Autor Cointelegraph By Yashu Gola

Tron's stablecoin USDD loses dollar peg on suspected selloff by Alameda Research

Tron's stablecoin USDD loses dollar peg on suspected selloff by Alameda Research

Uverejnil používateľ | nov 10, 2022 |

In April 2022, the Tron network launched USDD, a token pegged to the U.S. dollar, as an “over-collateralized stablecoin,” meaning its likelihood of slipping below $1 should be lower due to excessive reserves backing its valuation.USDD stablecoin slips below $1 pegBut it was not enough to keep USDD’s price anchored to $1 on Nov. 8 when some whales dumped over 11 million USDD tokens to seek exposure in rival stablecoins Tether (USDT) and USD Coin (USDC). A day later, USDD’s price fell to as low as $0.96, followed by a modest recovery to $0.98 on Nov. 10. USDD price performance on a 24-hour adjusted timeframe. Source: Messari The selling pressure was visible more broadly in the USDD liquidity pool on Curve’s decentralized finance protocol. As of Nov. 10, the pool was heavily imbalanced, holding nearly 82.50% in USDD and the rest in USDT, USDC, and DAI stablecoins. Tron founder Justin Sun speculates that Alameda Research, a crypto hedge fund headed by FTX’s Sam Bankman-Fried, could be the whale dumping its USDD holdings to avoid insolvency. Alameda’s balance sheet reportedly was 50% FTT (FTT), FTX’s native token that has recently fallen more than 90%.I think probably Alemeda just sold their USDD to cover the liquidity of ftx exchange. The pool currently is back with a healthy rate. pic.twitter.com/oSIzUNqE0Z— H.E. Justin Sun (@justinsuntron) November 9, 2022Miscalculated collateral reservesUSDD is issued by Tron DAO Reserve (TDR), which also serves as the custodian of its collateral. TDR is primarily responsible for selling the collateral to maintain USDD’s peg in the event of a sell-side shock.In theory, USDD appears sufficiently backed by a $2-billion pool of crypto collateral in the form of Bitcoin (BTC), Tron (TRX), and USDC, with the reserves reportedly outweighing the stablecoin supply by over 283%. USDD supply versus collateral. Source: USDD.ioBut there’s a catch.Currently, almost all the stablecoin collateral worth in TDR’s reserve wallets are staked and earning yields in JustLend, the largest lending protocol in the Tron ecosystem by total-value-locked (TVL). Meanwhile, 99% of TRX collateral is locked inside a “staking governance” contract.TDR also appears to be incorrectly including burnt TRX worth over $725 million as collateral. Overall, that leaves the DAO with about $600 million worth of USDC and $236 million worth of BTC in its liquefiable reserves. In other words, an almost 113% collateral ratio versus the 283% boasted.Bitcoin, TRX prices slideUSDD’s collateral ratio could fluctuate further as its reserve assets, BTC and TRX, undergo price declines.Notably, BTC’s price has plunged by more than 22% week-to-date to around $16,500 in a crypto market meltdown led by the Alameda-FTX fiasco. On the other hand, TRX wiped approximately 12% off its valuation in the same period, trading at around $0.05 on Nov. 10.TRX/USD weekly price chart. Source: TradingViewThe Tron token now eyes a break below its support long-standing support confluence, comprising its 200-week exponential moving average (200-week EMA; the blue wave) near $0.052 and its 0.236 Fib line near $0.055.This may push TRX on an extended decline toward the $0.022-$0.030 range (marked in red in the chart above). This area was instrumental as a consolidation channel in August 2020-January 2021 and January 2019-July 2021. Furthermore, it served as support between February and November 2018.Related: Buying Bitcoin ‘will quickly vanish’ when CBDCs launch — Arthur HayesAt the same time, Bitcoin has entered the breakdown phase of its prevailing inverse-cup-and-handle pattern, now eyeing $14,000 as its primary downside target.BTC/USD weekly price chart. Source: TradingViewThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Not just FTX Token: Solana price nukes 40% along with other ‘Sam coins’

Not just FTX Token: Solana price nukes 40% along with other ‘Sam coins’

