Cryptocurrencies

3 key indicators traders use to determine when altcoin season begins

Clever traders frequently use these three indicators to pinpoint when an altcoin season could begin.

It’s widely accepted that the fate of the cryptocurrency market depends largely on the performance of Bitcoin (BTC), which makes times like these for crypto traders who prefer to invest in altcoins.

When BTC price is down, altcoins tend to follow, but as a bottoming process begins, altcoins tend to perk up during Bitcoin’s consolidation phases and this typically leads to a call for an altcoin season. While Bitcoin’s current dip below $30,000 shows that it’s a bit premature to call for an altseason, analysts are still charting a variety of different outcomes that point to an altcoin season. Let’s have a look.

ETH/BTC price action could be an early indicator

Insight into the possibility of an altcoin season using the ETH/BTC chart as an indicator was discussed by analyst and pseudonymous Twitter user PlanDeFi, who posted the following chart comparing the 2016 to 2017 performance of ETH/BTC against the pair’s performance in 2021–2022.

*ETH/BTC in 2016/2017 vs. ETH/BTC in 2021/2022. Source: Twitter*

PlanDeFi said,

“Looks damn similar, right? Accumulation>Breakout>Ascending Channel>Breakout. The market is bigger now — it just takes longer.”

Based on the projection provided, the next altseason could kick off sometime after the start of July and it has the potential to extend through the end of 2022.

A 2017 fractal suggests an altseason is imminent

Further evidence that the market may be approaching an inflection point was provided by El_Crypto_Prof, who posted the following chart looking at the history of the altcoin market capitalization.

El_Crypto_Prof said,

“When it comes to altcoins, I can see the following scenario playing out. There are just too many similarities with the previous cycle. RSI also looks incredible. The next wave up will leave many behind.”

The market is firmly in “Bitcoin Season”

While fractals are pleasing to the eye and give hope to disillusioned traders, most fail to materialize and they are not accurate analysis methods to rely on when trading.

The Altseason Indicator provides a more metrics-based method for predicting when the market is in “Bitcoin season” and “altcoin season.”

*Altseason indicator. Source: Blockchain Center*

According to the chart above, it does not appear as though an altseason is likely to happen anytime soon because the metric is currently providing a readout of 24, while the level needed to signify an altseason is 75.

Based on the past performance of the index, it has taken a minimum of two to three months for it to climb from the area indicating that it is Bitcoin season to the altcoin season level. Current projections, according the the indicator, suggest that an altcoin season might not start until August or September 2022.

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.

Major crypto firms reportedly cut up to 10% of staff amid bear market

Previous crypto bear markets triggered much bigger layoffs, with some firms like ConsenSys reportedly firing up to 60% of its workforce in 2018.

Gemini, a cryptocurrency trading platform founded by brothers Cameron and Tyler Winklevoss, is the latest industry firm to lay off a significant part of its staff due to unfavorable market conditions.

Winklevoss’ crypto business Gemini Trust reportedly cut 10% of its employees amid the ongoing bear crypto market, the founders wrote in a notice to employees on June 2, as Bloomberg reported.

As part of its first major headcount cut, Gemini will refocus on products that are “critical” to the firm’s mission, the brothers said, adding that “turbulent market conditions” are “likely to persist for some time.” The notice reportedly reads:

“This is where we are now, in the contraction phase that is settling into a period of stasis — what our industry refers to as “crypto winter. […] This has all been further compounded by the current macroeconomic and geopolitical turmoil. We are not alone.”

The new report comes after a number of major industry companies fired some employees or put new hires on hold. In mid-May, the Coinbase exchange officially announced that it would slow down hiring and reassess its headcount in order to ensure it continues operating as planned.

Previously, the major crypto-friendly trading platform Robinhood fired 9% of its workforce. The layoffs came amid Robinhood’s HOOD stock touching all-time lows as part of a longer-term bear market on crypto markets.

The latest crypto industry layoffs are by no means new to the industry as major crypto markets like Bitcoin (BTC) have been historically moving in cycles, with major bear markets preceding bigger gains. Amid a massive bear market of crypto in 2018, some industry firms like ConsenSys reportedly fired up to 60% of their workforce, announcing plans to hire 600 employees afterward.

According to some sources, the current conditions of the crypto job market do not look too gloomy though. A spokesperson for the FTX crypto exchange told Cointelegraph that the firm has not cut and does not plan to lay off any of its current 175 employees at the global exchange or 75 employees at the FTX US.

