Značka: Terra

Here’s why Binance Coin is 33% down from its all-time high

Binance Coin (BNB) holders enjoyed a 1,760% rally from $37 to $692 between January and May 2021, but as is customary in crypto, this surge was followed by a 69% correction two weeks later. From there, it’s been a bit of a rough patch to regain investors’ confidence and BNB failed to produce another all-time high in November even though the aggregate cryptocurrency market capitalization peaked at $3 trillion.Binance Coin / USDT at Binance. Source: TradingViewIn addition to being 33% down from its all-time high, BNB investors have other reasons to question whether the current $465 price is sustainable. Especially since traders were recently paying up to 3% per week to keep futures’ short positions open, betting on the downside.Traders flipped bearish on January 10Unlike regular monthly contracts, perpetual futures prices are very similar to those at regular spot exchanges. This makes the process for retail traders a lot easier because they no longer need to calculate the futures premium or manually roll over positions near expiry.The funding rate allows this magic to occur, and it is charged from longs (buyers) when they demand more leverage. However, when the situation is reversed and shorts (sellers) are over-leveraged, the funding rate goes negative and they become the ones paying the fee.BNB 8-hour USDT/USD margin futures funding rate. Source: Coinglass.comNotice how the funding rate on BNB futures was mostly flat between Dec. 15 and Jan. 10, but then quickly shifted to negative 0.13%. This rate is equivalent to 2.8% per week, a relatively high cost for shorts (sellers) to keep their positions. The movement happened while BNB tested the $410 support, its lowest price in 90 days.Excessive premium versus competing blockchainsThe reason behind the Binance short could be the excessive premium versus competing smart-contract chains. For example, BNB’s $78.2 billion market capitalization is 80% higher than Solana’s (SOL) $43.3 billion. Moreover, the premium versus Terra’s (LUNA) $28.2 billion is 178%, and 275% compared to Avalanche’s (AVAX) $20.8 billion. Other factors are in play could also be Binance Smart Chain’s total value locked (TVL) stagnated at $15 billion.Binance Chain TVL in USD. Source: DefiLlama.comFor comparison, Terra’s TVL increased from $9 billion to $19 billion in three months, while Avalanche grew from $6.5 billion to $11.6 billion in the same period. The competition has vastly surpassed Binance Chain’s applications, except for the number of active users on PancakeSwap decentralized exchange.To correctly assess whether Binance Smart Chain use has topped, one must analyze the network’s activity. Some decentralized applications (dApps) like games, social, and NFT marketplaces require little total value locked (TVL) deposited on smart contracts.Binace Smart Chain daily transactions per day. Source: bscscan.comData shows that daily transactions on BSC peaked above 15 million on Nov. 25 and are recently averaging 6.5 million per day. One should also note that Binance Chain’s main competitor Ethereum has been struggling with $40 or higher average transaction fees, which creates the perfect scenario for competing chains. Despite this opportunity to seize market share, Binance Smart Chain seems to have flatlined in terms of daily transactions and TVL, both of which are signs of growth and adoption.Binance’s lead derivatives position could be challengedThe competition for Binance’s leading position might be challenged as Coinbase, America’s largest crypto exchange, plans to begin offering derivatives trading after the acquisition of FairX. Moreover, FTX exchange raised $1.32 billion from private investors and FTX US finalized its acquisition of crypto options exchange LedgerX on Oct. 25. This solidifies its plans to offer derivatives contracts for U.S. investors.There’s a good chance that Binance will keep its leadership versus Coinbase and FTX derivatives considering that it has the first-mover advantage. Furthermore, Binance launched a $1 billion development fund on Oct. 12 to expand the capabilities of the Binance Smart Chain ecosystem.Overvalued or not, solid fundamentals are backing the third-largest cryptocurrency and while the short-term price performance is not promising, there are still plenty of future catalysts for growth. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Price analysis 1/17: BTC, ETH, BNB, ADA, SOL, XRP, LUNA, DOT, AVAX, DOGE