Uverejnil používateľ | nov 9, 2022 |

Solana (SOL) is on the track to log its worst daily performance on record.On Nov. 9, SOL’s price dropped more than 40% to around $16 primarily due to its association with Sam Bankman-Fried, the founder of crypto-focused hedge fund Alameda Research and cryptocurrency exchange FTX.SOL/USD daily price chart. Source: TradingViewSam tokens get ‘fried’Fried was an early investor in the Solana blockchain project via Alameda Research. On Nov. 8, the entrepreneur’s estimated wealth plunged from a whopping $15.6 billion to around $1 billion, according to Bloomberg Billionaires Index.At the core of this wipeout was a near-collapse of FTX. On Nov. 6, Binance, FTX’s rival exchange and early investor, decided to sell its $2 billion stake, which it was holding in the form of FTX’s native token, FTX Token (FTT). In response, FTT’s price crashed by over 85% and was trading for around $3.60 as of Nov. 9.Alameda Research’s balance sheet reportedly was worth around $12 billion as of June 30, out of which half was FTT. The firm allegedly had $8 billion in liabilities on the same day, raising speculation about its potential insolvency after FTT’s massive crash.$FTT is the new Luna. Not buying the dip this time…— KSICRYPTO (@ksicrypto) November 8, 2022As a result, this has increased downward pressure on cryptocurrencies with exposure to Alameda Research, FTX and Bankman-Fried, or so-called “Sam coins.”Related: Alameda on the radar of BitDAO community for alleged dump of BIT tokensSOL’s price has plunged by more than 55% since Binance decided to dump its FTT reserves. Similarly, Serum (SRM), a decentralized exchange asset functioning atop the Solana blockchain, crashed by 55% in the same period.SRM/USD daily price chart. Source: TradingViewRen, a decentralized custodian project, also witnessed a 33% drop in the valuation of its native token, REN, after Binance’s announcement of intent to sell FTT. Overall, Sam tokens, including Raydium (RAY), Bonfida (FIDA) and Maps (MAPS), have dropped by an average of 40% since Nov. 6.Still hope for Solana?Meanwhile,18.77 million SOL tokens, or around $330 million at the time of writing, will be unstaked and enter circulation on Nov. 10, according to lending data collected by Lookonchain. This may further put downward pressure on SOL’s price.1/ A total of 18,775,348 $SOL ($330M) will hit the market after 23 hours.In Epoch 370, 18.77M $SOL has been unstaked.When Epoch 370 is over, 18.77M $SOL can be withdrawn and sold to the market.https://t.co/T9cgdB9KnYhttps://t.co/pKtysd0a81 pic.twitter.com/qxiSqWuSeu— Lookonchain (@lookonchain) November 9, 2022

From a technical perspective, SOL could drop toward $14.30 after entering the breakdown stage of its descending triangle pattern, as shown in the chart below. In other words, a 25% plunge from current prices.SOL/USD daily price chart. Source: TradingViewConversely, the Solana token’s daily relative strength index has dropped below 30, or “oversold,” which hints at a potential sideways consolidation or short-term price bounce toward the triangle’s lower trendline at $30 in the coming days.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Chainlink plunges from three-month high as LINK price eyes another 50% correction

Chainlink plunges from three-month high as LINK price eyes another 50% correction

Uverejnil používateľ | nov 8, 2022 |

Chainlink (LINK) returned to mimic the broader crypto market downtrend as its price fell alongside top coins Bitcoin (BTC) and Ether (ETH) on Nov. 8. LINK plunged by as much as 10% into the day to reach $8. While BTC and ETH slipped by approximately 6.5% and 9%. That contrasts with the trend witnessed on Nov. 7, wherein LINK rallied 14% to $9.25, its three-month high, while BTC and ETH dropped 1.5% and 0.5%, respectively.LINK/USD two-hour price chart. Source: TradingViewOverall, on a week-to-date timeframe, Chainlink has outperformed both Bitcoin and Ethereum. What’s making Chainlink strongerLINK’s price has rebounded by nearly 75% after bottoming out at $5.29 in May. Notably, the Chainlink token’s recovery rally has coincided with a persistent increase in the supply held by its whales (entities that hold at least 1,000 LINK).The Chainlink supply percentage held by addresses with a balance between 1,000 LINK and 1 million LINK has risen to nearly 23% in November from 18.2% in May, according to Santiment data. This indicates that rich investors may have been the key players behind the LINK price recovery.LINK supply distribution among addresses holding 1K-1M tokens. Source: SantimentInterestingly, the LINK accumulation trend is rising in the days leading up to the launch of “Chainlink Staking.”Chainlink Co-founder Sergey Nazarov announced at SmartCon 2022 that their long-awaited LINK staking reward function would go live in December. In addition, the project’s official website confirms that it would enable “eligible community members” to stake LINK into its pool in December.The LINK staking service will be opened for the public in the same month, with the initial annual percentage yield set at 5%. The event has started drawing speculations about increased demand for the Chainlink tokens by the end of 2022.LINK appears to have benefited in the short-term due to the euphoria around the Chainlink Staking function, given other coins have tumbled in unison in response to the crypto hedge fund Alameda Research’s insolvency rumors. #Chainlink spiked all the way above $9.20 for the first time since August 13th, a ~3 month high despite very volatile markets. This rise has been supported by the largest amount of active $LINK addresses in 5 weeks, and traders are longing aggressively. https://t.co/ZxsZnveURm pic.twitter.com/lia6XAgSar— Santiment (@santimentfeed) November 8, 2022A 25% correction setup is still in playFrom a technical perspective, LINK’s recovery rally since May has been confined inside an ascending triangle range.Related: Bitcoin heads to US midterms as research says dollar ‘closing in’ on a market topAscending Triangles are continuation patterns, meaning they typically send the price in the direction of its previous trend after a consolidation period. LINK was trending downward before it formed its ascending triangle. The token’s likelihood of continuing its downtrend and reaching its profit target stands at 44%, per the observation of ascending triangles by veteran investor Thomas Bulkowski. The profit target is measured after adding the maximum triangle height to its breakdown point, as illustrated below.LINK/USD three-day price chart featuring ascending triangle breakdown setup. Source: TradingViewThat puts LINK en route to around $4.15 by December 2022, down about 50% from today’s price.Conversely, independent market analyst Pentoshi anticipates LINK to reach $12 in the same period, given the token has been floating above the same support that was instrumental in sending its price to a record high in May 2021.LINK/USDT three-day price chart. Source: TradingView/Pentoshi”While people are quiet on it now. I don’t think that will be the case 3-4 weeks from now,” Pentoshi said.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Solana erases its 'Google rally' gains but a 50% SOL price recovery is still in play

