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Bitcoin Bearish Correction Pauses: Focus Remains on Dollar and Yields

Republished by Plato

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  • Bitcoin prices extended losses on Friday as the US dollar gained alongside the long-term Treasury yields.
  • Downside pressure on cryptocurrency remains amid expectations of modest job growth in the US.
  • The technical support offered by the 20-period moving average on the four-hour chart maintains Bitcoin’s medium-term bullish outlook.

Bitcoin dropped Friday, suggesting that the benchmark cryptocurrency may decline further into the week, followed by an equally depressive weekend session in the wake of the rising US dollar and a recent spike in the US Treasury yields.

Bitcoin Short-Term Targets

The spot BTC/USD exchange rate plunged 2.43 percent into the daily session. On the other hand, the pair was trading in a positive area on a week-to-date basis, up more than 4.5 percent ahead of the weekend session. The price action was choppy nonetheless, giving no clues about its direction in the coming sessions ahead.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT
Bitcoin looks trapped between two moving averages. Source: BTCUSD on TradingView.com

Technically, Bitcoin appeared trapped inside a range defined by two of its crucial moving averages. In doing so, the cryptocurrency tested the 50-period moving average as resistance and the 200-period moving average as support.

A bounce from the 200-MA on Friday pushed BTC/USD towards 50-MA for a bullish breakout attempt. Nevertheless, higher selling pressure near the latter wave kept prices from flourishing upward. That showed traders’ resilience, which may have to do with unfavorable macroeconomic climate.

Jobs Data, Bond Yields, US Dollar

Traders limited their bids near the local BTC/USD tops as Bitcoin formed a positive correction with the US stock market against the prospect of rising US Treasury yields. Both the markets tumbled last week as a bond market sell-off raised questions about whether low-interest rates, which propelled both Bitcoin and US equities last year, can continue for any longer.

Yields, which rise as bond fall, have rallied as a response to expectations of faster US economic growth, led by a speedier vaccination program and inflation expectations.

The yield on the US 10-year Treasury was flat on Friday but surged in the previous session to 1.547 percent.

That marked the highest close for the benchmark borrowing cost since February last year. Its climb on Thursday came as Federal Reserve Jerome Powell provided no signs that the central bank would intervene to limit the ongoing sell-off in the US government debt market.

The US dollar benefited from the global market uncertainty, with its value against a basket of foreign currencies—known as the US dollar index—rising by 0.75 percent on Thursday. The index surged 0.31 percent on Friday.

US Dollar Index, US dollar, DXY, bitcoin
US dollar index rallies higher on global market uncertainty. Source: DXY on TradingView.com

More tailwinds for the US dollar growth came from early estimations that the US labor market would log recovery in February.

“As we reopen the economy, inch-by-inch, that will unleash consumer spending and drive job growth, especially industries that have been most severely affected by the pandemic,” said Nela Richardson, a Ph.D. economist at human-resources software firm Automatic Data Processing Inc.

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Source: https://www.newsbtc.com/news/bitcoin/bitcoin-bearish-correction-pauses-focus-remains-on-dollar-and-yields/

Blockchain

Bitcoin Bull Mike Novogratz Predicts Existential Crisis Unless the US Creates a Digital Dollar

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Mike Novogratz, a veteran investor, and a huge Bitcoin supporter noted the U.S. is currently in a good economic position. Still, the nation can face a major competitive disadvantage unless it engineers a digital dollar soon.

The Importance Of An E-Dollar

Novogratz, chief executive of digital merchant bank Galaxy Digital GLXY, underlined the value that a digital dollar could bring to the US. In a Friday interview with MarketWatch, he stated:

”To me it is an existential crisis, we need a digital dollar.”

Furthermore, the investor expressed his view over the current COVID pandemic and the negative impact on the U.S. market and the world, in general. He referred to the trillions of dollars of monetary and fiscal spending done to help eliminate the worst of the economic aftershocks the disease caused:

”If our fiscal and monetary policy starts looking like it’s from a Banana Republic…you are going to run into some Minsky moment where confidence breaks down.”

With his statement, Mike Novogratz referenced Hyman Minsky, who exposed a view in the recent past that a period of distortions in the financial system eventually ends very badly.


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The existence of a digital dollar sounds even more important after some stock-market investors have been warning about a surge in US inflation in the past weeks.

The Competition With China

During the interview, Novgorotz claimed that while in the U.S., the development of an e-dollar is still under question and researches, China has fired the first salvo on the digital currency front.

The biggest economy in Asia conveys great support to its digital yuan. According to some experts in the field, its new currency is a weapon that the country can use to compete with the U.S. and other developed economies.

As CryptoPotato recently reported, PayPal CEO Peter Thiel said that Bitcoin could be used as a Chinese financial weapon against the U.S.

In the meantime, Novogratz said that there is ”zero evidence of the Chinese government buying Bitcoin” much less weaponizing it, referring to the comments made by Peter Thiel:

”Sometimes he likes to say things that are provocative.”

