COMP, a governance token associated with lending platform Compound, is back into rough waters after sailing calmy for days.
The 37th-largest cryptocurrency by market cap fell by $25.14, or 20.15 percent, to $100.68. Its move downside started at a local top of $126.10, established after an eight-day upward consolidation of around 45 percent.
That was similar to how other altcoins performed in the same timeframe: beginning with a rebound rally and lately falling after setting a sessional high.
The Compound's long positions failed to match expectations. Source: COMPUSD on TradingView.com
To Compound, however, the latest downside correction appeared more serious. That is because of its prevailing bearish correction that began at COMP’s all-time high near $277 and hinted to conclude at $86.63 – a 68.78 percent decline, overall.
Traders perceived COMP’s sharp rebound from $86.63 as a sign of renewed buying enthusiasm. As of this Wednesday, many among them were claiming to extend their Long targets for the token, with one among them saying that the token would rise to $129.47 in the coming sessions.
But an extreme profit-taking sentiment poured cold water on the bullish targets. COMP plunged, leaving traders with an upside outlook at a considerable loss.
Argh, should have waited for a 4h close above the magic EMA 🙁
Doubling down here close to invalidation and giving it up if we don’t bounce here. pic.twitter.com/qpJIJirHrO
— Crypto Krillin ॐ (@LSDinmycoffee) October 28, 2020
That left the Compound token’s short-term outlook more uncertain as ever.
Technically, the Compound token appeared stuck below a resistance level at $127.63 that coincided with the 23.6% Fibonacci level of the retracement graph from a swing high of $261.71 to a swing low of $86.21.
The Compound token is pursuing a deeper bearish correction following its parabolic rally to $277. Source: COMPUSD on TradingView.com
Traders approached $127 multiple times in the last 30 days to break bullish. But each one of their attempts met with a pullback. On Wednesday also, COMP’s explosive move towards the said level met with extremely high selling pressure.
Therefore, it became vital for COMP to invalidate $127 as its interim resistance level to shift its primary upside target towards $153.25 at the 38.2% Fibonacci line. Otherwise, the token risked crashing back to its sessional low of $86.63 with an additional bearish sentiment below the level.
The initial Compound gains appeared out of a so-called DeFi breakout quarter, wherein every decentralized finance project returned enormous profits to their stakeholders. Compound, as a distributed lending platform, was investors’ favorite, locked more than $911 million worth of capital into its liquidity pool, signaling adoption for its COMP tokens.
As of now, the same Compound pool has about $1.06 billion worth of assets. But that is not reflecting the price of COMP. One analyst explained why.
The pseudonymous entity had complained about the COMP’s overvaluation back on July 2, stating that its Compound protocol is basically an AUM business. The ideal valuation of such models is around 1/3 or 1/4 of the total assets in custody.
1/ I’m short on $COMP, the fundamentals of the ‘governance’, given the public information, don’t make too much sense today.
Won’t be surprised to see it fall below $100 unless a revenue model is proposed soon. – Read full thread..
— Theta Seek (@thetaseek) July 2, 2020
“BlockFi is valued at around 200M when their AUM was 650M. (This is generous as Goldman Sachs is valued at less than 1/50 of their AUM),” the analyst wrote, adding:
“Given that the COMP market cap is at $2 billion when there’s $1 billion of AUM…the fair value of the token, (assuming similar long term profitability as other crypto AUM businesses) should be at around $50 today.”
The Compound market cap is now just shy of $428,000. That, according to the pseudonymous analyst, should be way lesser than $50.
Trump Administration Worried China Is Leaping Ahead of US in Adoption of Digital Currency: Report
There is a growing concern within the Trump administration that US regulators are dragging their feet as China’s dominance in the digital currency space accelerates, according to a new report.
Just a week after Federal Reserve chair Jerome Powell said it’s more important for the US to implement its own digital currency in the right way than to be first in the world, Breitbart reports that the Trump administration is now worried that unclear and stringent regulatory policies from the Securities and Exchange Commission (SEC) are putting American companies at a disadvantage on the world stage.
Senior administration officials have expressed their frustration about the SEC chairman Jay Clayton’s approach in regulating digital assets.
“So when you look toward the future, digital currency is going to be a major front in the broader economic battle. We need to make sure the SEC is not putting American companies at a disadvantage because China is making a major play in the crypto-space.”
So far, the agency has officially stated that Bitcoin is not a security, but has not commented on the vast majority of the crypto market.
The lack of regulatory clarity is a risk to US national and economic security, Sen. Tom Cotton said in a letter obtained by Breitbart.