Bitcoin’s (BTC) volatility has been shrinking in the past few days. The standard deviation of daily Bitcoin returns for the last 30 and 60 days as calculated by the Bitcoin Volatility Index is at 2.63%, the least volatile it has been since November 2020.Generally, tight ranges are followed by strong price expansions. In 2020, the low volatility period in November was followed by a sharp rally in mid-December, which resulted in a supercycle that carried the price all the way to $64,854 on April 14, 2021.Daily cryptocurrency market performance. Source: Coin360However, there is no certainty that the volatility expansion will happen only to the upside. The price could break out in either direction. Commentator Vince Prince warned that the high leverage ratio of Bitcoin could trigger a big chunk of stop-losses if the $40,000 support breaks down.Could Bitcoin start a new up-move or will bears pull the price below the support levels, triggering a sell-off in altcoins? Let’s study the charts of the top 10 cryptocurrencies to find out.BTC/USDTBitcoin has been trading near the 20-day exponential moving average (EMA) ($44,181) for the past few days. Although bulls have not been able to push the price above this resistance, a minor positive is that they have not given up much ground.BTC/USDT daily chart. Source: TradingViewIf the price turns up from the current level or $41,725.95, the bulls will make one more attempt to clear the overhead resistance at the 20-day EMA and the horizontal resistance at $45,456.If they do that, the pair could rise to the 50-day simple moving average (SMA) ($47,680) where the bulls may again encounter stiff resistance from the bears. A break and close above this resistance could push the pair to $52,088.Conversely, if the price breaks below $41,725.95, the BTC/USDT pair could drop to the strong support at $39,600. This is an important level for the bulls to defend because if it breaks down, the selling could intensify and the pair may plummet toward $30,000.ETH/USDTEther’s (ETH) recovery off the support line of the descending channel fizzled out near the 20-day EMA ($3,439), which suggests that the sentiment remains negative and traders are selling on rallies.ETH/USDT daily chart. Source: TradingViewThe bears will now try to pull the price below $3,188. If they manage to do that, the ETH/USDT pair could drop to $2,928.83. This is an important support to watch out for because if it collapses, the decline could extend to $2,652.Contrary to this assumption, if the price turns up from the current level and breaks above the 20-day EMA, the bulls will try to push the pair above the resistance line of the channel. If that happens, the pair could rise to $4,200. BNB/USDTBinance Coin (BNB) failed to break above the resistance line of the descending channel pattern on Jan. 16. This may have sparked selling by short-term traders, pulling the price below the 20-day EMA ($488).BNB/USDT daily chart. Source: TradingViewIf bears pull the price below $466.50, the BNB/USDT pair could decline toward the support line of the channel. The flat moving averages and the RSI just below the midpoint, indicate equilibrium between the bulls and bears.If the price rebounds off $466.50, the bulls will again try to thrust the price above the channel and the 50-day SMA ($530). If they succeed, it will signal a possible change in trend. The pair could then rally to $572.ADA/USDT Cardano (ADA) broke and closed above the 50-day SMA ($1.34) on Jan. 16, indicating that bulls are attempting a comeback. The price could now reach the resistance line of the descending channel.ADA/USDT daily chart. Source: TradingViewThe moving averages are on the verge of a bullish crossover and the RSI has jumped into the positive zone, indicating that bulls have the upper hand in the short term. If buyers propel and sustain the price above the channel, it will signal a change in trend.The ADA/USDT pair could first rally to $1.87 and if this level is crossed, the next move could be to $2.47. On the other hand, if the price turns down from the resistance line, the pair could again drop to the moving averages.SOL/USDTSolana (SOL) continues to trade inside the descending channel pattern. The bulls attempted to push the price above the 20-day EMA ($154) on Jan. 13 but failed. This suggests that bears are selling on every minor rally.SOL/USDT daily chart. Source: TradingViewThe bears will now attempt to pull the price below the support at $130. If they succeed, the SOL/USDT pair could drop to the strong support at $116. This is an important level for the bulls to defend because a break below it could sink the pair to the support line of the channel.Contrary to this assumption, if the price turns up from the current level and breaks above the 20-day EMA, the pair could rise to the resistance line of the channel. A break and close above the channel will signal a possible change in trend. XRP/USDTRipple (XRP) has been trading between the 20-day EMA ($0.79) and the support at $0.75. This squeeze is soon likely to end in a range expansion.XRP/USDT daily chart. Source: TradingViewIf the price breaks below $0.75, the XRP/USDT pair could resume its downtrend and drop to $0.69 followed by a decline to $0.60. The downsloping moving averages and the RSI in the negative territory indicate advantage to bears.Contrary to this assumption, if the price turns up from $0.75 and breaks above the moving averages, it will suggest accumulation at lower levels. The pair could then start its northward march toward the stiff overhead resistance at $1.LUNA/USDTTerra’s LUNA token could not rise and sustain above the 61.8% Fibonacci retracement level at $87.88 on Jan. 15 and 16. This may have triggered profit-booking by short-term bulls.LUNA/USDT daily chart. Source: TradingViewThe price has turned down to the 20-day EMA ($80.17), which could act as a support. If the price turns up from the current level, the bulls will again try to propel and sustain the LUNA/USDT pair above $87.88. If they succeed, the pair could rally to the 78.6% Fibonacci retracement level at $94.80. Alternatively, if the price slips below both moving averages, it will suggest that traders are rushing to the exit. The pair could then drop to $68.33.Related: Propy rallies 227% as real estate NFTs become reality and PRO lists at CoinbaseDOT/USDTPolkadot (DOT) rose above the 20-day EMA ($26.90) on Jan. 12 but the bulls could not push the price above the 50-day SMA ($28.15). This may have attracted profit-booking from the short-term traders.DOT/USDT daily chart. Source: TradingViewThe bears pulled the price back below the 20-day EMA on Jan. 17. If sellers sink the price below $25.45, the DOT/USDT pair could drop to the strong support at $22.66. The 20-day EMA is flat and the RSI is just below the midpoint, indicating a balance between supply and demand. This suggests that the pair could remain range-bound between $22.66 and $32.78 for a few more days.If the price turns up from the current level and rises above the 50-day SMA, the pair could rally to $32.78. The bulls will have to clear this hurdle to signal the start of a new up-move.AVAX/USDTAvalanche (AVAX) turned down from the 20-day EMA ($95) on Jan. 16, indicating that bears continue to defend this level aggressively. If the price sustains below the uptrend line of the symmetrical triangle, the next stop could be $75.50.AVAX/USDT daily chart. Source: TradingViewThe downsloping moving averages and the RSI in the negative zone indicate that bears have the upper hand. A close and below $75.50 could complete a descending triangle pattern, which could signal the start of a new downtrend.The AVAX/USDT pair could drop to $57.02 and then to $50. This negative view will be invalidated if the price turns up from the current level and breaks above the downtrend line. The pair could then rally to $128.DOGE/USDTDogecoin’s (DOGE) failure to rise and sustain above the $0.19 overhead resistance on Jan. 15 may have attracted profit-booking from short-term traders. This has pulled the price to the 20-day EMA ($0.16).DOGE/USDT daily chart. Source: TradingViewThe flattening 20-day EMA and the RSI just below the midpoint signal a consolidation in the near term. If bears sink and sustain the price below the moving averages, the DOGE/USDT pair could drop to $0.13.Conversely, if the price rebounds off the current level, the bulls will make one more attempt to push and sustain the pair above $0.19. If they manage to do that, it will indicate the start of a new up-move. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.Market data is provided by HitBTC exchange.

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Price analysis 1/14: BTC, ETH, BNB, SOL, ADA, XRP, LUNA, DOT, AVAX, DOGE

