quarterly re-balance and re-constitution according to the updated constituent assets and weights found
rebalance and reconstitution according to the updated constituent assets and weights found below.
BTC dominance has always had an inverse effect on the price movements for altcoins. Historically, BTC dominance determines the direction the value of altcoins swings in. Bitcoin has so far maintained majority dominance on the market. But as more time passes, that dominance goes down as altcoins see more demand.
BTC dominance simply shows how much demand there is for bitcoin compared to altcoins. The more BTC dominance rises, the lower the demand for altcoins. This means that for altcoins to rally up further, bitcoin demand has to go down.
Related Reading | Ethereum Breaks 200,000 Validators Milestone, Over $14 Billion Now Staked In ETH 2.0
Over the years, this dominance has decreased as more and more investors put money in altcoins. One reason for this being a lot of investors feel they have missed the boat with bitcoin and thus are trying to get in early enough on altcoins. Others revolve around the new technological advancements being made by altcoin projects. Hence, investors are putting money into projects that they believe in.
How Current BTC Dominance Affects Altcoins
BTC dominance has continually declined over the past couple of months. Currently sitting at 48.97% dominance, bitcoin now has less than half of the entire market dominance. This trend shows that demand for altcoins is on the rise. So, BTC dominance will continue to see declining numbers.
As the dominance declines, the value of altcoins will continue to go up. Market trends indicate that BTC dominance is poised to drop following the latest recovery.
BTC dominance currently sits at less than 50% | Source: Market Cap BTC Dominance on TradingView.com
When this happens, the demand for alts is expected to pick up very quickly. Leading to another upward wave for the altcoin market. Coins like the number 2 coin Ethereum are forecasted to gain even more dominance as the project gains more notoriety among the investment sector. With ETH 2.0 moving the network to proof of stake and using significantly less power to mine. The reduced environmental impact will mean that mining will become less of a problem.
What This Means For Bitcoin
Alts gaining more dominance does not negate the value of bitcoin. Currently, there are over 5,000 coins in the market all vying for market share. And some of these projects come with some very innovative ideas and tech. Thus, it is expected that as time passes, some of these projects will become popular. Therefore gaining more market share as more investors come into the market.
Related Reading | Fast Money’s Brian Kelly Remains Bullish On Bitcoin, Here’s Why
The declining BTS dominance just means that bitcoin is not the only digital asset investors are rushing to get into. Despite decreasing dominance, bitcoin still remains the number 1 coin in the market. Being the first cryptocurrency and the reason why cryptocurrencies are currently so popular.
But as alts rally in what is usually known as “alts season,” bitcoin will continue to see declining dominance. This will translate to the price of altcoins rallying massively as interest in them grows.
Featured image from CryptoPotato, chart from TradingView.com
Cryptocurrency analyst Justin Bennett is scrutinizing the decentralized supply chain management platform VeChain (VET), smart contract blockchain leader Ethereum (ETH), oracle protocol Chainlink (LINK) and crypto king, Bitcoin (BTC).
Using VeChain’s past price history as a guide, Bennett suggests the asset may have hit a bottom as he traces a bullish path that – if it plays out – would see the asset increasing by 1,664% by the start of 2022.
“What if? VET. This is obviously highly speculative and mostly just for fun. We all know markets don’t repeat exactly. But it’s an intriguing thought nonetheless, especially with so many 100% convinced that the bull market is over. Time will be the judge.”
As for Ethereum, Bennett says he’s watching to see if the second-largest crypto asset can break through two areas of resistance – the first at $2,354 and the second at $2,612.
If ETH retraces, he believes there are areas of support at $1,996 and $1,863.
“When you combine levels this clean with the daily close as confirmation, trading becomes effortless.”
As for LINK, Bennett is watching out for resistance at around $20.15 and $26.55. On the downside, Bennett sees $15 as support.
“Starting to add to my LINK long here. Will add more at $17.80 if it comes. First entry just above $15 last week.”
The flagship cryptocurrency, Bitcoin, will face a tough battle at $40,600 and then $46,858, according to Bennett. Overall, he’s leaning bullish.
“This is either the start of the second leg of the bull market or a relief rally at the beginning of a bear market. There is no middle ground. I’m still leaning toward the former, but I’m also relying on the chart to tell the story, as always.”
The king coin jumped from $34,007 on Sunday to over $40,000 by Monday and is currently attempting to maintain that $40,000 level that Bennett outlines.
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- Bitcoin options contracts are set to expire on Friday, July 30.
- Bulls stand to benefit.
options contracts worth $1.5 billion will expire Friday on unregulated derivatives exchange Deribit. With Bitcoin’s price rebounding 10% in the last month, bullish traders could get a sizable discount.
