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Bitcoin sell-off over? Strong ‘buy the dip’ signal flashes for the first time in 5 months

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The price of Bitcoin (BTC) has dropped to the key $44,000-$45,000 support level on Feb. 28 for the third time in the past week.

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

The BTC/USD pair briefly dipped below $44,000 on Bitstamp before paring some of the losses, bouncing back above $45,000 at the time of writing. 

‘Full rest’ for SOPR, funding rates

Some analysts have pointed out an uptick in miners’ selling as the reason behind the latest drop in price. 

Fortunately, the third retest of this key support level may have a silver lining for the bulls. Data analytics resource Glassnode noted that the daily Bitcoin Spent Output Profit Ratio (SOPR) has seen a “full reset.”

The SOPR essentially shows whether spent outputs are in profit or loss at the time of transaction. This key metric turned negative for the first time since September 2020. In other words, investors are now moving BTC at a slight loss on average, suggesting that profit-taking has abated, according to Glassnode. 

“In total, we saw an on-chain net realized loss of $243 million yesterday,” the analysts added.

“That is the lowest daily value since April 2020.”

Bitcoin funding rates. Source: Bybt.com

Meanwhile, popular trader Philip Swift, the co-founder of trading suite Decentrader and creator of the Golden Ratio multiplier method, also pointed out the SOPR crash.

He considers this a potentially bullish turnaround for BTC price in combination with last week’s reset of derivatives funding rates because such events have previously coincided with the start of new uptrends.  

“The SOPR has now reset (green on the chart) meaning that wallets selling are now selling at a loss,” he explained, adding:

“This is a strong ‘buy the dip’ signal in a bull market. This alongside derivative fundings having reset is bullish.”

BTC price vs. SOPR. Source: DecenTrader/Twitter @PositiveCrypto

The last time the SOPR flipped green was five months ago when Bitcoin was trading around $10,000. At the time, this was a key hurdle for BTC to trigger a new bull market. Since then, the price has surged more than five folds to new all-time highs of around $58,000. 

Nevertheless, many traders remain cautious as the market enters the month of March, which has historically been bearish for cryptocurrencies, and all markets in general. 

“I think March may be slow with a lack of confidence in traditional markets but overall I am bullish Bitcoin and expect significantly higher over the next three months,” said Swift in private comments. 

$44K-$45K remains the key level to watch 

In the meantime, Bitcoin traders are keeping a close eye on the $44,000-$45,000 level. Trader Willy Woo, for instance, says the $45K level is very strong support and expects any dips below this level to be bought up aggressively should they occur. 

Furthermore, researchers at on-chain analytics firm Santiment believe that the entire cryptocurrency market now depends on Bitcoin holding above this key level.

“It’s been a red weekend thus far, with most eyes on Bitcoin as it has rallied back vs. the climb altcoins were making,” they said, adding: 

Keep an eye on the $44k support level for BTC as an indication to monitor for all of crypto. As well as BTC’s on-chain activity. 

Source: https://cointelegraph.com/news/bitcoin-sell-off-over-strong-buy-the-dip-signal-flashes-for-the-first-time-since-september

Blockchain

AgeUSD to Launch as First Stablecoin on Cardano Network

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Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. The firm has since announced a partnership between the Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.

The AgeUSD stablecoin will be available on Cardano as soon as smart contract capabilities are launched on the blockchain, it revealed.

Do We Need Another Stablecoin?

Emurgo is aiming to prevent events like MakerDAO’s Black Thursday which emerged through vulnerabilities in its Dai collateralization mechanism. A mass liquidation of the vast majority of Maker vaults resulted in around $4 million in Dai being under-collateralized at the time in March 2020.

AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).

“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly,”

The stablecoin runs on the Ergo blockchain aiming to automate as much as possible within the mathematics of the protocol itself. Reserve providers pay Ergo’s native currency (ERG) to mint reserve coins which represent the underlying collateral. Users of the stablecoin can also deposit ERG into the reserves in order to mint AgeUSD, it explained. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to loan out funds.


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The Cardano partnership will also enable its native token, ADA, to be used as collateral to mint reserves. However, the potential downside is that the stablecoin is only backed by these two assets whereas Dai is backed by multiple cryptocurrencies.

AgeUSD will launch on Cardano when it rolls out the Alonzo update that ushers in Plutus powered smart contracts. This is expected in the latter half of this year according to the roadmap.

Cardano ADA Price Update

As the long-awaited update nears, ADA prices have been cranking to new highs, the most recent ATH being $1.55 on April 14. At the time of writing, ADA was trading up 2% on the day at $1.45 according to Coingecko.

It is the sixth largest cryptocurrency by market cap which currently stands at $46 billion and there are 32 billion tokens in circulation. The token was briefly flipped by Dogecoin but has regained its position in the charts, just below Tether.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/ageusd-to-launch-as-first-stablecoin-on-cardano-network/

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Blockchain

How sustainable is YFI’s current price run?