Bitcoin (BTC) and most major altcoins are facing selling at higher levels and buying on dips, indicating the possibility of a range formation. On-chain analysis firm Whalemap said that a “reclaim of $46,500 will look like a trend reversal,” for Bitcoin as the previous accumulation phase of 90,000 BTC was at this level.Fidelity Digital Assets said in its annual report that the “massive “ Bitcoin accumulation by Bitcoin miners suggests that the “Bitcoin cycle is far from over.” The report went on to add that more sovereign nations may “acquire Bitcoin in 2022 and perhaps even see a central bank make an acquisition.” Daily cryptocurrency market performance. Source: Coin360Switzerland-based financial institution SEBA Bank CEO Guido Buehler said in a recent interview that if the right counterparties and necessary regulations are in place, asset pools at SEBA may invest in Bitcoin at the right time. Buehler portrayed a bullish picture for Bitcoin, saying a rally to $75,000 was possible. Will Bitcoin and most major altcoins remain range-bound in the short term? Let’s study the charts of the top-10 cryptocurrencies to find out.BTC/USDTBitcoin turned down from the 20-day exponential moving average ($44,681) on Jan. 13 indicating that bears continue to sell on rallies. The bears will now attempt to pull the price back to the strong support at $39,600.BTC/USDT daily chart. Source: TradingViewBoth moving averages are sloping down and the relative strength index (RSI) is in negative territory, indicating that the path of least resistance is to the downside. If sellers sink and sustain the price below $39,600, the BTC/USDT pair could extend the decline to $30,000.However, the bulls are unlikely to give up easily at $39,600. A strong rebound off the current level or from $39,600 will suggest accumulation at lower levels. The pair could then remain range-bound between $39,600 and $45,456 for a few days. A break and close above $45,456 will be the first indication that the correction may be over. The pair could then start its northward march toward $52,088.ETH/USDTEther’s (ETH) rebound off the support line of the descending channel on Jan. 10 could not even reach the 20-day EMA ($3,485) which suggests that demand dries up at higher levels.ETH/USDT daily chart. Source: TradingViewThe moving averages are sloping down and the RSI is below 40, suggesting that bears are in control. The sellers will now try to pull the price to the zone between the psychological level at $3,000 and the support line of the channel. A break and close below $2,652 will signal the start of the next leg of the downtrend.On the contrary, if the price turns up from the current level, the bulls will make one more attempt to push the ETH/USDT pair above the 20-day EMA. If they succeed, the pair could rise to the resistance line of the channel and later to the 50-day simple moving average ($3,893). The bulls will have to push and sustain the price above this level to signal that the downtrend could be over.BNB/USDTBinance Coin (BNB) is facing strong resistance at the 20-day EMA ($487) but a minor positive is that the bulls have not given up much ground. This suggests that traders are not rushing to the exit. BNB/USDT daily chart. Source: TradingViewIf the price breaks above the 20-day EMA, the bulls will try to clear the overhead hurdle at the downtrend line. If they can pull it off, the BNB/USDT pair will signal a possible change in trend. The pair could then attempt a rally to $617.Conversely, if the price turns down from the 20-day EMA or the downtrend line, it will suggest that bears are selling on rallies. That could keep the pair stuck inside the channel for a few more days. SOL/USDTSolana (SOL) reached the 20-day EMA ($157) on Jan. 13 but the bulls could not clear this overhead hurdle. This suggests that the bears have not yet given up and are selling on rallies.SOL/USDT daily chart. Source: TradingViewThe bears will now attempt to resume the downtrend by pulling the price below the support at $130. If they do that, the SOL/USDT pair could decline to the next important support at $116. The downsloping moving averages and the RSI in the negative territory indicate that the path of least resistance is to the downside.Contrary to this assumption, if the price rises above the 20-day EMA, the pair could rally to the resistance line of the channel. The bulls will have to push the pair above the channel to signal a possible change in trend.ADA/USDT Cardano (ADA) turned down from the 50-day SMA ($1.35) on Jan. 13 but the bulls did not allow the price to break below the $1.18 support. This suggests that bulls are buying on dips. ADA/USDT daily chart. Source: TradingViewThe bulls will now attempt to push and sustain the price above the 50-day SMA. If they manage to do that, the ADA/USDT pair could rally to the resistance line of the descending channel. A break and close above the channel could indicate that the downtrend has ended.Alternatively, if the price turns down from the 50-day SMA, it will suggest that bears continue to sell on rallies. The sellers will then try to sink the pair below $1.18 and pull the price to the critical support at $1.XRP/USDTRipple (XRP) turned down from the 20-day EMA ($0.80) on Jan. 13 but a minor positive is that bulls did not allow the price to dip below the support at $0.75. This indicates accumulation at lower levels.XRP/USDT daily chart. Source: TradingViewIf bulls drive the price above the moving averages, it will suggest that the bears may be losing their grip. The XRP/USDT pair could then rise to the overhead resistance at $1. If the price turns down from this level, the pair could remain range-bound between $1 and $0.75 for a few more days. A break and close above $1 will signal the start of an up-move toward $1.41.Conversely, if the price turns down from the 20-day EMA, the bears will attempt to pull the pair below the $0.75 to $0.69 support zone and resume the downtrend to $0.60.LUNA/USDTTerra’s LUNA token broke and closed above the resistance line of the channel on Jan. 12. The bears tried to pull the price below the 20-day EMA ($78.61) on Jan. 13 but failed. This indicates that bulls are defending the support aggressively.LUNA/USDT daily chart. Source: TradingViewThe buyers are currently attempting to push and sustain the price above the channel and the overhead resistance at $83.86. If they manage to do that, the LUNA/USDT pair could rally to $93.81.The 20-day EMA is trying to turn up and the RSI has risen into the positive territory, indicating that buyers are attempting a comeback.This positive view will invalidate if the price turns down from the current level and breaks below the moving averages. That could pull the price down to the support line of the channel.Related: Bitcoin dips below $42K as new forecast says breakout ‘most probable outcome’ for BTC priceDOT/USDTPolkadot (DOT) turned down from the 20-day EMA ($26.81) on Jan. 13 but the positive sign is that the bulls did not give up much ground. This indicates that bulls are viewing the dips as a buying opportunity.DOT/USDT daily chart. Source: TradingViewThe bulls are currently trying to sustain the price above the moving averages. If they do that, the DOT/USDT pair could rise to the overhead resistance at $32.78. The flat 20-day EMA and the RSI near the midpoint suggest a balance between supply and demand.If the price turns down from $32.78, the pair may extend its stay inside the range for a few more days. The next trending move may start on a break and close above the overhead resistance at $32.78 or on a break below the support at $22.66.AVAX/USDTAvalanche (AVAX) turned down from the 20-day EMA ($96) on Jan. 13, indicating that bears continue to sell on rallies. The price has dipped back to the uptrend line of the symmetrical triangle, which could act as a support.AVAX/USDT daily chart. Source: TradingViewIf the price rebounds off the current level, the buyers will again attempt to propel the price above the moving averages. If they succeed, the AVAX/USDT pair could rally to the downtrend line of the triangle.A break and close above the triangle will suggest that the correction could be over. The pair may then rise to $128.Contrary to this assumption, if the price slips below the uptrend line of the channel, the pair may retest the critical level at $75.50. If this support cracks, the pair could start a decline toward $57 and then $50.DOGE/USDTDogecoin (DOGE) broke and closed above the 20-day EMA ($0.16) on Jan. 13, which was the first indication that the selling pressure may be reducing. That was followed by another sharp move today which pushed the price above the stiff overhead resistance at $0.19.DOGE/USDT daily chart. Source: TradingViewHowever, the long wick on today’s candlestick suggests that bears continue to sell at higher levels. If the price sustains below $0.19, the DOGE/USDT pair could drop to the moving averages and extend its range-bound action for a few more days.Conversely, if the price sustains above $0.19, the bulls will make one more attempt to clear the overhead resistance zone at $0.22 to $0.24. If they manage to do that, the pair could rally toward $0.30.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.Market data is provided by HitBTC exchange.

