EOS and YFI lead altcoins higher as Bitcoin and Ether bounce from swing lows

YFI, EOS and REV notched double-digit rallies as altcoins capitalized on the oversold bounce in Bitcoin and Ethereum price.

The markets were mixed on May 11 as Bitcoin (BTC) recovered from Monday’s drop to $53,000 by bouncing to $56,862 but the digital asset is still finding resistance at the $57,000 level.

Ether (ETH) also worked its way back above $4,100 but according to Cointelegraph analyst Marcel Pechman, the bullish sentiment for Ether seen in recent weeks has begun to fade as traders question whether new all-time highs will be sustainable in the short term.

Data from Cointelegraph Markets and TradingView shows that Bitcoin bulls defended a late-night sell-off on May 10 that briefly dropped the price of BTC below $54,000 before dip buyers gobbled up sell orders and lifted the price back above $56,000.

BTC/USDT 4-hour chart. Source: TradingView

blue-chipWhile the blue chip cryptocurrencies have been stuck in a sideways market, canine-themed meme coins including Shiba Inu (SHIB) and Dogelon Mars (ELON) have followed Dogecoin’s (DOGE) lead and seen their prices explode for triple-digit gains.

Ethereum bulls take a brief breather

Bitcoin’s range-bound trading between $50,000 and $60,000 in recent weeks can partially be attributed to the rising price of Ether, which has caught the attention of institutional investors looking for exposure to more than just BTC. The growing demand for Ether can clearly be seen in the price action of the ETH/BTC pair.

ETH/BTC 4-hour chart. Source: TradingView

According to David Lifchitz, managing partner and chief investment officer at ExoAlpha, Ether’s recent all-time high was in part due to a “continued rotation away from Bitcoin” which helped push the price of Ether “as high as $4,214 before suddenly puking down to $3,658 (-13% in an hour).”

The downturn in the crypto market coincided with a selloff in the U.S. equity markets that hit the tech-heavy NASDAQ index especially hard. Lifchitz noted that Bitcoin and the other cryptocurrencies were eventually able to “bounce back half of the loss from the high.”

While the sell-off “could be explained by some correlation trades leading to a quick profit-taking in cryptos”, Lifchitz also pointed to the possibility of a more organized selloff where some traders took advantage of frothy market conditions.

Lifchitz said:

“It could also have been an organized selloff as Ethereum was at its ATH after a torrid ride (i.e. ETH was vulnerable to a quick drop) in order to spook the weak hands and shake them off, triggering a cascading selling effect, before buying back ETH on the cheap as shown by the even higher volume to buy right after the selloff.”

Lifchitz highlighted that just:

“Twenty-four hours later, Bitcoin is back in the middle of its twilight zone ($50,000 to $60,000) and Ether is slowly grinding higher above $4K. So all in all, it was just an ordinary day in crypto land.”

Further insight into the market moves over the past week was offered by Ben Lilly, co-founder and analyst at Jarvis Labs, who highlighted an increase in on-chain profit taking over the last week that had “lots of capital turning over throughout altcoins.”

Lilly said:

“As capital made its way from coin to coin, profits were being realized as Bitcoin traded sideways. What we saw on May 10 was the end of this phase.”

Altcoins lead the market higher

The overall altcoin market shook off the bearish moves seen in the larger-cap cryptocurrencies. EOS led the day with a 50% jump which took the price to $13.92  after Block.one announced that it had secured $10 billion in funding to launch an EOS-based cryptocurrency exchange named Bullish Global.

Daily cryptocurrency market performance. Source: Coin360

Yearn.finance (YFI) managed to break out of the trading range it had been stuck in to put on a 58% rally to a new record high above $80,000, while the price of Revain (REV) exploded 130% to reach a multi-year high at $0.049.

The overall cryptocurrency market cap now stands at $2.474 trillion and Bitcoin’s dominance rate is 42.8%.

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.

Continue reading

Range-bound Bitcoin price opens the door for altcoins to move higher

Bitcoin remains pinned below $58,000 while Ethereum price soars to new highs and the number of ETH held on centralized exchanges falls.

