altcoin

Ethereum price turns bullish ahead of next week’s Shanghai and Capella upgrades

ETH price found news bullish momentum as traders gear up for next week’s major network upgrades.

With one week to go until the Ethereum Shanghai and Capella upgrades on April 12, all eyes are on Ether(ETH). The second-largest cryptocurrency by market capitalization shrugged off rumors and regulatory action against exchanges to hit a seven-month high of $1,922 on April 5. 

Ether price has momentum, and here are three strong reasons why.

Multiple positive price achievements

According to data from Cointelegraph Markets Pro and TradingView, Ether price has posted gains on the seven-day, one-month and three-month timeframes despite market volatility. Ether price gains are also notable from the year-to-date perspective, showing 59% growth.

ETH/USD price chart. Source: Cointelegraph Markets Pro

Ether’s ability to break resistance levels is leading some analysts to believe a $3,000 price target is on the horizon in Q2 2023. The trend shows that whale accumulation remains strong, growing by 0.5% in March, according to data from analytics provider Santiment.

The bullish buying activity may prove on-chain data correct that Ether sell pressure after the Shanghai hardfork will be a non-event.

Related: US enforcement agencies are turning up the heat on crypto-related crime

The uptick in proof-of-stake validation by placing Ether in staking contracts is bullish for the Ethereum ecosystem. Since launching on Aug. 4, 2021, the Ethereum network has witnessed over 18 million ETH staked on the blockchain.

Total Ether staked. Source: TradingView

The emergence of liquid staking derivatives has reduced the barrier to entry to participate in Ether staking. Lido, the leader in LSDs and the largest single entity by value, has close to one-third of all staked EtTH. Including interest received, Lido contracts hold 5.9 million ETH from 137,000 unique depositors.

Lido Ether deposits overview. Source: Nansen

Ethereum network TVL surges

The total value locked in the Ethereum network is also rising, partially as a result of Lido’s protocol comprising 22.4% of the TVL on the Ethereum network. Despite the TVL starting to drop on March 10 due to regulatory and macro headwinds, the decentralized finance market seems to be recovering.

Related: 3 key Ethereum price metrics cast doubt on the strength of ETH’s recent rally

On April 5, TVL reached $50.8 billion, nearly reaching the yearly high of $51.4 billion from Feb. 21.

TVL dashboard. Source: DefiLlama

The strength of Ether price ahead of the Shanghai and Capella upgrades is visible on-chain through increased usage, whale accumulation and a steady uptick in staking. With only seven days remaining until the upgrade, traders expect continued volatility in Ether price.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

XRP price: ‘sell the news’ moment nears after crypto-leading 20% weekly gain

XRP whales have been accumulating since February with only days remaining until the SEC vs. Ripple lawsuit could reach its potential conclusion.

XRP (XRP) price is currently outperforming all other major cryptocurrencies as of March 27, rising over 20% in the past seven days.

XRP/USD daily price chart. Source: TradingView

XRP accumulation ahead of SEC vs. Ripple ruling

XRP has seen steady gains over the past seven days as the ongoing legal quandary between Ripple and the U.S. Securities and Exchange Commission (SEC) is expected to conclude by the end of March.

Meanwhile, the supply of XRP held by addresses with a balance between 10 million and 100 million tokens has risen by over 1% since February. That coincides with a 0.75% drop in the XRP supply held by the 1 million-10 million address cohort.

XRP balance in addresses holding between 1,000 and 100 million tokens. Source: Santiment

The addresses holding between 1,000 and 1 million XRP also increased their token holdings in the same period. That shows the XRP whales stacked up more tokens in the days leading up to the ruling on SEC vs. Ripple’s so-called summary judgment.

Multiple observers, including legal expert John Deaton, see Ripple winning the case, arguing that the SEC may have failed to give the company a “fair notice” before suing it for committing securities fraud. 

In recent months, Analisa Torres, the federal judge overseeing the lawsuit, has also favored Ripple on various motions. For instance, she has approved Ripple’s demand that the SEC makes its internal emails and documents regarding cryptocurrencies public, which may prove that the regulator unfairly targeted the company.

25% XRP price pullback in April?