According to the crypto hiring website by the Bitcoin influencer Anthony Pompliano, executives in the crypto and blockchain industry are still looking to hire people, with the PompCryptoJobs website listing about 600 open positions at the time of writing. The major global crypto exchange Binance is looking to hire nearly 1,000 employees, according to its official job openings website.

Gemini did not immediately respond to Cointelegraph’s request for comment.

Investors’ perception of crypto is changing for the better: Economist survey

Investors see cryptocurrencies as increasingly useful as the portfolio diversifies, according to an Economist report on consumer trust in digital currencies.

A report published by The Economist paints a bright future for cryptocurrency adoption, with survey respondents anticipating growing demand in the near future.

Economist Impact published the findings of its “Digimentality Report,” delving into consumer trust in digital payments and the stumbling blocks that have hampered the digitization of basic monetary functions. The data obtained provide food for thought and perspective, as it compares trends from previous surveys on the subject carried out in 2020 and 2021.

Information was gleaned from a consumer survey completed by 3,000 consumers in early 2022, with half of the respondents living in developed economies including the United States, United Kingdom, France, South Korea, Australia and Singapore. The other half were respondents hailing from developing countries including Brazil, Turkey, Vietnam, South Africa and the Philippines.

Around 75% of the participants had a tertiary education or higher and had used a variety of digital payments methods to pay for goods or services. The latter part of the survey involved 150 institutional investors and corporate treasury management respondents — giving insight into the attitude of the wider conventional financial system on the subject.

A key takeaway was the prevailing sentiment from investors who agreed that open-source cryptocurrencies like Bitcoin (BTC) or Ether (ETH) are useful as diversifiers in a portfolio or treasury account.

Eighty-five percent of respondents held this view, while nine in 10 institutional investors and corporate treasury survey takers indicated that demand for all cryptocurrencies, including CBDCs and enterprise blockchains, has increased over the past three years.

The report indicated that the rise of Web3 and different Metaverse projects may increase this demand. Seventy-four percent of respondents also agreed that nonfungible tokens (NFTs) are an emerging asset class that organizations plan to acquire and trade.

Central bank digital currencies (CBDCs) were another notable focal point, with an increasing number of consumers expecting their respective governments or central banks to launch a working CDBC system by 2025. Sixty-five percent of the executives that took part in the survey believe that CBDCs are likely to replace physical fiat currencies in their countries of operation.

The regulation was identified as the primary obstacle stopping institutional investors or corporate treasuries from using cryptocurrencies. Thirty-five percent of respondents cited market trust or understanding of the space as an obstacle — a marked decline in perception from the 47% in the 2021 study.

This echoed the sentiments of U.S. Treasury secretary Janet Yellen, who unpacked her remarks on digital assets policy and regulation in May 2022. She noted barriers limiting access to cryptocurrencies which included financial education and technological resources.

Here are 3 altcoins that could surge once Bitcoin flips $35K to support

ADA, MATIC and XLM appear well positioned for a bullish breakout once BTC flips the $32,000 to $35,000 zone to support.

Bitcoin (BTC) and the wider cryptocurrency market are taking a breather after the rally on May 31. Meanwhile, most altcoins remain severely oversold, with most between 70% and 90% below their all-time highs.

What is clear is that fear is everywhere and blood is in the water. Risk-on markets are suffering worldwide, but it is exactly these kinds of conditions that create opportunities where professional money accumulates and adds to positions.

Let’s take a look at three altcoins that could be positioned for a rebound if the broader market enters a new uptrend.

ADA could be setting up for an 80% surge

Cardano (ADA) has a significantly bullish update coming very soon. The much anticipated Vasil hard fork, which increases performance and adds more Plutus enhancements, is planned for June.

From a price action perspective, ADA is positioned in a strong price range that will likely support any further upside that the broader market experienced. Within the Ichimoku Kinko Hyo system, ADA has maintained a significant gap between the bodies of the past three weekly candlesticks and the Tenkan-Sen.

When the bodies of the candlesticks and the Tenkan-Sen have noticeable gaps, a correction often occurs within three to four days. This is because the equilibrium is out of sync, the Tenkan-Sen and price action like to stick together as much as possible. A mean reversion back to the Tenkan-sen is extremely likely when one strays too far from the other.

ADA/USD weekly Ichimoku Kinko Hyo chart Source: TradingView

However, if the broader cryptocurrency market experiences a big bounce, ADA price may shoot past the Tenkan-Sen to test the Kijun-Sen. ADA has not tested the weekly Kijun-Sen since the week of November 8, 2021.

