Top 5 cryptocurrencies to watch this week: BTC, XRP, DOT, XLM, SOL

Bitcoin price remains under pressure but select altcoins like XRP, DOT, XLM and SOL are showing signs of resuming their uptrend.

Bitcoin (BTC) has been struggling to rise above the $50,000 mark, which could have resulted in traders dumping their Bitcoin positions to invest in altcoins. Glassnode data suggests that whale addresses owning more than 1,000 BTC have reduced from about 2,500 in February to 2,100.

If large investors continue to sell, Bitcoin could witness a sharp correction until institutional investors step in and buy at lower levels. While MicroStrategy announced the purchase of 271 Bitcoin on May 13, other existing institutional investors appear to be adopting a wait and watch approach.

Crypto market data daily view. Source: Coin360

In an interview with Financial NewsSquare, Square chief financial officer Amrita Ahuja said, at this point, the firm does not have any plans to add Bitcoin to its existing haul of roughly 8,027 Bitcoin purchased in October 2020 and February of this year.

If other institutions also stay away from buying at current levels, Bitcoin’s price is likely to slide further. However, Fundstrat Global Advisors managing partner Tom Lee believes Bitcoin’s rally still has legs. Lee has increased his year-end Bitcoin target from $100,000 to $125,000.

With action becoming coin specific, let’s look at the top-5 cryptocurrencies that may lead the charge in the next few days.

BTC/USDT

The bulls again purchased the dip to the neckline of the head and shoulders pattern today but the long wick on the candlestick suggests profit-booking at higher levels. Bitcoin’s sentiment seems to have changed from buy on dips to sell on rallies.

BTC/USDT daily chart. Source: TradingView

If the bears sink and sustain the price below the neckline, the H&S pattern will complete. This setup has a target objective at $31,653.73. The downsloping 20-day exponential moving average ($53,297) and the relative strength index (RSI) below 36 indicate the bears are in control.

However, the bulls are unlikely to give up easily. They will try to stall the decline in the $43,000 to $40,000 support zone but if they fail, the decline could be sharp.

Contrary to this assumption, if the price turns up from the current level and rises above $51,550, the BTC/USDT pair may rally to the 20-day EMA. A breakout and close above the $60,000 resistance will suggest the bulls are back in the game.

BTC/USDT 4-hour chart. Source: TradingView

The rebound from $46,435.02 fizzled out at the 20-EMA. This suggests the sentiment is negative and traders are selling on rallies to the 20-EMA. If the bears sink the price below the neckline, the selling could intensify.

However, if the bulls again defend the neckline, the pair may attempt to rise above the 20-EMA. If that happens, the rally could extend to $51,538.22 where the bulls are likely to encounter stiff resistance.

If the price turns down from this resistance, the pair may consolidate between $46,000 and $51,500 for a few days.

XRP/USDT

XRP is currently trading inside a symmetrical triangle, which usually acts as a continuation pattern. If the bulls can drive the price above the resistance line of the triangle, the altcoin could retest the 52-week high at $1.96.

XRP/USDT daily chart. Source: TradingView

A breakout and close above $1.96 could start the next leg of the uptrend that may reach $2.68. The RSI has risen into the positive territory but the 20-day EMA ($1.43) is yet to turn up, which suggests that bears are likely to defend the resistance line aggressively.

If the price turns down from the resistance line, the XRP/USDT pair could extend its stay inside the range for a few more days. The pair could turn negative if the bears sink and sustain the price below the triangle. Such a move may pull the price down to $0.88.

XRP/USDT 4-hour chart. Source: TradingView

The price has dipped to the moving averages on the 4-hour chart. If the pair rebounds off the current levels with strength, it will suggest buying on dips. The bulls will then try to push the price above the triangle.

Alternatively, if the bears sink and sustain the price below the moving averages, the pair could drop to $1.35 and then to the support line of the triangle. A break below this support could signal advantage to the bears.

DOT/USDT

Polkadot (DOT) broke out and closed above the overhead resistance at $44 on May 14. The bulls continued the momentum and pushed the price to a new all-time high at $49.78 on May 15 but could not sustain the higher levels. Profit-booking has pulled the price back below the breakout level at $44.

