Kategorie: Crypto Analysis

Key Takeaways

• Volatility briefly rose in crypto markets last month but is back near all-time lows
• Capital flight out of the space has been enormous, with liquidity also at multi-year lows
• Trading volume continues to decline, with Binance’s volume down 95% from the peak in 2021
• Ethereum is now trading at a similar volatility to Bitcoin
• A combination of tight monetary conditions in the economy, as well as crypto-specific scandals and a regulatory crackdown, have all made their mark on the space

Volatility in the crypto markets is back to multi-year lows. After a brief pickup amid the positive ruling on the Grayscale ETF case last month, markets are back to the placid state we have become familiar with this year.

Looking at 90-day annualised volatility, both Bitcoin and Ethereum are close to the lowest levels we have seen. The chart below shows that, aside from three isolated episodes, we have seen volatility in a near-constant state of decline since Q1 of 2022. That marks the infelxion point for the wider economy, when we transitioned to a tight monetary environmen, kicking off what would prove to be a gruesome time in crypto.

The three episodes of reprieve with regard to volatility were the Terra collapse and subsequent summer of bankruptcies (from May 2022), the FTX collapse in November 2022 and, most recently, the banking contagion in March 2022. Otherwise, it has been a downhill ride.

The muted state of the once-volatile asset class is hurting market makers and liquidity. While the entire ecosystem has been ravaged, it is important to note that the macro environment has also pared down in volatility this year, as can be seen on the below chart where we have included the 90-day volatility of the Nasdaq for reference. 

However, the scale of the decline in crypto has gone above and beyond. While digital assets remain highly correlated with risk assets (the tech-heavy Nasdaq being the classic example), the capital flight and drain of both volatility and liquidity form the blockchain sector have been unmatched elsewhere.

Such is the lack of volatility that we are now even seeing Ethereum trade with similar volatility to Bitcoin (for a brief period, Ethereum’s volatility was even even lower than Bitcoin’s), despite the former traditionally operating at volatility levels above the world’s biggest crypto. 

On the one hand, this is positive for Ethereum and demonstrates a growing maturity. On the other hand, the convergence is emblematic of the drain in overall volatility from the space at large. 

Yet, in the context of what is happening across the space, the drawdown is not surprising. We keep mentioning the capital flight and dearth of liquidity; in looking at the numbers, the chasm compared to previous years is enormous. 

Fiat trade volume on Binance, the world’s biggest exchange with an approximate two-thirds market share of total volume, is down to its lowest level in more than two years. Fiat trade volume on Binance has declined by more than 60% since early January and is down 95% relative to its 2021 peak, according to data from Kaiko. 

While Binance is facing myriad issues which may have exacerbated the decline, the underlying fact remains: liquidity has fled the space at the speed of light, to the extent which has surprised perhaps even the most bearish of crypto analysts’ predictions. Not to mention, one of the many accusations levelled against Binance through several lawsuits is an alleged manipulation of trade volume, so perhaps the dropoff is even worse than those above numbers imply. 

Given volume and volatility go hand-in-hand, the subsequent drawdown in the latter is, therefore, not surprising. Crypto resides as far out on the risk spectrum as can be, and in a world that has seen interest rates jump from 0% to above 5% – and at a pace among the fastest in modern economic history – the fallout makes sense. And that is without even layering in the numerous scandals and crypto-specific episodes which have pushed market makers and investors alike away.

The post Crypto volatility continues to plummet, spot volume now at two-year lows appeared first on CoinJournal.

• Tron price made a strong comeback on Tuesday.

• Franklin Resources applied for its own Bitcoin ETF.

• Tron’s user statistics are strong as the DeFi TVL soars.

Tron price popped on Tuesday as cryptocurrencies went through a short squeeze. The TRX coin jumped to a high of $0.082, the highest level since July 30th. It has soared by more than 135 from the lowest level in August.

US inflation data ahead

The main catalyst for the TRX price was a decision by Franklin Templeton to file for its spot Bitcoin ETF. It joins other large American companies like Ark Invest, Invesco, and Blackrock. 

It is still unclear whether the SEC will accept these funds even though the companies have put in place strict surveillance clauses to prevent manipulation. Still, analysts believe that the SEC will ultimately accept these funds, thanks to the recent breakthrough by Grayscale Bitcoin Trust.

Franklin Resource’s application is a major one because of how big the fund is. It is one of the biggest companies in the US with over $1.5 trillion in assets under management (AUM). This makes it the 20th company in the industry.

Tron price also jumped as the total value locked (TVL) in its DeFi ecosystem continued rising. The TVL jumped to $5.7 billion, making it the second-biggest player in the sector after Ethereum.

Most dApps in Tron’s ecosystem have added more funds recently. For example, JustLend’s TVL has jumped by more than 7% in the past 7 days while JustStables, Sun, and stUSDT TVL has risen by over 5% in the same period.

Tron remains one of the most active blockchains in the industry. Data by DeFi Llama shows that the number of active users in the ecosystem were over 1.25 million in the past 24 hours. Its revenue in the same period was over $1 million.