From a technical perspective, the XRP/USD rally has brought the pair near a resistance confluence zone, which may lead to bearish reversal in the coming weeks.

The confluence comprises of a multi-year descending trendline (black), a 200-3D exponential moving average (200-3D EMA; the blue wave) and a support-turned-resistance horizontal level at around $0.50 (purple).

XRP/USD three-day price chart. Source: TradingView

In addition, XRP’s three-day relative strength index (RSI) eyes a close above its overbought threshold of 70, adding to the bearish case for April. 

Related: Will BTC ditch the bear market? 5 things to know in Bitcoin this week

In the case of a pullback, the XRP price’s next downside target appears at its multi-month ascending trendline support (black) around $0.35, down about 25% from current price levels.

On the other hand, a breakout above the descending trendline will have XRP price eyeing $0.60 as the next upside target.

This level has served as support in December 2021 and January 2022 — and as resistance in the September-October 2022 session. It is also the target of a prevailing bull pennant structure.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Avalanche (AVAX) price is up, but do fundamentals support the rally?

AVAX price has been in a strong rally since the start of 2023, but a sustained uptick in its DeFi components is needed in order to sustain the current bullish momentum.

Avalanche (AVAX) witnessed a meteoric start to 2023, gaining 98% in 30 days, and traders are now curious about whether the rally will extend throughout February. AVAX’s year-to-date gains for 2023 have outpaced those of Bitcoin (BTC) and Ether (ETH).

Recent reasons for AVAX’s rally can be attributed to an Amazon partnership announcement on Jan. 11. The partnership is meant to easily deploy nodes on the Avalanche blockchain with Amazon Web Services (AWS). Ava Labs, which supports the Avalanche ecosystem, hopes the partnership increases blockchain usage for enterprises and governments.

While AVAX price has benefited from the news, some analysts predict that the move could have been a bull trap.

Let’s dig into the fundamentals to see if on-chain network activity supports the recent AVAX rally.

AVAX fees from DeFi are up

After the AWS news, AVAX price was not the only metric seeing a quick rise. On Jan. 14, Avalanche network hit a year-to-date high of $31,218 AVAX fees received. The increase in fees compared to the previous 30 days is 59%, signaling that positive price appreciation helped boost the fees that the network received.

Avalanche network fees and AVAX price. Source: TokenTerminal

While the Avalanche fee base is increasing, it still lags behind top EVM-compatible blockchains like Ethereum, Binance Chain (BNB), Optimism (OP) and Polygon (MATIC). Over the past 30 days, the fees Avalanche has generated rank 9th out of all blockchains.

Top blockchains sorted by fees. Source: TokenTerminal

Notably, layer-2 competitor Polygon earned close to four times the amount of fees compared to Avalanche. Even with the astounding growth thaAvalanche has experienced in 2023, the network will need to substantially increase fees to overtake more blockchains.

Active addresses and users are down

A sign of blockchain health is the number of active addresses, users and transactions. Despite reaching a year-to-date high on Jan. 18 of 1.84 million transactions, Avalanche’s transaction count is trending down.

A similar downtrend is witnessed when looking at active addresses in the Avalanche ecosystem. Active addresses denote transactions taking playing on unique wallets for a given day. After reaching a year-to-date peak of 54,978 active addresses on Jan. 31, only 34,624 active addresses were registered the following day.

Active addresses and transactions. Source: Avalanche

The downtrend in Avalanche activity is creating further separation between other blockchains. According to TokenTerminal, Avalanche’s all-time high (ATH) number of daily active users is 131,000, which is dwarfed by Polygon’s ATH of 737,000. Avalanche is now far from its all-time high of daily users, registering only 44,000.

Blockchains sorted by daily active users, Source: TokenTerminal

For blockchains to create sustainable fees, there needs to be daily active users participating on the network.

AAVE dominates Avalanche DApps

The active users on Avalanche seem to have a preference for using Aave (AAVE) on the AVAX blockchain. Over 36% of all Avalanche transactions flow through the Aave protocol. Investors have staked over $353 million on Aave’s Avalanche version, far surpassing the second-most popular protocol by verified total locked value (TVL), the Trader Joe decentralized exchange (DEX).

