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Price analysis 4/12: BTC, ETH, BNB, XRP, ADA, DOT, UNI, LTC, LINK, XLM

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Bloomberg Intelligence senior commodity strategist Mike McGlone equated the current consolidation in Bitcoin (BTC) price to that of a “caged bull, well-rested to escape.” When compared with the rallies a year after the previous two Bitcoin halvings in 2012 and 2016, the strategist called the current price action “tame.’

According to McGlone, Bitcoin is “still in price-discovery mode” and its plateau is still far away.

While Bitcoin remains in focus, altcoins have continued to steal the show. Bitcoin’s market dominance, which stood closer to 70% on Jan. 4 has continued to slide even though its price has risen more than 104% year-to-date. The current market dominance at 54.3% is the lowest since April 2019 according to data from CoinMarketCap. This suggests that several altcoins are outperforming Bitcoin by a large margin.

Daily cryptocurrency market performance. Source: Coin360

However, approval of a Bitcoin exchange-traded fund could tilt the advantage back in favor of Bitcoin. Mike Novogratz’s Galaxy Digital became the latest to file an application with the United States Securities and Exchange Commission for a Bitcoin ETF on Monday. The growing list of candidates applying to launch a Bitcoin ETF shows that there is still huge demand for the digital asset

Will Bitcoin continue to trade sideways while altcoins rally or will it resume its uptrend and lead from the front. Let’s analyze the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin formed an inside day candlestick pattern on April 11, indicating indecision among the bulls and the bears. The bulls tried to resolve this uncertainty to the upside today by piercing the all-time high at $61,825.84, but the bears had other plans. They again successfully defended the overhead resistance.

BTC/USDT daily chart. Source: TradingView

Although the bears are defending the overhead resistance, they have not been able to sink the price further away from $60,000. This suggests the bulls are not closing their long positions in a hurry as they anticipate the uptrend to continue.

If the bulls can drive and sustain the price above $61,825.84, the BTC/USDT pair will complete a bullish inverse head and shoulders pattern. That could result in a rally to the pattern target at $69,540. If the momentum sustains, the next target to watch out for is $79,566.

This bullish view will invalidate if the pair turns down and breaks below the 50-day simple moving average ($54,7823). Such a move could signal the start of a deeper correction.

ETH/USDT

Ether (ETH) has been trading above the breakout level at $2,040.77 for the past three days, but the up-move lacks momentum. The long wick on the April 10 candlestick and the inside day candlestick pattern on April 11 suggests hesitation by the bulls to push the price higher.

ETH/USDT daily chart. Source: TradingView

If the price does not pick up momentum within the next few days, the bears will try to pull the price back below $2,040.77. If the ETH/USDT pair breaks below the 20-day exponential moving average ($1,985), the next stop could be the trendline. A break below this support could signal the start of a deeper correction.

However, the upsloping 20-day EMA and the relative strength index (RSI) above 61 indicate advantage to the bulls. If the bulls punch the price above $2,200 with force, the pair may start the next leg of the uptrend that could reach $2,618.14.

BNB/USDT

Binance Coin (BNB) is in a strong uptrend, but the up-move of the past two days is showing signs of a melt-up. The long wick on today’s candlestick suggests some traders are booking profits at higher levels.

BNB/USDT daily chart. Source: TradingView

Although the 20-day EMA ($385) is sloping up, the RSI above 84 indicates the rally is overheated in the short term. This could result in a minor correction or consolidation for the next few days. In strong uptrends, the corrections generally do not last for more than three days.

The first support on the downside is the 38.2% Fibonacci retracement level at $483.95. If the price rebounds off this support, it will suggest the sentiment remains positive and bulls are buying on dips. They will then try to resume the uptrend by pushing the price above the all-time high at $638.56.

If they succeed, the next leg of the uptrend could begin, which may propel the BNB/USDT pair to $888.70. On the contrary, if bears sink the price below $483.95, the pair could drop to the 20-day EMA.

XRP/USDT

The volatility contraction on April 9 was resolved to the upside on April 10 and XRP rallied above $1.11. The bulls continued their purchase on April 11 and pushed the price to $1.50. However, the long wick on the day’s candlestick suggests traders booked profits at higher levels.

XRP/USDT daily chart. Source: TradingView

The bears could not build up on the advantage today and start a correction. The bulls tried to resume the uptrend but failed, resulting in the formation of a Doji candlestick pattern. This suggests indecision among the bulls and the bears about the next directional move.

If the buyers can propel the price above $1.50, the XRP/USDT pair could rally to $2. Contrary to this assumption, if the price turns down and dips below $1.30, the pair could start a correction.

The major support on the downside is $1.11. If the buyers can flip this level into support, the pair will make one more attempt to rise above $1.50. On the other hand, a break below $1.11 may result in a drop to the 20-day EMA ($0.89).

ADA/USDT

The bulls successfully held Cardano (ADA) above the 50-day SMA ($1.17) in the past few days and are currently attempting to start an up-move. However, the long wick on today’s candlestick suggests that buying dries up above $1.33.

