Altcoin Roundup: DEXs come to the rescue after China bans crypto

China’s wide-spanning crypto ban puts a hefty dent in token values, but the surge in DEX volumes and BTC’s pop above $55,000 suggest the move was a blessing in disguise.

Over the past few months, there have been some major developments coming out of China that have rocked the cryptocurrency market and the global financial markets. China’s Evergrande debt repayment crisis sent shockwaves throughout global equities markets, as well as the United States Securities and Exchange Commission’s (SEC’s) consistent signaling of upcoming regulation for stablecoins and decentralized finance (DeFi) continued to weigh on sentiment within the market. 

While the Evergrande situation somewhat resolved itself, for the time being, the government crackdown on unregulated DeFi platforms and stablecoin transactions continues. This has resulted in cross-chain equipped layer-one protocols and layer-two solutions seeing increased volumes as traders search for non-centralized venues to interact with.

According to CryptoQuant CEO Ki Young Ju, after China announced a ban on all cryptocurrency transactions, major cryptocurrency exchanges like Huobi suspended services for accounts in mainland China.

This triggered an exodus of funds from Asia-based centralized exchanges (CEXs), and these funds were eventually deposited onto decentralized exchanges (DEXs) and the wider decentralized finance (DeFi) ecosystem.

This phenomenon is particularly interesting and requires further investigation, given the assumed failure of Ethereum’s London hard fork in addressing untenable gas fees and the regulatory concerns mounting over the U.S. and China’s response to cryptocurrencies.

Let’s take a look at some of the recent thriving DEXs and popular protocols that are seeing an increase in inflows.

The Ethereum network

The Ethereum network is by far the most dominant smart contract and it hosts the largest and most used decentralized exchanges like Uniswap (UNI) and SushiSwap (SUSHI), according to data from Dune Analytics.

Monthly DEX volume. Source: Dune Analytics

While the most recent cryptocurrency ban out of China dominated headlines in the last two weeks of September, the announcement was originally made on Sept. 3, around the same time that activity on Uniswap surged higher.

Uniswap trading volume vs. total revenue. Source: Token Terminal

As shown in the graph above, the spike in Uniswap’s activity and trading volume actually began on Aug. 28 and remained elevated above its previous average for the next couple of weeks.

Uniswap has also benefited from its recent integrations with the newly released layer-two solutions Optimism and Arbitrum, which helped to lower the transaction costs and speed up confirmation times for users on the network.

The Fantom network

The Fantom protocol has risen in prominence in recent months thanks to the launch of a bridge to the Ethereum network and a 370 million FTM developer incentive program designed to attract new projects to the Fantom ecosystem.

Data from Token Terminal shows that while the announcement of the incentive program on Aug. 30 provided an initial boost in protocol revenue and token price, it wasn’t until after the regulatory announcement from China on Sept. 3 that activity and protocol revenue really experienced a sustained increase.

Fantom price vs. protocol revenue. Source: Token Terminal

Fantom utilizes a directed acyclic graph architecture that enables a high throughput capability for near-zero fees, which has helped the protocol grow in popularity amongst DeFi and NFT traders who were priced out of conducting transactions on Ethereum.

SpookSwap and SpiritSwap are the two top DEXs on the Fantom network and together currently handle an average of $95 million in 24-hour trading volume.

Avalanche

The Avalanche network is a blockchain protocol that has been gaining traction since its mid-August launch of the Avalanche Rush liquidity mining incentive program, which includes more than $180 million worth of rewards and incentives designed to attract liquidity to the DeFi ecosystem on Avalanche.

Avalanche price vs. protocol revenue. Source: Token Terminal

Since the release of the incentive program in mid-August, the protocol revenue and token value for the native token AVAX have been on the rise as users transferred assets across-chain to engage in Avalanche’s growing DeFi ecosystem.

According to data from DefiLlama, the top DEXs on Avalanche are Trader Joe (JOE) and Pangolin (PNG), which combined currently see an average 24-hour trading volume of $355.2 million.