Bitcoin options contracts allow traders the (ahem) option of buying BTC at a set price. Contracts can be traded throughout the month, typically until the last Friday, meaning those who have purchased contracts can wait until the very last minute to see how the price shakes out. At any point, they can exercise the option or sell it to someone else. If they do neither, the option expires.
The max pain price for this period is $35,000, per Deribit. “Max pain” refers to the point at which overall traders get the least bang for their buck. In essence, it’s the area around which they would be better off just buying BTC rather than having wasted money buying the options (to buy BTC) in the first place.
According to crypto data provider Nomics, Bitcoin is currently trading at $39,700, an improvement on the $35,000 it was trading at one month ago. As a result, many traders who bought options as crypto prices were swooning stand to get a discount if they exercise their options now that markets have partially recovered. They’ll buy at, say, $35,000 tomorrow instead of $39,000. And those purchases could then, in turn, push the price of Bitcoin higher still.
Moreover, the put/call ratio of 0.86, which is used to measure investor sentiment, is moderately bearish, giving Bitcoin bulls a chance to clean up. In a nutshell, call options are contracts to exchange BTC at a certain price, if the buyer wants to. Put options are the reverse: They give a person the option to sell at a certain price. When people are buying more calls, it means investors are expecting the price to go up. When they’re buying more puts, they’re looking for a way to cash out should the price crash.
Speaking at the end of April as $3.6 billion in Bitcoin options expired, Arcane Research analyst Vetle Lunde told Decrypt that options expiries can move the market, even at a time when people were increasingly holding onto their BTC.
“We’ve seen Bitcoin rallying with force following all monthly options expiries in 2021, so the market action suggests that large expiries provide a short-term anchor for the price,” he said.
Instead, the price faltered over the next several months, dropping from near-record highs of $58,000 on Friday, April 30, to as low as $31,000 before the June expiry period (which did lead to a rally).
Bitcoin bulls are hoping this expiry period leads to a return to form.
The American lawmakers proposed new cryptocurrency taxation that would raise nearly $28 billion in extra tax revenue. As part of it, digital asset investors in the US would have to report transactions that exceed $10,000 to the International Revenue Service.
The Senate Aims to Collect More Taxes
According to a recent Bloomberg report, the American government aims to implement stricter rules on companies and people dealing with digital assets. The proposed new taxation law would require investors to report their crypto transactions of over $10,000 to the International Revenue Service (IRS). With this new legislation, the lawmakers expect to raise $28 billion in revenue.
Main senators from both the Republican and Democratic parties revealed that the government would add the funds to the $550 billion budget designed to renovate the country’s transportation and electricity infrastructure.
The lead Republican Senator Rob Portman of Ohio said that Congress expressed a united opinion regarding future cryptocurrency reporting and taxation:
“Everybody’s been talking about the appropriate way to provide more reporting in particular and that leads to better compliance.”
So far, the Biden administration has been requesting local banks and trading venues to report their cryptocurrency transactions to the IRS. Added to it, the upcoming move would aim to reduce the widening tax gap in the USA.
Are Cryptocurrencies a Threat to The US Financial System?
As CryptoPotato recently reported, the crypto skeptic US Senator Elizabeth Warren criticized digital assets as in her opinion, they would harm the American monetary system. The Democrat sent a letter to the US Treasury Secretary – Janet Yellen – and asked for greater regulation for cryptocurrencies. Moreover, Warren insisted on a complete ban for them:
“The hype, the volatility, the wild claims that turn out to be false. As the crypto market grows, so do the risks to our financial stability and our economy.”
The Senator also argued that virtual currencies are not as decentralized as it seems. She opined that many of them are under the control of founders and miners. Warren went further, labeling those in the industry as evil masterminds:
“Instead of leaving our financial system at the whims of the giant bank, crypto puts the system at the whims of some shadowy, faceless group of super-coders and miners, which doesn’t sound better to me.”
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The rumor that Amazon would accept cryptocurrency payments sparked a wave of bullish enthusiasm across the crypto market earlier in the week but now this sentiment has begun to wane as Bitcoin (BTC) bulls face stiff resistance at the $40,000 level.
Data from Cointelegraph Markets Pro and TradingView shows that bears have managed to fend off multiple attempts to flip the $40,000 level to support and defense of this zone continued on July 29 as Bitcoin’s stagnant price action and added to concerns that the price could fall back to last week’s $35,000 to $30,000 range.
Here’s what analysts and investors are saying about the recent developments in Bitcoin’s price.