ADA/USDT daily chart. Source: TradingView

If the bulls fail to sustain the price above $1.33, the aggressive bears may again try to sink the price below the 50-day SMA. If they manage to do that, the ADA/USDT pair could drop to the $1.03 to $0.98 support zone.

A rebound off this zone could keep the pair range-bound for a few more days. Alternatively, if the bears sink the price below the zone, the pair could decline to $0.80.

This negative view will invalidate if the pair sustains the price above $1.33. That could push the price to $1.48. A break above this resistance could start the next leg of the uptrend that may reach $2.

DOT/USDT

Polkadot (DOT) has been sandwiched between the 20-day EMA ($39.30) and the overhead resistance at $42.28 for the past few days. However, this tight range trading is unlikely to continue for long.

DOT/USDT daily chart. Source: TradingView

If the bulls can propel the price above $42.28, the DOT/USDT pair could rally to $46.80. The bears may again offer resistance at this level but if the bulls can overcome the barrier the pair could climb up to $53.50 and then $57.

The marginally upsloping 20-day EMA and the RSI above 54 suggest only a minor advantage to the bulls. If the bears can sink the price below the moving averages, it will open the gates for a decline to $32.50 and then $26.50.

UNI/USDT

Uniswap (UNI) has soared above the all-time high at $36.80 today. Although the moving averages are yet to turn up, the RSI has risen close to the overbought territory, indicating a pick-up in momentum.

UNI/USDT daily chart. Source: TradingView

If the bulls can sustain the price above $35.20, it will suggest strong demand at higher levels. The UNI/USDT pair could then march up to $43.43 and if this level also gets taken out, the up-move may hit $50.

Contrary to this assumption, if the bulls fail to sustain the price above $35.20, it will suggest that traders are booking profits at higher levels. If the price dips and sustains below $35.20, the range-bound action in the pair could continue.

LTC/USDT

Litecoin’s (LTC) volatility contraction on April 8 and 9 was followed by an expansion in favor of the bulls. The buyers pushed the price above $246.96 on April 10 and have successfully managed to sustain the price above it since then.

LTC/USDT daily chart. Source: TradingView

The upsloping 20-day EMA ($218) and the RSI above 63 suggest the path of least resistance is to the upside. If the buyers can drive the price above $262.93, the LTC/USDT pair could rally to its next target objective at $307.42.

This bullish view will invalidate if the price breaks and sustains below $246.96. Such a move will suggest that traders booked profits at higher levels. The critical support to watch on the downside is the 20-day EMA.

A strong bounce off it will suggest the sentiment remains positive and the bulls will once again try to resume the uptrend. Conversely, a break below the 20-day EMA could pull the price down to $170.

LINK/USDT

Chainlink (LINK) is stuck between $24 and $36.93. The marginally rising 20-day EMA ($30.92) and the RSI above 55 suggest the bulls have a slight edge. However, the failure of the bulls to challenge the $36.93 overhead resistance indicates that demand dries up at higher levels.

LINK/USDT daily chart. Source: TradingView

The bears are currently trying to sink the price below the $32 support. If they can accomplish that, the possibility of a break below the moving averages increases. Such a move could pull the price down to $24.

Contrary to this assumption, if the price bounces off the 20-day EMA, the bulls will make one more attempt to drive the price above $36.93. If they succeed, the LINK/USDT pair could resume its uptrend and rally toward $40 and then $50.

XLM/USDT

The bulls are attempting to resume the uptrend in Stellar Lumens (XLM) but they are facing stiff resistance at the $0.60 level. The bulls pushed the price above the overhead resistance on April 11 and today but they could not sustain the breakout.

XLM/USDT daily chart. Source: TradingView

If the bulls do not allow the price to slip below $0.55, it will suggest accumulation on dips. The upsloping 20-day EMA ($0.47) and the RSI near the overbought territory suggest the bulls are in control.

A breakout and close above $0.60 will be the first sign that bulls have overpowered the bears. If that happens, the XLM/USDT pair could resume the uptrend and rally to $0.72 and then $0.85.

On the other hand, if the bears sink the price below $0.55, the pair could drop to the 20-day EMA.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Price analysis 4/12: BTC, ETH, BNB, XRP, ADA, DOT, UNI, LTC, LINK, XLM

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The Emerging Trend of Security Token Offerings

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Codezeros

One of the advanced emerging technologies is blockchain. It supports crypto assets like Bitcoin, Ether, utility tokens, and security tokens. In the financial service marketplace, crypto-assets open a world of opportunities. Most of the people out there are familiar with utility tokens, but the concept of security tokens is relatively new.

A security token extracts its value from an external and tradable asset. The trend of security token offering development is emerging rapidly. To have a clear understanding, follow the article.

The Emerging Trend of Security Token Offerings

What is STO?

For the initiation of the projects, fundraising serves to be a crucial factor for the startup. In the past couple of years, several mechanisms of fundraising have assisted the startup. Several startups have implemented ICO (Initial Coin Offering) to fulfill their purpose of fundraising. But, currently, STO (Security Token Offering) has replaced ICO.