The next catalyst for Tron price will be the upcoming US inflation data scheduled for Wednesday. These numbers are expected to show that inflation remained at an elevated level in August.

Tron price prediction

The daily chart shows that the TRX price has been in a strong bullish trend in the past few months. It has formed an ascending channel that is shown in black and has now moved to its middle point. Tron’s volume has been relatively elevated while the price remains above the 50-day moving average.

Therefore, the outlook for Tron is bullish, with the next level to watch being at $0.0851, the highest level on July 28th. The stop-loss of this trade will be at $0.077.

How to buy Tron

The post Tron (TRX) price prediction as DeFi TVL rises in its ecosystem appeared first on CoinJournal.

Key Takeaways

• The US unemployment rate jumped to 3.8% last month, from 3.5% previously
• Cooling economic data has strengthened the market’s resolve that interest rate hikes could soon cease
• Implications for a pivot in policy are key for the crypto markets

Bitcoin has had a torrid time ever since the economy transitioned to a tight monetary environment for the first time since the Genesis block was mined, all the way back in January 2009. 

Throughout 2022, the tightening of liquidity conditions dragged Bitcoin down (also helped by some rather shocking events within the crypto ecosystem). From trading as high as $68,000 in Q4 of 2021, it tumbled as low as $15,500 before bouncing back somewhat thus far in 2023. 

This makes sense, given Bitcoin resides so far out on the risk spectrum. The question of whether Bitcoin can one day operate as an uncorrelated asset, or some sort of digital gold, is an intriguing one. It is evident, however, that this has not yet happened. 

Partially propelled upwards by the rampant money printing and easing of global liquidity since the financial crisis in 2008 (which just so happens to coincide with Bitcoin’s launch, a fact which did not go over the head of Satoshi Nakamoto when he/she mined the Genesis block), Bitcoin went parabolic during COVID when central banks really took things to the next level. 

But the music had to stop. And when inflation began to spiral, those same central banks were forced to reverse course, embarking on one of the most rapid tightening cycles in recent memory. Up went interest rates, dispelling the complacent notion that the new era of zero-rates was here to stay. And they kept going up – today, T-bills are paying north of 5%.

The chart below demonstrates the steep incline of the key Fed funds rate:

With economic data remarkably consistent, the Fed was forced to stay the course, rates rising ever higher and higher. Despite some wobbles along the way (the regional bank crisis led by the collapse of Silicon Valley Bank is the clearest example), the economy continued to hum along just fine. 

While this seems like good news (and it is!), it has led to a sort of good news is bad news paradox. To rein inflation in, the economy must slow down. But if the economy does not slow down, inflation remains high and hence rate projections also stay elevated. This is why we have often seen a scenario where markets fall on good news. 

Is the economy slowing down?

However, this could all be about to change. Finally, it seems as if the economy could – finally – be losing some momentum. The most recent Labor Department report shows the unemployment rate jumped to 3.8% last month, from 3.5% previously. 

On the one hand, this shows quite how unusual a situation we are in. Sentiment feels negative, rates have been hiked to oblivion, and yet unemployment is near half-century lows. At least it was, until this report. 

The 30 bps jump is not dramatic, but it could be significant and a demonstration to the Fed that it may be able to (finally) take its foot off the gas. Average hourly earnings also rose 4.3%, down slightly from 4.4% in July. And while employers added 187,000 workers to their payrolls in August, which was a greater number than July, revisions in prior months have shown job growth to be not as strong as first reported.

All in all, this is far from a seismic fallout, but it does at least point towards some progression. Looking at markets, traders felt the same way. Projections around the future path of interest rates immediately became more dovish. The next chart backs out probabilities implied by Fed futures, comparing the projections for the next Fed meeting on 20th September with those same projections a week ago, before the jobs report. 

The chances of a hike at the meeting dropped from 20% to 6%, with the market now expecting no hike with a 94% probability. 

Combined with inflation already coming down significantly in the last twelve months, the macro conditions are undoubtedly far better than they were at this time last year when inflation was not far off double digits. 

Again, the shift is far from dramatic, and the data overall remains strong. 3.8% unemployment is still a stellar number, while wage growth has slowed but is still hotter than what the Fed desires. 

But finally, with rates north of 5%, it appears that the end of the tunnel may be approaching. For Bitcoin, which trades like a high-risk asset, this paints optimism. Of course, the flip side of this is that Bitcoin is already up 55% on the year. Investors must decide to what extent a pivot off tight conditions is already priced in. 

In that respect, the latest report spells out a notable warning. Despite the “optimistic” news that the hiking of interest rates could draw to a close, Bitcoin barely moved as the numbers hit the market. Figuring out this dilemma will be key for Bitcoin traders, but at least the long-term picture feels clearer after eighteen months of brutal liquidity tightening. 

The post Could softer liquidity conditions finally pump Bitcoin? appeared first on CoinJournal.

Key takeaways

• Dogecoin has been underperforming in recent days and risks dropping below the $0.060 level in the near term.

• Shiba Memu’s presale continues to reach new highs and recently crossed the $2.6 million region.

DOGE, the native coin of the Dogecoin ecosystem, has been one of the worst performers over the past seven days. It has lost more than 4% of its value in recent days, with Bitcoin also struggling below $26k.