“Our government should not voluntarily cede that ground by failing to create a level playing field for US-based companies through the development of clear policy that allows them to compete fairly against foreign competitors.”
Bitcoin Stays Above USD 13,000, Altcoins Take Hit
After buying and selling in the direction of the USD 13,850 degree, bitcoin worth struggled to proceed larger. BTC began a corrective lower and traded beneath the important thing USD 13,500 assist. The worth declined 5%, however it’s at present (05:00 UTC) buying and selling nicely above the USD 13,000 assist.
Conversely, there was a robust decline in most main altcoins, together with ethereum, XRP, litecoin, EOS, XLM, LINK, BNB, TRX, and ADA. ETH/USD settled nicely beneath the USD 400 assist, however it’s holding the USD 385 assist degree. XRP/USD is testing the USD 0.245 assist and stays at a threat of extra downsides within the short-term.
Whole market capitalization
There was a pointy draw back correction in bitcoin worth from the USD 13,850 zone. BTC broke the USD 13,650 and USD 13,500 assist ranges to maneuver right into a short-term adverse zone. The worth even spiked beneath the USD 13,000 assist, nevertheless it rapidly recovered. It’s now buying and selling above the USD 13,150 degree, with an preliminary hurdle at USD 13,300.
The principle resistance for a contemporary improve is now forming close to the USD 13,500 degree. On the draw back, an preliminary assist is close to the USD 13,150 degree, beneath which the bulls may defend USD 13,000.
Ethereum worth failed to realize power and declined beneath the USD 400 and USD 398 assist ranges. ETH is at present consolidating above the USD 385 assist, beneath which there’s a threat of a pointy decline. The following main assist is close to the USD 370 degree.
If there’s a contemporary improve, the bulls may face a heavy resistance close to the USD 398 and USD 400 ranges. The following main resistance is forming close to USD 410.
Bitcoin money worth outperformed bitcoin and ether, with a robust transfer above the USD 275 degree. BCH corrected a number of factors, however it’s nonetheless holding the USD 265 assist degree. To begin a contemporary improve, the worth wants to realize tempo above the USD 270 degree. On the draw back, the USD 265 and USD 260 ranges are respectable helps.
Chainlink (LINK) retested the USD 11.20 assist degree, the place it discovered a robust shopping for curiosity. The worth is at present rising and it’s buying and selling above the USD 11.50 degree. Nevertheless, the primary hurdle remains to be close to the USD 11.80 and USD 12.00 degree. An in depth above USD 12.00 may clear the trail for a push in the direction of the USD 12.50 degree.
XRP worth settled beneath the USD 0.250 pivot degree and it’s at present consolidating close to the USD 0.245 assist. If there are extra losses, the bears may take a look at the USD 0.242 and USD 0.240 assist ranges. Conversely, the worth may face resistance close to USD 0.248 and USD 0.250 if there may be an upside correction.
Up to now few hours, many altcoins declined over 5%, together with CRO, OCEAN, MKR, EWT, DOT, NEAR, EGLD, LRC, CELO, ANT, AAVE, MANA, REN, RSR, BAT, and QNT. Out of those, CRO is down over 10% and OCEAN declined beneath the USD 0.512 assist.
General, bitcoin worth is correcting features and buying and selling nicely beneath the USD 13,500 pivot degree. Within the short-term, there may very well be extra downsides, however the bulls may see the present decline as a shopping for alternative.
Author: By admin
Ten Telltale Signs Of Stocks Topping Resemble DeFi And Crypto – news.kuaidiantou.vip
The stock market bubble is popping, according to most top economists and financial analysts. In a new note to investors, a well-known capital manager has revealed the ten telltale signs that the stock market has indeed topped. But it is the fact that these signs also match the recent DeFi trend that took over crypto in the last several months that should have cryptocurrency investors spooked.
If DeFi and crypto are also in a bubble that’s popping alongside stocks, could things get dangerous across the crypto market once again especially surrounding DeFi coins?
Greenlight Capital founder David Einhorn sent a letter to investors this week claiming that the top is in for the stock market, and now that sentiment is shifting, to brace for impact.
“The decline starts and the psychology shifts from greed to complacency to worry to panic,” Einhorn revealed. When panic finally kicks in, a second-leg down similar to the stock market in 1929 is possible that makes this year’s Black Thursday look like a walk in the park.
With company valuations likely to decline for the foreseeable future, stock market gains have been tapped, and the air is about to come out. Einhorn says that the current markets show all the telltale signs of a stock market bubble. These signs include the recent IPO mania, a large concentration in a single sector, and “increased participation of retail investors, who appear focused on the best-performing names.”
