Bitcoin is holding well above the critical support at $47,000. Trading at $50.067 with 1.6% in the 1-hour chart and sideways movement in the 24-hour chart, BTC seems to be on a path to recovery on the lower timeframes. As many in the crypto space have said, this bull-run will be defined by its quick bounce backs and consolidations periods.
BTC moving sideways in the daily chart. Source: BTCUSD Tradingview
Trader Josh Rager compared BTC’s past price action with the current price performance. For Rager is a normal part of a bull-run for BTC to trend below its 100 days Exponential Moving Average (EMA). During 2017, the cryptocurrency saw at least 3 drops below this metric.
The trader believes investors should be “concerned” if the price breaks below its 200D EMA. In contrast, BTC never trends below this metric while on bullish price action.
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Source: Josh Rager
During the weekend, the trader expects a bounce if BTC drops to the mid-$40,000. Currently, the 10W EMA is converging with the weekly support level, as Rager explained. This could serve as a good entry point for a long position in both BTC and altcoins, as the trader said:
The bottom could be in, but if Bitcoin bounces and then goes down to lower $40ks. Would love to buy in that area both $BTC and alts. As long as price holds there we could see some major rallies over the next few months as BTC slowly uptrends.
In the meantime, some side movement could be Bitcoin’s new normal for the short term. Lex Moskovski, CIO at Moskovski Capital, believes the recent crash “cooled off” BTC’s major overheating indicators.
As seen below, Moskovski compares 2017 bull run metrics with the current market and determined that Bitcoin is around 44% from potentially reaching a peak on its upside trend. On the contrary, there could be even more upside momentum after this week’s crash. Moskovski said:
Bitcoin has cooled off a bit and according to the major overheating indicators has even more upside now.
Source: Lex Moskovski
What Could Break Bitcoin’s Market Structure?
Economist and trader Alex Krüger provided further arguments for a long-term BTC bullish case. As Krüger said, this cryptocurrency has seen massive adoption with macro-economic conditions that benefit it. Since 2020, the thesis of Bitcoin as a store of value has gained a lot of strength among institutional investors.
Krüger laid out two possible scenarios. In one, “major catalysts” re-heat the market, and BTC’s price pushes into a new discovery period. The economist said:
The first half of this dump was expected, not so the second, which was news-driven. Shit happens. But nothing major has changed aside of a healthy cleansing. When expecting a range good to avoid getting bullish on breakouts, or risk getting head chopped off.
In the second scenario, the U.S. Government and its Secretary of Treasury Janet Yellen launch new regulations for crypto and digital assets. Krüger expects any “draconian” rules to negatively impact the market.
Decentralized finance (DeFi) started 2021 by taking the cryptocurrency sector by storm and helping to kick the bull market cycle into high gear as traders capitalized on ways to easily trade cryptocurrencies and earn high yields on their hodl stacks.
Eventually, high fees on the Ethereum (ETH) network and a few sharp market sell-offs helped contribute to a pullback in token prices and DeFi transactions beginning in late February, but that trend appears to have reversed over the past week as activity on decentralized exchanges is once again on the rise.
DEX user and volume comparison. Source:DappRadar
As seen in the chart above, decentralized exchange (DEX) volume spiked in late February, followed by a downtrend through the first week of April which saw the total volume traded on all DEXs fall as low as $603 million on April 4.
The uptick in users in mid-March was in part due to the explosion in popularity of nonfungible tokens (NFTs), and the end of that frenzy is marked by a precipitous drop-off in users seen between March 26 and March 27.
Bitcoin dips ignite DEX activity
One possible explanation for the spike in activity on DEXs in recent weeks can be found comparing the volume charts with the price chart for Bitcoin (BTC), which indicates a possible correlation between a dip in the price of BTC and increased trading activity.
BTC/USDT 4-hour chart. Source:TradingView
As the price of Bitcoin saw declined from April 6 through April 8, DEX volume began to increase and reached a peak on April 7, just as BTC price was bottoming out and preparing to climb higher.
After Bitcoin price reached a peak at $64,840 on April 14, it fell into a downtrend that continued through April 24 as the asset remains pinned below $50,000.
DEX volume saw a substantial increase beginning April 18, the same day that Bitcoin experienced a 16% pullback in price from $60,900 to $50,500, and it has remained elevated since, indicating that traders may be rotating out of Bitcoin and into altcoins as the top cryptocurrency works its way through what traders hope will be a brief corrective phase.
Daily DEX volume. Source:Dune Analytics
As seen on the chart above, the daily DEX volume reached its highest level in weeks on April 22 as Bitcoin and the wider cryptocurrency market underwent a significant downturn that saw the total market capitalization fall by more than $324 million.