Solana erases its 'Google rally' gains but a 50% SOL price recovery is still in play

Uverejnil používateľ | nov 7, 2022 |

A recent price rally in the Solana (SOL) market ran out of steam midway as traders’ attention shifted to crypto-focused hedge fund Alameda Research’s insolvency rumors.Alameda Research insolvency rumors affect SOL On Nov. 7, SOL’s price plunged nearly 6% to about $30.50. The intraday selloff came as a part of a broader pullback trend that started on Nov. 5 when SOL peaked at around $38.75. Between then and now, the Solana token is down over 20%.SOL/USD daily price chart. Source: TradingViewThe beginning of SOL’s plunge coincided with reports that Alameda Research has liabilities worth $8 billion but may not have liquid assets on its balance sheet to meet those obligations. Interestingly, the value of all those assets plunged synchronously in the past 48 hours — including SOL, as well as FTX Token (FTT), Serum (SRM), and Oxygen (OXY) — on fears of cascading liquidation if Alameda Research becomes insolvent.1. low liquidity tokens$4.6bn of the assets are in low liquidity tokens:⚰️ $SOL⚰️ $SRM⚰️ $MAPS⚰️ $OXY⚰️ $FIDAother than SOL there is no way to liquidate the rest of the holdings without completely crashing the marketsthe last 4 on the list are highly dillutive too!— otteroooo (@otteroooo) November 7, 2022Google partnership, NFT growthNevertheless, traders showed interest in holding SOL’s price above $30, a technical support level,on Nov. 7. One reason could be a flurry of optimistic news that emerged over the weekend, including the launch of smartphones, dApp stores, and a Google Cloud partnership.In addition, Solana continues gaining higher traction in the nonfungible token (NFT) sector. For instance, the total number of NFTs released on the Solana blockchain is up 19.3% quarter-over-quarter to reach over 8 million in Q3 2022.”Several developments across Solana’s NFT sector allowed it to maintain a strong position relative to a peer group of the top L1s by secondary NFT sales volume,” noted James Trautman, researcher at data resource Messari, adding: “Secondary sales volume managed to eclipse Ethereum in early September. The majority of the activity during that period took place on Magic Eden V2.”Solana NFT secondary sales volume dominance. Source: Messari/CryptoSlamOn Nov. 2, Instagram added support for Solana-based NFTs, enabling users to create, sell and market their favorite digital arts and collectibles.50% SOL price rebound?As mentioned above, the SOL price’s correction showed signs of exhaustion when it retested $30 as its support level on Nov. 7.SOL/USD daily price chart. Source: TradingViewSince August 2022, two rebound moves from this support line saw SOL recovering to nearly $37, excluding one time when the price slipped toward $27.75 in October. The same price ceiling, coupled with a multi-month descending trendline resistance, was instrumental in capping the Solana token’s price rally in the week ending Nov. 6.Related: Solana’s co-founder addresses the blockchain’s reliability at BreakpointA break above the $37 resistance line could have SOL test the $44.25-47 range thereafter, or a 50% price rally when measured from current price levels, by December 2022Conversely, an extended selloff below the $27.75-$30 support area risks sending SOL’s price to around $19.50, or about 40% lower than today’s price.SOL/USD weekly price chart. Source: TradingViewThe $19.50 level served as support between March and July 2021, as shown in the chart above.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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FTX Token price risks 30% plunge as a 23M FTT 'part' moves to Binance