Top Avalanche DApps. Source: DefiLlama

While Aave and Trader Joe are leading the Avalanche blockchain, when looking at DEX activity on other blockchains, they witness far less trading volume. DEX volume directly correlates to the fees that a protocol receives.

Ethereum DEX activity leads the way with over $1.6 billion in daily volume, whereas Avalance only sees around $104 million.

DEX activity by blockchain. Source: DefiLlama

While Avalanche is currently witnessing immense growth from the AWS announcement, the blockchain is still small compared to competitors. The goal of the AWS partnership was to help increase network activity by reducing barriers to entry. Reaching the goal may increase Avalanche adoption but other ecosystems seem to be out to a large and early lead.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Flare (FLR) airdrops 15% of total supply to XRP holders before correcting by 76%

After a two-year wait, the layer 1 Flare blockchain finally followed through, sending its tokens to those who held XRP at the time of the snapshot.

The Flare (FLR) token airdrop began on Jan. 9, nearly two years after a snapshot of XRP (XRP) holders took place on Dec. 12, 2020. The FLR airdrop was distributed at a ratio of 1.0073 FLR per 1 XRP, with 15% of the total supply released to the community.

A total of 28.5 billion FLR were distributed and according to Flare’s tokenomics, 58.3% of the total genesis FLR supply will be distributed over 36 months.

Flare initial token distribution allocation. Source: Flare

What is Flare?

Flare is a Layer-1 blockchain with an oracle system aiming to boost interoperability among decentralized applications (DApps) and blockchains. While the token only recently launched, the protocol launched its mainnet on July 11. To date, the Flare mainnet has already processed over 70 million transactions with over 500,000 unique wallets.

Flare network block explorers. Source: Flare
Cast your vote now!

FLR follows the path of most airdrops

According to data from CoinGecko, the FLR token started trading on Jan. 9 at $0.05 amid low liquidity on the MeXC exchange. After launch, the token soared to $0.15 as exchanges like Binance, OKX and Kraken started trading the airdropped token.

Shortly after the increased liquidity arrived from the centralized exchanges, the FLR token price began to crash. At the time of writing, FLR price has pulled back by 76% to $0.02 and its 24-hour trading volume sits slightly below $50 million.

While the airdrop provided long-awaited FLR tokens at no cost to XRP holders, the outcome of immediate selling is routine for most airdrops. Proof of real success will be whether the network sees a sustained uptick in the use of its layer 1 and interoperable oracle use case.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bonk token goes bonkers as traders chase after high yields in the Solana ecosystem

Traders are piling into BONK, boosting its price by triple-digits in the last 24 hours and possibly hinting at a trend reversal in Solana price.

Bonk, a meme token modeled after Shiba Inu (SHIB) that launched on Dec. 25, is skyrocketing and some traders believe the token’s trading volume is potentially driving Solana’s (SOL) price up. Over the past 48 hours, SOL price has gained 34%, and in the past 24 hours, Bonk has climbed 117%, according to data from CoinMarketCap. While the wider crypto market remains suppressed, traders are hoping that Bonk could present new opportunities during the downturn. 

According to the project’s website, Bonk is the first dog token on the Solana blockchain. Initially, 50% of the token supply was airdropped to Solana users with a mission to remove toxic Alameda-styled token economics. The airdrop resulted in more than $20 million in trading volume according to the Solana decentralized exchange Orca.

High yield returns

Liquidity providers (LPs) stand to benefit from interacting with Bonk, and on Jan. 4, LPs are earning over 999% APR, which is much higher than the popular SOL/USD Coin (USDC) pairing.

Liquidity provider returns on Orca. Source: Orca

While high yields do not always stay high, the current rates show large market demand for Bonk. In addition to the increase in demand, Bonk also burned 1 billion of supply on Jan. 3.

Solana (SOL) bounces alongside Bonk

Blockchains like Solana benefit from increased usage. After the FTX collapse, Solana saw multiple projects leaving the ecosystem. On Jan. 4, Solana saw an 18.6% increase in 24-hour fees and a 15.8% increase in 24-hour daily active users.