With Bitcoin now fighting to regain the $50,000 support level and a majority of the altcoin market now at fire-sale prices following the downturn from recent highs, decentralized exchange activity may hint at an approaching altcoin season that has historically as Bitcoin searches for direction following a pullback from a new all-time high.
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.
Coming every Saturday,Hodler’s Digestwill help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
Bitcoin tumbles 10% in 12 hours and falls below $50,000 for first time since March
Things were looking markedly bearish for Bitcoin following last weekend’s swift and sudden correction, which caused Bitcoin to crash by20%in a single hour.
Within minutes last Sunday,$60,000became a distant memory… with bulls forced to defend$55,000instead.BTC’s prized $1-trillion market cap was also lost, and at one point, dominance sunk below 50% — a milestone that hasn’t been seen since 2018.
But by the early hours of Friday, as selling pressure heightened, the world’s biggest cryptocurrency succumbed, dipping below$50,000for the first time since March.
Ether, which had managed to hita new all-time high of$2,641.09in the hours before the crash, also wasn’t immune from the sell-offs.
Mass liquidations, an overheated futures market, the decline of the Kimchi premium, whales selling and concerns over President Joe Biden’s tax plansmay all have been factorsin the major correction.
PlanB speculates that Bitcoin’s price fall doesn’t mean the end
There’s been no shortage of reaction to Bitcoin’s loss of momentum, with PlanB, the analyst behind the stock-to-flow forecast, insisting that the fall below$50,000doesn’t mean that the current bull run is over.
Pointing out that nothing goes up in a straight line, he tweeted:“#Bitcoin has gone up 6 months in a row, until this month. This looks like the mid-way dip that we also saw in 2013 and 2017.”
ExoAlpha’s Élie Le Rest also believes that there are reasons to be optimistic, saying:“This kind of market pullbackis very healthyas it contributes to deleveraging market participants and builds ground for a more stable growth.”
The next major move in Bitcoin’s price will prove decisive, helping us to determine if this is merely an overdue correction or the opening salvo of the next bear market cycle.
Veteran trader and chart guru Peter Brandt wasted little timein making a cheeky observation, writing:“The chances of a correction in cryptos is directly related to the prevalence of laser eyes on Twitter. Want the correction to end? Get rid of your laser eyes.”
Bitcoin transaction fees in U.S. dollars near all-time highs
In other signs that history is repeating itself, Bitcoin transaction fees measured in U.S. dollars neared all-time highs recorded in 2017.
Data from Blockchair shows the average cost of a BTC transaction hit $58 on Tuesday — approaching the record of $62 set in December 2017.
The latest spike in BTC transaction fees comes amid a major decline in the Bitcoin network hash rate, which may have been exacerbated by massive power outages in the Chinese mining hub of Xinjiang.
And the spike has also prompted some crypto exchanges to introduce less expensive ways of moving Bitcoin around as a matter of urgency, too.
OKEx has now integrated the Lightning Network, while Square’s Cash Apphas quietly raisedthe minimum Bitcoin withdrawal to0.001 BTC— 100,000 satoshis — markedly higher than the0.0001 BTCthat was in force previously.
“Bitcoin incentivises renewable energy,” agree Elon Musk and Jack Dorsey
As crypto traders with furrowed brows were confronted by a sea of red, industry heavyweights were focusing their attention on how to go green.
Earth Day 2021 happened this week, and with Bitcoin regularly castigated for the high levels of energy that it takes to keep the network secure, some of the cryptocurrency’s most vocal backers made the case for BTC’s environmental efficiency.
A new report authored by The Bitcoin Clean Energy Initiative argues that Bitcoin mining incentivizes the generation of electricity “from renewable carbon-free sources.”
The paper has received support from top crypto luminaries including Square’s Jack Dorsey, Tesla’s Elon Musk, and Ark Invest’s Cathie Wood.
Tether is listing on Coinbase Pro
Coinbase Pro has announced that it is listing Tether on its platform, paving the way for trading pairs linking the ERC-20 version of USDT with BTC, ETH, USDC, the euro, the British pound and the U.S. dollar.
This is a rather big deal, and it signifies that the exchangeis not concernedabout the stablecoin’s previous regulatory issues or the long-running controversy over the validity of Tether’s backing.
Bitfinex chief technology officer Paolo Ardoino told Cointelegraph: “We are gratified by Coinbase’s decision to add Tether tokens on ERC-20 to its Coinbase Pro platform. This is happening as we near a market capitalization of $50 billion and represents another step forward as we broaden our community.”
Winners and Losers
At the end of the week, Bitcoin is at$49,237.93, Ether at$2,203.74and XRP at$1.06. The total market cap is at$1,813,860,544,571.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week areSolana,CeloandPancakeSwap. The top three altcoin losers of the week areBitcoin SV,NEMandOntology.
For more info on crypto prices, make sure to readCointelegraph’s market analysis.
