Schlagwort: blockchain analysis

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.

Key Takeaways

• The total value locked in DeFi is close to levels last seen in March 2021 
• Ethereum is a commanding leader with 57% of the market share, but the overall market has shrunk drastically
• Sky-high yields proved unsustainable, while trad-fi interest rates have risen sharply, with investors reallocating capital as a result
• The reputational damage of crypto could also be hurting the sector

The total value locked in DeFi continues to sink, currently close to levels last seen in March 2021. From peaking in November 2021 at nearly $180 billion, it has fallen 80% to $37 billion. 

The stark dropoff last year comes as no surprise. Cryptocurrency as a whole was decimated – the Terra crisis alone in May 2022 is evident on the above chart as causing a massive drawdown. Beyond that, token prices collapsed, and hence TVL has come down drastically.

Yet, thus far in 2023, crypto prices have rebounded strongly. However, by repurposing the previous chart by now zooming on 2023, we can see that TVL has failed to rise.

Digging into the different blockchains, Ethereum remains the commanding market leader. It holds 57% of TVL across the space, with Tron a distant second with 13.9%. BNB Chain, launched by the embattled Binance, is third with 7.8%, with all other chains below 5%. 

Bearing in mind that Ethereum holds such a commanding lead in the space, we can dig into its TVL trend to see that the dropoff is not solely a result of falling token prices. 

For this, in the next chart we present the TVL both denominated in dollars and ETH. While dollar-denominated TVL is what we have focused on thus far in this piece, it is obviously affected by virtue of the fact that much of the TVL is held in crypto rather than fiat. Yet if we analyse the TVL in terms of ETH, which is down 55% since the start of 2022, we see that it is also down substantially. 

If we focus on 2023, we see that the TVL in terms of ETH has fallen less than in dollars, which makes sense given the converse has happened; the denominator has become larger (i.e. ETH has increased, up 35% this year). 

Therefore, the decline is not solely a result of falling prices. In reality, the entire crypto ecosystem is still seeing suppressed volume, liquidity and overall interest. DeFi’s momentum has also slowed, not helped by the fact that the sky-high yields which drew so many to the space during the pandemic have proved to be unsustainable (granted, this is mainly to do with elevated token prices).  

In conjunction with this last point, trad-fi yields have gone the opposite way – steeply up. T-bills are the safest investment in the world, guaranteed by the US government, and they now pay more than 5%. The decision about where to allocate one’s capital in this environment is vastly different to the same proposition when interest rates were at 0%. 

With a slew of ETF applications coming online in recent months, there is optimism that crypto could soon turn a corner. Exacerbating this is the expectation that, finally, we may be approaching the end of the tightening cycle. 

If/when the reversal comes, DeFi will be in a stronger position to persuade capital to return. The reality is that, right now, with interest rates above 5% and DeFi yields coming down so sharply, the risk-reward ratio is just not where it needs to be for prospective investors.

Moreover, the reputational damage sustained by crypto (even if that was unfair on DeFi, which some would even argue presented its true worth in comparison to CeFi firms like Celsius and BlockFi), may have dented its progress further again.

Times will change, but the capital outflow from DeFi is not surprising in this context. 

The post DeFi risk-reward remains out of whack, TVL continues to dip appeared first on CoinJournal.