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Price analysis 1/12: BTC, ETH, BNB, SOL, ADA, XRP, LUNA, DOT, AVAX, DOGE

Bitcoin (BTC) and most major altcoins appear to have started a relief rally. Glassnode data suggests that Bitcoin addresses with a non-zero balance have risen to about 40 million, indicating increasing adoption by retail traders.Edelman Financial Engines founder Ric Edelman said that the number of Americans owning Bitcoin could rise from 24% currently to one-third by 2022. He expects this to happen as “Bitcoin is becoming more and more mainstream. People are hearing about it everywhere — it isn’t going away.”Daily cryptocurrency market performance. Source: Coin360The investors buying Bitcoin seem to be in it for the long haul, if the outflows from major exchanges are any indication. CryptoQuant data shows outflows of 29,371 BTC on Jan. 11, the highest withdrawals since Sep. 10. Could the recovery in Bitcoin and the major altcoins sustain the higher levels? Let’s study the charts of the top-10 cryptocurrencies to find out.BTC/USDTBitcoin bounced off the $39,600 support on Jan. 10 indicating that bulls are attempting to defend the level with full force. The relief rally could reach the 20-day exponential moving average ($45,058) which is likely to act as a resistance.BTC/USDT daily chart. Source: TradingViewThe downsloping moving averages and the relative strength index (RSI) in the negative zone indicate that bears have the upper hand. If the price turns down from the 20-day EMA, the BTC/USDT pair could again retest the strong support at $39,600.If the level cracks, the pair could witness panic selling, indicating the start of the next leg of the down move.Alternatively, if bulls push and sustain the price above the 20-day EMA, the pair could rise to the 50-simple moving average ($49,031). If this level is crossed, the recovery could reach the stiff overhead resistance at $52,088. ETH/USDTEther (ETH) bounced off the support line of the descending channel on Jan. 10, suggesting that bulls are attempting to defend this level with vigor. The price could reach the overhead zone between the 20-day EMA ($3,536) and the resistance line of the channel.ETH/USDT daily chart. Source: TradingViewBoth moving averages are trending down and the RSI is in the negative zone, indicating that bears have the upper hand. If the price turns down from the overhead zone, it will suggest that sentiment remains negative and traders are selling on rallies. The bears will then attempt to pull the ETH/USDT pair to the support line of the channel. On the other hand, if bulls push the price above the overhead zone, the pair could rise to the 50-day SMA ($3,938). A break and close above this resistance will suggest a possible change in trend.BNB/USDTBinance Coin (BNB) broke below the support line of the descending channel on Jan. 10, but the bears could not achieve a close below it as seen from the long tail on the day’s candlestick.BNB/USDT daily chart. Source: TradingViewThis could have caught the aggressive bears off guard, resulting in a short squeeze on Jan. 11. Follow-up buying today has pushed the price to the 20-day EMA ($489). If bulls clear this hurdle, the BNB/USDT pair could rise to the 50-day SMA ($542).A break and close above this resistance will suggest that the downtrend could be over. The pair could then rise to $617. Conversely, if the price turns down from the 20-day EMA or the downtrend line, the bears will again try to pull the price to the support line of the channel.SOL/USDTSolana (SOL) is attempting a pullback in a downtrend. The price turned up from $130 on Jan. 10 and could now reach the 20-day EMA ($159).SOL/USDT daily chart. Source: TradingViewThe downsloping moving averages and the RSI in the negative zone suggest that bears have the upper hand. If the price turns down from the 20-day EMA, the sellers will attempt to sink the SOL/USDT pair to the strong support at $116.On the contrary, if bulls push the price above the 20-day EMA, the pair could rise to the resistance line of the channel. A break and close above the channel will signal a possible change in trend.ADA/USDT Cardano (ADA) turned up from $1.06 on Jan. 10, indicating that bulls are attempting a relief rally. The buyers have pushed the price to the 20-day EMA ($1.27) today.ADA/USDT daily chart. Source: TradingViewThe RSI is attempting to form a bullish divergence, indicating that the bearish momentum may be weakening. If bulls thrust the price above the moving averages, the ADA/USDT pair could rise to the resistance line of the descending channel.Contrary to this assumption, if the price turns down from the moving averages, it will suggest that the sentiment remains negative and traders are selling on rallies. The bears will then make one more attempt to pull the price down to the critical support at $1.XRP/USDTXRP dropped to $0.69 on Jan. 10 but the long tail on the day’s candlestick suggests that bulls bought this dip aggressively. The buyers pushed the price back above the overhead resistance at $0.75 on Jan. 11.XRP/USDT daily chart. Source: TradingViewThe XRP/USDT pair reached the 20-day EMA ($0.80) today but the long wick on the candlestick indicates that bears continue to defend this level. If the price turns down from the current level, the bears will again try to pull the XRP/USDT pair below $0.69. If they manage to do that, the pair could plummet to the Dec. 4 intraday low at $0.60.Conversely, if bulls push the price above the 20-day EMA, the pair could rise to the 50-day SMA ($0.86). A break and close above this resistance could clear the path for a possible up-move to $1.LUNA/USDTTerra’s LUNA token bounced off the support line of the channel on Jan. 10 and broke above the 50-day SMA ($71.99) on Jan. 11. Follow-up buying has pushed the price to the 20-day EMA ($78.12) today.LUNA/USDT daily chart. Source: TradingViewThe bulls will now try to propel the price above the resistance line of the descending channel. A close above the channel will be the first sign that the downtrend could be over. The LUNA/USDT pair will then attempt a rally to $93.81.On the contrary, if the price turns down from the resistance line, the pair could remain inside the channel for a few more days. A break and close below the support line of the channel could indicate the start of a deeper correction.Related: Bitcoin shoots to $44,000 as US inflation hits 7.8% in DecemberDOT/USDTPolkadot (DOT) bounced off the $22.66 support on Jan. 10, indicating that the bulls are defending the support. The rebound has reached the 20-day EMA ($26.85) which could act as a resistance.DOT/USDT daily chart. Source: TradingViewIf the price turns down from the 20-day EMA, the bears will again try to sink and sustain the DOT/USDT pair below the $22.66 support. If they pull it off, the pair could resume its downtrend. The next level to watch on the downside is $16.81.Conversely, if bulls drive the price above the moving averages, the pair could rally to the resistance of the range at $32.78. The buyers will have to push and sustain the price above this level to signal the start of a new up-move.AVAX/USDTAlthough Avalanche (AVAX) closed below the uptrend line of the symmetrical triangle on Jan. 8 and again on Jan. 10, the bears could not sustain the lower levels. This suggests that the bulls bought the dips.AVAX/USDT daily chart. Source: TradingViewThe bulls pushed the price back into the triangle on Jan. 11 and have followed that with another up-move today. The relief rally is likely to face stiff resistance at the moving averages.If the price turns down from this overhead resistance, the bears will make one more attempt to sink and sustain the AVAX/USDT pair below the triangle and the critical support at $75.50. Conversely, if bulls drive and sustain the price above the moving averages, the bulls will sense an opportunity and try to push the pair above the downtrend line of the triangle. DOGE/USDTThe bears attempted to pull Dogecoin (DOGE) below the Dec. 4 intraday low at $0.13 but the bulls thwarted their attempt on Jan. 10. The buyers pushed the price back above $0.15 on Jan. 11 but hit a roadblock at the 20-day EMA ($0.16). DOGE/USDT daily chart. Source: TradingViewThe downsloping moving averages and the RSI in the negative territory suggest that bears have the upper hand. If the price turns down from the 20-day EMA, the bears will attempt to pull the price below $0.13. If they succeed, the DOGE/USDT pair could slide to the psychological support at $0.10. This negative view will invalidate if bulls drive and sustain the price above the moving averages. That could indicate a possible change in trend. The bullish momentum may pick up on a break and close above $0.19.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.Market data is provided by HitBTC exchange.