Solana fees and daily active users. Source: TokenTerminal

In addition to fees and daily active user increases, SOL price rallied above $14 on Jan. 4 for the first time since Dec. 14. Some crypto market participants are attributing Bonk’s growth to Solana’s price action.

While Bonk is merely a meme token, the increasing demand is a positive sign for the Solana blockchain. This is a sign that Vitalik Buterin may get his wish that Solana gets a “chance to thrive.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

3 reasons why it could be a rocky week for Bitcoin, Ethereum and altcoins

BTC volatility is at a record low, inflows to spot markets remain muted and this week’s economic calendar suggests that volatility is set to rock the crypto market.

Continuing with 2022’s trend, there is a lack of positive excitement in the crypto market. While Bitcoin (BTC) and altcoins have remained stagnant to start 2023, there are a few reasons why volatility could spike in January. 

Market caps during the 2022 holiday period. Source: Arcane Research

Winklevoss Letter to DCG stirs up bankruptcy FUD

On Jan. 2, Cameron Winklevoss, the co-founder of Gemini, penned an open letter to Digital Currency Group (DCG) founder Barry Silbert, demanding answers on the $900 million in locked customer funds. Gemini launched the “Earn” program in coordination with Silbert but $900 million of customer money has been locked since Nov. 16 due to DCG liquidity issues. After the letter, Crypto Twitter began generating FUD toward DCG, believing there to be liquidity issues akin to 3 Arrows Capital and FTX.

The financial strain the large Gemini hole could place on DCG is significant because they may be forced to sell sizable GBTC and ETHE positions, along with other positions in trusts run by their sister company Grayscale. According to Arcane Research, another path for DCG to meet debt obligations would be to initiate a Reg M distribution, allowing holders of GBTC and ETHE positions to redeem them for the underlying assets at a 1:1 ratio.

Vetle Lunde, senior analyst at Arcane Research, noted:

“A Reg M would cause a massive arbitrage strategy of selling crypto spot versus buying Grayscale Trust shares. If this scenario plays out, crypto markets could face further downside.”

Grayscale trust holdings of circulating supply. Source: Arcane Research

Fear is high and liquidity is low

The DCG and Gemini drama comes during a period in the market where sentiment is down. Despite evidence that investors plan to participate in crypto in 2023, most market participants are not feeling bullish and are reluctant to engage with risk assets. The index currently sits at 26 out of a 100-point scale, which is the same as in December.

Fear and greed index. Source: Alternative.me

Such a high level of fear is even more significant during periods of low liquidity. Market activity continues to fall, reaching volumes not witnessed since Binance introduced zero trading fees for BTC pairs on June 24. The low spot trading volumes suggest that muted market participation will continue in the early part of this year.

BTC volume with and without Binance. Source: Arcane Research

If DCG were to take the Reg M path and spot market volume remains low, a correction in crypto prices could sharpen in the short-term.

The upcoming economic calendar hints at possible volatility

As shown below, macro markets have a busy start to 2023:

Wednesday, Jan. 4:

  • ISM manufacturing PMI (US factory activity)
  • US JOLTs (job openings)
  • Federal Open Market Committee (FOMC) meeting minutes

Thursday, Jan. 5:

  • US balance of trade

Friday, Jan. 6:

  • Nonfarm payrolls and unemployment data
  • ISM non-manufacturing PMI (a survey of business conditio)

Sunday, Jan. 8:

  • Gemini settlement offer to DCG expires

Thursday, Jan. 12:

  • US consumer price index (CPI) report on inflation

Friday, Jan. 13:

  • US banks start Q4 2022 earnings reports

If the numbers are below expectations or anything out of the ordinary occurs, the equities market may react by selling off.

Reduced spot volumes are coupled with BTC volatility reaching a 2.5-year low. According to Lunde, the low volatility period will not last too long:

“These low volatility periods rarely last for long, and volatility compression periods have previously tended to be followed by sharp moves, even in stagnant markets.”

BTC 7 and 30-day volatility. Source: Arcane Research

Some analysts believe that the Jan. 12 United States CPI report will show a spike in inflation. If this is the case, the Federal Reserve may continue to raise interest rates, which has caused crypto’s market cap to decline in the past.