We need to understand that each fundraising version has its advantages and disadvantages. Those versions are used by competitors to bring out a necessary featureful device. The latest type of fundraising that is used by startups is STO. The other forms of fundraising offered by security token offering development companies are utility tokens given to the investors.

Differences between IPO, ICO, and STO?

IPOs are the common way for companies to opt for fundraising. Having an IPO (Initial Public Offerings), the company can sell shares with corporate rights like voting or dividend. Such shares are highly regulated securities.

ICO emerged in 2017. The startups or companies that deal with projects associated with blockchain make use of ICO. In exchange for the capital, it provides digital value to the investors. In the beginning, most of the investors were opting for ICOs to invest. But with time, the number of digital frauds increased over here.

This made ICOs ineffective, and STO solutions took over. The popular reason behind this is that STOs were able to provide security to their investors. Keep in mind that ICOs did not fail initially, as, at that time, the tokens they provided to the investors were based on the emerging technology of blockchain. The utility tokens help the investors to access any platform of products.

Because of their high liquidity, the investors of ICO got a new way to make use of the tokens. The token could be sold for higher charges. However, the companies could not finish with their products even after gathering money from the investors. Thus, it eventually led to the loss for the investors, and thus, ICOs failed.

Insight about STO:

An investor always ensures that there should be no loss that he or she needs to face during the process. ICO did not facilitate security, and that is why these security tokens were launched to ensure a secure environment. Having real value, security tokens are the tradable assets’ digital representation.

While trading money from the companies the investors invest in, they will receive security tokens. The investment can be made peacefully, and one does not need to be worried about ROI (Return on Investment), as it is well-recognized by the law. The investment remains transparent because of the tokenization of securities.

Just like an ICO, an STO development company builds a smart contract on a network like Ethereum. To be more particular, what a usual contractor can perform, can be performed with a smart contract. There is no need for a middleman. It is fully digital.

Advantages of Security Token Offering:

We have understood that it helps in fundraising for startups and companies. But, apart from these are some more benefits that make it favorable for the companies out there. The popular benefits are as follows:

  1. The automated system eliminates frauds: Human intervention is eliminated because most of the transactions are performed on an automatic system. This means that there are little or no possibilities of extra charges or any fraud in the case of STOs. It not only improves the investors’ profitability but also increases their security.

2. Customization: Cryptocurrency can be easily customized. Any functionalities can be put, like dividends and transaction limits. The flexibility of digital assets not just makes it profitable but offers you customizable features as well.

3. No involvement of extra costs: In STOs, there is no existence of any middleman. Thus, one will never have to come across any additional costs, like a transaction fee. It increases profitability and makes the investment process less complicated for the investors.

4. One will not ever lose tokens: When a bitcoin is sent to avoid address, there is the involvement of risk up to a particular level. But the STOs can be programmed properly by the programs so that they can be recovered if stolen or lost. The only thing an owner needs to do is pass the procedures of stringent verification to acquire the tokens.

The popular STOs:

Among all the popular STOs, Nexo is comparatively more popular. It provides loans instantly with competitive rates. During the time of token sale, it raised 52.5$M successfully. Most of the shareholders of Nexo are also the most of Credissimo’s shareholders. The credibility of Nexo goes to the fintech group that is operating for several years.

Another successful STO is tZERO, which became the US’ first regulated security token exchange. At the time of token sale, they had successfully raised 134$M. CEO of Overstock was the founder of the platform. Overstock gives much credibility to the project.

In Luneburg, Germany, recently, a real estate object was tokenized. The platform was sold successfully for 1.5$M.

The future scope of the STOs:

Experts are expecting that security token offering services will enable many companies to improve their business’s liquidity by converting their valuable elements into an asset, which is more tradable. It will further leverage the company’s profit with newer investments.

To increase the fundraising capability, some startups are going to use the hi-tech blockchain feature of the STOs. They will do it by attracting global investors to make investments in their startups or companies.

Conclusion:

Compared to the ICOs’ security tokens, the STOs are more reliable and secured. This is the primary reason why most companies and investors are looking to turn their assets into tokens in the future. Moreover, STOs are now considered to be one of the most demanding investment mechanisms. We can conclude that STO will keep expanding in the upcoming future and tempt the companies and investors more towards STO.

The Emerging Trend of Security Token Offerings

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BTC December futures reach $73,500 — Is everyone flipping ultra bullish?

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Bitcoin (BTC) has been struggling to break the $60,000 resistance for almost a month. But despite the impasse, BTC futures markets have never been so bullish. While regular spot exchanges are trading near $59,600, the BTC contracts maturing in June are trading above $65,000.

Futures contracts tend to trade at a premium, mainly on neutral-to-bullish markets, and this happens on every asset, including commodities, equities, indexes, and currencies. However, a 50% annualized premium (basis) for contracts expiring in three months is highly uncommon.

