$420M in leveraged long traders liquidated after XRP rallies to $1.96

XRP price dropped by 20% shortly after making a 2021 high at $1.96, but have the altcoin’s bullish fundamentals changed?

XRP holders couldn’t have asked for a better year as the cryptocurrency rallied almost 800% and flirted with a $2 level in the early hours of April 14. 

In addition to achieving its highest level since January 2018, this robust price increase signals that investors are not worried about the ongoing SEC “unregistered securities offering” dispute.

However, just 6 hours after rallying to $1.96, XRP price crashed by more than 20%. During an interview, DCG Group CEO Barry Silbert said it would be risky for exchanges and companies in the United States to relist XRP ahead of receiving the SEC’s blessing. These remarks may have contributed to the unprecedented $420 million long liquidations on derivatives exchanges today.

XRP price in USDT at Binance. Source: TradingView

Over the past couple of weeks, the primary catalysts for XRP’s rally have been victories in Ripple’s legal battles. Lawyers representing Ripple were granted access to internal SEC discussions regarding cryptocurrencies, and more recently, a court denied the disclosure of two Ripple executives’ financial records, including CEO Brad Garlinghouse.

Considering the recent rally, pinpointing a single reason for the price correction will likely be inaccurate. Nevertheless, the impressive $420 million long liquidations past 24-hours exceed those of Feb. 1 when XRP price crashed by 46% in two hours.

XRP futures aggregate liquidations. Source: Bybt

The only logical reason behind this staggering liquidation is excessive leverage used by buyers. To confirm such a thesis, one must analyze the perpetual contracts funding rate. To balance their risks, exchanges will charge either longs or shorts depending on how much leverage each side is demanding.

XRP perpetual futures 8-hour funding rate. Source: Bybt

The chart above shows that the 8-hour funding rate is surpassing 0.25%, which is equivalent to 5.4% per week. Although this is excessive, buyers will withstand these fees during strong price rallies. For example, the current upward price move lasted for almost three weeks, and prior to that another took place in early February.

Blaming the liquidations exclusively on leverage seems a bit extreme, although it certainly played its part in amplifying today’s correction.

Moreover, the record growth in XRP futures open interest was accompanied by a hike in the volume at spot exchanges. As a result, the eventual impact from more significant liquidations should have been absorbed by the increased liquidity.

Cascading liquidations will always take place in volatile markets. Thus investors should focus on how long it takes until the price recovers from it.

Fundamentally, a 10% or 20% intraday drop should not be interpreted differently. The correction depends on how many bids were previously stacked at exchange orderbooks and is not directly related to investors’ bullish or bearish sentiment.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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SEC approves Exodus wallet for Regulation A stock offering

Exodus shares are now available for purchase through its wallet.

Crypto wallet provider Exodus recently received the green light from the United States Securities and Exchange Commission to sell shares of its operation. 

According to a public statement from Exodus on Thursday: “Exodus Movement, Inc., a Delaware corporation that has developed a leading non-custodial cryptocurrency software platform, received notice that the Securities and Exchange Commission has qualified its offering of Class A common stock under Regulation A.”

The shares hit the market last night in the U.S. and are available through the wallet itself. For many years, Exodus has existed as a desktop wallet for crypto users, compatible with an array of digital assets. The wallet also hosts a feature that allows users to swap between assets within the wallet. Now, according to the statement, users can buy Exodus shares through the app as well.

Exodus filed with the SEC for a Regulation A offering in February, as detailed in its related paperwork. Regulation A offers a form of exemption under which entities can sell unregistered shares, based on information from Investor.gov.

The Thursday statement notes a price of $27.42 per unit of Class A common stock. Buyers can pick up as little as a single share, or as much as 2,733,229 shares. “All investors must be registered with the Exodus transfer agent Securitize,” the statement noted, pointing toward two avenues for registration: through Securitize or in the Exodus wallet itself.

Shares can only be purchased by U.S. residents. Arizona, Florida and Texas folks, however, cannot participate. The statement also added:

“Exodus is currently exploring partnerships with alternative trading systems (ATS) that could potentially expand the availability of Exodus shares. Exodus intends to make the Class A common stock available for trading on several ATS, including the tZERO ATS within nine months of this offering.”

