Aave

Top 5 cryptocurrencies to watch this week: BTC, UNI, ICP, AAVE, QNT

Bitcoin is trending toward a retest of its lower support and if this happens, UNI, ICP, AAVE and QNT could breakout to the upside.

Bitcoin (BTC) has given up ground over the weekend as investors remain cautious about the United States consumer inflation data to be released on July 13. Analysts anticipate June’s consumer price index to be higher than May’s 8.6% level.

Due to the macro uncertainty, investors are not confident that Bitcoin’s correction is over. However, Fidelity Investments’ director of global macro, Jurrien Timmer, said that Bitcoin is back at the 2013 bull market levels “if the price per millions of non-zero addresses“ is considered for valuing it. That implies that “Bitcoin is cheap.”

*Crypto market data daily view. Source:* *Coin360*

The readings on the Reserve Risk indicator, which shows long-term holder sentiment, plunged to a new all-time low in July. Commentator Murad said this meant that “we are in the high timeframe bottoming zone” or the indicator may be broken.

Could Bitcoin turn around and start a new rally or will it continue lower? Are altcoins showing signs of bottoming out? Let’s study the charts of the top-5 cryptocurrencies to find out.

BTC/USDT

Bitcoin broke above the symmetrical triangle pattern on July 7 but the bulls could not sustain the momentum at higher levels. This suggests that the bears have not surrendered and are attempting to defend the overhead resistance at $23,363.

The bears are attempting to sustain the price below the 20-day exponential moving average (EMA) of $21,230. If they succeed, the BTC/Tether (USDT) pair could decline to the support line of the triangle.

If the price rebounds off this level, it will suggest that bulls continue to buy at lower levels. The bulls will then again strive to push the price above the overhead resistance at $23,363 and the 50-day simple moving average (SMA) of $24,692. If they succeed, it could signal the start of a new up-move.

On the contrary, if the price breaks below the support line, the bears will endeavor to pull the pair below $17,622.

*BTC/USDT 4-hour chart. Source: TradingView*

The bears pulled the price below the 20-EMA but a minor positive is that the bulls are trying to defend the 50-SMA. This indicates accumulation at lower levels. If bulls thrust the price back above the 20-EMA, the pair could rise toward $22,500.

Alternatively, if the price turns down from the 20-EMA, the likelihood of a break below the 50-SMA increases. If that happens, the pair could extend its decline to $19,300. The flattening 20-EMA and the relative strength index (RSI) just below the midpoint do not give a clear advantage to the bulls or bears.

UNI/USDT

Uniswap (UNI) broke above the overhead resistance at $6.08, which completed a bullish inverse head and shoulders pattern. The bears are attempting to pull the price back below the breakout level.

If they manage to do that, it will suggest that the rise above $6.08 may have been a bull trap. That could pull the price toward the 20-day EMA of $5.39. If the price rebounds off this level with strength, it could increase the possibility of a break above $6.62. The pair could then pick up momentum and rally toward the pattern target of $8.78.

Conversely, if the price breaks below the moving averages, it will suggest that the bullish momentum has weakened. The UNI/USDT pair could then remain range-bound for a few days.

*UNI/USDT 4-hour chart. Source: TradingView*

The bears pulled the price below the breakout level of $6.08 but the strong rebound off the 20-EMA shows aggressive buying at lower levels. The buyers will make another attempt to push the price above $6.62 and resume the uptrend.

Contrary to this assumption, if the price turns down and breaks below the 20-EMA, it will suggest that the bears are trying to trap the aggressive bulls. The pair could then drop to the 50-SMA. If this level also cracks, the decline could extend to $4.60.

ICP/USDT

Internet Computer (ICP) rose above the 50-day SMA of $6.48 on July 8, indicating that the bulls are attempting to form a bottom. The moving averages are close to completing a bullish crossover and the RSI is in the positive zone, suggesting that the bears may be losing their grip.

If the price rebounds off the moving averages, it will suggest that the bulls have flipped the level into support. That could open the doors for a possible rally to the psychological level of $10, where the bears may again pose a strong challenge.

Alternatively, if the price turns down and breaks below the moving averages, it will indicate that the bears continue to sell aggressively at higher levels. The ICP/USDT pair could then drop to $5.00, which is likely to act as a strong support.

*ICP/USDT 4-hour chart. Source: TradingView*

The long wicks on several candlesticks above $7.00 indicate that bears have not yet given up and they continue to sell on rallies. The bears pulled the price back below the 20-EMA but a minor positive is that the bulls aggressively purchased the dip. This suggests demand at lower levels.

The buyers are trying to push the price back above the 20-EMA. If they succeed, the pair could rise to $6.70 and later to $7.00.