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Price analysis 1/10: BTC, ETH, BNB, SOL, ADA, XRP, LUNA, DOT, AVAX, DOGE

Bitcoin (BTC) dipped below the $40,000 level on Jan. 10 for the first time since September 2021. The crypto markets were not alone as the U.S. equity markets also witnessed strong selling when traders chose to reduce risk and piled into the 10-year Treasury yield which surged to 1.8% from 1.51% at the end of 2021.On Jan. 9, Goldman Sachs chief economist, Jan Hatzius, said that the U.S. Federal Reserve may increase rates by four quarter-percentage points in 2022. Analyst Alex Krüeger also warned that crypto markets may not be able to ignore the Fed if it “decides to go all out wielding a deflationary machete.” He was not alone as ex-BitMEX CEO Arthur Hayes and Pentoshi also projected a bearish picture.Daily cryptocurrency market performance. Source: Coin360Quant analyst Benjamin Cowen gave some hopes to the bulls when he said that levels of “extreme fear” on the Crypto Fear & Greed Index occurred only four times since 2018 and those were followed by bullish reversals resulting in strong returns between 17% to 1,585% in Bitcoin.Could Bitcoin and major altcoins start a sustained recovery or will the support levels give way? Let’s study the charts of the top-10 cryptocurrencies to find out.BTC/USDTBitcoin plunged to $39,650 today when buyers stepped in and bought aggressively as seen from the long tail on the candlestick. If buyers sustain the rebound, the price could attempt to move toward the 20-day exponential moving average ($45,369).BTC/USDT daily chart. Source: TradingViewBoth moving averages are sloping down and the relative strength index (RSI) is in the oversold zone suggesting that bears are in command. If the price turns down from the 20-day EMA, the BTC/USDT pair could again drop to the strong support at $39,600 and remain range-bound between these two levels for a few days.If the support at $39,600 gives way, the selling could intensify further and the pair could start its march toward $30,000.Conversely, if bulls drive the price above the 20-day EMA, the pair could rally to the stiff overhead resistance at $52,088. A break and close above this resistance could signal a possible change in trend.ETH/USDTThe bulls have been defending the support line of the descending channel for the past few days but they have not been able to achieve a strong rebound off it. This suggests that demand dries up at higher levels. Ether (ETH) attempted a recovery on Jan. 9, but it could not rise above the breakdown level at $3,250.ETH/USDT daily chart. Source: TradingViewThe price has turned down again today and the bears are attempting to pull the ETH/USDT pair below the descending channel. If they manage to do that, the selling could intensify and the pair could drop to the next strong support at $2,652.This is an important support for the bulls to defend because if it cracks, the pair could plummet toward the psychological support at $2,000.Conversely, if the price rebounds off the current level, the bulls will make one more attempt to clear the overhead hurdle at $3,250 and push the pair to the resistance line of the channel.BNB/USDTBinance Coin (BNB) slipped below the support line of the descending channel on Jan. 8 but the long tail on the day’s candlestick showed buying at lower levels. The bulls pushed the price back into the channel on Jan. 9 but failed to sustain the price above the breakdown level at $435.30.BNB/USDT daily chart. Source: TradingViewThe price has turned down once again today and the bears are attempting to sustain the BNB/USDT pair below the channel. If they succeed, the pair could decline to $392.20. This is an important support for the bulls to defend because if it cracks, the next stop could be $330.The RSI has dropped into the oversold territory, indicating that the selling may be overdone in the short term. This could result in a minor recovery or a range-bound action in the next few days. A break and close above the 20-day EMA ($492) will be the first sign that the sellers may be losing their grip.SOL/USDTSolana (SOL) attempted a recovery on Jan. 8 but the bulls could not push the price back above $150. This suggests that bears are selling on relief rallies.SOL/USDT daily chart. Source: TradingViewIf bears sustain the price below $133, the SOL/USDT pair could drop to the strong support at $116. Both moving averages are sloping down and the RSI is close to the oversold zone, indicating that bears are in control.If the $116 level cracks, the pair could decline to the support line of the channel. If this support also breaks down, the selling may intensify and the pair could plummet to $82. The first sign of strength will be a break and close above the 20-day EMA ($162).ADA/USDT Cardano (ADA) broke and closed below the $1.18 support on Jan. 9 indicating the resumption of the downtrend. The next support on the downside is the critical level at $1.ADA/USDT daily chart. Source: TradingViewThe bulls are likely to defend this level aggressively as it has not been breached for the past several months. If the price rebounds off $1, the pair could rise to the 50-day SMA ($1.39) where the bears are expected to mount a strong resistance.If the price turns down from the moving averages, the bears will make one more attempt to pull the ADA/USDT pair below $1. If they succeed, the selling could pick up momentum and the pair could drop to the support line of the channel.XRP/USDTXRP closed below the $0.75 support on Jan. 8 but rose back above the level on Jan. 9. This suggests that bulls were attempting to trap the aggressive bears, but the recovery attempt was short-lived.XRP/USDT daily chart. Source: TradingViewThe price has turned back below $0.75 today, indicating that bears are selling on every minor rally. The downsloping moving averages and the RSI near the oversold zone indicate that bears are in command.If the price sustains below $0.75, the XRP/USDT pair could drop to the Dec. 4 intraday low at $0.60. The bulls will have to push and sustain the price above the 50-day SMA ($0.87) to signal the start of a stronger recovery.LUNA/USDTTerra’s LUNA token broke below the descending channel pattern on Dec. 8 but the long tail on the day’s candlestick suggests buying at lower levels. The bulls pushed the price back into the channel and above the 50-day SMA ($70) on Dec. 9.LUNA/USDT daily chart. Source: TradingViewThe relief rally hit a barrier at $75.67 and the price has turned down below the 50-day SMA today. This suggests that bears continue to sell on rallies. The 20-day EMA ($78) is sloping down and the RSI is near 43, indicating that bears are in control.If bears pull the price below $62.46, the selling could intensify and the LUNA/USDT pair could drop to $51.84. This bearish view will be negated if the price turns up from the support line of the channel and breaks above the resistance line.Related: Billionaire investor Bill Miller puts 50% of net worth in BitcoinDOT/USDTPolkadot (DOT) attempted a rebound off the strong support at $22.66 but the bulls have not been able to push the price to the 20-day EMA ($26.95). This suggests that demand dries up at higher levels. DOT/USDT daily chart. Source: TradingViewThe downsloping moving averages and the RSI in the negative zone suggest that bears have the upper hand. If bears sink and sustain the price below $22.66, the DOT/USDT pair could start its downward journey to $16.81.Alternatively, if the price rebounds off the current level, the bulls will again try to push the pair above the 20-day EMA. If they manage to do that, the pair could rise to the 50-day SMA ($29.66) and then to the overhead resistance at $32.78.AVAX/USDTAvalanche (AVAX) slipped below the uptrend line of the symmetrical triangle on Jan. 8 but the bears could not build upon this advantage. The bulls pushed the price back into the triangle on Jan. 9.AVAX/USDT daily chart. Source: TradingViewHowever, the recovery was short-lived as the bears have pulled the price back below the triangle. This indicates that the sentiment remains negative and traders are selling on every minor rally.There is a strong support at $75.50 but if it collapses, the AVAX/USDT pair could tumble to $57.02 and then to $50.On the other hand, if the price rebounds off the current level or the $75.50 support and sustains inside the triangle, it will suggest accumulation at lower levels. The pair could then rise to $98 where bears may mount a strong resistance.A break and close above the moving averages could open the doors for a rally to the downtrend line.DOGE/USDTDogecoin (DOGE) has broken below the critical support at $0.15, signaling the start of the next leg of the downtrend. DOGE/USDT daily chart. Source: TradingViewThe downsloping moving averages and the RSI in the oversold territory suggest that the path of least resistance is to the downside. If bears sustain the price below $0.15, the DOGE/USDT pair could drop to the Dec. 4 intraday low at $0.13.Contrary to this assumption, if the price rebounds off the current level, the bulls will try to push the pair above the moving averages. If they do that, it will bring the $0.19 to $0.15 range into play and the pair could rise to $0.19.The bulls will have to push and sustain the price above this resistance to indicate the start of a new up-move.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.Market data is provided by HitBTC exchange.