Decentralized perpetuals trading

Decentralized perpetuals trading protocol dYdX, which has exploded in popularity in September following the airdrop of its native DYDX token, has also seen an uptick in user activity and volumes.

According to data from Token Terminal, the daily trading volume on the exchange exploded in the final days of September, surging from an average below $2.1 billion to more than $9 billion on Sept. 27.

Total value locked on dYdX vs. trading volume. Source: Token Terminal

The regulatory crackdown has been especially hard on derivative and leveraged cryptocurrency exchanges like BitMEX and Binance, leading to an increase in demand for decentralized options like dYdX and Hegic.

While many across the cryptocurrency ecosystem lamented China’s crackdown on the crypto sector, their heavy-handedness may have actually turned out to be a blessing in disguise. It prompted traders to venture away from centralized exchanges and out into the rapidly expanding DeFi ecosystem where the ethos of decentralization and the ability to “be your own bank” is still available to those who seek it.

Want more information about trading and investing in crypto markets?

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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VORTECS™ Report: How this quant-style indicator foreshadowed Axie Infinity’s rally to a new ATH

AXS wrested control of the 2021 bull market to become one of the top-performing tokens, and Cointelegraph’s Markets Pro indicators accurately tracked each step of the journey.

Every week, subscribers of Cointelegraph’s Markets Pro data analytics platform receive a detailed breakdown of the top performers of the week and the VORTECS™ Score indicator’s performance in tracking potential bullish and bearish developments.

Here are some of the highlights of the latest report:

  • Axie Infinity Shard (AXS) recorded a new all-time high following a strong VORTECS™ Score.
  • Three out of ten top price movers flashed a VORTECS™ Score of 80 or higher before peaking.
  • NewsQuakes™ alerts gave traders an early signal for NEAR’s and RAY’s double-digit rally.
  • The all-time top VORTECS™ Scorers’ average gains against Bitcoin (BTC) demonstrated that the greatest returns come 24 and 72 hours after assets flash scores of 80 and 90.
  • Community members shared information on interesting tokens and successful trading strategies.

AXS charts its own path to the moon

The stellar run of Axie Infinity’s AXS to a new all-time high at $155.27 also shocked many investors, and it deserves particular attention.

The asset’s whirlwind appreciation follows its growing utility in the virtual Axie Infinity universe where players breed, trade and battle nonfungible token (NFT)-based creatures called Axies to earn AXS alongside another token called Smooth Love Potion (SLP). There are now more than 1.85 million active players in the game, which marks a 4,500% increase since April 2021.

Clearly, the asset has seen quite a few explosive rallies on its way to the current valuation. The data generated throughout this time allowed the VORTECS™ indicator, exclusive to Cointelegraph, to get exceptionally good at recognizing the telltale signs of AXS’ breakouts.

The VORTECS™ Score, exclusive to Cointelegraph Markets Pro, is an algorithmic comparison of historical and current market and social conditions around a coin calculated from a combination of variables including market sentiment, trading volume, recent price movements and Twitter activity.

While the indicator will not tell investors when to go long or short, it can provide insights that are based on historically bullish or bearish conditions for a particular coin. According to the algorithm, the higher the score, the more likely it is that the observed conditions will be historically favorable for the next 12 to 72 hours.

In the case of AXS, historical precedent seems to be particularly instructive.

VORTECS™ Score (green) vs. AXS price, Sept. 25 – Oct. 2. Source: Cointelegraph Markets Pro

Between Sept. 25 and Oct. 2, AXS gained 76.67% against the U.S. dollar and 56.05% against Bitcoin, reaching a new all-time high above $117.

AXS saw its VORTECS™ Score peak at 87 on Sept. 26 when its price was $63.15, and the model recognized a historically bullish setup of market dynamics and social sentiment. The breakout began some 2 1/2 days later when the token began to steadily climb from $65 to $117 on Oct. 2.

All-time-high scorer

With an overall 60 days during which its VORTECS™ Score hit 80 or higher, AXS remains the second-best all-time performer in terms of high-score days, trailing only THORChain’s RUNE.

