Bitcoin prices drop, DEX volumes explode
Record-breaking week and month for trading volumes on decentralized exchanges. Uniswap remains trading leader despite high commissions
Don’t fight with the market, because it’s like time. Even if it’s not always good, it’s always right
John Templeton
The closing week of February is set to end in the red after a month since the previous one. In terms of intensity, this is the worst weekly decline in over a month. For Bitcoin, if on Sunday prices were to close at Friday's prices below 47,000 USD, or lower, it would be a loss of more than 20 points calculated as a percentage on a weekly basis. To find a deeper loss one has to go back a year, to the middle week of March at the height of the crypto and financial market sell-off, when Bitcoin's value recorded a loss of more than 33%. In just two weeks' time, a year will have passed since one of the darkest periods in Bitcoin's history. In those days, Bitcoin's quotations plunged below USD 4,000, a step away from the lows recorded in December 2018 in the USD 3,300 area, making people fear the worst and betraying the expectations of the asset defined as 'digital gold'. It only took a few months for the fans of the king of cryptocurrencies to smile and gain confidence again, as it returned to shine by breaking record after record at a daily pace. The new highs are raising the attention not only of ordinary people, mostly attracted by the false illusion of easy gains, but also of governments and financial institutions.
During the course of the week there was renewed talk of stablecoins and digital currencies issued by central banks. The payment of an $18.5 million fine closes the investigation against Bitfinex and the Tether stablecoin initiated in April 2018 by New York Attorney General Letitia James, putting an end to insinuations made in recent years about the link between the Tether (USDT) issued and the price of Bitcoin. For the full story read the news section. On the same day, Federal Reserve Chairman Jerome Powell said that the US central bank was "looking very carefully at the issue of issuing a digital dollar", calling it a "high priority" project. A few hours earlier on Monday, U.S. Treasury Secretary Janet Yellen, after once again labeling Bitcoin as an 'inefficient' means of payment, expressed her support for the issuance of a digital dollar issued by the central bank to facilitate faster, safer and cheaper payments, even for Americans who do not have access to current digital payment systems and bank accounts.
Now it is only a matter of time. In the coming years, the United States will also issue its own digital currency. The process will have to find the right communication policies to gain people's trust and regulations that are still unclear. While it may seem a danger to many, an official cryptocurrency backed by the US government may also have ramifications for decentralized finance and could also trigger mass adoption of existing cryptocurrencies, opening up unimaginable scenarios.
Decentralized Finance
As the entire sector declines, so does the total value of locked tokens (TVL) in DEcentralized FInance projects. From the all-time highs of more than $44bn reached on Sunday 21st and Monday 22nd February, the TVL has lost more than $7bn. The price turbulence of the last few days has led many users to lock Ether, which is back up to around 8 million locked units, the most since mid-November 2020. In contrast, tokenized bitcoin drop by about 3 thousand units for a total of just over 47,000 BTC locked as collateral for decentralized finance activities.
Total Value Locked in DeFi
Maker is confirmed as the industry leader with $5.8 billion
Followed by two other lending and financing projects Compound and Aave both at $4.6 billion.
Among the decentralized trading protocols Curve with $4bn of collateral surpasses the Uniswap project. A record week also in terms of volumes.
Over the past seven days, trading on the decentralized exchange (DEX) has increased by 30% to surpass $18,5 billion in total. For two consecutive days, the Uniswap DEX has traded over $1 billion. This unprecedented event confirms that decentralized trading exchanges are becoming increasingly popular, despite rising fees that make it prohibitively expensive for some users to trade for sums of just a few tens of dollars.
DEXes Volume last 7 Days
In the last seven days, Uniswap has broken through the $8 billion barrier for the first time, although its share of the total market has fallen to 47%.
The SushiSwap vampire project doubles its weekly volume to over $4 billion and 24% of the market.
Head-to-head between 0x and Curve to win the third position of the week’s most used DEXs, with $1.4 billion and approximately 8% of dominance for each.
DEXes Monthly Volume
With 48 hours to go before the end of the month, total volumes touch to $70 billion, the all-time record for volumes traded month-on-month.
5 hottest DeFi news of the week
Sorare NFT project raised 50 million dollars
Polkadot launches a new API for accessing the blockchain
US Regulation could be against DeFi
Uniswap and Ethereum crazy fees
Tether increases its market cap again and again
Technical Analysis
Bitcoin (BTC)
From the recent all-time high of 58,300 USD last Sunday, February 21st, the declines of the last few hours have brought the price back to the 44,000 USD mark. Despite the considerable downward movement that indicates a loss of 25% in value, technically the movement can be configured as a retracement in the medium term. In fact, taking as a reference the area of the double minimum at the end of January and the recent high, 44,000 USD corresponds to the 50% Fibonacci retracement (1). Analyzing the price movement, the decline comes precisely in the middle of the two-month cycle that began at the end of January and I hypothesize it should end after mid-March. It becomes important to follow the evolution of the price next week. Following the cyclical analysis, I expect a rebound of the price that will give me indications of the strength of the current monthly cycle that, at the moment, remains bullish. If the rebound were to bring prices back above 52,000 USD (2) the bullish signal would be reinforced. While a bearish movement below the support of 44,000 USD would begin to give the first indications of failure of the bullish structure built in the last month. For the medium/long term it remains important not to push below 34,000 USD (3) in the coming days or weeks.