With the possibility of further interest rate hikes combined with the current market sentiment, potential DCG bankruptcy and decreased market liquidity, the crypto market could react with another drop to the downside.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

What is USD Coin (USDC), fiat-backed stablecoin explained

USDC is a U.S. dollar-backed stablecoin issued by Circle and Coinbase to combat the price swings of the highly volatile cryptocurrency market.

Is USD Coin safe?

Despite the fact that the USD Coin is subject to regulatory oversight, investors must weigh the pros and cons of investing in stablecoins before committing any funds.

Comparing USDC with USDT, USDC is subject to regulations as it is audited from time to time, and Circle is fully transparent about its operations. However, investing in the cryptocurrency market, even in stablecoins, has its own cons. For instance, the price of the USD Coin will never appreciate as it is pegged to the U.S. dollar.

This disadvantage is offset by the provision that USDC can be lent and borrowed on decentralized platforms to earn passive income. Moreover, it depends upon one’s risk-return profile and how much funds one wants to allocate to a particular asset. Also, with trusted exchanges like FTX going bankrupt, one must be mindful of the risks of investing in stablecoins and cryptocurrencies.

USDC vs. USDT

Although both USDC and USDT are USD-backed stablecoins, they have some differences in terms of the year they were launched, issuing organizations, compatibility with blockchain networks, assets-backing and auditors.

USDC and USDT are fiat-collateralized stablecoins pegged to the U.S. dollar, which were introduced to combat the highly volatile price swings of the cryptocurrency market. The majority of significant cryptocurrency exchanges offer USDC.

Similar to USDT, USD Coin can be sent and received by any ERC-20 compliant wallet or exchange and other blockchains like Stellar, Algorand, Solana and more. Along with these similarities, significant variations between these two stablecoins could influence a user’s choice.

Here are a few differences between USDC and USDT stablecoins:

USDC vs. USDT

How to buy a USD Coin?

USD Coin can be bought on cryptocurrency exchanges after meeting the Know Your Customer requirements.

One can buy USDC on exchanges like Coinbase, Kraken and Gemini. For example, buying USD Coin on a centralized exchange like Coinbase involves the following steps:

  • Sign up on Coinbase and get your account verified to start transacting.
  • Add a payment method such as a wire transfer, debit credit or bank account.
  • Start trade by selecting “( )” Buy on the Coinbase mobile app or Buy & Sell on Coinbase.com.
  • Enter “USD Coin” in the search field of the Coinbase mobile app to select USD Coin from the list of assets. Instead, click the Buy panel on Coinbase.com to search for and choose USD Coin.
  • Enter the amount you wish to spend to change the value to the corresponding amount of USD Coin.
  • Confirm your purchase by clicking “Buy now” to complete the purchase.

What are the advantages and disadvantages of USD coin

USDC offers instant payments, saves users from the cryptocurrency market’s price volatility and is audited by a regulated auditing firm, making it a transparent stablecoin. However, it does not offer price appreciation opportunities, and investors may incur high transaction and withdrawal fees while dealing with USDC.

One of the key advantages of the USD Coin is the speed of the transaction. Usually, one must wait a long time to send and receive USD because institutions such as banks and their complex procedures slow down the processing of transactions. Nonetheless, USDC allows instant clearing and settlement of payments.

In addition, stablecoins like USDC saves users from the price volatility of cryptocurrencies, as leading American financial institutions ensure that Circle’s reserves are 100% backed by the U.S. dollar or short-term treasuries at all times. Moreover, there are numerous digital asset exchanges where one may buy USDC. Many exchanges also enable the withdrawal of USDC across various blockchains.

Furthermore, using a cryptocurrency wallet, one can quickly make cross-border payments or remittances. Similarly, one can earn passive income by lending USDC on decentralized finance (DeFi) platforms like Aave.

Regardless of the above advantages, the USD Coin may not be an ideal investment asset for those looking to earn money from digital assets because USDC may not offer potential price appreciation opportunities to yield profits.

Also, some exchanges charge a high fee for withdrawing USDC stablecoin, and transaction fees may be higher than a typical bank transfer or a PayPal transfer for smaller transactions. Moreover, even if DeFi platforms offer more interest for each USDC lent, they are riskier, as evidenced by various crypto heists.