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Source: https://cryptopotato.com/bitcoin-bull-mike-novogratz-predicts-existential-crisis-unless-the-us-creates-a-digital-dollar/

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Ripple becomes tidal wave, leads weekend pump and notches legal victories

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Amid a weekend pump carrying multiple cryptocurrencies higher, Ripple’s XRP looks to be leading the way with a push as high as 30% on the daily — carried on the back of a string of legal victories and rumors of relisting at some exchanges. 

Where Bitcoin and Ethereum are up merely 2.7% and 3.4% respectively on the day, XRP climbed to $1.36 before retreating to $1.32, where it sits at the time of publication. The digital currency is now up 111% on a 7 day basis, and a staggering 544% on the year. The recent push has also buoyed XRP back into the top 10 cryptocurrencies by marketcap, behind only BTC, ETH, and BNB at #4.

The rally flies in the face of a lawsuit from the Securities and Exchange Commission, which charges that XRP’s $1.3 billion ICO was an “unregistered securities offering.” The news led multiple exchanges to delist the currency, and XRP lost its place as the 3rd largest currency by marketcap, at time looking as if it would even fall out of the top ten. 

The bad news for XRP didn’t stop with the SEC, either. In March Ripple CEO Brad Garlinghouse announced that the company would be “winding down” its relationship with Moneygram — a once highly-touted partnership that investors often pointed to as proof of the digital currency being on a path towards becoming “the standard” for payments and settlement.

Despite the deluge of negative headlines, it appears all buyers needed was a small ray of hope to jump back in — and they’ve gotten exactly that. Ripple lawyers have notched two victories in their legal battle against the SEC, including winning access to internal SEC discussion history regarding cryptocurrencies, and a court denied the SEC the ability to disclose the financial records of two Ripple execs, including Garlinghouse.

Ripple executives themselves seem heartened by the news, with CTO David Schwartz saying the US isn’t “prepared” to regulate cryptocurrencies (a possible dig at the ongoing legal proceedings).

All in all, it’s just another week for one of the most controversial cryptocurrencies in the space.

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Source: https://cointelegraph.com/news/ripple-becomes-tidal-wave-leads-weekend-pump-and-notches-legal-victories

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Why this OlympusDAO’s product could be amongst DeFi most lucrative

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Taking the market by storm, OlympusDAO’s native OHM is up 95.8% this week alone and 31.1% in the past two weeks. At the time of writing, OHM is trading at $812,76 with 7.3% profits in the 24-hour chart.

With a market cap of just $68 million, OlympusDAO might have gone unnoticed by many investors. However, it has a mechanism called Bonds which promises to be one most important and lucrative in the DeFi sector.

According to research firm Messari, this protocol is attempting to create a stable currency backing every OHM with DAI and OHM-DAI. The objective is to maintain a “fundamental check on inflation” and a currency with an undiluted purchasing power.

Unlike Tether and other stablecoins, OHM is not pegged to any other asset. Its stability is achieved via the DAO (Decentralized Autonomous Organization) when it alters variables to obtain more profitability for stakers.

This is done via the sales contract connected to the protocol’s treasury and a liquidity pool (OMH-DAI) on decentralized exchange Sushiswap, as shown below. Messari explains:

When OHM trades above 1 DAI, the protocol mints and sells new OHM. When OHM trades below 1 DAI, the protocol buys back and burns OHM. In each case the protocol makes a profit. Olympus DAO distributes these profits 90% to OHM stakers pro rata and 10% to a DAO.

OlympusDAO OHM
Source: Messari

How OlympusDAO’s bonds operate

The Bonds are a treasury component to get liquidity with it users can trade Stake Liquidity Provider tokens to get OHM directly with the protocol, as an OlympusDAO developer explained.

Once the trade is completed there is a vesting schedule of 5 days. During this time, the user can redeem the tokens but has incentives to get them at a discount. The latter is determined by the number of bonds in the protocol, more bonds are equal to a lower discount.

Via this mechanism, as the developer said, OlympusDAO restrains its own growth, to have become “steadier”.

The liquidity from a bond is locked in the treasury and used to back new $OHM. That liquidity now belongs to the market and, by extension, the token holders. The more liquidity the protocol builds up, the more confident holders can feel.

The users are basically contributing to OlympusDAO by adding liquidity. In retribution, the user gets a reward in OHM at a much cheaper price during a specific period. That way, both the user and the protocol can benefit.

OlympusDAO offers LP a variety of strategies around OHM which they can leverage to obtain a bigger profit than on the spot market. The developer claims:

All of this serves to create a long-term, sustainable bootstrapping mechanism for the protocol, with participants as the main beneficiaries. A good system shouldn’t offer one opportunity to “make it”; it should offer them in perpetuity with diminishing returns. This is how you produce wealth; slowly, through compounding gains.

Ethereum is trading at $2096,58 with a 1.2% profit in the 24-hour chart, after dropping from its ATH at $2,198.

OlympusDAO OHM Ethereum ETHUSD
ETH with small profits in the 24-hour chart. Source: ETHUSD Tradingview

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Source: https://www.newsbtc.com/news/why-this-olympusdaos-product-could-be-amongst-defi-most-lucrative/

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