DOT/USDT daily chart. Source: TradingView

If the bulls do not give up much ground from the current levels, it will suggest buying on dips. The DOT/USDT pair could then make one more attempt to rise above the psychological level at $50.

If that happens, the pair could start the next leg of the uptrend that may reach $63.68. The marginally upsloping 20-day EMA ($39.54) and the RSI in the positive territory suggest the path of least resistance is to the upside.

Contrary to this assumption, if the price sustains below $44, the pair could drop to the moving averages. A break below this support could pull the price down to $32.50.

DOT/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the bears pulled the price below the 20-EMA but the bulls are attempting to reclaim the support. The buyers will have to push the price above $47 to regain the advantage. If they succeed, a retest of $50 is likely.

On the other hand, if the price fails to climb above the 20-EMA, it will suggest a lack of buying support. That could pull the price down to the 50-simple moving average. The flattening 20-EMA and the RSI near 50 suggest a balance between supply and demand.

XLM/USDT

Stellar Lumens (XLM) is attempting to start a new uptrend. The bulls purchased the dip to the 20-day EMA ($0.61) on May 13 and pushed the price to a new 52-week high at $0.79 today. However, the long wick on the day’s candlestick indicates profit-booking at higher levels.

XLM/USDT daily chart. Source: TradingView

If buyers can sustain the price above $0.73, the XLM/USDT pair could rally to $0.85 and then to $1. The upsloping moving averages and the RSI above 63 indicate that bulls have the upper hand.

Contrary to this assumption, if the price sustains below $0.73, the pair could drop to the 20-day EMA. A strong rebound off this support will suggest the sentiment remains positive. The bulls will then make one more attempt to resume the uptrend.

This positive view will invalidate if the price breaks below the 20-day EMA. Such a move will suggest that traders are closing their positions in a hurry and not buying the dips. That could result in a drop to the 50-day SMA ($0.53).

XLM/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the formation of an inverse head and shoulders pattern. This bullish setup has a target objective at $0.90. The upsloping 20-EMA and the RSI in the positive territory suggest that bulls are in command.

During strong uptrends, corrections are likely to be shallow. Therefore, the current dip may find support at $0.72. A strong bounce off this level could increase the possibility of the resumption of the uptrend.

This bullish view will invalidate if the price dips and closes below the neckline. Such a move could trap the bulls, resulting in long liquidation. The pair may then decline to $0.55.

SOL/USDT

Solana (SOL) had been range-bound between $40 and $49.99 for the past few days. A tight consolidation near the high is a positive sign as it shows that traders are not booking profits in a hurry.

SOL/USDT daily chart. Source: TradingView

The 20-day EMA ($42.86) is sloping up and the RSI has risen above 65, indicating the path of least resistance is to the upside.

If the bulls can sustain the price above the psychological level at $50, the SOL/USDT pair may resume its uptrend. The next target objective on the upside is $60 and then $69.

On the contrary, if the price fails to sustain above $50, the pair may re-enter the range and extend its consolidation for a few more days. This positive view will invalidate if the pair breaks below $40.

SOL/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows the bulls pushed the price to a new all-time high at $52.60 today but the long wick on the candlestick indicates profit-booking at higher levels. The price has dipped back below $50 but it may find strong support at $46.

A strong rebound off this level will suggest that traders are buying on dips. The bulls will then again try to resume the uptrend. The rising 20-EMA and the RSI near the overbought zone suggest advantage to the bulls.

Contrary to this assumption, if the bears sink the price below $46, the pair may drop to the 20-EMA. Such a move will suggest aggressive selling above $50 and that could keep the pair range-bound for a few more days.

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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Staking giant Lido looks to bring services to Solana

Infrastructure provider Chorus One believes they can help Lido corner 25% of all staked SOL.

One of the largest ETH 2.0 and Terra staking services is now looking to expand to other proof-of-stake chains, starting with upstart layer 1 Solana. 

In a proposal today on Lido’s governance forums, crypto infrastructure provider Chorus One laid out a plan to build “a liquid staking token (for now: stSOL) that will accrue staking rewards and represent staking positions with Lido validators on Solana,” similar to Lido’s current interest-accruing stETH token.