BTC Chart
The fall in prices over the last few days is beginning to clarify the next strategies of professional traders in options that continue to remain set to the upside. Put options, twice as many as Call options (on the upside), are increasing in coverage. It means that eventual bearish extensions should be less volatile and more controlled. On the upside, the 49,000-49,600 USD area is the resistance range to protect. A price rebound in line with a new weekly sub-cycle, as indicated above, should find strong resistance to protect extensions above 50,000 USD.
BTC Options
Ethereum (ETH)
Unlike Bitcoin, Ethereum's most reliable and regular cycle appears to be the quarterly cycle. I consider the current 3-month cycle to have started in late December. If correct, the cycle has passed its halfway point and topped out with recent highs above 2,000 USD last Saturday, February 20th. A rise that has exceeded 270% multiplying 4x its value in less than two months. Although the bearish intensity of the current movement exceeds 33%, technically it is still a price retracement. In fact, the 50% Fibonacci retracement passes in the 1,300 USD area. As already written and explained several times in recent weeks, the bullish structure built by Ethereum in recent months is more harmonious than that of Bitcoin, resulting in easier identification of the technical operational areas. Although structured differently with the monthly cycles, I expect Ethereum to rebound in the coming days in line with the new weekly cycle. A rebound that should not have much strength and should extend to the maximum area of 1,800 USD. An eventual return above 1,800 USD would provide an important signal of strength that would change the current hypothesis developed. It will be necessary to understand the strength of the rebound in order to assess the next support levels, useful for operations in line with the closing of the quarterly cycle that, like for Bitcoin, should end in the second part of March. The medium-term support is in the 1,300 USD area. Only extensions below 1,000 USD would begin to change the long-term scenario, still currently set to the upside.
ETH Chart
Traders in options on Ethereum do not seem optimistic. Upside hedges are predominant with a Put (downside) to Call (upside) ratio of 1:8. The protections are at lower levels than those indicated in the analysis written above. The strength protecting the resistances in the 1,650 USD area is important, which coincides with the area of relative highs tested in recent hours. Bearish extensions below 1,300 USD, the technical support area indicated above, would open spaces to give a quick impulse to speculation to the downside.
ETH Options
Crypto Heroes is here, an NFT Trading Game inspired by the crypto world
In March, Noku (www.noku.io) will come out with Crypto Heroes, a Trading Cards Game powered by blockchain and Non-Fungible Tokens (NFTs).
The idea is to combine the Pokémon card game with fantasy football and put everything on the blockchain.
Users will have their "heroes" in the form of tokens in their Wallet and will be able to deploy them against their opponents in a game that will reward whoever performs the best. So one might line up the Ethereum card/NFT + Vitalik Buterin + Nick Szabo against a team made up of Binance Coin + CZ + the Cake card and see who will accumulate the highest performance in that match.
The scores are calculated on the basis of the crypto performance on CoinMarketCap, and each card/NFT is associated with one or more assets (BTC, ETH, BNB, etc ...).
To play simply open a Noku Account on www.noku.io, and a Noku Wallet, and you will receive the first 4 cards for free, then you will be entitled to receive a weekly airdrop of two cards until the start of the official tournament.
The teams have 10 cards, 8 of which are crypto heroes and 2 antagonists who score negatively. That's right, because in this game cryptocurrencies challenge fiat currencies and central banks!
It is compulsory to have 2 antagonists in each match.
Special cards can be purchased on the Noku platform to make the game even more interesting.
The intention of Roberto Gorini, the creator, is to educate more and more people about the basic concepts of cryptocurrencies, while having fun and playing. Games are always the ideal way to learn new things.
The technology behind Crypto Heroes has been developed in-house by Noku's team of developers. NFTs are created and managed on NOKUCHAIN, a cross-chain developed especially for NFTs and DEFI tokens. It is currently impossible to play on a MAINNET like Ethereum's, as it would be slow and unnecessarily expensive. NOKUCHAIN validates transactions through a PoA (Proof of Authority) algorithm, but is periodically anchored to the various mainnets (Ethereum and Bitcoin). All the logic of the game is based on Smart Contracts and verifiable on the Blockchain, but transactions are free, thanks to the particular algorithm.
With Noku's Blockchain, collecting and trading NFTs becomes a reality as each user can verify the exact circulation of each card directly on the blockchain.
The airdrop of NFT cards has just started. Those who sign up will receive two free cards per week. Then the 2021 Tournament will start and the prize money will be 1 bitcoin... that's right, 1 bitcoin, and who knows what the value of 1 BTC will be at the end of 2021!
For more information: www.noku.io