BTC futures curve, in USD. Source: bitcoinfuturesinfo.com

Unlike the perpetual contract — or inverse swap, these fixed-calendar futures do not have a funding rate. Thus, their price will vastly differ from regular spot exchanges. Fixed-calendar futures eliminates eventual funding rates’ spikes from the buyers’ perspective, which can reach up to 43% per month.

On the other hand, the seller benefits from a predictable premium, usually locking longer-term arbitrage strategies. By simultaneously buying the spot (regular) BTC and selling the futures contracts, one gains a zero-risk exposure with a predetermined gain. Thus, the futures contracts seller demands higher profits (premium) whenever markets lean bullish.

The three-month futures usually trade with a 10% to 20% versus regular spot exchanges to justify locking the funds instead of immediately cashing out.

OKEx BTC 3-month futures annualized premium (basis). Source: Skew.com

The above chart shows that even during the 250% rally between March and June 2019, the futures’ basis held below 25%. It was only recently in February 2021 that such phenomena reemerged. Bitcoin surged by 135% in 60 days before the 3-month futures premium surpassed the 25% annualized level on Feb. 8, 2021.

While professional traders tend to prefer the fixed-month calendar futures, retail dominates perpetual contracts, avoiding the expiries’ hassle. Moreover, retail traders consider it expensive to pay 10% or larger nominal premiums, even though perpetual contracts (inverse swaps) are more costly when considering the funding rate.

BTC coin-based perpetual futures funding rate. Source: Bybt.com

While the recent 0.20% funding rate per 8-hour is extraordinary, it is definitely not unusual for BTC markets. Such a fee is equivalent to 19.7% per month but seldom lasts more than a couple of days.

A high funding rate causes arbitrage desks to intervene, buying fixed-calendar contracts and selling the perpetual futures. Thus, excessive retail long leverage usually drives the futures’ basis up, not the other way around.

As crypto-derivatives markets remain largely unregulated, inefficiencies shall continue to prevail. Thus, while a 50% basis premium seems out of the norm, one must remember that retail traders have no other means to leverage their positions. In turn, this causes temporary distortions, although not necessarily worrisome from a trading perspective.

While exorbitant funding rate fees remain, leverage longs will be forced to close their positions due to its growing cost. Thus, December’s $73,500 contract does not necessarily reflect investors’ expectations, and such a premium should recede.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

BTC December futures reach $73,500 — Is everyone flipping ultra bullish?

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How NFTs, DeFi and Web 3.0 are intertwined

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While blockchain itself provides the technology constructs to facilitate exchange, ownership and trust in the network, it is in the digitization of value elements where asset tokenization is essential. Tokenization is the process of converting the assets and rights to a property into a digital representation, or token, on a blockchain network. 

Distinguishing between cryptocurrency and tokenized assets is important in understanding exchange vehicles, valuation models and fungibility across the various value networks that are emerging and posing interoperability challenges. These are not just technical challenges, but also business challenges around equitable swaps.

Asset tokenization can lead to the creation of a business model that fuels fractional ownership, the ability to own an instance of a large asset. While discussing asset tokenization in a previous article, I also mentioned the value of an instance economy in democratizing finance, commerce and global access, as well as in creating a broader global marketplace at a scale never before seen.

With digital assets and their fungibility in a blockchain ecosystem, there are various drivers of valuation. These include: 1) tokens based on crypto economic models that are driven by supply and demand, and the utility of the network; 2) nonfungible tokens, or NFTs, which have an intrinsic value such as identification, diplomas and healthcare records — essentially, tokens that are simple proof validations of the existence, authenticity and ownership of digital assets; and 3) fungible tokens that are valued on various bases, such as the sum total of economic activity in the network (cryptocurrency), its utility (smart contracts and transaction network processing), assigned values (stable coins and security tokens), and so on.

In this article, I address the complex issue of the hyperbolic and rapid rise of NFTs, after a similarly meteoric rise of decentralized finance, or DeFi, creating amazing innovations — with immense promise of democratization, new business models and global marketplaces with global access — all fueled by the basic premise of decentralization and fundamental constructs of tokenization and wallets. While NFTs may be characterized as one-of-a-kind cryptographic tokens with some intrinsic value to a holder or to a market (art, collectibles), the NFT movement is indicative of a larger token revolution that will not only fuel massive innovation and growth in Web 3.0 protocols but also test the resolve of the DeFi movement, along with its ability to intersect and provide platforms and an exchange vehicle for all token types.

Growth in Web 3.0 protocols

The first two generations of web protocols were largely about disseminating information and connecting people. They fueled a massive growth in information and collaboration, and did wonders for connecting the world. However, those web protocols were never designed to move things of value. Also, as the Web 2.0 era reached its fullest potential, vulnerabilities such as “fake news” and the “batched relay” of the movement of assets via a series of intermediaries emerged. Threats to the commerce and financial infrastructure of the system risk destabilizing it.

Web 3.0 promises to safeguard all things we value: information, truth and digital assets — both fungible and nonfungible. Whereas Web 2.0 was driven by the advent of social, mobile and the cloud, Web 3.0 is largely built on three new layers of technological innovation: edge computing, decentralized data networks and artificial intelligence.