Development funding to bring Lido’s services to an additional chain would come from the Lido Ecosystem Grants Organization, a program Lido’s governance kicked off in March. Chorus One’s requested a compensation package including 2,000,000 vested LDO tokens and a revenue-sharing model that would entitle Chorus One to 20% of the revenue from protocol fees that would go to the Lido treasury.

The milestones for Chorus One’s vesting unlocks are notably ambitious, including a 1 year cliff to “capture 2.5% of the staked SOL supply,” as well as 1,000,000 tokens scheduled to begin a one year vesting schedule “when Lido for Solana manages to capture 25% of the staked SOL supply.” The proposal notes that Chorus One is currently the largest SOL staker with $600 million in tokens.

A representative for Lido told Cointelegraph that an expansion could be a boon for the protocol’s income.

“For the Lido DAO, an expansion to liquid staking on Solana could bring with it a similar protocol fee set-up as we’re currently seeing with stETH/liquid staking on Ethereum, whereby a 10% fee on staking rewards is collected and split between node operators and the Lido DAO treasury (e.g. to grow an insurance fund),” they said.

They also noted that the door remains open to expanding to other Proof of Stake chains.

“Lido has a very simple mission – keep Ethereum staking simple, secure and decentralised – and we will look to extend this to other networks where possible,” they said.

Per Lido’s website, the services currently accounts for 256,964 ETH staked (worth over $700 billion) across nearly 5000 addresses earning 7.1% APY, and is the third-largest staking pool currently live per Nansen. While estimates vary, once ETH 2.0 launches, the APY rewards are expected to increase significantly.

Lido’s $LDO token has been on a tear as of late, rising 54% on a 24 hour basis to $2.9 and 216% on the week — a run possibly fueled by another governance proposal that would diversify a portion of the treasury to a group of notable venture capital funds, including Delphi Digital, Digital Currency Group, Three Arrows Capital, and Alameda Research.

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Money Legos keep stacking! Finance Redefined 4/21-4/28

Why acquire when you can integrate?

Happy Wednesday fellow DeFi degens! 

I was expecting to spend a large portion of this edition of Finance Redefined analyzing Aave’s liquidity mining program. There was some anxiety from investors that the emission of 2,200 $AAVE per day (which would translate to roughly 5% of the ecosystem reserve fund of 2.8 million AAVE per year) might end up dragging down the token’s price as farmers earn and dump.  

Turns out, it’s unnecessary: the program’s an unmitigated success. The AAVE token is up nearly 15% since the launch of liquidity mining to $462, and the protocol’s total value locked figure has surged to $11.8 billion — up from just over $7 billion since liquidity mining began.

Well-researched liquidity mining works. Only question now is, if the program is discontinued, how much of that TVL will be sticky? 

Other narratives to keep an eye on: 

Money legos keep stacking

At the start of the year there was speculation that in 2021 DeFi would see something of a novelty: one protocol acquiring another, likely via a governance token buyout. The Synthetix 2021 roadmap in particular opened the door to such a possibility, comparing it to acquisitions in TradFi and looking to Yearn’s merger/acquisition/collaboration spree for inspiration. 

Large-scale mergers and acquisitions have yet to play out, however. There are some smaller examples brewing — Inverse Finance is currently looking to buy out Tonic for some $1.6 million, for instance — but instead what we’re seeing is a boom in deep integrations at the protocol and frontend layers.

On Monday, Badger DAO and RenVM launched the Badger Bridge, a new interface for depositing native BTC into Badger vaults with just a few clicks. The integration stands out for two reasons. One is that it’s so clearly beneficial for both parties: an idiot-proof way to earn yield on BTC is attractive for hodlers, meaning Ren will see an uptick in activity on its bridge (and therefore protocol fees), while Badger likewise gets a boost in TVL.

The other angle, however, is the willingness with which Ren subordinated its branding, letting Badger — which, I’d argue, has the stronger community — take over the landing page. Were it not for absurd token valuations, one might have been an acquisition target for the other, given the obvious needs each fills — but by working together Ren gets everything they’d want from a protocol like Badger, and the same applies to Badger and Ren.

This raises the question: why bother with takeovers when a friendly integration can accomplish the same effects?

