Bitcoin - Back in BusinessCryptomaniacs crew!
Like a wearying prizefighter, BTC is doggedly remaining in the ring despite appearances of fading energy. Bitcoin, along with the rest of the cryptocurrency market, is currently amidst an unmitigated period of indecision. Then again, you cant really complain about $10K BTC. Especially when global buyers have repeatedly stood their ground to say this is what one bitcoin is worth. As crypto traders, were used to two market modes - !Mooning and !Dumping. As a demographic of traders, cryptomaniacs (as famed technical analyst Peter Brandt calls us) probably have no idea how to handle periods of indecision. Shouldnt we be celebrating these moments of comparatively low volatility? Is this not bitcoins store-of-value argument in proof and deed? Of course, if is true for bitcoin, then its day-to-day moves will be more incremental. That doesnt mean BTC cant or wont achieve the stratospheric values we hope for, but it might not get there as quickly or decisively as everyone wants.
The drop and retest of the $10K marker happened on low volume that failed to challenge support in that area substantively Bitcoin is currently trading at just a touch above $10,200. It fell abruptly to this level after a swift rejection during its pursuit of the $11K zone. BITCOIN found renewed vigor as it unexpectedly jumped from $9,400 up to $10,700. The run-up from $9,600 was particularly vigorous. The latest move confused anyone seeking logic behind it. That attempt, though promising, signaling disinterest around current prices, Even now, volume remains shallow, however, despite this interruption of BTCs march toward the moon, we want to believe it correspond very nicely with the news that VanEck SolidX is offering a limited bitcoin ETF to institutional investors, and ecosystem Crypto Loan Industry.
Bitcoins narrative, which has been lacking in recent weeks, is beginning to regain strength as Bakkt comes into the frame along with an ETF decision looming on the horizon. Bakkts physically-settled bitcoin futures are due to go live on September 23, and shortly after, on October 19, is the SEC final deadline for ruling on the VanEck/SolidX Bitcoin ETF. Of the various proposals delivered to the SEC, the VanEck/SolidX ETF is roundly believed to have the best odds for approval. Market sentiment needs a narrative. Without an objective on the horizon, even if its a source of insecurity (such as the ETF, which hinges on a yes or no answer), sentiment falls away along with interest. To see how much interest has waned since BTC fell away from its parabolic advance, check the Google Trend chart at the bottom of this post.
In the short term we have:
• VanEcks unexpected ETF offering
• Bakkts bitcoin futures live date on the 23rd
• Final ETF decision arriving mid-October
The takeaway is that were entering a precarious time rife with the potential for extreme volatility. Remember, volatility is not just to the downside, but to the upside as well. The possibility of reaching for the $11K-$11.5K region is crystallizing more with every daily close spent above $10.2K. Bitcoins obvious strength over the past couple of days tells us that with only an additional bit of fuel thrown in the fire, we may find ourselves firmly breaking out of the descending triangle in the chart below. A move up towards $11K may be nothing more thana fakee-outt attempt at breaking from the triangle, but banking on that by being short now is more risk than were willing to stomach. After all of these weeks spent sideways and slipping lower, it would be a real shame to watch from the sidelines as BTC retests yearly highs around $14K.
Crypto Loan Industry Hitting All-Time Highs
Crypto-collateralized loans are going from peak to peak as they lock-in value in the crypto-financial ecosystem. Graychain, the worlds first crypto credit bureau, recently released a report detailing the estimated $5 billion crypto loans that have gone out to borrowers up to now. The way crypto collateralized loans work is simple. Say you want to take out a loan – you choose a lender like Celsius, Nexo, Unchained, or the various other companies available, then deposit your crypto on the platform. Youll need to deposit crypto worth roughly 2x the loan amount (i.e., for a loan of $10,000 youll need to deposit $20,000 worth of collateral). Part of the appeal behind crypto loans is that you dont need to worry about credit or employment checks – the only thing that matters is that youve got the crypto to back the loan. Even if you dont, there are some companies, like Salt Lending, who let you get away with riskier loan terms. What all this means for the crypto ecosystem is that more and more people are locking in BTC, ETH, LTC, XRP, BCH, and other leading digital currencies for the duration of a loan term. Loan terms are commonly between 12 and 36 months.