The growth of NFTs has not only empowered the ability for artists, skilled professionals and entrepreneurs to encapsulate innovation in a tokenized form but has also fueled the democratization of the platform as one of the promises of blockchain technology. The underlying infrastructure includes decentralized storage technologies, efficient consensus protocols, off-chain computing, and oracle networks to provide connectivity and validation to existing systems.

Collectively, the Web 3.0 set of technologies envisions a connected, trustless, accountable network for efficiently delivering value, thus crafting an infrastructure for things of worth. NFTs represent both transferable entities and nontransferable tokens that we value. The latter include things such as our identification, healthcare records and passports, things that represent us and allow us to participate in the digital economy with our own unique, digital identities.

As we dare to envision a shift toward a world with decentralized control, governance based on distributed technology that challenges every business model, and governance structure built upon centralized business frameworks, we do have to ponder some things. Not only the shift itself, but the motivation, incentive and monetization elements that fuel and power the economic infrastructure to move things that have value — thereby keeping up with our changing perception and subsequent realization of that value.

Intersecting with finance — DeFi

DeFi is the movement in the blockchain applications space that leverages decentralized network technology to disrupt and force a transformation of old financial products into trustless, transparent protocols, facilitating digital value creation and dissemination with few to no intermediaries. It is widely understood and accepted that — due to new synergies and co-creation via new digital interactions and value-exchange mechanisms — blockchain technology lays the foundation for a trusted digital transactional network that, as a disintermediated platform, fuels the growth of marketplaces and secondary markets.

While DeFi aims to deliver the promise of finance democratization, NFTs test the resolve of DeFi by delivering a competitive yet inclusive asset class, plus avenues to provide a medium of exchange, fungibility by other fungible asset classes, and liquidity to a traditionally illiquid market.

Asset classes resulting from DeFi protocols and NFTs avail themselves of the advantages of fractional ownership of the assets, blurring the lines between asset classes and using constructs like digital wallets as a receptacle for them. This is all supported by underlying layers of Web 3.0 that provide security and availability via decentralization, as well as trust and immutability via consensus, extending these principles to basic computer infrastructure like storage and interconnect.

Commercialization of Web 3.0 protocols, which manifest as fungible utility tokens, further blurs the lines with diverse financial innovation products introduced by DeFi (such as base assets and derivatives), products that are also tokenized. So, while decentralization is the underlying theme — and the wallet and the token are fundamental constructs — these blurring lines are quite profound.

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 author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Nitin Gaur is the founder and director of IBM Digital Asset Labs, where he devises industry standards and use cases and works toward making blockchain for the enterprise a reality. He previously served as chief technology officer of IBM World Wire and of IBM Mobile Payments and Enterprise Mobile Solutions, and he founded IBM Blockchain Labs where he led the effort in establishing the blockchain practice for the enterprise. Nitin is also an IBM Distinguished Engineer and an IBM Master Inventor with a rich patent portfolio. Additionally, he serves as research and portfolio manager for Portal Asset Management, a multi-manager fund specializing in digital assets and DeFi investment strategies.

How NFTs, DeFi and Web 3.0 are intertwined

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Price analysis 4/9: BTC, ETH, BNB, XRP, ADA, DOT, UNI, LTC, LINK, THETA

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Hong Kong tech company Meitu revealed on April 8 that it had added $10 million worth of Bitcoin (BTC) to its holdings which were purchased at an average rate of $57,000 per coin. After the latest purchase, Meitu’s total cryptocurrency portfolio consists of $49.5 million worth of Bitcoin and $50.5 million worth of Ether (ETH). This acquisition shows that institutional investors are confident that the rally in Bitcoin is still in its early stages.

Tom Jessop, Fidelity’s head of the crypto division, believes that Bitcoin has reached a tipping point and that traditional finance companies will continue to adopt cryptocurrency aggressively in the next few years. Jessop believes the massive monetary stimulus from governments and central banks has accelerated institutional adoption and this is a trend that could extend for at least another year.

Daily cryptocurrency market performance. Source: Coin360

It is not only institutional investors who are rushing into cryptocurrencies. Data shows that the number of retail investors trading cryptocurrency has also increased. Popular trading app Robinhood reported on April 8 that crypto trading on its platform surged to 9.5 million users in Q1 2021, a six-fold increase over Q4 2020.

While crypto adoption is on the rise, some legacy finance firms are still taking an anti-crypto approach. HSBC has reportedly blacklisted MicroStrategy stock and will not allow customers on its HSBC InvestDirect platform to buy shares from the company.

Will Bitcoin and major altcoins extend their uptrend and attract more buyers or will they enter a corrective phase? Let’s analyze the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

The bears could not capitalize on Bitcoin’s break below the 20-day exponential moving average ($57,043) on April 7. Their failure to break the 50-day simple moving average ($54,572) support could have attracted buying from the aggressive bulls, resulting in the rebound on April 8.