Most Memorable Quotations
“Contrary to what you may have been told or wish, #crypto is not a get rich quick scheme.”
Changpeng Zhao, Binance CEO
“Bitcoin is up 600% in last year. Gold is up 3% in last year. No more tweeting until gold can beat inflation, Peter!”
Anthony Pompliano, Bitcoin proponent
“Without any strong catalyst, breaking above $60k looks difficult at this time, and a break below $50k may drive Bitcoin down to $30k. Traditional markets showing signs of exhaustion may also put a dent on the crypto markets recovery.”
David Lifchitz, ExoAlpha chief investment officer
“ETH is rapidly becoming the currency of the digital world and BTC is the pristine collateral and base layer.”
Raoul Pal, Real Vision CEO
“I think the crypto space is amazing right now. It’s the best-kept secret in the world and maybe the history of the financial markets.”
Thomas Farley, New York Stock Exchange president
“DOGE is relatively well suited for payments. It’s extremely fast and efficient — transactions cost less than a cent.”
Jason Lau, OKCoin chief operating officer
“unSAFEMOON”
Luke Martin, blockchain developer
“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”
Morten Friis, NatWest head of risk committee
“I would argue that such a change is critically important for Bitcoin to remain the world’s dominant cryptocurrency. PoW’s current energy demands and carbon footprint are already unsustainably high.”
Chris Larsen, Ripple co-founder
“The chances of a correction in cryptos is directly related to the prevalence of laser eyes on Twitter. Want the correction to end? Get rid of your laser eyes.”
Peter Brandt, veteran trader
“70% of our time should be focused on core work, 20% on strategic bets, and 10% on innovative experimentation.”
Coinbase
“I think we could pull back to $20,000 to $30,000 on Bitcoin, which would be a 50% decline, but the interesting thing about Bitcoin is we’ve seen these kinds of declines before.”
Scott Minerd, Guggenheim chief investment officer
“Could Bitcoin really be stopped by government? I actually think maybe it could be.”
Curtis Spencer, Electric Capital co-founder
Prediction of the Week
Guggenheim CIO repeats $20,000 Bitcoin price forecast as BTC doubles since last warning
The chief investment officer of Guggenheim has repeated his warning that Bitcoin will crash to$20,000.
Speaking to CNBC, Scott Minerd said: “Given the massive move we’ve had in Bitcoin over the short run, things are very frothy, and I think we’re going to have to have a major correction in Bitcoin.”
It is worth noting that Minerd is adamant that Bitcoin could hit$400,000in the long run. He said:“I think we could pull back to $20,000 to $30,000 on Bitcoin, which would be a 50% decline, but the interesting thing about Bitcoin is we’ve seen these kinds of declines before.”
Many Bitcoin proponents have dismissed suggestions that deeper losses were inevitable, referencing a combination of factors including strong on-chain indicators.Minerd has also been wrong before. Back in January, he said Bitcoin had put in a price top for 2021… and since then, it has more than doubled.
FUD of the Week
Not so safe? SafeMoon’s parabolic rally isn’t sustainable, traders warn
A token on the Binance Smart Chain has been receiving a lot of attention from crypto enthusiasts on TikTok, but there are warnings that its recent rally is unsustainable.
SafeMoon’s price rose from $0.00000029 to $0.0000074 in merely three weeks — gains of 2,200%. The altcoin then dramatically dropped by 50% in two days.
Luke Martin, a well-known cryptocurrency trader, described the price trend of SafeMoon as “unSAFEMOON” after it had dropped 65% in a short period on April 22.
Another U.K. bank serves anti-crypto notice to customers
The British bank NatWest has said that it will refuse to serve business customers that accept cryptocurrency payments.
A report in The Guardian quoted the head of the bank’s risk committee, Morten Friis, as saying:“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”
Friis’ comments echo similar sentiments recently attributed to HSBC, another U.K. bank, that used identical statements in announcing its decision to bar customers from buying MicroStrategy stock. HSBC’s anti-crypto stance also saw the bank refuse to allow account holders to deposit profits from cryptocurrency exchanges earlier in the year.
Governments can stop Bitcoin by shutting down mining, says Electric Capital exec
Electric Capital co-founder and partner Curtis Spencer has implied that the Bitcoin network may owe its continued existence to the grace of world governments.
In a panel at the Collision Conference web summit on Tuesday, Spencer said lawmakers are the ones giving Bitcoin a chance to grow by not imposing harsher restrictions on mining operations in their respective countries.
He argued: “Could Bitcoin really be stopped by government? I actually think maybe it could be. If you think about the cost of attacking the network, it’s not something that nation-states couldn’t do.”
Spencer then pointed to what happened in Xinjiang, where a power outage dramatically affected Bitcoin’s hash rate.
