Bitcoin without Brakes, hits $1 Trillion Market Cap
Bitcoin's capitalization exceeds 1 trillion for the first time. Gravity-defying growth
"It's not so important to buy at the lowest possible price as it is to buy at the right time."
Jesse Livermore
The sharp rise in prices and the daily news about bitcoin and cryptocurrencies are increasingly attracting the attention of the mainstream and consequently the average person on the street. Unless you live in a dark cave or another galaxy you will have heard or read about bitcoin at least once a day in the last week. Suddenly people seem to be crazy about bitcoin, cryptocurrency and blockchain again. Everyone wants to know, everyone wants to participate. A similar effect to the last period in 2017 when for the first time many people heard about bitcoin, cryptocurrencies and blockchain. But at that time just as everything quickly developed, everything quickly burned out. The ICO (Initial Coin Offering) craze hit everyone hard, indiscriminately. The smart ones managed to get out in time, or almost. However, as happens in euphoric phases, people buy everything without knowing what they are doing and without knowing the real value. They follow the mania of the masses who are afraid of missing the high-speed train and are willing to jump during the race, blinded by the returns and without considering the risks. From record highs in less than three months, the price of Bitcoin, as well as the entire galaxy of tokens, lost over 70%, burning not only dreams but also a lot of capital. From the lows touched in the first quarter of 2018 began a long winter period that for two years confined Bitcoin & Co. to being tools for insiders again.
Today, or rather for the past three months, the situation is turning around again. Just a few weeks ago we were here commenting on the crossing of the $20,000 mark, the previous record of mid-December 2017 . Two months later, the value of Bitcoin has multiplied 2.5 times its value flying to within a step of 55,000 USD in the last few hours. An unstoppable growth that yesterday passed the wall of $1 trillion in capitalization.
The rest of the sector also reached record levels with altcoins. Ethereum, the queen of the Alts, is one step away from 2,000 USD. An incredible mass of liquidity is flooding the entire sector. Unlike in 2017, the liquidity is not coming from small investors or those who already held Bitcoin and decided to exchange it for Ethereum to participate in Initial Coin Offerings (ICOs). The current liquidity comes from institutional and professional investors who are increasingly buying Bitcoin for their own and their clients' funds. Recent news is that the clever business company Microstrategy has announced plans to issue $900 million worth of convertible obligations with the proceeds used to purchase Bitcoin. A convertible senior obligation is a type of debt security that can be converted into shares or repurchased by the issuer. The obligations issued by Microstrategy will mature in 2027 but can be repurchased in 2024.
A few weeks ago, on 20 December 2020 to be precise, the most popular financial investment site "The Motley Fool" published an article titled "Here's why I won't buy Bitcoin and neither should you". This week The Motley Fool bought $5 million worth of Bitcoin.
And what are you doing? Playing or watching?
Decentralized Finance
The trading volume on decentralized exchange platforms continues to grow. In the last 7 days, the volume generated has risen to around $4 billion, the highest peak ever. Since the beginning of the month, over $45 billion has been traded, a 37% increase over the last 30 days. Continuing this pace into the last week of February should result in a second consecutive month reaching $60 billion in volume, twice the monthly record set in September 2020.
DEXes Volume last 7 Days
Uniswap continues to strengthen its leadership with over $7.7 billion per week rising to 55% of the entire market.
SushiSwap's vampire project follows with $2.9 billion weekly, its highest volume ever, but fails to confirm last week's market share by dropping two points to 20%. This is a sign of how other new projects are gaining ground.
The 1inch.exchange project - an aggregator of decentralized exchanges (DEXs) allowing users to find the cheapest solution - with over 22,000 trades per week marks a new record. A sign that despite the difficulties of Gwei commissions continuing to rise, it highlights the growth in both interest and usage for decentralized trading platforms.
Despite the reduction from last week's levels in the total amount of Ethereum and Bitcoin tokenized and tied up in the various lending, financing and trading projects, the increase in the price of both Ether and Bitcoin raises the total amount of locked collateral above $43 billion for the first time.
Total Value Locked in DeFi
The leading project remains Maker with $7.4bn and a market share that remains consolidated above 17%.
This is followed by two other lending protocols by Aave and Compound, both above $5bn.
In fourth place is Uniswap, the first decentralized exchange with $4.5 billion.
5 hottest DeFi news of the week
Charlie Lee tweeted against NFT
Polkadot to create new parachains
Nexus raises 2.7 M in a token sale
Uniswap reached a $100 billion volume
Elon Musk to launch Marscoin
Technical Analysis
Bitcoin (BTC)
Prices have been climbing unstoppably and in seven days have gained about 10,000 USD, a gain of over 20% since last Friday's levels. After breaking through the psychological barrier of 50,000 USD, prices are quickly heading for the next resistance of 60,000 USD. Since the beginning of the year, Bitcoin's value has almost doubled, surpassing even the best and most absurd short- and medium-term assumptions. The rise seems to be unstoppable, reaching ever-higher levels. In such a context it also becomes difficult and almost superfluous to analyze the rise using classic technical analysis. The support levels are moving away, leaving room for potentially double-digit speculative movements without compromising the medium and long-term trend. Daily volatility increased by more than 5.5%. Removing the nervousness between March and April 2020, coinciding with the start of the Covid19 crisis, these are levels not seen since August 2019, when the price of Bitcoin moved between USD 9,000 and USD 12,000.