Sound familiar? Because if it does, these signs and the rest of the list of warnings very closely match the exuberance during the peak DeFi phase.
Crypto analysts claim that Bitcoin is slowly but surely decoupling from the recent stock market correlation. But if the stock market bubble bursts and the selloff again turns violent, crypto could come crashing down again along with it.
And while it is very well Bitcoin continues to do well and decouple, altcoins and DeFi could be in for a dangerous future.
Einhorn says that the stock bubble includes an IPO mania where new companies go public wish shares. This doesn’t exist in crypto, but the newly launched DeFi tokens on platforms like Uniswap and others are the closest thing to it.
Next, he calls out “extraordinary valuations and new metrics for valuations” such a DeFi’s total value locked. Third, he points to a single sector soaking up most of the interest, which is exactly what decentralized finance has done.
“Second-tier” stocks suddenly will have S&P 500 style valuations, similar to what Aave and Chainlink have done by rising the ranks to the top of CoinMarketCap. “The more fanciful and distant the narrative, it seems the better the stock performs,” also matches the bizarre trend toward food-named coins with oddball use cases or no reason to exist at all.
Einhorn even calls out companies accused of fraud outperforming others, which isn’t uncommon in the crypto space, and “an outsized reaction to stock splits.” Tokens rarely split up their supplies, but a comparable event could be the creation of new UNI tokens, which caused a frenzy of FOMO across the crypto market.
Moving along, the next sign is increased retail participation “who appear focused on the best-performing names.” The several YFI knock-offs prove this theory correct.
Aave is a prime example of a DeFi token gone parabolic during the irrational exuberance of a bubble | Source: AAVEUSD on TradingView.com
Finally, Einhorn points to a parabolic ascent supported by trading volume in speculative instruments. The launch of DeFi related contracts where traders can long and short a basket of tokens helped turn the tides on the trend and kick off losses.
There are also few more prominent examples of parabola, than the DeFi token Aave, which grew over 23,000% from bottom to peak during the climb. That parabolic curve has been broken, but losses have not yet picked up suggesting that the bubble hasn’t yet burst, and capitulation volume will soon arrive.
Featured image from Deposit Photos, Charts from TradingView.com
This country is revitalizing Bitcoin’s primary functionality
While Altcoins are struggling to improve by a buck, Bitcoin registered its new 2020 high recently. Leading a serious sense of awakening in the space, the developments elsewhere have been instrumental as well. However, keeping price out of the picture, Bitcoin’s demand is now improving in a multi-directional facet, here’s how.
Investment Demand and Fundamental Demand: Cohesive growth for the ‘future’?
When we talk about the Investment Demand for Bitcoin, the narrative is simple. Traders or Investors are hoping for an appreciation over the long-term on their capital. Over the past few months, Microstrategy and Square have followed up on this interest, putting in millions of dollars in Bitcoin.
Coming to BTC‘s Fundamental demand, this form of interest was supposed to be Bitcoin’s initial sell-point. To use the digital asset for utility and transactions. Fundamental demand is as legit as it gets because Bitcoin is censorship-resistant money. Users can transfer value from one place to another without any restrictions or potential threats. While Fundamental demand seems irrelevant in front of Investment interest, an on-going situation in Central Africa is revitalizing Bitcoin’s primary functionality.
Bitcoin’s critical role in Nigeria’s #EndSARS movement
Nigeria’s anti-police brutality protests are currently all over the news. Feminist Coalition, one of the major groups driving the protest forward in Nigeria, faced a major dilemma a few weeks back. The organization noticed that bank transactions were being slowed down, and the group was allegedly restricted from accepting donations. However, these were tech-savvy individuals leading the protest and they turned their heads towards donations via Bitcoin.
The above chart illustrates the number of Bitcoins received by the group since its early days of protest. According to reports, on 22nd October, 40% of the total donation received by the Feminist Coalition was accounted for in Bitcoin.
The issue of government led-restrictions on their donation links was completely tackled. Bitcoin’s use as a censorship-resistance shined through for a critical issue in Africa.
‘Better Late than Never’
As stated earlier, Fundamental demand was losing its value in front of Investment interest. However, the fact that Bitcoin was used to avoid financial oppression, is like serving poetic justice to Bitcoin’s prime functionality. The asset’s investment’s side will bear fruit in the long-term. However, Bitcoin’s unique ability to withstand unjust limitations will be important in the future as well. Right now, Bitcoin’s growth is extremely cohesive in terms of Investment and Fundamental demand, and it could potentially be the beginning of a new chapter for the digital asset.
Author: by admin