Contrary to this assumption, if the price turns down from the overhead resistance and slips below $6.30, the pair could slide to the 50-SMA.

AAVE/USDT

Aave’s (AAVE) recovery rose above the 50-day SMA of $79 on July 9, indicating a likely change in trend. The 20-day EMA of $68 has started to turn up and the RSI is in the positive zone, indicating that bulls are attempting to gain the upper hand.

If bulls sustain the price above the 50-day SMA, the AAVE/USDT pair could pick up momentum and rally toward the psychological resistance at $100. This level may act as a strong hurdle, but if bulls arrest the next decline above the 50-day SMA, it will suggest that buyers are back in the game. The pair could then attempt a rally to $120.

Contrary to this assumption, if the price sustains below the 50-day SMA, it will suggest that bears continue to sell on rallies. The bears will then strive to sink the pair below the 20-day EMA and trap the aggressive bulls.

*AAVE/USDT 4-hour chart. Source: TradingView*

The 4-hour chart shows that the pair broke above $78 and completed a bullish ascending triangle pattern. The bears pulled the price back below the breakout level, but a positive sign is that the buyers are defending the 20-EMA.

If the price rises and breaks above $83, the pair could pick up momentum and rally to $93. The pattern target of this bullish setup is $110.

The bears will have to sink the price back below the 20-EMA to invalidate this positive view. That could open the doors for a possible drop to the 50-SMA.

QNT/USDT

Quant (QNT) has risen sharply in the past few days, indicating that a bottom may be in place. The momentum picked up after buyers pushed the price above $67.

The moving averages have completed a bullish crossover and the RSI is in the positive zone, signaling a possible trend change. The up-move is facing a strong hurdle near $90.

If the price turns down from this resistance but rebounds off the 20-day EMA of $64, it will suggest that the sentiment has turned positive and traders are buying on dips. That could enhance the prospects of a rally to the psychological level of $100.

This positive view could invalidate in the short term if the price continues lower and breaks back below $67.

*QNT/USDT 4-hour chart. Source: TradingView*

The sellers are attempting to stall the up-move at $90 but the upsloping moving averages and the RSI in the positive territory indicate that bulls have the upper hand. If the price rebounds off the 20-EMA, the buyers could again push the price toward $90. A break and close above this resistance could signal the resumption of the short-term uptrend.

This positive view could be invalidated in the near term if the price turns down and breaks below the 20-EMA. The pair could then decline to the 50-SMA.

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.

Finance Redefined: UK government explores DeFi with a focus on staking and lending

Majority of the top-100 DeFi tokens broke out of three week long bearish phase and registered double digit gains over the past week.

Welcome to Finance Redefined, your weekly dose of key decentralized finance (DeFi) insights, a newsletter crafted to bring you some of the major developments over the last week.

This past week, the DeFi ecosystem got recognition from the United Kingdom government, as they sought public feedback on taxation of the DeFi ecosystem, especially staking and lending.

MakerDAO is looking to collaborate with the traditional banks, which would take place after the proposal gets community approval. Aave (AAVE) is planning to launch an overcollateralized stablecoin called GHO, subject to the community decentralized autonomous organization’s (DAO’s) approval. The hacker who exploited Solana-based liquidity protocol Crema Finance on July 2 returned most of the funds but was allowed to keep $1.6 million as a white hat bounty.

After nearly two weeks of bearish dominance, the top 100 DeFi tokens finally started to trade in the green. The majority of the DeFi tokens registered double-digit weekly gains.

UK government seeks public input on DeFi taxation

The government of the United Kingdom is asking the public for input on the taxation of crypto-asset loans and staking in the context of DeFi.

In particular, the government is interested in gathering information on the taxation of crypto-asset loans and staking. Her Majesty’s Revenue and Customs (HMRC) call for evidence paper, published on Tuesday, described its intention to study whether administrative hassles and costs may be reduced for taxpayers who participate in the emerging industry, as well as whether the tax treatment might be more aligned with the transactions’ fundamental economics.

Aave to launch overcollateralized stablecoin called GHO

DeFi giant Aave has unveiled plans to launch an overcollateralized stablecoin called GHO, subject to the community DAO’s approval. The announcement was made by Aave Companies, the centralized entity supporting the Aave protocol, on its Twitter page on Thursday.

According to the governance proposal shared on Thursday, GHO would be an Ethereum-based and decentralized stablecoin pegged to the United States dollar that could be collateralized with multiple assets of the user’s choice.

MakerDAO voting on collaborating with a traditional bank

MakerDAO is voting on a proposal that will bring a traditional bank into its ecosystem for the first time, allowing the bank to borrow against its assets using DeFi.