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These 3 cryptocurrencies are taking an even bigger hit during Bitcoin's price slump

The cost to purchase one Bitcoin (BTC) has dropped almost 10% in the last seven days and has been eyeing extended declines as it drops below $40,000, its interim psychological support, on Jan. 10.BTC/USD weekly price chart. Source: TradingViewNonetheless, the losses suffered by Bitcoin still appear lesser than some of its top crypto rivals’ performances. For instance, Cardano (ADA), the seventh-largest cryptocurrency by market valuation, has dropped by nearly 11% to around $1.15 in the last seven days.Similarly, XRP, the eighth-largest by market capitalization, has dipped by around 10% to nearly $0.75 in the same period.Meanwhile, some cryptocurrencies listed among the top 50 digital assets have experienced bigger losses between 15% and 30% in the last week. They include Ethereum’s native token Ether (ETH), which has plunged over 16%, and its blockchain rival Terra, whose token LUNA has declined by nearly 20.50%.That said, listed below are three tokens among the top-50 cryptocurrencies that have performed worse than Bitcoin on a seven-day adjusted timeframe.Axie Infinity (-27.50%)Sitting atop more than 12,000% year-over-year profits, Axie Infinity (AXS) turned out to be one of the best places for traders to secure their profits.AXS price plunged nearly 27.5% to around $70 in the last seven days, thus becoming the worst performer among the large-cap coins. Meanwhile, against Bitcoin, the token slipped by almost 17% to 0.0017 BTC in the same period.ASX/USD vs. AXS/BTC daily price chart. Source: TradingViewNevertheless, AXS price may rebound in the coming days as one of the market’s key momentum indicators, the relative strength index (RSI), alerts about the token’s “oversold” status. In detail, the AXS’s daily RSI has slipped below 30, which traditional chartists interpret as a buy signal.More bullish cues for the Axie Infinity token have been coming from its downside target area between $64.50 and $50, as shown in the chart below. Notably, the $64.50-level served as a support to the AXS price during the August-September trading session in 2021.AXS/USD daily price chart featuring its potential downside targets. Source: TradingViewSimilarly, the levels around $50 prompted traders to accumulate AXS en masse on four occasions since Sept. 7 selloff.Conversely, breaking below the downside target range may end up pushing below $40, another support level from August 2021.AAVE (-25%)Unlike Axie Infinity, Aave (AAVE) native token of the same name had been sitting atop dwarfed year-over-year profits — nearly 60% since Jan. 10, 2021. Nonetheless, it has still become one of the worst-performing cryptocurrencies entering 2022.AAVE price dropped by a little over 24% to $200 in the last seven days. Meanwhile, the token’s performance against Bitcoin came out to be nearly -15%, reflecting that traders remained unconvinced about a bullish rebound in the Aave market.AAVE/USD vs. AAVE/BTC daily price chart. Source: TradingViewFor instance, AAVE’s daily RSI has been trending lower since Dec. 27 and now sits near 39. It now eyes an extended correction to reach its oversold levels below 30, meaning there is still room for the AAVE price to go further down than its current rates.The sell signal appears also as AAVE retests its two-month-old ascending trendline support, as shown in the chart below. AAVE has rebounded at least four times from the said rising level since Dec. 4. Therefore, if the coin breaks below it, its likelihood of correcting toward $165, another support level, would be higher.AAVE/USD daily price chart featuring its interim support and resistance targets. Source: TradingViewConversely, a rebound from the ascending trendline support may have AAVE rally toward the $250-275 trading range, which has a recent history of acting as both resistance and support. Since December 2021, the area has been able to cap AAVE’s upside attempts successfullyIOTA (-24%)Based on their seven-day adjusted timeframe performance, IOTA’s losses are marginally lesser than AAVE’s. But given the token has been sitting atop nearly 150% year-over-year profits, it appears like a good sell for traders looking to offset their losses elsewhere during the recent crypto market decline.Notably, IOTA’s price dipped a little over 24% to $1.00 in the past seven days. Against Bitcoin, IOTA is down about 14% in the same period.IOTA/USD vs. IOTA/BTC weekly price chart. Source: TradingViewRelated: Top 5 cryptocurrencies to watch in 2022: BTC, ETH, BNB, AVAX, MATICA bounce is now likely, however, as the token’s daily RSI neared oversold levels, while it dropped to a trading range of $0.93-$1.00, which has a recent history of attracting buyers.IOTA/USD daily price chart featuring its interim support and resistance targets. Source: TradingViewAs a result, if IOTA drops below the $0.93-$1.00 range, its likelihood of extending its price decline towards $0.71 — a support level from the May-June 2021 trading session — looks high. Conversely, a rebound action from the area could have the IOTA price eye $1.21 as its interim bull target.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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Crypto regulation concerns make decentralized stablecoins attractive to DeFi investors