Best Cointelegraph Features
Satoshi Nakamoto saves the world in an NFT-enabled comic book series
A comic version of Satoshi Nakamoto (SATOSH1) explores a “distant dystopian future version of our Earth after the ‘Big Reset’, where the big corporations and citadels hold the power.”
DOGE out of control? Social media and whales sway Dogecoin price action
Dogecoin posting over 14,000% gains in a year could be a sign of the rise of retail investors in the crypto market, but will the price go up even further?
One week of COIN: How Coinbase’s Nasdaq listing is shaping up so far
Coinbase’s largest investors — Andreessen Horowitz, Union Square, Ribbit Capital — have already roped in multi-billion-dollar profits.
Louisiana governing body gives a major shout out to bitcoin (BTC).
Louisiana Heaps Praise for Satoshi Nakamoto
In what comes as a government nod of approval, the governing body of the state of Louisiana, U.S., recently gave a major shout-out to bitcoin’s success in a new resolution. According to the resolution, the governing body noted several of bitcoin’s robust and cutting-edge accomplishments in recent times.
In addition, the body also commended the accomplishments and contributions of Satoshi Nakamoto – the pseudonymous creator of bitcoin.
Rep. Mark Wright’s House Resolution No. 33 notes in part:
“THEREFORE, BE IT RESOLVED that the House of Representatives of the Legislature of Louisiana does hereby commend Satoshi Nakamoto for his contribution to economic security.”
An article from The Hill posits the document was signed on April 22.
It is worthy of note that the praise for Nakamoto came on the heels of the recent rising popularity of bitcoin as a reliable asset class with sound functioning as a store of value. The first few lines of the resolution read in part:
“To commend Bitcoin for its success in becoming the first decentralized trillion-dollar asset and to encourage the state and local governments to consider ways that could help them benefit from the increased use of this new technology.”
Further, the Louisiana document heaps praise for BTC by describing several of its details including its rising rate of adoption, its decentralized nature, and its usage. Notably, the resolution also dubbed bitcoin as an alternative to gold.
“Bitcoin, which could potentially replace gold as a monetary reserve, is limited and finite and there is a maximum capacity of only twenty-one million bitcoins allowed to be produced,” the document said.
A Look at Bitcoin Adoption
Louisiana’s appreciation for bitcoin does not come as a surprise. Lately, several high-profile publicly traded companies announced details about their BTC purchases and the trend is likely to spread to other companies.
As previously reported by BTCManager, Elon Musk’s Tesla had announced that it would be accepting BTC as a payment medium for its products and services without ever converting BTC to USD.
Central Bank Digital Currencies (CBDCs) have received increasing interest since Facebook’s failed launch of Libra and China’s recent announcement that they are moving forward with the digital yuan after an early trial period. This is “why we Bitcoin”: because the damage, destruction, and inequality brought about by fiat money will only be magnified with the proliferation of CBDCs.
Although some manifestations of the US dollar are already digital, there are inherent differences in what can be done with these new digital currencies. First, money can be time-based, and the issuer (the People’s Bank of China in the case of the digital yuan) can set an expiration date for your money. Money can also be “fine-tuned” to be sector-based, meaning that it can be designated to only be spent in certain sectors or stores. Finally, China has already implemented a draconian social credit score system, and that the digital yuan could end up tying into the social credit score. For centralized governments, CBDCs have huge benefits over both the current fiat system and a decentralized, neutral currency. However, that is not the case for the sovereign individual.
With CBDCs, the central government has the ability to attach an expiration date to money. Following the economic shutdowns of 2020, many people questioned whether the stimulus payments would circulate into the real economy or whether they’d just stay on the sidelines as savings or debt payments. Enter CBDCs. The U.S. Federal Reserve’s initial interest in a CBDC was as a way to influence the velocity of money.
When the U.S. government granted stimulus payments to its citizens to keep the economy afloat, there was no guarantee that the recipients would use them as the government intended. Those payments were meant to help people who lost jobs make ends meet and otherwise keep the economy moving. Saving that money for a rainy day, paying off debt, and investing it all run counter to the desires of a government that desires inflation.
The U.S. government (along with most governments around the world) is in a tremendous amount of debt, and at this point, the only solution for a government as indebted as that of the U.S. is inflation. Inflation is often sold as a necessity for the economy, with its proponents insisting that it goes hand-in-hand with economic growth: it increases the prices of goods and services but comes with the benefit of a more productive economy that produces more of those goods and services. In reality, the only reason why inflation is “necessary” is because without it, the government would be unable to meet its debt obligations. Politicians would not be reelected because they would fail to provide the handouts on which they campaigned, but more importantly, the government and global reserve currency would default, causing untold levels of economic damage worldwide.