Ether (ETH) took charge as a new month begins and the second-largest cryptocurrency by market capitalization rallied to a new all-time high at $3,338. This has many analysts shouting out that a new ‘altcoin season’ has commenced. Meanwhile, Bitcoin  (BTC) price is continuing to meet resistance around the $56,000 to $58,000 level. 

Data from Cointelegraph Markets and TradingView shows that since dropping to a low of $2,160 on April 25, the price of Ether has rallied 54% to a new record high at $3,324 on May 3 as Monday’s 12% spike lifted the top altcoin above the $3,300 level for the first time in history.

ETH/USDT 4-hour chart. Source: TradingView

While a majority of crypto traders are celebrating Ether’s price breakout, which has helped elevate project co-founder Vitalik Buterin to the crypto billionaire club, bearish traders are en route to heavy losses as nearly every one of the 76,000 put option contracts that are set to expire on April 7 will become worthless if Ether price manages to stay above $3,100.

And it’s not just Ether that has been performing well as of late. In the past 2 months, the altcoin market as a whole has seen its value increase 119% and flipped the 2017 peak into a new support level.

Ether HODL rates rise

According to Glassnode, an on-chain analytics firm,  the amount of Ether being held long term has been on the rise since late 2020 and this could be a contributing factor propelling the multi-month rally.

Ethereum HODL waves. Source: Glassnode

The chart above showing “Ethereum HODL waves” indicates that “coins appear to be maturing from 1-week to over 6-months old since late 2020 (blue arrows),” with the “proportion of coins aged 1-month to 6-months progressively increasing in thickness suggesting HODLing coins accumulated in the early bull market remains a favored strategy.”

Glassnode also pointed out that a large volume of Ether has been removed from exchange wallets in 2021, with 10 instances of withdrawals in excess of 200k Ether per day taking place in just 4 months as institutional demand and decentralized finance (DeFi) use grows.

Ethereum supply in smart contracts vs. balance on exchanges. Source: Glassnode

As seen on the chart above, the amount of Ether held on exchanges has been on the decline since September 2020 which coincided with a noticeable increase in the amount of Ether held in decentralized finance smart contracts.

Currently, the amount of Ether locked in smart contracts is outpacing the amount held in centralized exchange reserves.

Altcoins outpace Bitcoin for now

With Bitcoin still struggling to secure a daily close above $58,000, altcoins continue to make the case for an emerging altseason.

Daily cryptocurrency market performance. Source: Coin360

Waves (WAVES) was the breakout star of the day with its token price surging 41% to a record high at $36.41. Ethereum Classic (ETC) also rallied 15% to a new all-time high at $50.90.

After rallying 17.84% to $5,777 in the past 24-hrs, Maker (MKR) is now the top-ranked decentralized finance (DeFi) protocol with a total value locked of $10.92 trillion.

The overall cryptocurrency market cap now stands at $2.29 trillion and Bitcoin’s dominance rate is 46.6%.

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.

Continue reading

Ethereum market cap hits $337 billion, surpassing Nestle, P&G and Roche

The value of the Ethereum network soared above major companies like Nestle and P&G after its market cap hit a new high at $337 billion.

Ether (ETH) price has rallied more than 200% in 2021, resulting in a massive $337 billion market capitalization. This impressive figure pushed the value of the Ethereum network ahead of the total market cap of major companies like Procter & Gamble’s ($326 billion) and PayPal’s $308 billion.

The market cap figure is achieved by multiplying the last trade price by the total outstanding number of coins, regardless of whether they’ve been moved. Therefore, it seldomly reflects the average price where most investors transacted.

For investors from traditional finance, ‘value’ is assessed by comparing multiples and valuations. These are often calculated in the form of earnings, sales, and market share, and attempting to apply these same ‘value’ metrics to cryptocurrencies with multiple use cases creates uncertainty and discomfort.

Ether is a multi-faceted asset that is difficult to evaluate

There is not a bullet-proof metric available to assess how Ether’s value stacks against its potential. The cryptocurrency might simultaneously act as a digital store of value while also functioning as the token required to access the Ethereum network.