Stablecoins have emerged as a foundational part of the cryptocurrency ecosystem over the past couple of years due to their ability to provide crypto traders with an offramp during times of volatility and their widespread integration with decentralized finance (DeFi). These are necessary for the health of the ecosystem as a whole. Currently, Tether (USDT) and USD Coin (USDC) are the dominant stablecoins in the market, but their centralized nature and the persistent threat of stablecoin regulation have prompted many in the crypto community to shun them and search for decentralized alternatives. Top 9 stablecoins by reported market capitalization. Source: MessariBinance USD (BUSD) is the third-ranked stablecoin and is controlled by the Binance cryptocurrency exchange. DAI, the top ranked decentralized stablecoin, has 38% of its supply backed by USDC which, again, raises questions about its “decentralization.”Investors’ pivot toward decentralized stablecoins can be noted by the rising market capitalizations and the number of DeFi platforms integrating TerraUSD (UST), FRAX (FRAX) and Magic Internet Money (MIM).Here’s a look at some of the factors backing the growth of each stablecoin.TerraUSDTerraUSD (UST) is an interest-bearing algorithmic stablecoin that is part of the Terra (LUNA) ecosystem and is designed to remain value-pegged with the United States dollar. In order to mint new UST, users are required to interact with Anchor Protocol and either burn an equivalent value of the network’s native LUNA token or lock up an equivalent amount of Ether (ETH) as collateral. The addition of Ether as a form of collateral really helped kick things into high gear for UST because it allowed for some of the value held in Ether to migrate into the Terra ecosystem and this resulted in an increase to UST circulating supply. 1/ bETH is now live on the Anchor web app!You can now borrow $UST against bETH, a wrapped version of the stETH staking derivative for ETH 2.0. We teamed up with @LidoFinance to provide a guide to using bETH on Anchor. https://t.co/T5KkGNNAYE— Anchor Protocol (@anchor_protocol) August 13, 2021As a result of the growth of UST, the Terra network recently surpassed Binance Smart Chain in terms of total value locked (TVL) on the protocol, which now sits at $17.43 billion, according to data from DefiLlama. Terra has also been adopted by the Curve stablecoin ecosystem which further helped its distribution across numerous DeFi protocols. This also gives UST holders another way to earn a yield alongside the 19.5% annual percentage yield (APY) offered to users who stake their UST on Anchor Protocol. FRAXFRAX (FRAX) is a first-of-its-kind fractional-algorithmic stablecoin developed by Frax Protocol. It is partially backed by collateral and the remaining portion is stabilized algorithmically.The real story behind the growth of FRAX starts with its adoption by the DeFi community within multiple well-known projects and decentralized autonomous organizations (DAOs) voting to add support for the stablecoin within their ecosystems and treasuries. FRAX was adopted early on by the OlympusDAO rebase protocol as a form of collateral that could be bonded to obtain the platform’s native OHM token. It also became the stablecoin of choice within the recently launched TempleDAO protocol.On Dec. 22, 2021, FRAX was added to Convex Finance (CVX) and was immediately thrust into the ongoing Curve Wars where a handful of major DeFi protocols are battling to accumulate CVX and Curve (CRV) to gain voting power over the Curve network and increase their stablecoin yield.The @fraxfinance Convex soft-launch has begun.https://t.co/oZ9WKZxNXRDeposit + convert $FXS to $cvxFXS— Convex Finance (@ConvexFinance) December 22, 2021

This week, the Curve Wars received a new participant after Tokemak members voted to add FRAX and Frax Share (FXS) to its Token Reactor, vowing to “bring the fight to a massive new scale.” Magic Internet Money Magic Internet Money (MIM) is a collateral-backed stablecoin issued by a popular DeFi protocol called Abracadabra.Money. What differentiates this coin is that it is “summoned” into existence when users deposit one 16 supported cryptocurrencies in “cauldrons” that support MIM.There are limitations placed on the amount that can be borrowed from the assets supported on Abracadabra and this is part of the protocol’s effort to avoid the problems faced by MakerDAO (DAI). Namely, the presence of too many centralized stablecoins and the history of catastrophic liquidations during market volatility. Some of the popular tokens available to pledge as collateral to mint MIM include wrapped Ether (wETH), Ether, Shiba Inu (SHIB), FTX Token (FTT) and Fantom (FTM).‍♂️!Our first zero-interest lending market is here!1️⃣ Provide $WETH as collateral and mint $MIM or leverage your $ETH!- Interest 0%- Liquidation Fee 4%- LTV 90%- Borrow Fee 0.5%What are you waiting for anon? Mint now!https://t.co/N3r54iPo7n— ‍♂️ (@MIM_Spell) December 31, 2021

MIM has also been integrated into the pools on Curve Finance, further highlighting the important role that Curve plays for stablecoins within the DeFi ecosystem and underscoring the incentives for participating in the Curve Wars. MIM’s cross-platform and centralized exchange integration, including its long list of collateral options, have boosted its circulating supply to $1.933 billion, making it the sixth-ranked stablecoin in terms of market capitalization.While the amount of value held in these decentralized stablecoins is only a fraction of that held in USDT and USDC, they are likely to continue to see their market share increase in the months ahead as proponents of decentralization choose them over their centralized counterparts. Want more information about trading and investing in crypto markets?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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Here’s how Terra traders use arbitrage to profit from LUNA and bLUNA