However, AXS’ average returns following high scores are much better than those of RUNE.

On average, AXS gained 4% 24 hours after its VORTECS™ Score hit 80, 7% after 48 hours and 10% after 72 hours. When looking at the occasions when the coin hit the 90 VORTECS™ Score mark, the coin’s average returns are even more impressive: 7% after 24 hours, 13% after 48 hours and 21% after 72 hours.

VORTECS™ Score (green) vs. AXS price, Sept. 29 – Oct. 5. Source: Cointelegraph Markets Pro

The token’s price plateaued on Oct. 2 and 3 after recording its then-all-time high above $117. With the price still flat, AXS’ VORTECS™ Score began sharply rising again, crossing the 80 threshold when it traded for $105 and surging to 96. Fifteen hours after hitting 80, AXS price reached a record $153.70.

Currently, AXS’ VORTECS™ Score is again in the high eighties, so it is quite possible that the feast is not over yet.

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions.

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DeFi and DEX volumes soar amid China’s crypto ban and ongoing US regulation

Data shows that crypto holders are increasingly shifting to DeFi protocols and DEXs as China continues its cryptocurrency crackdown and fears of heavy-handed regulation scare US-based traders.

Last week China’s heavy-handed crackdown on crypto trading crypto briefly sent shockwaves across the market as Bitcoin and altcoin prices saw a sharp drop following the announcement, but as is the case with all things crypto-related, the market bounced back as resilient traders found other ways to participate in the market. 

Part of China’s goal in limiting citizens ability to trade cryptocurrency seems focused on discouraging the use of cryptocurrencies and the growing decentralized finance (DeFi) ecosystem but these maneuvers appear to be having the opposite effect as the token price and protocol activity for projects like Uniswap (UNI) and dYdX have seen an uptick since the crackdown began.

According to data from Chainalysis, there has been a significant amount of regional Bitcoin (BTC) flows happening within eastern Asia, as highlighted by the tall orange bar in the graph below. This suggests that crypto holders in the region have been shifting around their holdings in response to the regulatory crackdown.

Regional BTC flows. Source: Chainalysis

As stated by Chainalysis, “assets typically flow within a region, likely due to preferences for local exchanges, but flows between regions often occur as a result of regulatory concerns, geopolitical changes, or significant market price variations.”

The lack of flows out of Eastern Asia combined with crypto exchanges like Huobi and Binance suspending services for Chinese residents suggests that funds are being kept within the region, but not on centralized exchanges.

Related: Derivatives DEX dYdX beats out Coinbase’s spot markets by volume amid China FUD

Gains in the DeFi Ecosystem

At the same time that this increased movement within the Eastern Asian region was occurring, activity on decentralized exchanges like Uniswap and the decentralized derivatives exchange dYdX has been on the rise as traders in China seek out a safe haven for their crypto activities.

Uniswap trading volume vs. total revenue. Source: Token Terminal

DydX is a particularly helpful data point as it is now the most widely used decentralized derivatives exchange and has seen a spike in demand after regulators from around the world dropped the hammer on centralized exchanges with loose KYC policies that offer derivative services.

According to data from Token Terminal, dYdX is in the top-5 ranking for numerous categories over the past week, including the increase in token price, total protocol revenue, fees paid, the price to sales ratio and the price to earnings ratio. The exchange also rose to the top 6 in terms of increases in total value locked (TVL).

Total revenue vs. total value locked on dYdX. Source: Token Terminal

A closer look at the available data also shows that layer-two protocols and layer-one Ethereum (ETH) competitors have also seen some of the biggest gains over the past week, led by Avalanche-based protocols like Trader Joe and Pangolin, as well as the Fantom network.

Above all else, what the recent data shows is that the decentralized finance ecosystem is performing as it was originally intended to by providing an uncensorable way for crypto holders to transact outside of the control and purview of governments and financial regulators.

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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VORTECS™ Report: This key trading algo spotted bullish altcoin setups even as BTC price fell

Even in a red market, solid gains can be made. Here’s how Cointelegraph’s unique trading tools highlighted the assets with the strongest historical outlook.

