Cryptocurrency market analysis 10: Crypto news, DeFi madness

07/28/2021, 04:28 PM

Cryptocurrency market analysis 10: Crypto news, DeFi madness

The past month was marked by the DeFi protocol, the “Ethereum Killer” and the seemingly unstoppable ChainLink which continues to break all records.

Alternative platforms are trying to benefit from the regular delays and prolonged deadlines for the release date of the new version of the Ethereum platform, which we all have been impatiently waiting for.

Cardano recently released a new version of the protocol which has activated the Proof Of Stake. On the other hand, there is Elrond, claiming that he has done everything that Ethereum has not managed to do for years.

The Elrond network should be put into circulation at the end of the month and it will work on the Proof Of Stake system and support sharding.

Great promises have quickly reflected on the price which is breaking records every day. It remains to be seen whether the final product will justify the current price and expectations.

Cryptocurrency heatmap price indicator.

Chainlink continues to grow and break records with no end in sight due to the general acceptance of the platform and the lack of any real competition. However, we advise caution when investing into LINK because every parabolic growth ends painfully sooner or later, i.e., results in a deep revision of the price. Let us also mention Theta which had good performance and an excellent growth round due to its partnership with Samsung.

DeFi madness

There was a big craze over DeFi services during the past few weeks. Everything started when the Compound network was released, enabling “easy” profits on the so-called yield farming. In other words, COMP tokens are received as a compensation for providing liquidity.

Their value sky-rocketed due to high demand from users eager to profit by using the Compound protocol services. COMP tokens are needed to use the Compound protocol.

Genuine madness is happening on Uniswap - a decentralised Ethereum stock exchange. Tens of new ERC-20 tokens are issued every day, created by frauds who try to make a quick turnover without any backing. It is a madness in which only the most skillful people manage to obtain a profit. Fortunately, because of the small liquidity, most of the fishy tokens are relatively hidden from sight.

Crypto news summary

  • There are rumors that Pay Pal is planning to introduce the cryptocurrency payment method.
  • Chinese TikTok users tried to "pump" the value of Dogecoin by making several videos encouraging other users to invest in Dogecoin. The videos became viral and started the trend. The value of Dogecoin didn't reach the value of $1, but it jumped by 82% in one day.
  • Various scams continue to plague the internet. Some scammers used specially created Bitcoin addresses which contained the names of popular stars to squeeze over $2 million from careless users.
  • Some USDC and USDT addresses have been blocked by the people who issue these coins. These people have the ability to block any address upon the request from security services. This is a good reminder that most of the stablecoin currencies are not decentralized but are managed by companies.
  • One of the most popular crypto companies - Coinbase is allegedly going public. They plan to release the company's shares to the US stock exchange. Company is also trying to improve relations with national authorities by selling software for blockchain analysis which enables the US Secret Service to track suspicious users.
  • Members of the Ethereum Foundations recently held a large AMA on Reddit. Many technical questions were answered, and the current state of ETH 2.0 development was described in detail. As it was expected, the Phase 0 will not be activated this summer, but rather it has been postponed for autumn. We recommend all Ethereum holders to read what the members of the Foundations had to say because they explained a lot of the key details which reveal what is to come over the next few months.
  • The Bitcoin hash rate broke its previous record and reached the highest level in history. With it, the mining industry has completely recovered from the consequence of halving, becoming stronger than ever. Unfortunately, most of the miners (around 65%) are still concentrated in China.

Bitcoin analysis

Over these past few days, Bitcoin had a movement of a stablecoin. Its value is constantly moving around USD 9,000. The entire focus is directed at altcoins, mentioned in the introduction. This situation is playing well on the nerves of the bitcoin maximalists and traders which eagerly expect the next step.

Regardless of the direction of the next step, we expect a high dose of volatility in which the altcoins surely will not be spared.

We still expect that support will be found close to the green support lines marked on the graph. The psychological resistance border of USD 10,000 has been tested so many times that when the next upward price trend arrives, we expect to smoothly pass it.

With this in mind, it is important to notice that Bitcoin is currently moving on a trajectory with no clear trend. Therefore, it is not prudent to guess what could happen next, it is wiser to let the market do its thing and wait for a new trend to come.

The candle chart showing the movement of Bitcoin over time.

It is interesting to observe the trend of an increase in correlation between Bitcoin and traditional markets monitored by the US S&P 500 index. Despite the increase of the coefficient (0.25), the correlation can still be considered low. If you notice a common denominator, this information can help in making trading decisions.

The graphic comparison of Bitcoin markets with other markets.

Bitcoin Store is not an investment consultancy company and as such, is not authorized to provide financial advice. Our thoughts and forecasts can't be a basis for an investment. All analyses have been published for information purposes only and can't be considered as investment advice.

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