Its not only borrowers who are improving the HODL ratio of crypto. Lenders are enjoying the benefits of loaning their crypto on platforms like ETHLend, Dharma, and Compound at rates between 6–11% annual interest. To loan crypto and accrue interest, the process is roughly the same as borrowing – just lock it into a wallet on the platform of your choice. The emergence of cryptocurrency lending also means that there is less incentive for selling crypto to fiat. Doing so is not only a taxable event, but it also means youll miss out on potential future gains. Instead of selling, cryptocurrency investors now have the option of leveraging their holdings. Doing so not only keeps investors in the game but also holds value where it belongs – on the blockchain.
Altcoins showing surprising resilience
Its no secret that altcoins have been taking a crazy beating as of late. Just when you thought the bottom was in, they vaporize all previous support and head lower. Maybe that goes some way in explaining why, right now, altcoins are showing a decent amount of strength relative to BTC. Realistically, how much lower can they go? The truth is, theres simply no telling where this pit of despair ends. In a way, that is up to the developers behind altcoin projects. Broken promises, endless delays, and the faint sting of countless scams continue to haunt the industry. Nonetheless, development is happening – we just need to be patient. As the king of altcoins, Ethereum is the perfect marker for observing the relative health of the altcoin market as a whole. Ethereum, the worlds #2 digital asset, is similarly seeing price growth as investors regain confidence in its premise as a world computer and defacto public blockchain. Very recently, Microsoft released a developer toolkit for building apps on Ethereum. If that isnt a clear sign of the times, then we dont know what is.
ETHEREUM
(Spotlight on Scaling)
As the blockchain space matures and finds widespread adoption across most industries imaginable, the question of how to scale to the demand has arrived front and center. As smart contract blockchain platforms roll out, theyre teasing their potential transaction per second speed well before discussing other similarly important qualities. The pressure to scale up to the demands of impending blockbuster commercial applications is getting so intense that some blockchains, like Zilliqa, are engaging in psychological battles. ZIL founder Max Kantelia recently stated that “…people are starting to mine Zilliqa, were beginning to see the network starting to grow and grow, so is absolutely within sight, and I would say that it could happen as quickly as the next 12 to 18 months.” Ethereums ETH 2.0 project is promising to bring sharding to the network within the next two years – however, other projects may have the upper hand well before it comes online. Coming to Ethereums rescue is the rise of new second-layer scaling projects like Matic and Celer. Using a second-layer scaling solution takes some of the heat off of Ethereum, as theyll be able to use projects like Matic to scale decentralized applications that want to use the Ethereum network to build and launch. Regardless of who wins the transaction speed war, the way the question of scaling is solved will determine much of whats to come in cryptocurrencys future.
Binance driving indecision?
At bitcoins indecision may be directly tied in with the fear surrounding Binance structural reorganization. Thats a nice way of saying that Binance is on the brink of axing American customers from its global service. With some estimates claiming Americans make up 30% of global crypto trading volume, shunning a financial powerhouse from the majority of assets available on Binance might be a bad thing. Theres really no telling, which also means that cryptos pseudonymity is an effective privacy safeguard. That hasnt stopped a few prominent digital assets from performing strongly in recent days. ATOM, KCS, and even ICX have shown themselves as winners in the short term, but whether theyll go the distance is another matter. Some altcoin moves are based on fundamental developments. ICON, for instance, went live with staking this month, while KuCoin announced a second anniversary BTC sale which requires KCS for participation. Binance move away from US customers is rife with unresolved questions surrounding execution. For instance, how will Binance know who is American and not? Using IP detection will unfairly exclude US-based non-American traders. These questions dont appear to be slowing the Binance.US rollout. Just a few hours ago, Binance.US tweeted that onboarding for American clients is now underway. They also used the hashtag #ThisIsJustTheBeginning when addressing the variety of digital assets available on the exchange. As always, anything Binance does is worth paying close attention to, even if your non-American Binance account is #SAFU.
Either of these scenarios is likely but are by no means exhaustive of what the short term future may hold.
im monitoring the situation closely and will keep you up to date.
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