BTC/USDT daily chart. Source: TradingView

However, today’s Doji candlestick suggests the bulls are struggling to sustain the momentum at higher levels.

The BTC/USDT pair has formed an inverse head and shoulders pattern that will complete on a breakout and close above $60,000. This bullish setup has a target objective at $69,540. If the bulls sustain the momentum and clear this hurdle, the uptrend may reach the next target at $79,566.

Contrary to this assumption, if the price turns down from the current level, the bears will once again try to break the critical support at the 50-day SMA. If they succeed, the selling could intensify as short-term traders may rush to the exit. That could pull the pair down to $50,460.02 and then $43,006.77.

ETH/USDT

Ether’s (ETH) drop on April 7 was arrested at the 20-day EMA ($1,933), which shows the bulls are accumulating on dips. The price rebounded sharply on April 8 and rose above the resistance at $2,040.77.

ETH/USDT daily chart. Source: TradingView

The bulls will now make one more attempt to climb above the all-time high at $2,150. If they manage to do that, the ETH/USDT pair could resume its uptrend and march toward the next target objective at $2,618.14.

However, the bears are likely to have other plans. They will try to pull the price below the 20-day EMA. If that happens, several aggressive bulls may get trapped. That could intensify the selling, resulting in a drop to the trendline. A break below this support will suggest a change in trend.

BNB/USDT

Binance Coin (BNB) continues to be in a strong uptrend. The bulls flipped the $348.69 level to support on April 7 and followed that up with a breakout to a new all-time high on April 8. This shows a strong appetite from the bulls.

BNB/USDT daily chart. Source: TradingView

The upsloping moving averages and the relative strength index (RSI) above 75 indicate that the bulls are in command. The next target objective on the upside is the $500 to $530 zone where the bears may mount a stiff resistance.

On any correction, the first support to watch out for is the 20-day EMA ($334). A strong rebound off this support will suggest the sentiment remains bullish and traders are buying on dips.

However, if the BNB/USDT pair dips below the 20-day EMA, it will suggest that the bullish momentum is weakening.

XRP/USDT

XRP made successive inside day candlestick formations on April 7 and April 8. The current price action is pointing to another inside-day candlestick pattern today. The drop in daily volatility shows the altcoin is still digesting the recent gains.

XRP/USDT daily chart. Source: TradingView

This tightening of the intraday range usually ends with a strong breakout. If the uncertainty resolves to the upside and the bulls drive the price above $1.11, the XRP/USDT pair could start the next leg of the rally that could take it to $1.34 and then $1.66.

Alternatively, if the indecision resolves to the downside, it will suggest that supply exceeds demand and traders have dumped their positions. If that happens, the pair could drop to the 20-day EMA ($0.72). A break below this level could pull the price down to $0.65.

ADA/USDT

Cardano (ADA) dipped below the 20-day EMA ($1.18) on April 7 but the bulls did not allow the price to slip below the 50-day SMA ($1.16). This shows the bulls are defending the moving averages aggressively.

ADA/USDT daily chart. Source: TradingView

The buyers will now try to push the price above $1.33. If they manage to do that, the ADA/USDT pair could rise to $1.48. This is an important level to watch out for because the pair has returned from it on two previous occasions.

If the price again reverses direction from $1.48, it will suggest that the range-bound action may continue for a few more days. On the other hand, if the bulls can drive the price above $1.48, the pair could resume the uptrend toward the next target objective at $2.

A break below the moving averages will be the first sign of weakness and that could result in a drop to the $1.02 support. If this level breaks down, the bears could start a deeper correction to $0.80.

DOT/USDT

Polkadot (DOT) bounced off the 20-day EMA ($38.68) on April 7, indicating buying on dips. The bulls will now try to push the price above the overhead resistance at $42.28.

DOT/USDT daily chart. Source: TradingView

If they succeed, the DOT/USDT pair will retest the all-time high at $46.80. A breakout and close above this level could start the next leg of the rally that has a target objective at $53.50 and then $57.

The gradually upsloping 20-day EMA and the RSI in the positive territory suggest the bulls have the upper hand.

However, if the price turns down from the current level and breaks below the moving averages, it will indicate that traders are closing their positions on rallies. That could result in a fall to $32.50 and then $26.50.

UNI/USDT

The bulls successfully held the $27.97 support on April 7, which is a positive sign as it shows accumulation on dips. Uniswap (UNI) bounced back above the 20-day EMA ($29.65) on April 8 and the buyers will now try to push the price above $32.50.

UNI/USDT daily chart. Source: TradingView

If they succeed, the UNI/USDT pair could rally to the $35.20 to $36.80 overhead resistance zone. The bears are likely to defend this zone aggressively. If the price turns down from this resistance, the pair may extend its stay inside the range for a few more days.

Contrary to this assumption, if the price turns down from the current level, the bears will make one more attempt to pull the price below the $27.97 to $25.50 support zone. If they manage to do that, the pair could start a deeper correction to $20.74.