What are the unique features of USD Coin

A USD Coin is a fully transparent and audited stablecoin, which is pegged to the U.S. dollar and can be used for instant global payments, purchasing goods and services and lending and borrowing without intervention of third parties.

The USD Coin maintains the same value as the U.S. dollar, making it a unique option for holding a digital currency without bearing the price risk of major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH). Other notable features of the USD Coin are explained below:

  • Instant global payments: USDC allows individuals and businesses to accept payments in digital assets 24/7. As a result, it is possible to transmit money across international borders as rapidly as sending a text message.
  • Purchase goods and services: Online retailers allow customers to purchase various items using USDC. For instance, users can buy NFT compilations of rare basketball moments with USDC on well-known online marketplaces like NBA Top Shot.
  • Instant lending and borrowing: USDC can be lent to those in need without the intervention of third parties. Similarly, it is feasible to borrow USDC instantaneously and start using funds in a matter of seconds rather than waiting several weeks to secure a loan.

How does a USD Coin work?

Each time a USD is deposited, a smart contract creates a USDC that may be redeemed for one dollar.

USDC commercial issuers must possess any or all licenses required by the operating jurisdictions. Moreover, they need to ensure audited Anti-Money Laundering and compliance processes that comply with the Financial Action Task Force requirements.

They should support the fungible exchange and redemption of USDC tokens from other reputable issuers and abide by further reporting and review specifications set forth by the Center. USDC issuers must also hold reserves at a 1:1 ratio to the amount of issued tokens and offer monthly publicized proof of reserves with qualified public auditors’ attestations.

Technically, a USDC token is created via a smart contract each time a dollar is deposited. Moreover, each USD Coin is redeemable for one dollar and is backed by either one dollar or an asset denominated in USD (fiat currency), which is kept in accounts at regulated institutions in the United States.

For stablecoins and USDC to function as intended, the parties in charge of overseeing them must be trustworthy and transparent. As a result, Circle employs Grant Thornton LLP, a U.S. accounting company, to audit those accounts and offer routine updates via monthly attestations on the reserves supporting USDC.

Then, to maintain consistent backing, the coins are permanently destroyed, or burned, when a consumer wants to redeem USDC back for dollars, and funds from the underlying reserves are returned to the client’s external bank.

What is a USD coin (USDC)?

A fully-reserved stablecoin, USDC, was created to ensure price parity with the US dollar.

USD Coin (USDC) is a fiat-collateralized stablecoin, a decentralized digital asset that lives on the blockchain and is pegged to a fiat currency — in this case, the United States dollar — to stabilize its value against market volatility. However, USDC is not the only stablecoin available in the market. Another asset-backed (U.S. dollar) stablecoin called Tether (USDT) was launched in 2014 by Tether Limited.

So who is behind the USD Coin? The Boston-based Circle and Coinbase exchange created the USD currency (USDC) in 2018 as part of the Center consortium. USD Coin claims to be equivalent in value to one U.S. dollar, meaning that for every USDC in circulation, one U.S. dollar is held in reserve. In essence, the USD Coin is a service that tokenizes the U.S. dollar and makes it easier to utilize over the internet and on public blockchains.

Unlike cryptocurrencies, the USD Coin cannot be minted. USDC is available as ERC-20, the most widely used standard for blockchain apps, making it interoperable with all other Ethereum-based decentralized applications (DApps). However, it is not solely restricted to the Ethereum network. Instead, the USD Coin is compatible with significant blockchain networks, including Solana, Stellar, Algorand, Flow and TRON.

Since its introduction, USDC has established itself as a critical component of the stablecoin market with ample liquidity and trading across centralized and decentralized exchanges worldwide.

Is DeFi back? GMX rallies toward all-time high and LOOKS price gains 30%

GMX and LOOKS have staged double-digit rallies in the last week as former BitMEX CEO Arthur Hayes revealed his investment thesis for both projects.

In a recent blog post, cryptocurrency legend and former BitMEX CEO Arthur Hayes mentioned he holds sizable bags of GMX and LOOKS tokens. According to Hayes, his main reasoning for investing in both was their platform revenue and their potential to outperform standard Treasury bills. 