However, the market’s poor performance hasn’t halted Shiba Memu’s ongoing presale from hitting new highs. 

DOGE could drop below $0.060 soon

DOGE is one of the worst performers amongst the top 10 cryptocurrencies by market cap over the past seven days. The leading meme coin has lost more than 5% of its value during that period. At press time, the price of Dogecoin stands at $0.06027.

If the bearish trend continues, DOGE could drop below the $0.060 mark. The poor performance comes as the broader crypto market undergoes a correction. The total cryptocurrency market cap stands just above the $1 trillion mark.

What is Shiba Memu?

Despite the bearish sentiment in the broader crypto market, Shiba Memu continues to set new records with its presale. Shiba Memu is an exciting Web3 project which aims to combine the powers of blockchain technology and artificial intelligence. With the rise of AI, their applications have become vast globally. 

Shiba Memu is a Web3 project that seeks to take advantage of the powers of AI and blockchain technology to make marketing campaigns easier for individuals and entities. 

According to their whitepaper, Shiba Memu is designed to handle various marketing tasks, including content creation, marketing, social media advertisement, and creative advertisement. 

As an AI software, Shiba Memu will always be active and will work 24/7 to find the best work going on in creative advertising, consuming it and generating better content marketing. 

Shiba Memu is launching as a meme token thanks to the recent popularity of meme coins in the crypto space. Within two years, meme coins saw their market caps grow from practically $0 to $20 billion in 2022. 

Shiba Memu is different from the other meme token projects because it has real-world use cases. With Shiba Memu, users can create marketing strategies, roll out PR schedules, and promote campaigns on relevant forums and social media platforms. 

The project is being deployed on the Ethereum and BNBChain blockchains. 

Shiba Memu’s presale hits $2.6M

The bearish sentiment in the market hasn’t negatively affected the ongoing Shiba Memu presale. So far the presale has been going on for more than two months now, and the team has raised more than $2.6 million. 

The funds generated from the Shiba Memu presale would be directed towards developing some of their products and services. Most of the funds would be directed towards developing the Shiba Memu AI technology. 

According to their whitepaper, the Shiba Memu platform would also have a robotastic dashboard, making it possible for users to interact with the AI, provide feedback, make suggestions, and ask questions.

Click here to find out more about Shiba Memu’s presale event.

Shiba Memu price prediction

It is almost impossible to predict Shiba Memu’s medium-term price at the moment since the HMU token is still in its presale stage. At the moment, 1 SHMU =0.026425 USDT

According to the team, SHMU’s price increases every day at 6 pm GMT. In a few hours, the token will go for 0.026650 USDT. 

SHMU began trading at $0.011125 when the presale began and will trade at $0.0244 when the presale ends. The SHMU token can be purchased using Ethereum, USDT, BNB and BUSD

Should you buy Shiba Memu now?

Shiba Memu has the features to be an exciting Web3 project. Its combination of AI and blockchain technology could prove useful to marketing agencies. The fact that Shiba Memu is still in its early stages could be a bonus to investors. 

If the project gains the right level of adoption, SHMU’s price could rally over the next few months and years. Furthermore, a rally by the broader crypto market could also see SHMU’s price experience a major boost in the coming months. 

The post Dogecoin price prediction as Shiba Memu’s presale hits $2.6M appeared first on CoinJournal.

• Bitcoin has moved in tight ranges since it broke above $30k in 2023
• Market participants await key economic events in September
• All eyes are on the Fed and its monetary policy decision 

Bitcoin investors probably have lost their patience during the summer months, as the cryptocurrency did not move. Known for its high volatility levels, Bitcoin is simply consolidating current levels. 

Make no mistake, the start of the year was a promising one. After all, Bitcoin rallied from 16k to $32k, doubling in price. 

But since it traded above $30k for the first time this year, it began a consolidation that currently lasts for more than five months. Moreover, the ranges become tighter and tighter, making it difficult to swing trade. Speculators, therefore, must scalp or wait for the market to move first and act second. 

Bitcoin chart by TradingView

Financial markets await key events in September

Most likely, financial markets (and the cryptocurrency market) do not move because market participants await key events due in September. 

More precisely, they await the Federal Reserve of the United States September decision and the US CPI data for August. Both events will increase volatility for the US dollar, so Bitcoin might finally break the range it held during the summer. 

The latest inflation data showed that the prices of goods and services in the United States have come down nicely. Sure enough, inflation is way above the Fed’s 2% target. 

Nevertheless, the disinflationary process suggests that inflation has peaked and what remains is to give the interest rate hikes time to make their way through the economy. 

Therefore, the Fed’s focus might not be on inflation anymore but on job creation – the other part of its dual mandate. As such, if the current inflation trend remains unchanged, the Fed might not see the need to raise the funds rate again. 

It means the US dollar might weaken in September if the Fed does not pause and delivers a dovish message. Bitcoin may resume its bullish 2023 trend if that is the case. 

The post As the US dollar’s strength persists, Bitcoin remains trapped in tight ranges appeared first on CoinJournal.