The end of the year is normally a time to wind down and prepare for the holiday season, but the last few weeks of 2021 saw a crypto market that showed no signs of resting. One of the headline-grabbing stories related to Terra reaching an all-time high in terms of the total value locked (TVL), and the project surpassed Binance Smart Chain (BSC) as the second-largest decentralized finance blockchain after Ethereum. After reaching the $20-billion TVL mark on Dec. 24, Terra’s TVL has come down to around $19.3 billion at the time of writing according to data from Defi Llama, but this is in no way, shape or form a bearish signal.Top 5 total value locked on the top 5 blockchains. Source: Defi LlamaCurrently, Terra has only 14 protocols built on the chain, compared to the 257 protocols on BSC and the 377 that are on the Ethereum network. Terra’s protocols have managed to attract liquidity very successfully, and the recent Astroport protocol launch coincides nicely with the swift rally of Terra’s native governance token, LUNA, to a new all-time high on Dec. 26, 2021. Looking at the TVL in United States dollars versus LUNA, the former has experienced exponential growth since September 2021 while the latter remains quite flat during the same period. It is not hard to see that the contributing factor to the recent increase in the U.S. dollar TVL is the increase in LUNA’s price itself.Terra TVL in USD (left) vs. in LUNA (right). Source: Defi LlamaWhile price increases in the governance token often show investors’ confidence in the chain and the protocols, it seems to also produce more lucrative arbitrage opportunities. Let’s take a closer look at some of the strategies used to arbitrage between LUNA and its bonded asset bLUNA.LUNA price vs. Luna/bLuna premium in %. Source: Flipside CryptoWhy are there spreads across Terra’s markets?LUNA is the governance and staking token of the Terra blockchain, whereas bLUNA is the token that represents the staked LUNA and its corresponding block rewards. Since bLUNA is fungible and transferable just like LUNA, it’s also traded on Terra’s decentralized exchange. Like other currency or token pairs traded on exchanges, the LUNA/bLUNA pair traded on different decentralized exchanges (DEX) such as TerraSwap, Loop Markets or Astroport may have different prices due to price inefficiency across different platforms. Arbitrageurs will profit from buying at a lower price from one protocol and selling at a higher price on another, helping the platforms resolve price inefficiencies and eventually reach a fair price across all exchanges. Besides the common reason for price inefficiency, there are other factors specifically related to the nature of bLUNA that make the LUNA/bLUNA price different across protocols.bLUNA is priced higher than LUNA on Anchor Protocol. This is because bLUNA, once bonded and minted on Anchor, can only be burned and exchanged back to LUNA after 21 days (plus three days processing time) unless it’s an instant burn. Since bLUNA not only represents the value of the staked LUNA but also the block rewards from staking during the 21-day lock-up period, its value is always higher than LUNA. As shown in the graph below, bLUNA’s price per LUNA is slightly below 1 on Anchor most of the time, with three distinct outliers showing bLUNA happened to be more valuable at the rate of 0.97 bLUNA per LUNA.Anchor bLUNA hourly price per LUNA is below 1. Source: Flipside CryptoAnchor bLUNA hourly price per LUNA is always below 1. Source: Flipside CryptoLUNA is priced higher on DEXs than bLUNA most of the time possibly due to: (1) More users selling bLUNA than buying on DEXs (hence bLUNA is worth less) because burning bLUNA on Anchor Protocol takes 21 days if it’s not an instant burn. So, if users want to get LUNA back instantaneously, they need to go to a DEX to sell bLUNA. (For an instant bLUNA burn on Anchor, the rate is the same as TerraSwap.) (2) Users don’t normally want bAssets as much as bLUNA unless they need to use them as collateral on Anchor. Currently, Anchor provides bonding functionality to exchange LUNA for bLUNA at a very close to but slightly lower than 1 ratio — i.e., investors get slightly less than 1 bLUNA for 1 LUNA. Even though the exchange rate on DEXs is better (traders get more than 1 bLUNA for 1 LUNA on DEXs), users tend to seek the most convenient way, which is to use the Anchor Bond, to get their bLUNA so they don’t have to switch between different protocols.How to capitalize on Terra’s arbitrage opportunitiesBased on the price difference explanations presented earlier, there are two main ways to arbitrage LUNA and bLUNA.TerraSwap, Loop Markets and Astroport all provide swaps for LUNA/bLUNA. Small price differences often exist across these DEXs, which create arbitrage opportunities for traders to buy the pair at a lower rate on one DEX and sell at a higher rate on another. LUNA/bLUNA price comparison across DEXs. Source: Flipside CryptoThe chart below shows the LUNA/bLUNA daily average price observed from swaps from different platforms during December 2021. The ratio is the actual amount of bLUNA received (after a deduction of fees and slippage) divided by the amount of LUNA offered for the swap. As explained in the previous section, one LUNA swaps for more than one bLUNA on DEXs due to more demand for LUNA on DEXs.The graph below annualizes the daily arbitrage return between either two of the three DEXs. The best opportunity existed on Dec. 15 between TerraSwap and Loop, with an annual percentage yield (APY) of almost 600%.Arbitrage LUNA/bLUNA pair among different DEXs. Source: Flipside CryptoArbitrage between DEXs and AnchorInvestors could swap LUNA for bLUNA on one of the DEXs that offers the highest bLUNA per LUNA, burn bLUNA on Anchor, and wait 21 days (plus three days) to get more LUNA back. Note that burn on Anchor has to be a normal “slow” burn; instant burns will not work because the exchange rate is the same as TerraSwap.Based on the 24-day (21 + three days processing from the Anchor burn) annualized return, the graph below shows the APY from arbitraging between different DEXs and Anchor. Arbitrage between DEXs and Anchor APY vs. LUNA staking APY. Source: Flipside CryptoLido’s 8% APY from LUNA liquid staking is also added as a risk-free benchmark return comparison. During the month of December, the highest APY reached 80% on Dec. 27 and, since then, has decreased significantly, dropping below the risk-free return in the new year. This could be because the increased popularity of Terra and more participation in different Terra protocols have helped rationalize prices across platforms, reducing price inefficiencies and arbitrage opportunities and consequently creating a fairer price.Savvy investors are always watching for the next opportunityAs shown in the December 2021 historically observed swap data, LUNA/bLUNA arbitrage opportunities exist across different protocols on Terra. Traders can choose the riskier way to arbitrage among different DEX platforms such as TerraSwap, Astroport and Loop Markets, or they can choose the safer way to arbitrage between these DEX platforms and Anchor, given they are willing to hold bLUNA for 24 days. The annualized return from the DEX and Anchor arbitrage strategy consistently performed better than the risk-free Lido liquid staking in December 2021 until only recently when the return almost evaporated on Jan. 1, 2022. This was possibly due to more participation and price rationalization in the Terra protocols. The arbitrage opportunities will likely reappear again in the future due to volatilities in trade volumes and participation or from the launch of new DEX protocols.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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