Crypto companies going mainstream has been hot news as of late, with Coinbase’s direct listing on the horizon, expected to occur on April 14.

Quotes in this article taken from previously published sources have been lightly edited.

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Robinhood’s crypto business explodes in the first quarter despite GameStop controversy

The popular trading app offers commission-free trading for Bitcoin, Ethereum and other cryptocurrencies.

Robinhood, a popular trading app targeting millennials and other inexperienced investors, has become a major hub for cryptocurrencies, offering further evidence that digital assets are garnering mainstream appeal. 

The company reported Thursday that 9.5 million users traded digital assets on its platform during the first quarter of 2021 – a six-fold increase from the previous quarter.

Robinhood provides commission-free trading for several major cryptocurrencies, including Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE), Ethereum (ETH), Litecoin (LTC) and Ethereum Classic (ETC). It provides real-time market data for nearly a dozen more digital assets.

That Robinhood’s crypto business is on the rise is hardly surprising given the size and growth rate of the crypto market over the past six months. The combined value of all cryptos reaching $2 trillion in early April, having doubled in just three months.

A huge chunk of those gains was catalyzed by Bitcoin’s nearly twofold increase since January. As Bitcoin’s gains moderated, altcoins have taken over. Cryptos not named Bitcoin now account for roughly 45% of the overall market, according to CoinMarketCap data.

But 2021 hasn’t been entirely positive for Robinhood. The company was embroiled in controversy after deciding to suspend trading of GameStop and other stocks that had grown in popularity among retail traders. As a result, public opinion of the company tanked, forcing its executives to rethink their plans for a public listing.

Despite the controversy, Robinhood is moving ahead with its initial public offering, according to paperwork it filed with the United States Securities and Exchange Commission last month. Although the company didn’t specify when its IPO would take place, it confirmed that the offering would go ahead “after the SEC contemplates its review process, subject to market and other conditions.”

Robinhood joins crypto-focused exchanges Coinbase and Kraken in reporting stellar first-quarter results. As Cointelegraph recently reported, Kraken appears poised to follow in Coinbase and Robinhood’s footsteps in pursuit of a public offering, perhaps as early as next year.

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Ren price rallies 40% after adding LUNA, SOL and FTM to its ecosystem

Ren continues to gain momentum as the addition of new tokens and the protocol’s focus on DeFi and interoperability leads to an uptick in trading volume.

The cryptocurrency sector has emerged as a hot topic on the global stage in 2021 thanks in large part to the growth of decentralized finance and non-fungible tokens which have caught the general public’s attention. 

Throughout the sector there is a need for interoperability between networks as many of the most popular projects are on siloed blockchain networks and high Ethereum fees prevent developers and investors from interacting across chains.

One project focused on solving this project is Ren, which revealed on March 31 that Solana and Fantom had become the latest tokens supported by the interoperability-focused protocol.

These additions mark the third new token supported by the protocol over the past week, which has coincided with a 40% rally in the price of REN as community members from the newly supported tokens discover a newfound interest in the Ren ecosystem.

REN/USDT 4-hour chart. Source: TradingView

As more NFT and DeFi projects continue to emerge on separate blockchain networks, the need for projects like Ren is likely to increase as the cryptocurrency ecosystem as a whole looks for ways to increase its interconnectedness. 

REN price soars as its ecosystem expands

2021 got off to a hot start for Ren thanks to the explosion in growth of decentralized finance and the protocol’s ability to bring tokens from other blockchains onto the Ethereum (ETH) network where a majority of the active decentralized applications exist.

Momentum for Ren really started to build on Jan. 26 after it was announced that Dogecoin (DOGE) could be transacted on the Ethereum network through the renDOGE bridge.

The announcement of a partnership with Alameda research on Feb. 2 followed by the protocol’s integration with the Binance Smart Chain on Feb. 18 helped push Ren to an all-time high of $1.84 on Feb. 19 before the overall market correction that began on Feb. 20 dropped the price back below $1.