Another prime example is today’s Balancer-Gnosis Protocol announcement. You can see the details in my piece, but effectively Balancer v2 is bringing some neat innovations to AMM liquidity provision and Gnosis’ CowSwap is a liquidity aggregator and offchain transaction batching protocol that will reportedly cut back on miner extractable value. The combination of the two will make for a significantly more feature-rich DEX from both a LP and trader’s perspective — possibly even positioning the Balancer-Gnosis-Protocol as a Uniswap v3 competitor.

In a statement to Cointelegraph, Balancer CEO Fernando Martinelli noted that such a deep collaboration would be impossible in the traditional finance world:

“Each of the two protocols would be impossible to implement in the traditional finance world simply because there is no such thing as trustlessness there (you always need an intermediary). Even if that were possible, combining these two protocols would be as much of a challenge as it would be to integrate Fidelity Index Funds (Balancer) with Nasdaq (Gnosis) under one single platform.”

Acquisitions may be an outdated model — or at least one that doesn’t apply to DeFi. Interoperability and composability means that protocols can benefit from one another without hostile takeovers.

The branding might still need to get figured out in certain instances, however — Balancer-Gnosis-Protocol isn’t exactly the best name.

Are you speaking my language? 

The goalposts keep moving for Ethereum maximalists as organic activity begins to spread to other chains. 

On Solana, for instance, $COPE and $STEP have attracted significant community following and investment from major players (including from funds other than noted SOL supporters Alameda Research!), and this morning announced a hackathon aiming to kick off the hashtag “solanaszn.” Other folks have bandied around “Solana Summer” in the mould of last year’s DeFi Summer, but whatever your preferred sobriquet the competition is for real — no one can cry “show me one developer building a real XYZ” anymore. 

The success has — perhaps predictably — led some observers to try and poke holes in SOL’s growth thesis. While, like any chain, there’s plenty of attack surface, one growing criticism is that Solana’s flagship language, Rust, is both difficult and exotic.

In a statement to Cointelegraph, Solana founder and current Solana Foundation president Anatoly Yakovenko rejected that view. 

“Rust is a modern language with wide adoption suitable for writing high performance secure code. It has ranked on Stack Overflow as one of the most loved programming language by 65,000 people who code, so we are confident this plays a key role in driving the organic growth in our developer community to date,” he said.

He also noted that the Foundation has counted 2,000 developers building on Solana (he didn’t mention methodology or definitions used to arrive at the figure, and it seems perhaps a touch inflated given that a 2019 study from ConsenSys found that there’s about 1,300 Ethereum developers, and in 2020 Electric Capital pegged the total number of ETH devs around 2,300), and that Solana devs aren’t interested in “copy/pastes” of Ethereum projects.

He’s also right about the Stack Overflow study, though a 2018 survey from the Rust Blog showed that over 20% of developers working with the language felt unproductive after a year of use.

Whatever you feel about Rust, however, crypto is all about incentives — which means it’s a problem that money can fix. And to that end Solana is pressing the pedal: the hackathon will feature “up to $1 million” in prizes and/or seed funding. I think I could learn a tough language for that.

Other stories this week:

Uranium Finance loses $50 million, likely rug

ETH cracks all-time highs

Aave’s liquidity mining program a success out of the gate

NYSE president bullish on DeFi

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Altcoins hit new highs after bulls kick Bitcoin price back above $50K

A quick short squeeze catapulted Bitcoin price above $54,000 and a handful of altcoins rallied to new all-time highs.

Cryptocurrency investors breathed a sigh of relief on April 26 as the sharp reversal in the price of Bitcoin (BTC) was accompanied by a market-wide recovery that has a majority of altcoins seeing green. It’s likely that the breakout was aided by bullish assessments from JPMorgan analysts and PayPal’s announcement that demand for purchasing cryptocurrencies had surpassed expectations. 

Data from Cointelegraph Markets and TradingView shows that after bouncing off a low near $47,000 on Sunday evening, Bitcoin roared back above the $50,000 support level in the early trading hours on Monday and climbed above $53,500 by mid-day while Ether (ETH) reclaimed $2,500.

BTC/USDT 4-hour chart. Source: TradingView

Last week’s market pullback did little to slow the mainstream adoption of cryptocurrencies as stories like NFL draft prospect Trevor Lawrence signing an endorsement deal with crypto portfolio-tracking platform Blockfolio and hotels in Nigeria announcing plans to accept Bitcoin as payment emerge on a daily basis.