Last week was challenging for crypto traders, with Sept. 24’s FUD-triggering crypto-ban news out of China wiping out much of the gains investors managed to rake in earlier in the week. Between Sept. 18 and Sept. 25, the top 100 altcoins shed as much as 14.4% of their aggregate value, while Bitcoin (BTC) lost 12.5%.

The number of altcoins posting double-digit returns was unusually low as well. Data from Markets Pro, Cointelegraph’s subscription-based data intelligence platform, shows that only eight assets out of the hundreds tracked gained more than 10% against the U.S. dollar.

While trading is an activity marked by a steady flux of gains and losses, how can investors spot ahead of time the coins that are well-positioned to weather the storm?

The top performers of a tough week

The table below lists the eight altcoins that managed to secure a robust return even amid the sea of red that swept through the market last week.

COTI continued its winning streak, boosted by the recent release of the Coti Treasury white paper, the asset’s listing on Crypto.com and anticipation of a new stablecoin partnership with Cardano.

CELR’s momentum accelerated following the launch of Celer Network’s cross-chain cBridge 2.0, which is designed to facilitate the transfer of digital funds between major blockchains.

The third best performing asset of the week, Trace (TRAC), is the native token of OriginTrail, a blockchain ecosystem and protocol that aims to improve global supply chains by providing infrastructure for trusted data exchange. The token’s valuation has recently been growing on the back of a series of bullish developments, such as United States home improvement business Home Depot’s adoption of the SCAN Trusted Factory solution built on OriginTrail.

TRAC and REN also posted very high VORTECS™ Scores last week. The VORTECS™ Score is a machine learning algorithm that compares historical and current market conditions around crypto assets to help traders make more informed decisions.

The model considers a host of quantitative indicators — including market outlook, price movement, social sentiment and trading activity — to generate a score that assesses whether the current conditions for a coin are historically bullish, neutral or bearish.

Here is how it worked for TRAC and REN last week.

VORTECS™ caught the early signs of a breakout

The VORTECS™ model is optimized to detect patterns of social and market activity that in the past have consistently appeared 12 to 72 hours before the coin’s price shot up. A score of 80 or higher indicates that the observed conditions have a strong history of preceding price increases.

TRAC price vs. VORTECS™ Score. Source: Cointelegraph Markets Pro

The price of TRAC was volatile throughout the week against mostly favorable — low to mid-seventies — VORTECS™ Scores. The peak score of 81 briefly flashed late on Sept. 21 (red circle in the chart), indicating the model’s rising confidence that the patterns of market and social activity around the coin looked historically bullish.

Despite a price downturn that had begun shortly after the peak VORTECS™ Score was registered, TRAC soon saw its fortunes reverse, kicking off a two-day rally from $0.37 to $0.56.

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

The price of REN had been steadily declining in the first half of the week against the backdrop of a sequence of very strong VORTECS™ Scores.

REN eventually bottomed out at $0.70 before starting to climb again, and the week’s second sequence of VORTECS™ Scores registering 80-plus showed up shortly thereafter. Savvy traders know that an asset whose VORTECS™ Score remains high for a long time — even while the price is flat — can present an excellent profit opportunity.

Sure enough, toward the end of Sept. 23, REN’s price exploded from $0.81 to reach a peak of $1.13 some 29 hours later.

Digital assets do not always behave in ways similar to what has been observed in the past, especially during market downturns.

After all, out of last week’s eight best performers, only two coins generated familiar bullish patterns before their prices exploded. However, the additional insight that the VORTECS™ Score supplies to traders can be indispensable in a situation when very few coins can be expected to beat the struggling market.

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risks including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions.

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Altcoin roundup: There’s more to DeFi than just providing liquidity

Bitcoin price is down but crypto investors still have a plethora of yield opportunities thanks to DeFi.

The growth of the decentralized finance (DeFi) sector has been a recurrent headline throughout 2021 and to date, hundreds of billions of dollars in crypto assets are locked on protocols across numerous blockchain networks and earning a yield for their holders. 