Following the downturn, Ren has continued to expand its ecosystem through integrations with DeFi protocols like 1inch (1INCH), PancakeSwap (CAKE) and BadgerDAO (BADGER), as well as through the addition of new cross-chain assets including Digibyte (DGB), Terra (LUNA), Solana (SOL) and Fantom (FTM).

A collaboration that was formed with Polkadot (DOT) back in June 2020 has also been paying off for Ren of late as DeFi projects like the Acala network prepare to launch on the Polkadot network once the upcoming parachain auctions are complete.

According to the most recent ecosystem update, the RenVM surpassed $3 billion in total volume at the end of February and has paid out over $5,500,000 to node holders since its inception. The team has also released an update for Ren Bridge 2, which is now fully open-source and can be accessed on GitHub.

Signs of rising fundamentals 

Alongside the recent integration with multiple DeFi platforms and the addition of Solana, Fantom and Luna to the Ren ecosystem, the VORTECS™ Score, an algorithm comprised of current and historical market sentiment, trading volume, recent price action and Twitter activity, has risen as high as 78 over the past week as fundamentals for the project improve.

VORTECS™ Score (green) vs. REN price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score flipped green on March 26 and has remained in this zone for a majority of the time since then. Previous backtesting of the Markets Pro system has shown that higher VORTECS™ scores hint that the current market conditions are similar to conditions in the past when the asset rallied over the next several days.

With the momentum of nonfungible tokens starting to wane, traders could soon be looking to rotate into the next hot sector and there are signs that activity on DeFi platforms is again on the uptick.

As blockchain technology increases its presence in the mainstream financial markets, Ren is one altcoin investors are clearly watching due to the fact that interoperability will remain a major focus in helping to unify what is currently a disjointed cryptocurrency ecosystem.

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.

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Flamingo (FLM) TVL rises as Ethereum gas solutions remain elusive

Flamingo’s total value locked continues to rise as DeFi investors are attracted to the platform’s zero-fee transactions and high-yield liquidity pools.

Yield farming has grown in popularity over the past year alongside the rise of decentralized finance, but recently the ability to earn a good return has been limited by the high transaction costs on the Ethereum (ETH) network. 

As a result, yield farmers have begun exploring options outside the Ethereum network for more accessible opportunities in a low fee environment.

One option that has shown steady growth in liquidity since launching is Flamingo Finance (FLM), a DeFi platform based on the Neo (NEO) blockchain and the Poly Network interoperability protocol.

Flamingo finance total liquidity and 24-hour volume. Source: Flamingo Finance

Flamingo aims to become a full-service DeFi platform and the protocol currently has a cross-blockchain asset gateway (wrapper), an on-blockchain liquidity pool (swap), a blockchain asset vault, a perpetual contract trading platform (perp) and a decentralized governance organization (DAO).

The cross-blockchain asset gateway is currently capable of wrapping ERC-20 tokens including Wrapped Ether (WETH) and Wrapped Bitcoin (WBTC), as well as Ontology-based (ONT) tokens.

Interaction with the protocol is done using the NeoLine or O3 wallet browser extensions for Neo tokens, the Cyano wallet browser extension for Ontology-based assets, and the MetaMask browser extension for transactions requiring the Ethereum network.

While the platform is not really a contender with Etheruem, the low fees have been attracting users, as shown by the rising TVL. Once all collateral has been wrapped and deposited on the Neo blockchain, all transactions on the Flamingo protocol have a fixed cost of 0.011 GAS and there is a option to choose a feeless transaction if the user is willing to wait a little longer for the transaction to process.

Competitive yields boost liquidity

When Flamingo originally launched, it offered simple staking and high yields to attract the initial pool of liquidity that helped get the ecosystem established. It has since shifted into offering yield opportunities for liquidity pool providers, especially on pools where there is a greater need for liquidity.

Liquidity pool staking rates on Flamingo Finance. Source: Flamingo Finance

As seen in the graphic above, all of the pools are paired with Neo and rewards are paid out in FLM token.  

According to Flamingo’s Twitter feed, the protocol is now gearing up for the release of Neo 3.0, which began its Testnet launch on March 25. Once fully implemented, Neo 3.0 could see increased activity on the network and spark a rise in value for FLM as it’s the base pair for all of the liquidity pools.

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.

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