times which drained STA balance from the pool. […] Every time the attacker swapped WETH to STA, the Balancer Pool received 1% less STA than was expected.”

After this, the Ethereum user leveraged a vulnerability to drain Wrapped Ethereum, Wrapped Bitcoin, Synthetix, and Chainlink from the pool. As aforementioned, the value of the stolen funds amounts to ~$500,000.

For some context, the issue was a byproduct of the built-in deflation of STA. The token has an algorithm designed to “ensure that for every transaction, 1% of the amount transacted is destroyed.”

1inch has classified the attacker as a “very sophisticated smart contract engineer with extensive knowledge and understanding of the leading DeFi protocols” due to the exploits used. The attacker is currently at large because they used an Ethereum mixer to obfuscate their identity/ties to exchange.

The post by Balancer Labs’ Mike McDonald corroborated what the decentralized exchange staff wrote.

Not DeFi’s Only Issue

Hacks aren’t the only issues that DeFi is currently facing.

Larry Sukernik, an investor at Digital Currency Group, argued that DeFi products are too complicated for their own good.

“A very high IQ can be a headwind to building massively successful products. You get people with a big brains that need to be put to work. And when they’re put to work, the result is often a complex, brilliant, but massively unusable product. Lots of that in DeFi now,” he explained.

There are also concerns surrounding high transaction fees. Joseph Todaro of BlockTown Capital wrote:

“If fees move higher or even maintain this level, I expect $ETH competitors focused on scalability to see increased attention.”

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A Hacker Just Drained $500k in Ethereum & Altcoins From a DeFi App

Peter Schiff: Bitcoin Won’t “Even Come Close” to Its $20k High This Year

Bitcoin price featured image
It’s been a strong past few months for both Bitcoin and gold. The leading cryptocurrency is up more than 150% from its March low while the precious metal has gained 15%. Both performances mark notable gains for the assets. Yet according to a prominent investor and gold proponent, it won’t be Bitcoin setting a fresh high this year. Instead, he says it will be the precious metal. Peter Schiff Says Bitcoin “Won’t Even Come Close” to $20,000 Highs Due to what seems to be a combination of central-bank buying and easy monetary policies, gold has rocketed higher over the past few months. The precious metal is approaching an all-time high (against the dollar) and is seemingly poised to continue higher. The “digital gold” Bitcoin, unfortunately, may not share gold’s fate. CEO of Euro Pacific Capital Peter Schiff said on June 28th:  “I’m just talking about the last 2.5 years. I was wrong not to buy Bitcoin 8 years ago, but anyone still holding it was wrong not to sell it 2.5 years ago. #Gold will likely make a new all-time high in 2020. BTC won’t even come close.” I'm just talking about the last 2.5 years. I was wrong not to buy Bitcoin 8 years ago, but anyone still holding it was wrong not to sell it 2.5 years ago. #Gold will likely make a new all-time high in 2020. #Bitcoin won't even come close. — Peter Schiff (@PeterSchiff) June 28, 2020 Schiff isn’t the only one thinking that gold will perform extremely well this year. Lisa Shalett, the chief investment officer of Morgan Stanley Wealth Management, recently argued that the U.S. dollar may be reaching a peak. In a world where that happens, gold should outperform, she explained: “The dollar may be near a peak. If the dollar weakens, this may be a good time for certain investors to consider adding some gold to their portfolios.” Many Beg to Differ Despite Schiff’s skepticism about Bitcoin, there are many expecting BTC to move past $20,000 this year. Bloomberg’s senior commodity strategy Mike McGlone released an extensive report on crypto earlier this year. In it, he wrote that there’s a good likelihood Bitcoin reaches $20,000 this year. This forecast was derived from an analysis that BTC’s current price action is similar to that seen after 2016’s halving. “Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016’s trend.” Similarly bullish is BitMEX’s chief executive, Arthur Hayes. He wrote in an April blog post that his “end of 2020 price target remains $20,000.” Like many others in the industry, Hayes expects the money printing by central banks to boost Bitcoin. Dan Morehead of Pantera Capital echoed this sentiment to a T. The former Wall Street investor said on how central banks may boost Bitcoin: “Now that we’re in the trillions, the deficit just simply has to have a positive impact on the price of things not quantitatively-easable — stocks, real estate, cryptocurrency relative to the price of money. Said another way, the BTC/USD cross-currency rate will rise. The price of bitcoin may set a new record in the next twelve months.” Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Peter Schiff: Bitcoin Won't "Even Come Close" to Its $20,000 High This Year

Last Time This Technical Sign Flashed, Bitcoin Dumped 60%. It’s Nearly Back

After a more than 150% rally from March’s lows, Bitcoin’s upward momentum has petered out over recent weeks. For nearly two months, the cryptocurrency has been caught in a tight range between $8,500-10,000.

This has resulted in a key trend indicator halting its uptrend. According to a trader, if the indicator slides further, there’s a high chance a strong drop will ensue.

Related Reading: There’s a Bitfinex “Whale” Looking to Buy Bitcoin in the High-$8,000s

Bitcoin Could Drop as Trend Indicator Poises to Roll Over

According to a trader, Bitcoin’s one-week Stochastic RSI reading is about to print a bearish sign: a bearish crossover while the Stochastic is above 70.

Each time this sign has appeared in BTC’s history, a “pretty heavy correction” followed suit. For instance, near the $10,500 highs earlier this year, the indicator saw a bearish crossover prior to the 60% correction.

Image

Long-term Bitcoin Stoch RSI analysis by trader "Coiner-Yadox" (@Yodaskk on Twitter). Chart from TradingView.com

As a pertinent aside, while the Stoch RSI is poised to turn over on the weekly, it’s a different story for other time frames.

As reported by NewsBTC, an analyst observed last week that the Stoch RSI on the 12-hour, one-day, two-day, and three-day is trending bullish:

“12h, 1D, 2D and 3D are over-sold and look like they want to reverse while monthly also is turning bullish!”

Image

Stoch RSI analysis across many of Bitcoin's time frames by analyst "JB" (@blackswan0815 on Twitter). Charts from TradingView.com

The confluence of bullish short-term Stoch RSI readings and a bearish long-term reading may suggest a short-term rally before a medium-term decline.

Buyers Are Still Stepping In

Despite the mixed technical picture, buyers are still stepping in.

As reported by NewsBTC previously, a day trader noted that Bitfinex’s order book showed on Saturday that a big buyer (or buyers) stepped in. The order book data suggested that an entity stacked buy orders between $8,600 and $8,800.

There were so many orders that the trader that shared this information branded the entity a “whale.”

Even institutional players are seemingly accumulating. Technology analyst and content creator Kevin Rooke shared the chart below on June 25th, showing large inflows of Bitcoin into Grayscale’s Bitcoin Trust:

“Unbelievable. Grayscale added 19,879 BTC to their Bitcoin Trust since last week (53,588 BTC since the halving). Bitcoin miners only produced 7,081 BTC since last week (39,544 BTC since halving).”

Documents suggest that the American firm now has nearly 400,000 BTC under management.

In a similar vein of news, blockchain analytics firm Glassnode reported that 61% of all BTC in circulation has not moved in a year. This indicates there remain many committed to the long-term vision of Bitcoin.

This statistic is also important as this same metric was extremely high prior to the rally from the hundreds to $20,000.

Related Reading: Crypto Tidbits: BTC At $9k, Grayscale Ethereum Trust, Cryptocurrency & PayPal
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Price tags: xbtusd, btcusd, btcusdt
Last Time This Technical Sign Appeared, BTC Dumped 60%. It's Nearly Back