The weekly Kijun-Sen is at $1.02 and contains the 2021 volume point of control and the 50% Fibonacci retracement of the all-time high to the low of January 25, 2021.

ADA/USD weekly chart (Binance) Source: TradingView

MATIC aims for $1

Looking at the weekly chart of Polygon (MATIC), one can’t help but notice that it looks strikingly similar to ADA. MATIC and ADA both have sold off from $3 and both are stuck in the mid $0.50 to mid $0.60 price range, but that is where the similarities mostly end.

Fundamentally, MATIC remains strong. Governments worldwide have attempted to restrict or ban mining due to excessive energy costs for proof-of-work blockchains and MATIC is likely to avoid government scrutiny and attract supporters as a positive example of environmental stewardship.

Like ADA, MATIC has significant gaps between the bodies of its weekly candlesticks and the Tenkan-Sen. Although, MATIC’s gaps are more significant. Likewise, the gap between price and the Kijun-Sen is much more meaningful.

Within the Ichimoku Kinko Hyo system, there is a max-mean that price will travel away from the Kijun-Sen before experiencing a violent mean reversion. For MATIC, that threshold is 63%.

MATIC/USD weekly chart (Binance) Source: TradingView

Any renewed bullish momentum ifor Bitcoin will likely see MATIC lead the altcoins higher until it reaches the $1.00 to $1.15 value area near the weekly Tenkan-Sen.

XLM lags the altcoin market, but it’s known for surprises

Sometimes it is hard to forget that during the last major bull run from the COVID crash to November 2021, there were a few major altcoins that did not hit new all-time highs. Stellar (XLM) is one. In fact, the last time XLM made a new all-time high was the week of January 8, 2018, almost four and a half years ago!

One thing that XLM has going for it that not many other weekly charts have is a very clear falling wedge pattern. Out of the standard rectangle and triangle patterns in technical analysis, wedge patterns are the most powerful. What makes its wedge so powerful is the probable fakeout breakout lower.

XLM/USD weekly chart (Binance) Source: TradingView

The most probable direction for a falling wedge is higher — but breakouts below a falling wedge can yield powerful short opportunities. The typical behavior that analysts and traders expect to see with a failed falling wedge is an immediate and swift sell-off, but so far, bears have been unable or unwilling to do so.

Instead, the weekly chart for XLM shows a very strong probability of a fakeout. If bullish momentum returns to the cryptocurrency market, XLM is likely to hit the second peak of the falling wedge near the $0.38 value area.

Classic technical analysts believe that technicals lead fundamentals. If that is true, then altcoins like XLM, MATIC, and ADA could be positioned in very desirable conditions in the event of any new bull run.

However, downside risks remain a concern, but they are likely extremely limited. If a new uptrend fails to materialize before the end of June, the cryptocurrency market will probably move sideways until a major breakout higher or lower occurs in the Fall.

NY Fed president urges colleagues to prepare for coming digital payment transformation

Technology is changing fast, but the role of the central bank stays the same, Williams tells an audience of officials, scholars and financial industry leaders.

Get ready for a fundamental change in money and payments, John Williams, president and CEO of the Federal Reserve Bank of New York, told central bank officials, academics and financial industry leaders from around the world on Wednesday. Williams delivered the opening remarks at an invitation-only workshop on monetary policy implementation co-hosted by the New York Fed and Columbia University.

The central banker dismissed much of the digital asset space with a single-sentence observation that not all cryptocurrencies are backed by non-crypto assets. Central bank digital currencies (CBDCs) and stablecoins backed by safe, liquid assets have the potential for innovation, he continued.

Williams did not elaborate on the possible future impact of digital currency. Rather, he contextualized the potential changes by pointing out the effects of the introduction of overnight reverse repurchase (ON RRP) agreements in 2014. With $2 trillion of ON RRP agreements being maintained, they have dramatically altered the structure of the Fed’s balance sheet.

An ON RRP is an agreement that a Federal Reserve bank will sell a security to an eligible financial institution and buy it back the next day for the purpose of keeping the federal fund rate within a target range. Destabilizing interest rates is one of the potential effects of the introduction of a CBDC.

The role of the central bank remains the same, regardless of technological changes, Williams emphasized. He said:

“As central bankers, it’s critical that we remain focused on carrying out our responsibilities, while keeping pace with the world around us.”

The introduction of a U.S. CBDC has been the topic of much discussion and controversy within the government. The Fed has repeatedly stated that ideally, it would have a congressional mandate before issuing one.

DeFi protocols launch stablecoins to lure new users and liquidity, but does it work?