The 21-week EMA marks the line between a bull and bear market
Bitcoin’s rapid ascent from $31,000 to $40,925 lifted the price near its 21-week exponential moving average, a level that is widely considered as a bull market indicator according to pseudonymous crypto Twitter analyst Rekt Capital.
The 21-week EMA is largely regarded as a #BTC Bull Market indicator
When $BTC is above it – BTC is thought to be in a Bull Market
When price is below it – BTC is thought to be in a Bear Market
BTC is now fighting to breakout beyond the 21-week EMA (green)#Bitcoin #Crypto pic.twitter.com/rMqeWzJS4i
— Rekt Capital (@rektcapital) July 28, 2021
As seen in the tweet above, the 21-week EMA is currently near the $40,000 price level, effectively becoming the ‘line in the sand’ that separates bulls and bears.
One of the responses to the above tweet offers a word of caution for overly bullish traders because similar moves in the past were followed by lower lows and an extension of bear market conditions.
As shown by the yellow circles in the chart above, previous instances of the price breaking above the 21-week EMA have resulted in a reversal that leads to a retest of lower lows in the following weeks and months.
Bitcoin whales remain greedy while others are fearful
One group of market participants who have shown little evidence of indecision are Bitcoin whales, who have embraced Warren Buffett’s mantra to “be fearful when others are greedy, and greedy when others are fearful,” by buying up low-priced BTC as weaker hands tap out.
#Bitcoin’s whales have been staying busy, and addresses holding between 100 and 10,000 $BTC just reached a combined #AllTimeHigh 9.19m coins held. They have added 170,000 more $BTC since May 22nd, and a staggering 130,000 $BTC in the past 4 weeks alone. https://t.co/qv5IbYXgGQ pic.twitter.com/PwrmUyz9Of
— Santiment (@santimentfeed) July 29, 2021
According to data from Santiment, an on-chain and behavioral analysis platform, whale wallets have accumulated 130,000 BTC in the past four weeks as the price of Bitcoin traded below $35,000.
With such heavy accumulation being seen in the lower $30,000 to $35,000 range, some analysts have suggested that whales may attempt to orchestrate another pullback in price so that they can continue to accumulate.
Related: Bitcoin bulls control Friday’s $1.7B monthly options expiry
Long-term cycles offer hope
When near-term confusion prevails, sometimes it’s best to take a step back to see the bigger picture of where the market is and what possibilities the future holds.
According to Inmortal UP ONLY, a pseudonymous Twitter user, Bitcoin’s four-year cycle is currently about 65% through its bull-market phase and the trader predicts a top at $150,000, which will be followed by a correction to $32,000.
For traders and holders that prefer to operate on a longer time scale, there remains plenty to be optimistic about in the future for and experienced market participants know the price moves seen over the past few months are part and parcel of the normal progression for Bitcoin.
Further confirmation of the long-term perspective was offered by Ecoinometrics, who compared Bitcoin’s current post-halving price action to performances in the previous two halvings.
#Bitcoin after the Halving
Jul. 29, 2021
443 days after the 3rd halving#BTC at $39,973
Catching up to the growth trajectory of the previous cycle will require a lot of juice.
But we can hope this move is the start of a new leg up.
So far so good. pic.twitter.com/a12RYAhlsn
— ecoinometrics (@ecoinometrics) July 29, 2021
As shown above, the current price of BTC is well below the average growth of previous cycles, indicating that the BTC has some “catching up to do” if it will achieve a similar trajectory and reach a new all-time high above $100,000.
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.
CEO Michael Saylor struck a defiant tone during a Q2 investor call, pledging to add more Bitcoin to its balance sheet while continuing to advocate for the cryptocurrency.
Publicly traded business intelligence firm MicroStrategy is pledging to add more Bitcoin to a corporate balance sheet that already includes 105,000 BTC worth roughly $4 billion.
Speaking during a live video call with investors Thursday, CEO Michael Saylor and CFO Phong Li struck a defiant tone at a time when the mainstream press has taken aim at the firm for its focus on accumulating Bitcoin amid its recent market downturn.
However, Saylor appeared unassuaged by criticism, stating: “Our macro strategy is to acquire and to hold Bitcoin. We’ll help explain Bitcoin to the regulators, to the public and to the media.”
“We think acquiring Bitcoin at this time is going to be a wise move. We feel like there is a land grab right now to acquire as much as we can,” he said.
Elsewhere, Saylor said he was “pleased” with the investment (to date the firm has invested over $2 billion in Bitcoin), while describing an improving economic environment for Bitcoin despite negative news catalyst that have seemingly deterred retail investors of late.
“The China exodus was a really good thing for Bitcoin. The result was a decentralization of mining throughout the world,” Saylor said. “Long term, the Westernization of Bitcoin is good for Bitcoin, the U.S. dollar and Western technology.”