So, the government’s desire for inflation drives the desire for money to which they can add an expiration date. When inflation is the goal, money needs to be circulated quickly, and CBDCs allow for that. With programmable money, the central bank could issue money through some sort of helicopter money program (universal basic income [UBI], stimulus, etc.) and require that the money be used by a certain date, or else it would simply vanish. That would prevent people from saving it (the neo-Keynesian sin of “hoarding”) and ensure that the money circulates into the economy. By adding money into the economy and removing the ability to save that money, the Federal Reserve (or any other central bank) could more easily achieve its inflation targets, thereby ensuring the desired destruction of our wealth at an average rate of 2%/year.
With the stimulus payments, the Fed is most closely targeting inflation. They purchase the government issued bonds which enable the legislative and executive branches of the U.S. government to issue stimulus. With CBDCs in the picture in a situation similar to the COVID lockdowns, people would be unable to make their own decisions about what to do with their stimulus payments. In many cases, this is money that the government is giving people because it took away their ability to earn a living. Yet, individuals would be stuck having to spend it when they might think they would be better off paying down debt or saving for a more long-term purchase.
If we consider a possible future with UBI, money with an expiration date could reduce lower-income individuals to a role as pure consumers: they would exist as vessels to spend money to keep the economy moving, but they would have no ability to save to start a business or improve their lifestyle. The psychology inherent in a money giveaway program would incline people to maintain their lifestyle, never advancing, but growing more agitated as others advance around them; Thomas Sowell believes that this would exacerbate social strife.
One of the problems with attaching an expiration date to money is that more restrictions are needed to produce the desired inflation. In a stagnating economy, individuals typically want to save, invest, and pay off debt because they are concerned about keeping their jobs and making ends meet (see Milton Friedman’s “permanent income hypothesis”). Although setting an expiration date on money prevents saving, more restrictions are needed to prevent people from investing and paying off debt with their newfound helicopter money.
Central banks would need to be able to fine-tune money to prevent certain uses (investing and paying off debt) to ensure that the newly printed money is put directly into the economy. However, at that point, it is not a long stretch to restrict the new money to being spent in specific sectors and businesses. Agustin Carstens, general manager of the Bank for International Settlements, has stated that the bank wants to have “absolute control” over the use of money. This idea should ring authoritarian alarm bells.
Some dystopian capabilities come with the government’s ability to fine-tune money. Anyone who has read The Bitcoin Standard or allowed Bitcoin to change their time preference knows that the mere existence of a fiat monetary system changes people’s behavior, generally in a negative manner. They are more likely to take on debt, spend outside of their means, overwork themselves, and reduce their time with their families. The ability for programmable CBDCs to change people’s decision making would be dramatic.
With programmable CBDCs, central banks would have the ability to force individuals to finance political pet projects. For example, because of the growing concern around climate change, a central bank could manipulate the money so that it could only be spent on “green” businesses. If the right person had enough influence, perhaps the next round of stimulus would not be able to be spent on beef, but perhaps only on vegetables, edible bug paste, and pod-based real estate. Regardless, the money system would quickly become a tool wielded by the most influential to pursue their goals, some of which you may share but others of which you may dramatically oppose.
Although this may seem like a dire possibility, it does not even consider the possibility of tying the concept of a social credit score to a future CBDC. The possibilities of controlling the population could definitely be expanded if that were to happen: central planners would be in a position to encourage certain behaviors by individuals who receive stimulus payments or UBI. If average employees are referred to as “wage slaves” today, then what are they when the government can remove their ability to access the goods and services if they don’t stay in line?
So far, we’ve focused primarily on the use case of CBDCs as UBI, stimulus, or other helicopter-type payments. However, there is also the possibility that a government could apply the same controls to all money entering the system, including wages. That would give the central bank even more control over the citizenry, but such controls could not be implemented immediately because they could be seen as too much of a shock.
This is why we Bitcoin: we are now in a race to wield a monetary weapon against a corrupted system. We don’t desire to control others, we just desire not to have others control us. A neutral, permissionless money is needed to prevent government’s continuing creep and overreach, and it has arrived just in time. If CBDCs are implemented in the near future, it will be necessary for Bitcoiners to be ready with solutions to exchange goods and services for bitcoin. Fortunately, there are solutions available, and they are improving every day.
When it comes to the tyrannical possibilities of CBDCs, bitcoin is truly freedom money. Will the U.S. and the West follow the path of China, which intends to implement a highly authoritarian monetary system to further control its populace, or will they embrace a neutral, permissionless option that is in line with the foundations on which the United States was built?
Here is a video further explaining CBDCs.
This is a guest post by James Holloway. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
Bitcoin’s latest massive price crash in which the asset lost $16,000 in roughly a week could be nothing more than a stepping stone towards new highs, suggested the creator of the popular S2F model. He outlined that BTC could be in the middle of its run, which could take it to the stock-to-flow’s targets of up to $288,000.