In the wake of UST’s collapse, several DeFi platforms launched their own stablecoins to lasso new users and liquidity but are investors willing to take on the risk in return for 20% APY?

Stablecoin projects have been thrust into the limelight over the past month as the popularity of algorithmic stablecoins and the collapse of the Terra project put a spotlight on the important role dollar-pegged assets play in the crypto market.

In response to the void left by UST, multiple protocols have released new stablecoin projects in an effort to attract new users and capture liquidity. Generally speaking, the DeFi sector is full of gimmicks that are designed to entice user participation and it’s possible that the recent stablecoin launch programs are simply the next trending tactic being used to boost TVL on DeFi platforms.

Let’s take a look at some of the newest stablecoins to hit the market and what impact they may or may not be having within DeFi.

USDD

One of the biggest stablecoin projects to launch recently is USDD, a decentralized algorithmic stablecoin on the Tron (TRX) blockchain. Since launching on May 5, USDD has experienced rapid growth in terms of its circulating supply, which currently sits near 601.86 million and its integration within the Tron ecosystem is relatively widespread.

USDD is also available on the Ethereum (ETH) network and the BNB Smart Chain (BSC), which has helped to increase the tokens distribution along with providing additional yield opportunities.

There are multiple liquidity provider pools available to USDD holders that offer 20% APY or more across various protocols, including JustLend, SunSwap, Ellipsis and Curve. In the time since USDD launched, the price of TRX has increased 17% from $0.07 to its current price of $0.0818 after briefly hitting a high of $0.092 on May 31.

fUSD

Fantom recently released fUSD, its first native stablecoin, which is an over-collateralized and can be minted using Fantom (FTM), USD Coin (USDC), Dai (DAI), SpiritSwap (SPIRIT) and wrapped Tether (fUSDT) as collateral.

The new @FantomFDN's native stablecoin, $fUSD…

Brings all the goodness of decentralization while delivering stability:

✅Governed by the community.
✅Full transparency.
✅Overcollateralized stability.

Plus, new collateral assets you’ll be happy to see!

pic.twitter.com/JMaD4D5oWZ

— Stader.Fantom (@stader_ftm) May 25, 2022

In an effort to attract more liquidity, the Fantom Foundation set the fUSD staking reward at 11.3% and created a fUSD to USDC swap interface that allows users to purchase fUSD and repay their positions to avoid liquidations.

At the time of writing, the circulating supply of fUSD stands at 60,993,403 and it is trading at a price of $0.7112, which is significantly below its $1 peg.

aUSD

Following the official launch of the first parachains within the Polkadot ecosystem, the Acala decentralized finance platform released aUSD as the first native stablecoin for Polkadot projects.

aUSD is an over-collateralized stablecoin that can be minted by pledging Polkadot (DOT), staked Polkadot (LDOT), Kusama (KSM), staked KSM (LKSM), Acala (ACA) or Karura (KAR) as collateral.

Pledging LDOT and LKSM as collateral allows DOT and KSM holders to continue earning staking rewards while simultaneously being able to borrow collateral against their holdings.

On March 23, Acala joined with nine other parachain teams to launch a $250 million “aUSD Ecosystem Fund” that is designed to support early-stage startups planning to build strong stablecoin use cases on any Polkadot or Kusama parachain.

Acala, nine parachain teams, and a group of venture funds have launched the $250 million 'aUSD Ecosystem Fund' ️

The fund is seeking early-stage projects from any @Polkadot or @KusamaNetwork parachain with strong $aUSD stablecoin use cases https://t.co/OJ2V47ZUry pic.twitter.com/NDgLg2bG8N

— Acala (@AcalaNetwork) March 23, 2022

As of May 31, 6.31 million aUSD have been minted and the amount of pledged capital locked on Acala stands at $91.53 million.

OUSD

Origin protocol’s OUSD is a stablecoin that is fully backed by more recognizable stablecoins like USDC, USDT and DAI.

Users can mint OUSD by pledging their stablecoin collateral on the Origin Dollar protocol and earn a yield of 12.79% by holding OUSD in a wallet. Yields that are paid to OUSD holders come from automated strategies managed by smart contracts that put the deposited funds to work in DeFi.

After briefly dropping to a low of $0.967 on May 12 during the height of the UST fallout, OUSD has, for the most part, maintained a price above $0.996 and has a current circulating supply of 63,605,444.

Tether’s reported bank partner Capital Union shares its crypto strategy

Tether stablecoin’s reported bank partner Capital Union supports a large variety of digital assets as part of its trading and custody services.