Let’s take a brief look at on-chain data and compare GMX and LOOKS to competitors to determine whether Arthur’s assumption will work out. 

GMX usage cooling after a strong November

The week prior to Nov. 16 provided decentralized finance (DeFi) with a significant influx in fees after the centralized exchange (CEX) exodus triggered by FTX’s bankruptcy. The temporary high inflows to DeFi propelled GMX to outperform Uniswap in protocol fees.

On Nov. 28, GMX earned about $1.15 million in daily trading fees, which surpassed Uniswap’s $1.06 million in trading fees on the same day.

GMX fees and daily active users. Source: Token Terminal

While usage of GMX may be decreasing, the token is outperforming the industry. The GMX token is only 8% away from an all-time high, after gaining 59% in the past 30-days.

GMX token performance. Source: Delphi Digital

Since Uniswap is the closest competitor to GMX, comparing the two protocols can show which users prefer to use for trading. Aside from the fee flip on Nov. 28, Uniswap continues to outperform GMX in terms of fee revenue and daily active users. Unlike Uniswap, GMX distributes fees to stakers of various GMX and GLP tokens.

The 90-day peak for Uniswap fees is $5.9 million, whereas GMX’s high in daily fees is only $1.4 million. The major difference in peak fees may show that GMX has reached capacity when it comes to platform usage.

The fees that GMX accrues are split 30% to GMX token holders and 70% to GLP holders. The current homepage for GMX estimates an annual percentage yield of 10% for GMX tokens and 20% for GLP tokens. While GLP would fit Hayes’ 20% annual yield goal, liquidity providers are susceptible to impairment loss and price declines, making it difficult to ensure success against the conservative Treasury bill strategy.

Fees earned by Uniswap and GMX. Source: TokenTerminal

OpenSea usage continues to dominate LooksRare

LooksRare, which is also the home of the LOOKS token, was also mentioned by Hayes due to the fees the NFT protocol earns. To date, NFT marketplaces, including Coinbase, have struggled to chip away at OpenSea’s market dominance.

While OpenSea seems to have a natural flow of daily active users between 35,000 and 50,000, LooksRare has a small range of 350 to 500 users. Using this metric, OpenSea is 100 times bigger than LooksRare and the trend does not seem to change over a 90-day timeframe.

Another difference between the two protocols is that OpenSea does not have a token that emits rewards through staking and inflationary minting. The rewards emission may hit Hayes’ 20% goal, but it should also be noted that LooksRare is notorious for wash trading. The primary objective of these wash trader is to gain more LOOKS tokens, but this could have the effect of diluting the price.

Daily active users of LooksRare and OpenSea. Source: TokenTerminal

The recently announced UniSwap NFT aggregator could help propel LooksRare to gain more “authentic” transactions since users can purchase LooksRare NFTs without ever visiting the site.

The current fee distribution is heavily concentrated toward OpenSea. Over the past 90 days, OpenSea reached a peak of $2.5 million in daily fees, whereas during the same period LooksRare only earned over $200,000 in daily fees once.

Fees earned by LooksRare and OpenSea. Source: TokenTerminal

Investigating the protocol fundamentals mentioned by Hayes are an important first step when considering investing in DeFi and altcoin. Looking at the competitive landscape for both LooksRare and GMX, it would take much more adoption for either protocol to overtake the current leaders. Furthermore, the 20% goal Hayes sets out might be a stretch when analyzing inflated emissions and token prices.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Waves-backed stablecoin USDN drops further after regulator warning and exchange delisting

WAVES price and its USDN stablecoin lose value after the Digital Asset eXchange Association issues a caution notice and Upbit exchange delists the token.

Algorithmic stablecoins have had a rough year, starting with TerraUSD (UST) depegging to zero and the subsequent blow-up of Terra’s LUNA token, which was used for the asset’s backing. Algorithmic stablecoins are not fully collateralized and rely on different mechanisms to maintain their peg to a fiat currency, making them inherently fragile during market volatility. 

The UST implosion created a domino effect that caused another stablecoin, Magic Internet Money (MIM), to depeg. Despite the fragility of algorithmic stablecoins, new projects like Djed by Cardano are still planning on launching, but that doesn’t mean that the concept has improved since the crises seen earlier in the year.