LTC/USDT

Litecoin (LTC) successfully completed the retest of the breakout level from the symmetrical triangle on April 7. That was followed by a rebound on April 8, but the bulls are struggling to pick up momentum.

LTC/USDT daily chart. Source: TradingView

This shows hesitation to buy at higher levels. If the bulls do not overcome the hurdle at $246.96 within the next few days, the possibility of a break below the 20-day EMA ($207) increases. In such a case, the LTC/USDT pair could drop to the support line.

Contrary to this assumption, if the bulls sustain the momentum and propel the price above $246.96, the pair could start the next leg of the uptrend that may reach $307.42. The gradually rising 20-day EMA and the RSI above 59 suggest a minor advantage to the bulls.

LINK/USDT

Chainlink’s (LINK) sharp reversal on April 7 could not break below the 20-day EMA ($30.29). This shows the sentiment remains positive and the bulls are buying on dips. The rebound on April 8 rose above the $32 resistance but the bulls are struggling to build on this strength today.

LINK/USDT daily chart. Source: TradingView

If the price turns down and breaks below the moving averages, it will suggest that supply exceeds demand at higher levels. That could pull the price down to the critical support at $24.

On the other hand, if the bulls again defend the 20-day EMA, the LINK/USDT pair could rise to the all-time high at $36.93. A breakout and close above this resistance will suggest the bulls have absorbed the supply and that may indicate the start of the next leg of the uptrend.

However, if the price again turns down from $36.93, the pair could extend its stay inside the range for a few more days.

THETA/USDT

After the large range day on April 7, THETA made an inside day candlestick pattern on April 8 and has followed it up with another one today. This shows indecision among the bulls and the bears about the next directional move. While the bears are defending the overhead resistance, the bulls are buying on every minor dip.

THETA/USDT daily chart. Source: TradingView

The upsloping 20-day EMA ($11.33) and the RSI above 62 suggest a minor advantage to the bulls. The buyers will have to clear the hurdle at $14 to signal the start of the next leg of the uptrend. If they manage to do that, the THETA/USDT pair could rally to $17.65 and then $22.50.

On the contrary, if the bears sink the price below the 20-day EMA, it will be the first sign of a possible change in sentiment. It will suggest that the bulls are no longer buying the dips to the 20-day EMA. The next critical support to watch will be $10.35. If this level is taken out, a deeper correction to the 50-day SMA may start.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Price analysis 4/9: BTC, ETH, BNB, XRP, ADA, DOT, UNI, LTC, LINK, THETA

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DeFi’s money markets are finally luring in institutional investors

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Bitcoin’s bull run from last year has caused even some of its biggest skeptics to soften their stance. From economists to hedge fund managers, the world is opening itself up to technology, and at the center of this movement is decentralized finance, or DeFi. While the market capitalization of all cryptocurrencies has hit $2 trillion, worth as much as Apple, it’s the promise of DeFi — a small corner of the blockchain industry today — that’s grabbing the attention of institutional investors.

As Bitcoin’s (BTC) bullish trend persists, interest-bearing crypto products have become all the rage. Some services offer up to 8% returns on Bitcoin holdings. For investors who are already expecting a rise in value, this can be incredibly useful for maintaining cash flow without selling any assets.

The three main factors solidifying institutional interest in Bitcoin are the current historically low interest rates, the inflation rate and geopolitical instability. With near-zero interest rates expected for the foreseeable future, investors are gearing up to move their funds into alternative locations for securing wealth.

The United States Federal Reserve’s 2% inflation target has incited concern in investors fearing devaluation, and with tensions between the U.S. and China on a precarious edge, portfolios denominated in U.S. dollars are becoming riskier by the day.

A market for money

Buying, storing and using cryptocurrencies securely is still quite a complex ordeal — far more involved than setting up a bank account. However, according to Larry Fink, the CEO of BlackRock — a global investment management fund with nearly $9 trillion in assets under management — Bitcoin could evolve into a global market asset and achieve new highs in the upcoming years.

In the traditional financial system, money markets are parts of the economy that issue short-term funds. They usually deal with loans for periods of a year or less, and offer services like borrowing and lending, buying and selling, with wholesale trading taking place over the counter. Money markets are composed of short-term, highly liquid assets and are part of the broader financial markets system.

Money markets are traditionally very complicated, with expensive overheads and hidden fees pushing most investors to hire a fund manager. However, their existence is paramount to operating a modern financial economy. They incentivize people to lend money in the short term and allocate capital toward productive use. This improves the overall market’s efficiency while helping financial institutions meet their goals. Basically, anyone with extra cash on hand can earn interest on deposits.

Money markets are composed of different kinds of securities, such as short-term treasuries, certificates of deposits, repurchase agreements and mutual funds, among others. These funds generally consist of shares that cost $1.

On the other hand, capital markets are dedicated to the trade of long-term debt and equity instruments, and point to the entire stock and bond market. Using a computer, anyone can purchase or sell assets in mere seconds, but companies issuing the stock do so to raise funds for more long-term operations. These stocks fluctuate, and unlike money market products, they have no expiration date.