‘Nothing Goes Up In a Straight Line’
Looking on a more macro scale, it’s safe to conclude that bitcoin has been in a state of a bull run since early October. A solid confirmation for this comes from the six consecutive months in which the primary cryptocurrency closed in green from less than $14,000 in October to nearly $60,000 in March.
April is historically a bullish month as well for BTC, and it sure seemed that way, at least until a week ago. Taking advantage of the hype around the Coinbase listing on Nasdaq, bitcoin skyrocketed to a new all-time high of $65,000.
However, it all came crashing down last Sunday, and a $9,500 drop took BTC to a 3-week low. Friday didn’t go all that well either, and bitcoin found itself on the receiving end of another beatdown – this time, it even plummeted beneath $50,000 where it still struggles.
The Twitter user PlanB, perhaps best known in the community for creating the stock-to-flow model, said about these developments – “nothing goes up in a straight line.” Furthermore, he believes this massive setback could actually precede another significant leg up.
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Bitcoin Bull Runs After Each Halving. Source: Twitter
Was This the Mid-Cycle Stop?
As PlanB’s graph above indicates, the cryptocurrency had experienced similar steep price corrections during its previous two major bull cycles – in 2013 (after the first halving) and 2017 (after the second). In fact, both transpired approximately at the same time during the run as the current one, which he classified as “the mid-way dip.”
Should bitcoin be indeed halfway through its bull cycle now, then the asset could be heading towards the price targets of the stock-to-flow cross-asset model. Aside from looking at the “stock” as the size of existing BTC reserves (or stockpiles) and the flow – the annual supply of new bitcoins, the upgraded version of the model examines the different phases the asset has gone through since 2009.
Those include the initial “proof of concept,” the “payment” stage, “e-gold,” and the latest one – “financial asset.” Ultimately, PlanB believes that the cryptocurrency could peak at $288,000 per coin by the end of the current bull run.
With bitcoin trading around $49,000 now, this optimistic prediction would need it to surge by roughly 6x. Although this may sound a bit far-fetched given the current negative sentiment in the market, it’s worth noting that BTC already skyrocketed six-fold in a matter of months. As mentioned above, bitcoin traded at $10,000 in early October and jumped to over $60,000 in April.
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We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and we throw in a few random zingers to keep them on their toes!
This week, our 6 Questions go to Denelle Dixon, CEO and executive director of the Stellar Development Foundation.
Denelle Dixon is the CEO and executive director of the Stellar Development Foundation, a nonprofit organization using blockchain to unlock the world’s economic potential by making money more fluid, markets more open and people more empowered. Before joining Stellar, Denelle served as the chief operating officer of Mozilla, one of the most successful mission-driven open-source organizations. During her tenure at Mozilla, she led the organization’s business, revenue and policy teams, including the ongoing fight for net neutrality and the global effort to ensure that people can control their personal data. She also pushed Mozilla to understand how to partner with commercial entities while staying true to its core mission of openness, innovation and opportunity on the web. A lawyer by trade, Denelle previously served as a general counsel and legal advisor in private equity and technology. Throughout her career, Denelle has been a vocal advocate for net neutrality, encryption, the disclosure of vulnerabilities by governments, and greater user choice and control.
1 — What’s one problem you think blockchain has a chance to solve but hasn’t been attempted yet?
There is no shortage of ideas for what blockchain can solve in terms of efficiency, transparency, data security, speed and cost. The great thing is blockchain’s versatility can be applied to most if not all industries ranging from finance to healthcare to education to retail. And blockchain has been around long enough that it’s not just for crypto enthusiasts anymore. Companies, organizations and institutions are now looking for ways to make blockchain part of their tech stack. Essentially, if there is a process that can be improved upon with technology, blockchain has the potential to be part of that solution.
But blockchain needs to further mature before we see a fully comprehensive solution happen. So, maybe “attempt” isn’t the right word here so much as “fully implemented.”
I would love to see blockchain tackle cybersecurity. Staying indoors throughout the pandemic has only amplified people’s reliance on technology — through their modes of communication, shopping habits or content consumption/creation. But it’s difficult for users to choose between protecting their data and the incentives provided to them for providing access to their data — not to mention that users are constantly at risk of being scammed or hacked. So, while users need to take a more vigilant approach to safeguarding their own data, blockchain can protect users at the product level via decentralization and built-in encryption methods. I’m very excited to see where blockchain projects focusing on cybersecurity end up in the coming years.
2 — What do you think will be the biggest trend in blockchain for the next 12 months?
From a general standpoint, as blockchain becomes more consumer-friendly, we’ll see more businesses and individuals begin to adopt it. Interest in blockchain is only rising as the technology and infrastructure becomes more robust and useful, allowing people to solve problems in increasingly versatile ways.