At the end of voting on Thursday, 87.1 % of voters were in favor of the proposal. The proposal involves creating a vault with 100 million Dai (DAI) for Huntingdon Valley Bank (HVB) as part of a new collateral type in the Maker Protocol.

Crema hacker returns $8M, keeps $1.6M in deal with protocol

The hacker who exploited Solana-based liquidity protocol Crema Finance on July 2 returned most of the funds but was allowed to keep $1.6 million as a white hat bounty.

The bounty, 45,455 Solana (SOL), is worth a generous 16.7% of the $9.6 million Crema lost initially, which forced the protocol to suspend services. Crema’s team began an investigation to identify the hacker by tracking their Discord handle and tracing the original gas source for the hacker’s address. Just as it seemed the team may have been onto the secret identity, it announced that it had been negotiating with the hacker. On Wednesday, the hacker returned 6,064 Ether (ETH) and 23,967 SOL worth roughly $8 million.

DeFi market overview

Analytical data reveals that DeFi’s total value locked registered a minor rise from the past week, rising to a value of $58.69 billion. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top-100 tokens by market capitalization showed great signs of recovery with the majority of the tokens trading in green with double-digit gains.

Curve (CRV) was the biggest gainer in the top-100 DeFi token list with a weekly surge of 50.18%, followed by Convex Finance (CVX) with 43.15% weekly gains. ThorChain (RUIN) registered a 28% gain over the past seven days, while Aave gained 26% during the same time period.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.

Aave to launch overcollateralized stablecoin called GHO

GHO would allow users to borrow the stablecoin while still learning yield on their locked assets on Aave. However, the proposal is just seeking feedback at this stage.

Decentralized finance (DeFi) giant Aave has unveiled plans to launch an overcollateralized stablecoin called GHO, subject to the community decentralized autonomous organization’s (DAO’s) approval.

The announcement was made by Aave Companies — the centralized entity supporting the Aave protocol — on its Twitter page on Thursday, stating:

“We have created an ARC for a new decentralized, collateral-backed stablecoin, native to the Aave ecosystem, known as GHO.”

According to the governance proposal shared on Thursday, GHO would be an Ethereum-based and decentralized stablecoin pegged to the U.S. dollar that could be collateralized with multiple assets of the user’s choice.

To obtain GHO, users would need to mint the stablecoin against their deposited collateral. However, the list of supported collateralized assets and the collateral ratio has yet to be detailed.

As users are essentially borrowing the stablecoin against their holdings, the position will need to be overcollateralized as per any normal Aave loan.

“With community support, GHO can be launched on the Aave Protocol, allowing users to mint GHO against their supplied collaterals. GHO would be backed by a diversified set of crypto-assets chosen at the users’ discretion, while borrowers continue earning interest on their underlying collateral.”

The proposal notes that 100% of the interest payments accrued by GHO minters would be “directly transferred to the AaveDAO treasury; rather than the standard reserve factor collected when users borrow other assets.”

Holders of the staked AAVE token (stkAAVE) would also benefit from the stablecoin’s adoption, as Aave Companies has proposed that they would also be able to mint and borrow GHO at a discounted rate.

“If the community votes positively for the deployment of the protocol creating the ability for users to mint GHO, a recommended starting interest rate and discount rate will be proposed,” the team stated, adding that an audit would happen over the next few weeks if all goes to plan.

Aave founder Stani Kulechov stated via Twitter that the team has a broader vision of the USD-pegged asset:

“While GHO would be secured by the assets on the Ethereum market, the main vision for GHO is to pursue organic adoption via L2s to solve real life payment opportunities across the internet and on-ground.”

BREAKING: The @AaveAave team submitted ARC to launch a self-sovereign overcollateralized stablecoin GHO backed by the Aave Protocol collaterals https://t.co/YHpLmipLjl

— stani.lens (,) (@StaniKulechov) July 7, 2022

Aave is an automated DeFi protocol that enables users to lend and borrow digital assets without needing to go through or obtain approval from a centralized intermediary. The latest proposal to the DAO has coincided with Aave’s native token Aave (AAVE) gaining 15.04% over the past 24 hours to sit at $72.31 at the time of writing.

According to data from DefiLlama, Aave is the second-largest DeFi platform in terms of total value locked (TVL) at $6.76 billion. The ecosystem is based on Ethereum and also supports multiple ayer 2s including Polygon, Optimism and Arbitrum.

Maker cuts off Aave’s DAI supply as fallout from Celsius continues

The MakerDAO decided to cut off Aave from its direct deposit module as a safeguard in light of the possibility that Celsius folds and crashes the price of stETH.