Using Fibonacci projections the next target level is just below 60,000. Looking back, the short-term supports left during the unbridled run are fragile. Only a drop below 47,000 USD would start to trigger the first short-term alarms while for the medium term it is necessary for prices not to go below 41,000 USD.
BTC Chart
Options strategies continue to indicate that professional traders remain confident on the upside by defending the short-term support levels above USD 50,000. Any fall below this psychological area could trigger some repositioning with derivatives hitting all-time highs over the past week. Aggregate open interest (this is the figure that calculates the positions of all contracts, both up and down, held by traders beyond the close of the day) exceeds $19 billion for futures and $13 billion for options.
BTC Options
Ethereum (ETH)
Bitcoin's run overshadowed Ethereum's performance, which continues to break new records almost unnoticed. In the last few hours, the price of Ether has broken through the USD 2,000 mark. Since last Friday, the price has gained around 20%, which, when added to the performance of the past few weeks, more than doubles the price of Ether since the beginning of the year. Having repeatedly both anticipated and then analyzed what has happened in recent months, it is almost unnecessary to mention that Ethereum's rise is less surprising given that the quasi-textbook consolidation of prices between summer and autumn last year built the foundations for a rise that is now finding the realization of bullish targets. With prices continuing to move in unprecedented price areas, unlike Bitcoin, the price of Ethereum moves in less violent upward snatches. This allows traders to better analyze movements by identifying more reliable reference areas.
This is why professional traders using options hedges continue to place their hedges preferring to cover the risk of further rises above USD 2,100. This means, just as last week, to avoid taking bearish positions while maintaining a pragmatic approach. Keep following the uptrend but without ignoring the risk of possible downward reversals.
ETH Chart
Ethereum futures derivatives also had their highest ever Open Interest peak this week at over $7.2 billion. Two weeks after its launch on the CME's largest commodities exchange in Chicago, the futures' open interest closed at $89 million at yesterday's close on Friday, February 19th. The day before, on Thursday, February 18th, the total volume traded on the CME exchange exceeded $100 million on the day, which recorded an aggregate volume across all platforms of $20 billion. For Ethereum futures, the day with the highest futures trading volume ever remains the record set on Jan. 11th at more than $50 billion.
ETH Options
The Nemesis, a virtual gallery for NFTs
Interview with Alessandro de Grandi, CEO and co-founder of The Nemesis
- How and when was The Nemesis born?
The idea and technology behind The Nemesis was born over 5 years ago in the mind of Alessandro De Grandi, who imagined a tool for the virtualization of 3D and augmented reality environments that would be responsive and easy to use. Then in 2019, this idea evolved into The Nemesis project, which in less than 2 years we managed to structure into what we see today.
- How does it work? Who can participate in events or exhibit their work?
The Nemesis is a platform that allows an artist, or an influencer in general, to convey their content in a completely new way, within a virtual location designed to engage users and create interaction, as part of gamification.
Anyone can display their artwork in a virtual art gallery on The Nemesis. We will soon be launching an editor that allows artists to create and update their own branded metaverse in complete autonomy. Within a branded metaverse, it is also possible to organize a live streaming event - all that is required to go live is a connected smartphone!
On the user side, anyone can explore a virtual art gallery and participate in events! The user experience from the desktop is more complete and immersive for the time being, but within a few weeks, the mobile app for iOS and Android will be available to enjoy our killer features also from smartphones.
We've also introduced a guest mode that allows users to explore the metaverse and participate in events without having to register with the platform, to accommodate as many community users as possible.
- What are your long-term goals?
In the long term, we aim to become the platform of choice for brands, influencers and artists who want to offer their communities branded experiences in virtual and augmented reality, to engage millennials and increasingly demanding users in general. The interactions possible thanks to gamification lead the user to play and have fun with the brand, the influencer or the artist and this greatly increases engagement and community participation.
- Why NFTs?
NFTs are a huge and booming market, but at this point in time, we don't think there is a worthy tool that can offer both performance technology and aesthetic appeal. We look at Decentraland and CryptoVoxels, which are great projects, but for us, the former is still not very usable for the general public and the latter is not up to the graphical expectations of the average user today. We think that the way in which art is displayed is itself part of the artistic process, so we have devised a way to allow the crypto artist to have his own space, dedicated to his digital works and his project, which can highlight his work and help him stand out from the others, thanks to gamification and user involvement.