Capital Union, a Bahamas-based bank that reportedly holds a portion of reserves by the Tether (USDT) stablecoin issuer, has been actively involved in the cryptocurrency industry.

The banking institution has rolled out crypto trading and custody services to its professional clients as part of the bank’s trading desk, a spokesperson for Capital Union told Cointelegraph on Tuesday.

“We work with a few selected trading venues and liquidity providers and a handful of custodians and technology providers, which allows us to support a large variety of digital assets as part of our trading and custody services,” the firm’s representative said.

Capital Union’s crypto-related services still represent a “fairly small portion” of its business, which is mainly focused on providing traditional wealth management and investment services, the representative noted.

The spokesperson did not elaborate either on what cryptocurrencies are supported on Capital Union’s platform or when they were launched, stating:

“We do not have a directional view on crypto markets or on any specific coins but as a forward looking financial institution have chosen to enable our professional clients to trade in this new asset class should they desire to do so.”

According to the representative, Capital Union has also been working actively on developing “transactional blockchain related capabilities” as the bank expects this to be an area of “significant disruption for the financial industry.”

Capital Union’s latest crypto-related remarks follow a Monday report claiming that Tether held some of its reserves at the Capital Union bank. The company’s representative declined to confirm or deny the bank’s involvement in Tether’s operations to Cointelegraph, citing confidentiality reasons. The only publicly available information from the bank is included in Capital Union’s annual reports, the person added.

Founded in 2013, Capital Union managed $1 billion of assets by the end of 2020. The bank partnered with Chainalysis in April 2022 to ensure the safe and compliant rollout of its crypto solutions like trading and custody. According to the bank’s spokesperson, the Bahamas was one of the first nations to adopt a regulatory framework known as the DARE Act in 2020.

“As a locally regulated bank, this allows us to offer crypto-related services to our clients, which are financial institutions, financial intermediaries and professional investors,” Capital Union’s representative said.

DeFi crypto wallet aims to decentralize inheritance of crypto and NFTs

Kirobo’s new inheritance solution allows users to generate and execute an automated last will without the need for lawyers, government authorities or any other centralized entity.

The concept of cryptocurrency inheritance continues to rapidly evolve as the decentralized finance (DeFi) industry spawns more ways to make a “crypto will.”

The Israeli crypto software provider Kirobo is moving to tackle a major void in the DeFi industry by providing crypto investors with an opportunity to pass private keys or transfer funds according to their last will.

The firm announced on Tuesday the launch of an inheritance feature on its decentralized crypto wallet Liquid Vault, allowing users to designate crypto wallets to inherit their funds.

The new solution enables the generation and execution of an automated last will and testament without the need for lawyers, government authorities or any other centralized entity. Instead, users just need to select up to eight beneficiaries and choose a date for distributing the assets to the designated wallets.

Liquid Vault’s new inheritance mechanism is based on Kirobo’s unique “future conditional transactions” technology, similar to the wallet’s backup feature. The tool allows users to create future transactions or get a secondary access point to crypto based on various conditions.

“Future conditional transactions is a unique infrastructure, based on smart contracts. It allows users to sign future transactions and to condition them on almost anything,” Kirobo CEO Asaf Naim told Cointelegraph. “It also allows third parties to develop complex services on the blockchain without the need to develop smart contracts,” the CEO added.

Launched in beta in late 2021, the Liquid Vault wallet supports Ether (ETH) and all ERC-20 tokens, including the Ethereum-based version of Bitcoin (BTC), Wrapped Bitcoin (WBTC), as well as ERC-721 nonfungible tokens (NFTs). At launch, Liquid Vault’s inheritance tool supports ETH and ERC-20 tokens, with Kirobo also planning to add support for theinheritance of NFTs with future updates.

“There’s a growing trend of Web3 users holding significant sums in cryptocurrency, increasingly relying on these assets in investment portfolios and retirement nest-eggs,” Naim noted. According to the CEO, the new tool unlocks a simple and secure inheritance mechanism to pass digital wealth to future generations while “staying true to Web3’s values of decentralization and community ownership.”

The issue of crypto inheritance is one of the most concerning questions for crypto owners as private cryptocurrencies like Bitcoin (BTC) don’t allow anyone but the owners to control their assets by design. As of 2020, as much as 4 million BTC, or about 20% of the total circulating BTC, was estimated to be lost forever due to lost access to BTC, with a large portion likely caused by death.

As previously reported by Cointelegraph, there are a wide number of ways to pass on crypto to the next generation, including using software inheritance services or simply sharing keys with trusted family members.