Let’s look at the latest depeg event in the cryptocurrency space.

Warning issued for WAVES and its USDN stablecoin

On Dec. 8, the Digital Asset eXchange Association (DAXA), which consists of the five major crypto exchanges in Korea, issued a warning about Waves and its WAVES (WAVES) token.

The warning comes after the stablecoin USDN, which is backed by WAVES, depegged and has thus far failed to reestablish the $1 peg in more than 180 days. This means that the USDN protocol may liquidate WAVES through an automatic arbitrage process in an attempt to regain the peg. On Dec. 8, USDN was 16% below the peg.

USDN/USD 180-day chart. Source: CoinGecko

The move by DAXA to issue the warning has led Upbit to delist both WAVES and USDN. The delisting, combined with the DAXA warning, appears to be playing some role in the price decline currently seen in WAVES and USDN.

Algorithmic stablecoins are not alone in depegging. Constant concerns about Tether’s (USDT) backing and its general solvency continue to raise depeg fears among all levels of investors.

Over the years, USDT has lost its peg but never to the extent seen with UST and USDN.

As the community continues to reel from algorithmic stablecoins, regulators are taking notice and placing priority on regulating the space.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Litecoin eyes $100 after ‘rare’ LTC price breakout

MoneyGram’s decision to integrate Litecoin into its crypto services and the coin’s upcoming halving event has served as catalysts behind LTC’s price rally.

Litecoin (LTC) could rise another 20% amid a rare trend reversal breakout that has already resulted in LTC outperforming most crypto assets in recent days.

LTC’s not-so-bearish symmetrical triangle

LTC’s price broke out of what earlier appeared to be a bearish symmetrical triangle.

Symmetrical triangles are trend continuation patterns, meaning breaking out of their range typically prompts the price to move in the direction of their previous trend. 

Litecoin formed a symmetrical triangle pattern between May and November after dropping 70% to nearly $40 in the prior trading sessions. Ideally, the LTC/USD pair could have resolved the pattern by breaking below its lower trendline.

But instead, it broke above the upper trendline in early November, as shown below. According to Robert D. Edwards and John Magee, the authors of Technical Analysis of Stock Trends, the breakout move is rare, given only 25% of symmetrical triangle breakouts have historically resulted in trend reversals.

LTC/USD three-day price chart. Source: TradingView

Litecoin followed up with its symmetrical triangle reversal move decisively and now eyes a run-up toward $100, or another 20% by December 2022.

This upside target is measured after calculating the distance between the triangle’s upper and lower trendline and adding the output to the breakout point (around $58 in Litecoin’s case).

Why is Litecoin price up?

Litecoin’s symmetrical triangle breakout move started in late October. It coincided with MoneyGram’s announcement that it would enable users to purchase, store and use LTC alongside Bitcoin (BTC) and Ether (ETH) for payments.

LTC/USD three-day price chart. Source: TradingView

The LTC breakout lost momentum due to FTX’s collapse in the first week of November and its negative impact on the broader crypto market. But Litecoin resumed its upward trend amid speculations about its reward halving in the summer of 2023.

Related: Litecoin hits fresh 2022 high versus Bitcoin — But will LTC price ‘halve’ before the halving?

“Litecoin tends to rally in the months leading up to the halving,” noted market analyst The Digital Trend in a SeekingAlpha op-ed, adding:

“Then, the price tends to stabilize before entering a lengthier and more substantial bull market. Then, around halfway through the cycle, Litecoin enters a bearish/distribution phase like Bitcoin.”

LTC/USD price performance before and after halving. Source: TradingView/The Digital Trend

Litecoin’s price could reach $180 by July if the halving fractal plays out as intended, as Cointelegraph previously reported.

The bearish take

Conversely, Litecoin can see a short-term correction, as its three-day relative strength index (RSI) is turning “overbought.” The trigger for the downside move could be the RSI crossing above 70 from its current reading of 68, as shown below.

LTC/USD three-day price chart. Source: TradingView

LTC’s price downside target comes to be at around $40 in the event of a correction trend, down about 50% from current price levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.