Ether market cap, in USD billion. Source: TradingView

Therefore, one must consider the coins deposited on exchanges or the percentage effectively changing hands when comparing different asset classes. The existence of regulated derivatives markets allow institutional investors to bet against the asset’s price, and it is another factor that should be accounted for.

Largest global assets’ ranking by market capitalization. Source: Infinite Market Cap

While the merits of comparing the market cap of different asset classes side-by-side is debatable, the metric essentially works the same way for commodities, stocks, and mutual funds.

According to data from Infinite Market Cap, Ether recently surpassed the market cap of Nestle, Procter & Gamble, PayPal, and Roche.

The American multinational consumer goods company P&G was founded in 1837 and holds a diversified brand portfolio, including personal health, consumer care, and hygiene. With 100,000 employees worldwide, the conglomerate posted a $13 billion net income in 2020.

On the other hand, Ethereum has 2,320 average monthly developers, according to the Electric Capital’ Developer Report’. Although it is not a secular company, its decentralized applications (dApps) handle over 100,000 daily active addresses. Even more impressive is the $12 billion daily transfer and transactions on the Ethereum network. These numbers alone are outstanding even for an S&P 500 company.

Stocks have their own risks, which can’t be ignored

Comparing a 183-year company that is heavily dependent on production and distribution to a technology-based protocol is unlikely to uncover many similarities. However, equity investors enjoy the fruits of dividends, and while some will argue that Ether could be staked for a return, there are more significant risks involved.

Investors staking in the ETH 2.0 contract have the options of becoming a full validator or joining a pool but their coins could be lost due to malicious activity or by failing to validate network transactions. Similar risks emerge when lending Ether via centralized services and decentralized protocols.

On the other hand, listed companies can create new shares to benefit from excessive valuations or increase their cash position.

Tax changes, operational liabilities, and regulatory changes are other risks that stockholders sometimes face. For example, Roche was recently challenged for $4.5 billion from the government for deceiving the CDC, according to a lawsuit unsealed in September 2019.

Decentralized protocols are virtually free of these perils, and perhaps this justifies their sky-high valuations.

Considering the risks described above, investors might conclude that holding Ether is less risky than buying stocks. At least it is possible to self-custody, making the asset less dependent on third parties and unauthorized transactions.

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.

Continue reading

Bullish ETH/BTC pair revives the Ethereum ‘flippening’ discussion

Bitcoin price is clinging on to $53,000 while Ethereum’s increasing bullish momentum prompted renewed discussions of an ETH flippening.

Bitcoin and the overall cryptocurrency market saw minor losses on April 29 as the market heads into the expiry of $4.2 billion worth of (BTC) options contracts. 

Data from Cointelegraph Markets and TradingView shows that since reaching a high above $56,400 on April 28, the price of Bitcoin has dropped more than 6% back down near the $53,000 support level while Ethereum (ETH) continues to trade above $2,700.

BTC/USDT 4-hour chart. Source: TradingView

Despite the lull in market activity, signs of mainstream cryptocurrency integration continue to emerge on a near-daily basis. Earlier today Coinbase announced that users can now purchase up to $25,000 worth of cryptocurrency per day using their PayPal account.

And it’s not just financial institutions that are integrating blockchain technology to help achieve financial objectives. The government of Ethiopia revealed a partnership with Input Output Hong Kong (IOHK), the research and development arm behind Cardano (ADA). The goal of the new partnership is to us blockchain technology to overhaul its education system.

ETH/BTC starts to climb higher

While Bitcoin continues to struggle below the $55,000 resistance level, the ETH/BTC pairing has started climbing higher in a move that was predicted by multiple analysts, including Real Vision CEO Raoul Pal. The bullish movement in the ETH/BTC pair has also reignited conversations about Ether price evetually flipping BTC.

ETH/BTC 4-hour chart. Source: TradingView

According to Élie Le Rest, partner at digital asset management firm ExoAlpha, Ether has been getting stronger against Bitcoin since the end of March with the upcoming upgrade which includes EIP 1559 being “seen as a strong catalyst of the recent ETH bull-run.”