MakerDAO has voted to cut off lending platform Aave’s ability to generate DAI for its lending pool without collateral as the risks of Celsius’s liquidity crisis loom large over the entire crypto ecosystem.

The decentralized autonomous organization (DAO) made the decision as a means of mitigating the Maker protocol’s exposure to the beleaguered staking and lending platform in case Celsius goes belly up and implodes the stETH peg as well.

stETH is a token representing an amount of ETH that is staked on the Lido staking platform. Its peg to ETH has been wavering for several weeks and it’s currently trading about 6% below the price of ETH. Celsius invested a significant amount of user funds into stETH, which is reportedly one of the reasons it paused withdrawals.

The Maker Governance has voted to temporarily disable the @AaveAave DAI Direct Deposit Module (D3M).

This change is available for execution on June 17 2022 21:03 UTC.

https://t.co/3wKQiEvcMw

— Maker (@MakerDAO) June 15, 2022

A June 14 governance proposal from DAO member prose11 suggested that the Maker protocol should temporarily disable the DAI Direct Deposit Module (D3M) for Aave because Celsius borrowed 100 million in DAI collateralized by stETH, which would be at risk of liquidation if Celsius fails.

“The reason we believe this is risky is because out of 200M DAI borrowed on Aave Ethereum v2, 100M DAI is being borrowed by Celsius and collateralized mostly by stETH.”

The D3M allows Aave to stabilize the DAI loan interest rates by providing access to liquidity when needed. Aave’s D3M consists of 200 million DAI, 100 million of which have been borrowed by Celsius.

If Celsius does collapse, it might sell off its stETH to honor retail responsibilities and get liquidated on Aave, which would likely force stETH to depeg even further. This would put the Maker protocol at the risk of not being able to retrieve all the DAI Celsius borrowed.

Around 58% of the 83 voters on the proposal felt that the tail risk presented by Celsius was greater than the loss of revenue from Aave by passing the proposal. The pause will come into effect at 5:03 pm ET on June 17.

A separate June 14 governance proposal was put forth on Aave itself to determine whether it should freeze stETH, pause ETH borrowing, and increase the liquidation threshold for stETH borrowers. However, opponents have a steep edge on this proposal with nearly 90% of the vote at the time of writing.

Maker’s move is an example of decentralized finance (DeFi) protocols observing contagion in the ecosystem and attempting to protect themselves from getting tagged. In addition to Celsius, crypto investment firm Three Arrows Capital is now suffering the effects of contagion, and threatening to spread it further, with reports of a $400 million liquidation and its inability to meet margin calls.

Maker cuts off Aave’s Dai supply as fallout from Celsius continues

The MakerDAO decided to cut off Aave from its direct deposit module as a safeguard in light of the possibility that Celsius folds and crashes the price of stETH.

MakerDAO has voted to cut off lending platform Aave’s ability to generate Dai for its lending pool without collateral as the risks of Celsius’s liquidity crisis loom large over the entire crypto ecosystem.

stETH is a token representing an amount of ETH that is staked on the Lido staking platform. Its peg to Ether (ETH) has been wavering for several weeks, and it’s currently trading about 6% below the price of ETH. Celsius invested a significant amount of user funds into stETH, which is reportedly one of the reasons it paused withdrawals.

The Maker Governance has voted to temporarily disable the @AaveAave DAI Direct Deposit Module (D3M).

This change is available for execution on June 17 2022 21:03 UTC.

https://t.co/3wKQiEvcMw

— Maker (@MakerDAO) June 15, 2022

A Tuesday governance proposal from DAO member prose11 suggested that the Maker protocol should temporarily disable the DAI Direct Deposit Module (D3M) for Aave because Celsius borrowed 100 million in Dai collateralized by stETH, which would be at risk of liquidation if Celsius fails:

“The reason we believe this is risky is because out of 200M DAI borrowed on Aave Ethereum v2, 100M DAI is being borrowed by Celsius and collateralized mostly by stETH.”

The D3M allows Aave to stabilize the Dai loan interest rates by providing access to liquidity when needed. Aave’s D3M consists of 200 million Dai, 100 million of which have been borrowed by Celsius.

A separate Tuesday governance proposal was put forth on Aave itself to determine whether it should freeze stETH, pause ETH borrowing and increase the liquidation threshold for stETH borrowers. However, opponents have a steep edge on this proposal, with nearly 90% of the vote at the time of writing.

Maker’s move is an example of decentralized finance (DeFi) protocols observing contagion in the ecosystem and attempting to protect themselves from getting tagged. In addition to Celsius, crypto investment firm Three Arrows Capital is now suffering the effects of contagion and threatening to spread it further, with reports of a $400 million liquidation and its inability to meet margin calls.