This means that industries beyond just fintech will start thinking of ways blockchain can benefit them. I welcome the diversification of industries as they bring more applications, products and services to blockchain, as it indicates growing acceptance by the public that blockchain really can be part of the mainstream.
Regarding financial systems, the conversation around stablecoins and digital currencies will continue to intensify. We’re finally starting to see buy-in from traditional financial institutions that blockchain is a cost-effective, swift and powerful solution. If these institutions begin issuing stablecoins on their own, as Bitbond and Bank von der Heydt did, the mainstream consumer will become much more comfortable with the idea of digital currencies and blockchain in general.
3 — What’s the most interesting place you’ve ever visited, and why?
This is a hard question because “interesting” could cover so many feelings. If I had to pick one, I would go with Kraków, Poland. While my visit there was brief, I could feel the history — both beautiful and tragic — beaming from within the large, culturally distinct and historically significant areas of Kraków. The contemporary city boasts vibrant businesses with historic buildings and churches and cathedrals dotting the landscape. It was a moving juxtaposition for me, especially after visiting the Jewish Quarter — Kazimierz — which is an ever-present reminder of the tragedies inflicted during WWII combined with more recent brilliance in the resurgence of the Jewish community there with art exhibitions that commemorate the rebuilding. For me, going to Kraków was a lesson in life, art and cultural protection.
4 — What’s the future of social media?
If anyone has watched The Social Dilemma on Netflix, they’re probably aware that social media has deviated far from its original promise: to provide a space where people can voice their thoughts and connect with one another.
We see now that social media has a whole host of problems. Not only have the psychological and cultural impacts of social media been more dramatic than many of us anticipated but current policies and regulations are not enough to safeguard users.
As with most technology, social media in itself is neither good nor bad. It’s a tool, albeit one that is highly susceptible to algorithmic changes and design choices in the hands of a few.
So, will we see a lot more video-driven features because that’s what performs best according to the algorithm? Will we see the voices of a few rise to the top because they happened to say the thing that would get the most eyeballs? Will we see companies increase their prominence on social media because their advertising budgets are the primary source of revenue for these networks? Yes to all of the above.
But now we know where the flaws of social media exist, and these networks need to be reexamined, redesigned and rebuilt with not just the input of a few, but from all voices. That’s what it’ll take to recapture what made social media so special in the first place: to have a platform where your voice can be heard and matters.
5 — What are the top five Crypto Twitter feeds you can’t do without, and why?
Am I allowed to say @cointelegraph?
The other five are (in no particular order):
@CoinDesk: Their focus on data, research and multimedia content help me keep tabs on broader trends, use cases and innovations taking place in crypto.
@TheBlock__: How they stay updated on all the major players in the crypto/blockchain space — short, sweet and to the point.
@ForbesCrypto: They’re one of the biggest crypto pubs on Twitter and for good reason: They get all the exclusives!
@BlockchainAssn: The Blockchain Association has a front seat to DC policymaking and regulations in blockchain and crypto. I appreciate their nuanced takes on the discussions and legislation circulating in the space.
@CoinMarketCap: CoinMarketCap is a data lover’s dream. Aside from the rankings and charts, [what] they’re best known for, CoinMarketCap also puts out great content focusing on global policy, regulations and projects happening in crypto.
6 — Close your eyes and think of a happy place. What do you see?
I see my family, my parents, my partner, our children and our close friends sitting around a bonfire in our backyard playing a game of charades. It is one of my happiest moments — particularly when my team is winning.
Dogecoin (DOGE) saw more liquidations than Bitcoin (BTC) at one point on April 24. This shows there is a significantly high demand for trading the meme cryptocurrency even as Bitcoin and Ether (ETH) struggle to recover.
Various trends and metrics, such as social volume, trading volume, and liquidations in the futures market indicate that DOGE remains one of the most frequently traded cryptocurrencies in the global market.
Large liquidations mean DOGE is seeing genuinely high demand
Although some metrics, like the daily volume on small exchanges, is often exaggerated, futures market open interest and liquidations data is much harder to inflate.
According to Bybt.com, in the last 12 hours, over $44 million worth of DOGE positions were liquidated.
In comparison, Bitcoin saw $117.4 worth of liquidations, suggesting that the trading interest around DOGE remains relatively high.
Cryptocurrency liquidations. Source: Bybt
CoinMarketCap’s data also shows that DOGE’s daily trading volume across all exchanges is higher than most top cryptocurrencies
In the last 24 hours, DOGE recorded $11.5 billion in daily trading volume. In the same period, Cardano (ADA), Binance Coin (BNB), and XRP saw lower trading volume than DOGE despite having larger market capitalizations.
A large portion of the demand for DOGE could be coming from the influx of new entrants into the cryptocurrency market in the wake of the bull market.