Still, in the question-and-answer portion of the event, Saylor faced no shortage of questions, including whether the company would consider investing in other “crypto assets” including Ethereum.
Saylor replied, “Our strategy is to focus on Bitcoin. I can plug Bitcoin into the entire digital economy and it makes everything better. Bitcoin fixes everything.”
“The least risky, most diversified investment strategy is to simply hold Bitcoin.”
For his part, Li backed Saylor’s statements arguing the investment has “generated substantial value for shareholders” and noting that the company is still in the early stages of deploying its Bitcoin strategy.
“Going forward you can expect we will purchase additional bitcoin,” he said.
- DODO is set to launch on Arbitrum, and believes that Arbitrum will surpass people’s expectations.
- While initially, liquidity will be spread between layer 2’s and sidechains like Polygon or BSC, if layer 2 delivers it will eventually prevail.
- The recent slump in DeFi prices hasn’t affected most projects as they all have more than enough funds to continue building the future of finance.
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In an interview with Crypto Briefing, the founder and CEO of DODO exchange Lei Mingda talks Arbitrum, scaling Ethereum, Polygon, BSC, Three Arrows Capital, concentrated capital, and the future of DODO in a multichain world.
Onboarding Millions to Layer 2
DODO is a decentralized exchange that pioneered concentrated liquidity, the key feature of Uniswap v3, back in August 2020. The exchange achieves concentrated liquidity through a proactive market maker algorithm that automatically allocates funds to a certain range dynamically, achieving a lower price impact on transactions with less necessary liquidity in DODO’s pools.
The twist of the proactive market maker is arguably one of the best advantages DODO has over the cut-throat competition for liquidity between decentralized exchanges. While Uniswap‘s v3 concentrated liquidity feature depends on users moving their liquidity, DODO does it automatically around the relevant price range. As moving liquidity can be expensive, DODO’s automatic system favors smaller users.
While this feature has been integrated into the exchange since its launch, future updates for DODO tell us a lot about the general direction of DeFi for the second part of 2021. High on the agenda for most DeFi protocols, including DODO, is bringing their protocol to layer 2 scaling solutions like Arbitrum. The exchange’s CEO Lei Mingda has a lot of positive things to say about Arbitrum.
“Layer 2 works even better than I expected. Arbitrum is a great project and a team with a solid background. That doesn’t mean there won’t be issues at launch though, but the product is ready and works well,” said Lei. “The reason why they haven’t opened it to the public is that they want everything to be ready and tested before Arbitrum becomes available to the public.”
DODO’s Multichain Future
DODO was also one of the first exchanges to port their protocol on Binance Smart Chain. BSC has been having a complicated few months as it first brought millions of users to the network, using DeFi and Ethereum Virtual Machine. When it comes to layer 1, DODO is chain agnostic. Its strategy has been following the user activity, which has led to the implementation of the protocol on ETH, BSC, and Polygon.
“Binance Smart Chain is an important partner of DODO, but its reputation has taken a hit recently. The biggest problem is Binance’s “move fast break things” style, which has led to great growth when the chain wasn’t really ready and battle-tested,” says Mingda. “Now they’re paying for that.”
One of the key shows of strength for DeFi in the coming months will be the duel for liquidity between sidechains like Polygon or BSC and true layer 2 like Optimism or Abritrum. While the first two already have established user bases, true layer 2 will benefit from better security by directly leveraging Ethereum’s main chain security.
“Sidechains have developed strong userbases so short/mid-term there’s going to be a split between these two solutions. Eventually, if L2 delivers, that’s where the money will go,” predicts DODO’s CEO. “Splitting capital around different chains is a problem, but this is something DODO’s market maker algorithm is perfectly suited for, as it makes up for lower liquidity.”
State of DeFi
Mingda also had interesting words of wisdom regarding the recent downward price trajectory of DeFi tokens. Between February and May, DODO’s token traded around $4. Today, the token changes hand barely above $1. When asked about it, Mingda seemed more amused than worried.
“We don’t care about that, and we can tell you other projects don’t care either. We’re too busy building to care about secondary market prices. DeFi tokens crashing is a very normal phenomenon that has happened many times before,” he assured. “All the DeFi teams have more than enough cash to continue building and we shouldn’t worry about the industry.”
Indeed, the exchange has the luxury of being backed by Three Arrows Capital, one of the foremost investment funds in the crypto space. The exchange enjoys biweekly calls with founding partners Su Zhu and Kyle Davies, two veterans of the crypto space who can properly advise DODO’s growth.
Disclaimer: The author held ETH and several other cryptocurrencies at the time of writing.
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