This increased momentum is a signal for Le Rest that the market may be in a “buy the rumor, sell the news configuration that may drive the price up until EIP 1559 is released in July this year.”

Le Rest said: 

“Overall, this Ethereum upgrade is getting closer to ETH 2.0, with features like shifting from a proof-of-work to a proof-of-stake chain including a burning fee mechanism. Those upcoming features are a great incentive for investors to tag along, contributing to ETH’s strong recovery against BTC, but it’s still very early to put the flippening topic on the table again.”

A few altcoins make gains

The slumping price of Bitcoin weighed down the wider cryptocurrency market on Thursday with a majority of altcoins experiencing minor losses.

Daily cryptocurrency market performance. Source: Coin360

Some notable exceptions to the pullback include Syscoin (SYS), which at one point spiked 45% to $0.50 and the Binance Smart Chain-based Venus lending platform, whose XVS token rallied 30% to $97.90, just a dollar short of its all-time high.

Waves (WAVES), a multi-purpose blockchain platform, also experienced a 20% surge that lifted the token to a new record high at $23.43.

The overall cryptocurrency market cap now stands at $2.035 trillion and Bitcoin’s dominance rate is 48.8%.

Continue reading

Bulls push Ethereum price higher ahead of Friday’s $930M options expiry

Bulls have a $115 million lead on Friday’s $930 million Ethereum options expiry, a signal that ETH could be en route to new all-time highs.

The last couple of weeks have been nothing short of a roller coaster for Ether (ETH), which oscillated between $2,000 and a record-high $2,650. The 20% crash on April 17 caused a $1 billion liquidation on long futures contracts, and it also drastically reduced investors’ appetite for risk.

Ether (ETH) USD price at Coinbase. Source: TradingView

However, as displayed above, the 28% gain over the last couple of days caused the open interest on Ether futures to reach $8.2 billion, which is just 5% below its April 15 record. A similar event took place in the options markets, which have grown by 45% since the March 25 expiry.

The recent price recovery has been attributed to Paypal’s CEO stating that demand for cryptocurrencies has been multiple-fold higher than expected. Moreover, the net value locked in Ethereum smart contracts reached a record-high $54.2 billion, led by Uniswap, Compound, and Maker.

Ethereum network Net Value Locked. Source: DeBank.com

The 154% increase in this metric happened while network fees sustained levels above $8 per transaction, therefore easing speculation of predatory competition. Meanwhile, Binance Smart Chain reached a $17 billion TVL, and the decentralized finance (DeFi) growth seems more than enough to support both.

Open interest soared, but 22% of it is about to mature

While the current $4.2 billion Ether options open interest represents an all-time high, $930 million of these are set to expire on April 30. As usual, Deribit exchange reigns supreme with a 90% market share.

It is worth noting that not every option will trade at expiry, as some of those strikes now sound unreasonable, especially considering there are less than three days left.

Options are divided into two segments, as the call (buy) options allow the buyer to acquire Ether at a fixed price on the expiry date. These are often used on either neutral arbitrage trades or bullish strategies.

Meanwhile, the put (sell) options are the preferred instrument for hedging to gain protection from negative price swings.

To understand how these competing forces are balanced, one should compare the calls and put options size at each expiry price (strike).

April 30 ETH options at Deribit. Source: Laevitas.ch

A weird pattern emerged as bears were caught by surprise, with 91% of the put options open interest at $2,400 or lower. Meanwhile, bulls were overly optimistic, with nearly half of those call options at $2,880 and above.

Bulls have a decent $115 million lead

However, any expiry above $2,240 is highly favorable for the bulls who currently lead with a $115 million open interest. This difference favoring call options would double at $2,880, although this doesn’t seem to justify a 10% hike in Ether price.

As for the bears, this game seems utterly lost as only a miracle 17% drop below $2,240 would be enough to eliminate the call options advantage.

At the moment, there is little reason to believe that the April 30 options expiry will bring any surprise for Ether price. Both Deribit and OKEx settle at 8:00 AM UTC, and the focus of traders is likely to just move on to June options.

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.

Continue reading