Značka: TVL

A key Ethereum price metric hits a 6 month low as ETH falls below $3K

Ether (ETH) price lost the $3,600 support on Jan. 5 as minutes from the Federal Reserve’s December FOMC meeting showed that the regulator was committed to decreasing its balance sheet and increasing interest rates in 2022.Even with that looming overhead, Ether has problems of its own, more specifically, the ongoing $40 and higher average transaction fees. On Jan. 3 Vitalik Buterin said that Ethereum needs to be more lightweight in terms of blockchain data so that more people can manage and use it.The concerning part of Vitalik’s interview was the status of the Ethereum 2.0 upgrade, which is merely halfway implemented after six years. The subsequent roadmap phases include the “merge” and “surge” phases, followed by “full sharding implementation.” When implemented, they will lead to an 80% estimated completion of the network upgrade, according to Buterin.Ether price at Coinbase, USD. Source: TradingViewFor those analyzing Ether’s performance over the past 3 months, the current pricing seems appealing because the cryptocurrency is currently down 34% from its $4,870 all-time high. However, this short-sighted view disregards the 560% gain Ether had accrued up till Nov. 10, 2021.Furthermore, the network’s adjusted total value locked (TVL) has dropped by 17% since Ether’s price peak.Ethereum network total value locked, USD. Source: DefiLlamaAs shown above, the network’s TVL dropped from $166 billion to the current $138 billion. Meanwhile, competing smart contract networks like Terra saw their TVL increase from $11 billion to $18.7 billion. Fantom also increased the value locked on its smart contracts from $5 billion to $9 billion.Due to network upgrade delays, worsening macroeconomic conditions and a 3-month long price correction, professional traders are clearly becoming frustrated and anxious.Ether futures are at the edge of turning bearishQuarterly futures are usually the preferred instruments of whales and arbitrage desks due to their settlement date and the price difference from spot markets. However, the contract’s biggest advantage is the lack of a fluctuating funding rate.These fixed-month contracts usually trade at a slight premium to spot markets, indicating that sellers request more money to withhold settlement longer. Therefore, futures should trade at a 5% to 15% annualized premium in healthy markets. This situation is technically defined as “contango” and is not exclusive to crypto markets.Ether futures 3-month annualized premium. Source: LaevitasAs displayed above, Ether’s futures contracts premium has come down from 20% on Oct. 21 to a meager 5.5%, just slightly above the neutral market threshold. Although the basis indicator remains positive, it reached the lowest level in 6 months.The crash below $3,000 on Jan. 10 was enough to drain any bullish sentiment and more importantly, the Ethereum network’s high fees and delayed upgrades might have scared away some investors. Currently, data shows little sign that bears are ready to take the helm. If this was the case, the Ether futures premium would have turned negative.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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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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DAO treasuries surged 40X in 2021: DeepDAO

The total combined value of treasuries, or assets under management (AUM) for the use of decentralized autonomous organizations, increased by around 40 times between January and September of 2021. According to data from DAO stats platform DeepDAO, the total AUM for DAO treasuries listed on the platform increased from around $380 million in January to a peak of roughly $16 billion in mid-September. Looking ahead at 2022:✍️How far and how deep will DAOs go into the mainstream, and into which use cases?✍️(When) will DAO treasuries exceed $100B?Lots of interesting questions, but together we can BUIDL this! pic.twitter.com/JDEC9JBuHC— DeepDAO.io (@DeepDAO_io) December 30, 2021As of mid-December, the total AUM has decreased by 28.1% since the high water mark to sit at $11.5 billion, dropping a hefty $3.6 billion over the past 30 days alone. User participation in DAOs has surged as well throughout 2021, with the total DAO members and token hodlers tallying in at around 1.3 million in December, marking a 130x increase since the start of the year. DeepDAO ranks the DAOs for decentralized exchange (DEX) Uniswap, the general purpose BitDAO, and decentralized finance staking platform Lido Finance as the top three in terms of total treasury value at $2.9 billion, $2.4 billion and $602 million apiece. The Uniswap DAO has roughly 275,000 members that can vote on the project’s roadmap and maintain governance over the DEX. Uniswap has been the dominant DEX throughout 2021, pulling in more trading volume than all of the other DEXs combined according to Dune Analytics data. The Lido DAO governs its platform, and users are granted governance rights via the Ethereum-based LDO token. Lido Finance has also exploded in 2021, with the platform’s total value locked increasing from $12.5 million at the start of January to a whopping $11.68 billion in late December. According to data from DeFiLlama, Lido Finance currently sits as the sixth-highest ranked DeFi platform in terms of TVL.Related: DAO aims to raise $5M to resurrect Blockbuster VideoBitDAO is focused on supporting decentralized projects across any blockchain that are voted on by BIT token holders.The DAO has around 10,000 members and focuses on proposals relating to direct partnerships or swaps with projects, and expansion opportunities such as the launching of autonomous artist guilds, farming cooperatives and ecosystem funds. DAOs are becoming the digital native dream of the future of workA global movement that is amassing copious amount of capital and has turned into a powerful talent magnet providing alternative to big tech https://t.co/0LxGnRziYN— DeepDAO.io (@DeepDAO_io) December 28, 2021

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3 reasons why Solana (SOL) price could see additional upside in 2022