FTX Token price risks 30% plunge as a 23M FTT 'part' moves to Binance

Uverejnil používateľ | nov 7, 2022 |

An ongoing selloff in the FTX Token (FTT) market could worsen in the coming months owing to a mix of pessimistic technical and fundamental indicators.FTT could plunge 30%From a technical perspective, FTT has formed an inverse-cup-and-handle pattern on the daily chart, identifiable by its crescent-shaped price trend followed by a less extreme upward retracement. On Nov. 6, FTT broke below the pattern’s support line near $22.50, accompanied by a volume spike. The FTX exchange token’s selloff continued on Nov. 7 below the support line, raising risks of a bearish continuation phase in the coming months.FTT/USD daily price chart featuring inverse-cup-and-handle pattern. Source: TradingViewAs a rule of technical analysis, the inverse-cup-and-handle breakdown can push the price down by the length equal to the distance between the pattern’s support and peak level. That puts FTT’s breakdown price target at around $16, down roughly 30% from the current price.The bearish technical setup came as Changpeng Zhao (CZ), the CEO of crypto exchange Binance, said his company would liquidate its entire FTT holdings in the coming months, on fears that the token might collapse in the same manner as Terra (LUNA) in May 2021.Binance was an early investor in FTX.Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs. Onwards.— CZ Binance (@cz_binance) November 6, 2022Raising selloff risks, the announcement followed a large transfer of roughly 23 million FTT tokens worth $530 million to Binance, which CZ confirmed was a “part” earmarked for liquidation. Yes, this is part of it. https://t.co/TnMSqRTutr— CZ Binance (@cz_binance) November 6, 2022

This also coincided with a spike in individual transactions worth more than $100,000.Number of FTT transactions worth $100,000 or more. Source: SantimentAlameda Research faces insolvency allegationsBinance’s decision took cues from allegations that Alameda Research,a crypto-focused hedge fund founded by FTX exchange’s Sam Bankman-Fried, could turn insolvent from its exposure to illiquid altcoins, including FTT.Notably, Alameda Research had $14.6 billion on its balance sheet as of June 30, with FTT being the largest holding at $5.8 billion, making up 88% of its net equity. In addition, the firm held $1.2 billion in Solana (SOL), $3.37 billion in unidentified cryptocurrency, $2 billion in “equity securities,” and other assets.On the other hand, Alameda Research reportedly had liabilities worth $8 billion, including $2.2 billion worth of loans collateralized by FTT. That, coupled with the firm’s alleged exposure to illiquid altcoins, prompted some analysts to predict its insolvency in the future. “Alameda will never be able to cash in a significant portion of FTT to pay back its debts,” wrote Mike Burgersburg, an independent market analyst, for the Dirty Bubble Media Substack, noting:”There are few buyers, and the largest buyer appears to be the very company which Alameda is most closely tied to […] the fair market value of their FTT in the event of large sales would rapidly approach $0.”Interestingly, on-chain data trackers detected wallets associated with Alameda Research sending nearly $66 million worth of stablecoin tokens to FTX addresses on Nov. 6, potentially to absorb the token’s sell-side pressure.93% of FTT tokens in circulation are owned by 10 addresses. Source: EtherscanDamage controlAlameda Research CEO Caroline Ellison countered these allegations, noting that the firm had more than $10 billion worth of assets and had returned most of its loans due to the tightening in the crypto credit space in 2022.A few notes on the balance sheet info that has been circulating recently:- that specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren’t reflected there— Caroline (@carolinecapital) November 6, 2022

Bankman-Fried called the rumors “unfounded,” assuring followers that FTX keeps audited financials.Related: FTX in talks with investors to raise $1B for further acquisitionsHowever, FTX traders appear to be taking the cautious route, reflected by a 95% drop in the exchange’s stablecoin reserves in the last two weeks. As of Nov. 7, FTX held $26.141 million worth of dollar-pegged tokens, its lowest in a year.All stablecoin reserves on the FTX exchange. Source: CryptoQuantMeanwhile, investors have been selling their FTT holdings at a loss amid the ongoing Alameda Research fiasco, per EtherScan data. For instance, a small whale reportedly took a 65% loss on its FTT investmentStill, independent market analyst Satoshi Flipper sees a potential FTT price rebound ahead as it retests a long-standing support range visible on the weekly chart below.FTT/USD weekly price chart. Source: TradingView/Satoshi Flipper”Too much FUD so I’m long here @ $22.95,” the analyst wrote.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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