Since money market investments are virtually risk-free, they often come with meager interest rates as well. This means that they will not produce huge gains or display substantial growth, compared with riskier assets like stocks and bonds.

DeFi vs. the world?

To hedge against currency risk, institutions have started using Bitcoin, and retail investors are following their lead. More than 60% of Bitcoin’s circulating supply hasn’t moved since 2018, and BTC is predicted to push well above $100,000 in the next 24 months.

If the current trend carries forward, investors will continue to stockpile BTC. However, while much of the supply of the world’s first cryptocurrency remains in storage, the DeFi industry is constantly producing alternative platforms for interest-bearing payments through smart contracts, which increases transparency by allowing investors to view and track on-chain funds.

The average return for DeFi products is also much higher than in traditional money markets, with some platforms even offering double-digit annual percentage yields on deposits. From asset management to auditing smart contracts, the DeFi space is creating decentralized infrastructure for scalable money markets.

According to Stani Kulechov, co-founder of the Aave DeFi protocol, rates are high during bull markets because the funds are used to leverage more capital, with the cost of margin pushing up the yield. “New innovation in DeFi is consuming more stablecoins, which further increases the yield. Unless there is a new capital injection — these rates might stick for a while,” he said.

The Ethereum network currently hosts most of the DeFi applications, and this has barred tokens that aren’t available on the network from participating in decentralized finance. Bitcoin, for example, despite being the largest cryptocurrency by market capitalization, has only recently found its way onto DeFi platforms.

Related: DeFi yield farming, explained

With Kava’s Hard Protocol, investors can yield farm using Bitcoin and other non-ERC-20 tokens like XRP and Binance Coin (BNB). Backed by some prominent names (Ripple, Arrington XRP Capital and Digital Asset Capital Management, among others), the platforms allow users to stake their cryptocurrencies into a pool of assets, which is lent out to borrowers to generate interest.

The team also plans to add support for Ethereum-based tokens in the near future. The network’s upgrade to Kava 5.1, which was postponed to April 8 after failing to reach the required quorum, will also introduce the Hard Protocol V2, bringing powerful incentivization schemes and enhancements to its governance model.

Most loans in DeFi are overcollateralized, meaning the pool always has more money than it lends out. In case the value of the issued token drops, funds in the pool are liquidated to compensate.

According to Anton Bukov, co-founder of decentralized exchange aggregator 1inch, blockchains are the first-ever unbiased executors in human history — very limited, but ultimately fair — and could deliver new services and new flows of interactions in future. “Developers are doing their best to solve potential dishonesty issues of existing flows and invent new flows by replacing intermediaries,” he said.

By creating an automated platform to borrow and lend assets, decentralized finance enables money markets without intermediaries, custodians or the high fees that stem from high infrastructural costs.

Honest work

Of the many trends DeFi has set into motion over the last few years, yield farming has attracted quite a lot of attention. Yield farming is when the network rewards liquidity providers with tokens that can be further invested into other platforms to generate more liquidity tokens.

Simple in concept, yield farmers are some of the most vigilant traders out there, constantly switching up their strategies to maximize their yield and tracking rates across all platforms to ensure they’re getting the sweetest deal. The potential rate of return can become obscenely high, but it’s still unclear whether yield farming is just a fad or a phenomenon in the making. Kulechov added:

“Yield farming is simply a way to distribute governance power to users and stakeholders. What actually matters is whether the product itself would find protocol market/fit. Most successful governance power distributions with yield farming have been with protocols that have found protocol market/fit before such programs.”

Yield farming has an incredibly positive feedback loop, with an increase in participation pushing the value of its governance token up, driving further growth. According to Kava CEO Brian Kerr, while this feedback loop can produce very positive results in bull markets, it can have entirely the opposite effects in falling markets:

“It will be up to the governance groups of the various projects to navigate bear markets effectively, by ratcheting back rewards before a full-on death spiral occurs. Regardless of bull or bear markets, yield farming will be a mainstay in blockchain projects for years to come.”

Money markets are the pillars of our global financial system, but most of its transactions occur between financial institutions like banks and other companies in time deposit markets. However, some of these transactions do find their way to consumers through money market mutual funds and other investment vehicles.

Decentralization is the next frontier for finance, and as prominent investors continue to engage with the DeFi space, a decentralized economy seems all but inevitable. Participating in the burgeoning environment may be a risky bet today, but what decentralized finance platforms learn now will be the foundation of the robust DeFi applications of the future. According to Bukov, the higher interest rates of DeFi platforms are “absolutely sustainable.” He added:

“Higher profits are usually involved with higher risks. So the risk-profit model of all these opportunities is always nearly balanced. Normalizing risks would decrease profits because more participants will join to share the rewards.”

From smart contract malfunctions to the unauthorized withdrawal of community funds, the DeFi space is a place of both miracles and nightmares. DeFi-based yield farming platforms are still in their very early stages, and while the numbers can be all too tempting at times, it’s crucial to do your own research before investing in any platform or asset.

DeFi’s money markets are finally luring in institutional investors

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