A pseudonymous trader known as NYUU said that most of this friends in the past week bought cryptocurrencies.
Unsurprisingly, the cryptocurrencies that were purchased recently were XRP and DOGE. The trader said:
“Turns out, every single friend of my bought #cryptocurrencies this or last week. Mainly $XRP and $DOGE very close to the high. Everyone I tried to convince to buy 1-2 years ago and gave up – is in now. Not sure how much fresh money is left to enter…”
In addition to the rising demand for DOGE from new investors entering the cryptocurrency space, data from TheTie shows that the social metrics for DOGE are growing.
30-day average sentiment vs. Long term sentiment (DOGE). Source: TheTie
Social media volume often demonstrates authentic interest in a cryptocurrency on Twitter and other social media platforms across a prolonged period.
Will DOGE see a continued uptrend?
Analysts say that the cryptocurrency market consolidating before a possible new leg up is healthy.
John Street Capital, an analyst who focuses on cryptocurrencies, said:
“$BTC is still +75% YTD and given the froth in parts of the market with moves in $DOGE etc… consolidation is healthy before resuming the upward trend. It also lets new corporate / ‘real money’
If Bitcoin and Ether continue to consolidate comfortably above $50,000 and $2,200, respectively, it could create a more favorable environment for smaller altcoins, like DOGE, to rally.
As a countrywide cryptocurrency ban looms, multiple Turkish exchanges have now come under investigation with four employees of the recently-shuttered Vebitcoin exchange arrested this morning for allegations of fraud.
Last night, Vebitcoin announced it would be ceasing operations in a short statement posted on its website, claiming that unspecified financial strain led to the decision — possibly caused by an unusually high number of withdrawals leading up to Turkey’s forthcoming cryptocurrency ban.
“We have decided to cease our activities in order to fulfill all regulations and claims,” the announcement read in part.
The exchange was among the largest in Turkey with nearly $60 million in daily volume, with Bitcoin accounting for half of the trading activity.
This morning, Muğla chief public prosecutor Mehmet Nadir Yağcı announced in a statement to local media that four employees have been detained by law enforcement following allegations of fraud.
“Following the search and seizure operations carried out at the company headquarters and at some addresses, 4 people, who are company directors and employees, were detained. The investigation carried out by the Directorate of Cyber Crimes Branch of the Muğla Police Department is carried out in a multifaceted and meticulous manner.”
MASAK, Turkey’s financial crime enforcement wing, is currently investigating.
The arrests follow a similar pattern seen in the aftermath of fellow exchange Thodex’s closure. Thodex announced a halt to all trading amid reports of a police raid and that the founder of the exchange had fled to Albania. Police subsequently issued upwards of 75 arrest warrants and detained 62 in connection to a possible exit scam.
The arrests and closures come after a surprise “diktat” from Turkey’s newly-appointed central bank governor effectively banning cryptocurrencies in the country, which will go into effect April 30th. The ban has become a hot-button issue, as opposition leaders have voiced support for crypto.
DODO is a decentralized exchange operating on the Ethereum blockchain that utilizes the algorithm of the Proactive Market Maker (PMM) to provide users with tokens to earn transaction fees.
According to DeFi Pulse data, DODO’s native token DODO is now ranked 37th with a $59.1 million total value locked in the decentralized finance (DeFi) market. It has only been listed for two months and is a relatively new project in the crypto space.
Some of the decentralized exchanges we are familiar with, such as Uniswap, use algorithms such as automatic market maker (AMM), allowing investors to deposit funds into the on-chain liquidity pool in advance, in a completely decentralized and non-custodial manner, all the while providing seamless transactions between cryptocurrencies.
However, traditional AMM possesses the pain points of impermanent loss, low capital efficiency, insufficient liquidity utilization, and multi-token risk exposure.
In order to solve the above problems, DODO created the Proactive Market Maker (PMM) algorithm, which aims to generalize the order book matching system.
High capital utilization
PMM adjusts the pricing curve by using a price prediction system so that a larger part of the liquidity is concentrated around the market price of assets. This enables more active and frequent transactions, thereby improving capital efficiency and reducing impermanent losses. As shown below, near the market price, the DODO curve is flatter than the Uniswap curve, indicating higher capital utilization and lower slippage.
Unilateral transaction
At the same time, PMM allows market makers to deposit solely unilateral assets of a certain trading pair, so traders do not need to bear bilateral risks.
Low transaction costs
The DODO mainnet integrates the Chainlink oracle, which provides price updates by aggregating responses from twenty-one different price feeds, and reasonably allocating less costly transaction fees to liquidity providers.
DODO has gained the approval of many top global investment institutions including Three Arrows Capital, Binance Labs, Coinbase Capital, and Alameda Research, to name a few. Dodo is currently listed on the Binance and FTX exchange.