What started off as a simple Ethereum-based swap interface that allowed ERC-20 tokens to be exchanged in a decentralized manner, called Uniswap, has exploded into a vast ecosystem full of decentralized exchanges, yield farms, lending protocols and staking platforms.

As development continues and older protocols become more established, newer projects have emerged to incorporate more pieces from the traditional financial realm into the DeFi arena as digital technology slowly transforms the global financial system.

Here’s a look at some ways for users to get involved with DeFi outside of simply staking in liquidity pools or depositing to a lending protocol.

Decentralized derivatives trading

Cryptocurrency derivatives exchanges have long been a target for regulators, and once defiant exchanges like BitMEX and Binance have found themselves bending to the will of the law and modifying their operating practices as they seek a more legitimate standing.

This has furthered the necessity for crypto traders to have a decentralized option and led to the creation of protocols like dYdX and Hegic, which offer similar services without the target that is a centralized structure for regulators to come after.

DYdX is a non-custodial perpetuals trading platform built on a layer-two protocol that operates on the Ethereum network and offers users access to up to ten times leverage on futures contracts for more than twenty cryptocurrencies.

Hegic is an on-chain options trading protocol that utilizes hedge contracts and liquidity pools to offer options contracts that last up to 90 days and can payout in Ether (ETH), Wrapped Bitcoin (WBTC) or USD Coin (USDC).

Both of these platforms offer users access to these advanced trading products without the need to divulge their identities, as is required on the centralized counterparts.

Bonding, rebase and ultra-high APY tokens

One topic that is increasingly popping up more in financial discussions is the concept of how to create a decentralized reserve currency that is free of the control of any government or centralized financial institution.

Olympus aims to address this issue through a decentralized autonomous organization (DAO) platform which offers staking and various bond offerings including the ability to bond Ether, MakerDAO (DAI), Liquidity USD (LUSD) and Frax (FRAX).

The bonding process on Olympus is basically a cross between a fixed income product, a futures contract and an option. Bonders are provided with a quote outlining terms for a trade at a future date and include a predetermined amount of the protocol’s native OHM token that the bonder will receive once the vesting period is complete.

Funds that are raised by bond offerings go into the Olympus treasury as collateral to back the OHM tokens that were minted, helping to provide the underlying value behind the OHM token which allows it to be used as a reserve currency or medium of exchange.

The only other projects that have a treasury that provides the underlying value for each token are stablecoins, but as the name implies their price is fixed whereas the price of OHM can increase, offering a new avenue of yield for users.

Once bonding is complete, users can sell their OHM on the open market or stake them on the Olympus protocol for a current yield of 7,299%.

Related: CFTC renewed: What Biden’s new agency picks hold for crypto regulation

Crowd loan participation on Polkadot and Kusama

Another way crypto holders can put their assets to work while also helping the cryptocurrency ecosystem expand is through participating in the parachain auctions in the Polkadot and Kusama ecosystems through a process known as a crowd loan.

In the auction process, different projects vie for one of the limited parachain slots that connect the project directly to the main Kusma or Polkadot network, facilitating the interconnection of all parachains in the ecosystem.

With crowdloans, users who hold the native KSM and DOT tokens can “contribute” them towards the pool that a project uses to secure a parachain slot, and they will have their tokens returned after a specified lock-up or bonding period that can last for up to one year.

In exchange for their contribution and inability to earn staking rewards for the period that the tokens are locked up, users receive a specified number of tokens for the new protocol which can then be used in the ecosystem or sold on the market.

This approach offers a less risky yield opportunity for token holders, as all principal contributions are locked in a smart contract and returned after the stipulated lock-up period. And by the nature of the parachain auction process, there have been well-developed projects with larger communities that have secured parachain slots, increasing the chance that their tokens will maintain or increase in value as long development for the protocols stays active.

Aside from the threat of regulation, the DeFi ecosystem is showing few signs of slowing its integration of the best parts of the traditional financial system and developing innovative protocols that level the playing field for retail investors.

Want more information about trading and investing in crypto markets?

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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