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The past week saw a lot of growth across the cryptocurrency market, with Bitcoin and Ethereum seeing their values pushed towards new all-time highs. However, it is safe to say that the digital assets market is no longer just about the top two cryptos in the market, with DeFi coins such as YFI registering significant gains on the charts.

Over the past 6 months, YFI has seen its price hike by over 520 percent. Now, while this looks extremely promising for the alt, the truth seems to be in yet another shade of grey. The price hike from over $11k in November 2020 to its press time valuation of $48,415 has been less than straightforward.

Akin to many other altcoins in the market, YFI  too has endured extended periods of the price going back and forth. However, given the current market scenario, how sustainable is YFI’s current price or is history going to repeat itself in the form of yet another short-term price correction?

Interestingly, data provided by Santiment highlighted that despite the bullish nature of the YFI market, there may be a bit of FUD finally creeping into the market as the price continues to remain close to the $50k-level. In such a scenario, what YFI really needs is a strong level of support for the price if bearishness is to soon hit the market.

Source: Santiment

Taking a look at a few of the key fundamentals can provide more clarity on where the price is likely to head in the coming weeks. According to data provided by Santiment, YFI’s supply on exchanges has been stagnant for a while and hasn’t been increasing. While fewer coins in exchanges are normally a good sign of hodling, in the case of YFI, if one were to take a look at past precedents, the price decline began as soon as the supply hit a stalemate.

Source: Santiment

Additionally, the analytics platform also pointed out that the current price rally began with low on-chain activity for the coin. However, over the past few weeks, a trend reversal has emerged, with on-chain activity noting a surge and the price continuing to be inversely relational to it.

With the price inching closer to its ATH, there is always the question of price discovery. YFI seemed to be lacking in this regard, at press time. The coin’s MVRV, as per Santiment’s data, placed it in the danger zone and prime for a new trend reversal, one that can induce a short-term price correction.

Source: Santiment

In the coming days, if the price correction does set in, YFI’s $44k-price level may end up being a key support level for the coin. However, if this level is flipped to resistance in the coming weeks, a lot of the upward momentum and price surge YFI saw over the past few months might be undone.

This, once again, will result in YFI’s price continuing its current trend by which the coin will be subject to strong ‘push and pulls’ at regular intervals.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://eng.ambcrypto.com/how-sustainable-is-yfis-current-price-run

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Blockchain

EOS, Synthetix, Maker Price Analysis: 16 April

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EOS can be expected to find strong support around the $6.8-zone. If Bitcoin stabilizes above the $60.5k-area, altcoins could have a chance of recovery in the coming days. Otherwise, it would be further selling pressure across the market. Synthetix and Maker posted gains over the past few days, but were likely to retrace a significant portion of their value.

EOS

EOS, Synthetix, Maker Price Analysis: 16 April

Source: EOS/USDT on TradingView

EOS was trading within a rising channel, and the past few hours saw the price test the upper boundary of the channel before falling lower.

The mid-point of the channel was ceded to bearish pressure. A region of demand lay just above the $6.8-mark. The confluence with the channel’s lower boundaries could serve as strong support for EOS.

The RSI was back at neutral 50 and would drop lower to signal a shift in momentum to bearish over the next day or two, especially if EOS closes a session under $6.8. This could see EOS fall further to find support at $5.6.

Synthetix [SNX]

EOS, Synthetix, Maker Price Analysis: 16 April

Source: SNX/USDT on TradingView

Synthetix ascended past the $21. 4-level of resistance, but its retest of the same level on the back of strong selling forced the price to drop to $20.7 and could drop further. On the 4-hour, the Supertrend indicator continued to give a buy signal that would only be flipped to sell on a session close under the $19.5-level.

The 20 EMA and 50 EMA (white and yellow respectively) highlighted the bullish momentum behind SNX in recent days, with the price not sinking under these moving averages yet.

The OBV was on an uptrend and suggested that the recent spate of selling was reactionary fear, rather than sustained selling.

Maker [MKR]

EOS, Synthetix, Maker Price Analysis: 16 April

Source: MKR/USDT on TradingView

Two sets of Fibonacci retracement levels were plotted to highlight some levels of importance for MKR. $2,400 is a level that MKR had been stuck under from late February till the past week. The surge past this level in recent days has been rapid, and the price did not stop at many areas to mark it as support or resistance.

As such, the move back down could be almost as rapid, and some of the Fib levels laid out possible areas of support for MKR.

The MACD was correcting lower after the MACD line rose high above the Signal line to indicate overbought market conditions.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://eng.ambcrypto.com/eos-synthetix-maker-price-analysis-16-april

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