Solana (SOL) has become a top contender in the smart contract industry and in the past year, the network’s total value locked (TVL) grew by $660 million and stretches across more than 40 decentralized applications to hit an all-time high above $11 billion.Even with this growth, investors have reason to question whether the current $56 billion market capitalization is justified and how it compares to competing networks like Binance Smart hain (BNB), Avalanche (AVAX) and Polygon (MATIC).Avalanche, Solana, Binance Coin, and Polygon, priced in USD. Source: TradingViewBy analyzing the past six-month price performance, there’s an apparent decoupling from Terra (LUNA), Solana and Avalanche when compared to other smart contract platform competitors.There is strong institutional appetite for Solana’s ecosystemSolana’s market capitalization is more than double that of Avalanche and Terra, each of which has a $26 billion market cap. Searching Solana’s latest news on Cointelegraph yields an exciting array of institutional investments, ranging from the $314 million private token sale by Solana Labs in June, to an $18 million fundraise in September by Solana’s DEX project Orca.There’s solid evidence of a growing ecosystem judging by investor appetite. However, to understand how successful Solana’s scalability solution is, we have to evaluate its usage metrics.Looking at the number of active addresses on Solana’s DApps is a good place to start.Solana, Ethereum, Avalanche and Polygon 7-day most active dApps. Source: DappRadarEthereum’s leading DApp by active addresses is Uniswap, which has 188,200. Therefore, Raydium’s 97,600 weekly users is rather impressive, considering it was launched just 10 months ago. Meanwhile, back in Feb. 2021, Uniswap already held over $4.3 billion TVL.As for Solana’s NFT marketplace Magic Eden, its 58,400 weekly active addresses also account for more than half of Ethereum’s OpenSea, the sector’s absolute market leader in volume and users activity.Avalanche user activity is highly concentrated on the Trader Joe decentralized finance app, but its $715 million weekly volume pales in comparison to Uniswap’s $22.1 billion or Raydium’s $12.5 billion. The same can be said by Polygon, which has $573 million in trading activity at its QuickSwap DEX.Solana has the third largest futures marketSolana currently holds the third largest futures open interest, which is the most relevant metric in derivatives contracts. This indicator aggregates the total number of contracts held by market participants regardless of the recent trading activity.Solana futures aggregate open interest. Source: CoinGlassDespite the sharp drop since the Nov. 8 peak at $1.9 billion, the current $860 million futures open interest ranks Solana the third derivatives market by size. For example, Binance Coin (BNB) futures holds $520 million, followed by Terra (LUNA) with $430 million.Solana leads in TVL, users and derivatives marketsUndoubtedly, there’s an impressive amount of activity coming from Solana’s on-chain data and derivatives markets. The network’s TVL increased by 15x over the past six months and Solana’s DApps users is nearly half the amount of users on the Ethereum network.Solana seems to be quickly closing the gap in three important metrics: TVL, active users and derivatives markets. Competitors like Terra, Avalanche and Polygon seem a long way behind, which possibly justifies the market capitalization premium.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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Regulatory fears put a damper on Ethereum traders’ $5,000 target

This week Ether (ETH) price came within 2% of its all-time high, and on Dec. 2 the altcoin reached its highest price in Bitcoin (BTC) terms since May 2018. Ether hitting 0.0835 in its BTC pair represents a 229% gain for 2021, but Ether bulls might come out empty-handed from this Friday’s $680 million options expiry.ETH/BTC price at FTX. Source: TradingViewNotice the ascending channel formation initiated in mid-October, which likely reflects the network’s $177 billion total value locked in smart contracts (TVL). Moreover, Ether’s ETH 2.0 beacon chain balance reached an 8.45 million high, which is a 4.5% increase in November.Last week, four Ethereum blockchain-based metaverse projects generated more than $100 million worth of virtual land in nonfungible token (NFT) sales last week, according to reporting by Cointelegraph.However, Ether investors might be concerned about the United States Lower House meeting scheduled for Dec. 8 where the committee will focus on “Digital Assets and the Future of Finance.” Stablecoin issuers and exchange CEOs have been invited, so there’s some potential heat coming from the threat of new regulation.Regardless of the rationale behind ETH’s current 6% ETH price drop, bulls missed the opportunity to secure a $80 profit in Dec. 3 weekly options expiry.Ether options aggregate open interest for Dec. 3. Source: Coinglass.comA broader view using the call-to-put ratio shows a 19% advantage to bears as the $375 million put (sell) instruments have a larger open interest versus the $305 million call (buy) options. The 0.81 indicator is deceptive because the 49% bull run since September caused most of the bearish bets to become worthless.For example, if Ether’s price remains above $4,400 at 8:00 am UTC on Dec. 3, only $68 million worth of those put (sell) options will be available. Therefore, there is no value in the right to sell Ether at $4,400 if it is trading above that price.Bulls are unfazed after today’s 4% price dropBelow are the three most likely scenarios based on the current price action. The number of option contracts available on Dec.3 for bulls (call) and bear (put) instruments vary depending on the expiry ETH price. The imbalance favoring each side constitutes the theoretical profit:Between $4,300 and $4,500: 11,300 calls vs. 15,400 puts. The net result is balanced.Between $4,500 and $4,700: 21,700 calls vs. 7,300 puts. The net result is $65 million favoring the call (bull) instruments.Above $4,700: 26,000 calls vs. 5,000 puts. The net result is $100 million favoring the call (bull) instruments.This crude estimate considers call options being used in bullish bets and put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.For instance, a trader could have sold a call option, effectively gaining a negative exposure to Ether above a specific price. But, unfortunately, there’s no easy way to estimate this effect.Bulls need $4,700 to secure a decent-sized profitEther bulls need a 4.7% move from $4,500 to $4,700 to score a $100 million profit. On the other hand, bears simply need to keep Ether price below $4,500 to avoid any losses.As the ETH/BTC chart indicates, there’s some decoupling gaining traction, which might favor Ether holders. Despite the incentives for pushing Ether price above $4,700 ahead of Friday’s expiry, this favourable outcome for bulls seems somewhat distant.Could bears save this week’s options expiry and avoid a $100 million loss? Possibly.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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