On-chain analysis tracks Bitcoin’s growing bullish momentum

Data from Glassnode shows that on-chain transfer volume and the average transaction fees for the Bitcoin network hit new all-time highs in the previous week as the network continues to recover from mempool congestion due to the drop in hashrate that occurred as the result of a power outage in China.

Mean transaction fees on the Bitcoin network. Source: Glassnode

Analysis of the Spent Output age bands, which detail how long BTC has been sitting in a wallet, indicates that newer token holders were shaken out by the recent dip while wallets that have been holding longer than 1 month saw a decline in transaction activity.

The data also shows that wallets that have been holding for longer than 6 months have not seen a notable increase in spending since the market pullback in February.

Further bullishness can be found when looking at miner accumulation which, according to Glassnode, is at its highest level since mid-2018.

Miner net position change. Source: Glassnode

Overall, analysis shows that it was the newer hands in the market that were shaken out by last week’s correction, while the more experienced crypto traders were happy to accumulate BTC from those worried about a further price drop.

Altcoins rise as Bitcoin finds its footing

Bitcoin’s struggles over the past week have allowed altcoins to step forward and gain market share with a number of coins breaking out to new all-time highs and trading volume on decentralized exchanges on the uptrend.

The Ethereum-based DeFi lending platform Compound (COMP) spiked 17% overnight to reach a new record high at $671 while the layer-2 solution Polygon (MATIC) surged 68% to a new all-time high at $0.576.

Daily cryptocurrency market performance. Source: Coin360

The Solana-based decentralized exchange Serum (SRM) saw its native token price break out to a new high at $11.47 thanks to increased activity on the Solana (SOL) blockchain network.

Solana price gained over 120% in the past week and reached a new high of $48.46 on April 25 as its ecosystem continues to expand and new projects launch on this layer-1 Ethereum competitor.

The overall cryptocurrency market cap now stands at $2.004 trillion and Bitcoin’s dominance rate is 50.3%.

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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Solana (SOL) hits new highs as DApps, DeFi and stablecoins join the network

Solana price is pushing toward new highs as an increasing number of DApps, DeFi projects and stablecoins build platforms on the network.

The arrival of institutional investors and the rise of decentralized finance (DeFi) has been an incredible boon for the entire cryptocurrency sector but it has also highlighted a number of persistent limitations that many blockchain networks encounter when faced with surges in activity and the need to scale.  

High fees and slower transaction times on the Ethereum (ETH) network have left the door open for new layer-1 solutions to emerge, and Solana (SOL) is one such project that has been gaining traction lately.

Data from Cointelegraph Markets and TradingView shows that the price of SOL has increased 195% over the past month, rallying from a low of $12.19 on March 26 to a new all-time high of $36.10 on April 19th on a record $1.4 billion in trading volume.

SOL/USDT 4-hour chart. Source: TradingView

Similar to how Ethereum rose to prominence in 2017, Solana’s strong performance in the past month was sparked by the launch of multiple projects on the SOL blockchain with everything from legitimate DeFi protocols to pump and dump airdrops that brought speculators to Solana’s exchange.

Fast transactions and low fees entice developers

One of the biggest draws for the Solana network is its claim of being able to process 65,500 transactions per second (TPS), which is significantly faster than Ethereum’s current average of 18.3.

The network’s ability to handle a larger load has also made the platform a cross-chain destination for projects like Civic (CVC) and the popular stablecoins USD Coin (USDC) and Tether (USDT).

DeFi platforms like Raydium and Serum have launched on Solana and there is a growing list of projects in the process of transitioning to the network.

Prospects for the network received another boost in early April when the Solana-based Sollet wallet released its Chrome extension that offers the Solana ecosystem functionality that mirrors the way MetaMask works for Ethereum.

Simple yield opportunities attract DeFi users

The Solana protocol utilizes a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain, which makes it easy for token holders to earn a yield on their SOL tokens while also participating in the network.

The number of cryptocurrency wallets supporting SOL is also a sign that the project is garnering more attention. To date, Exodus, Ledger and Blockfolio are some of the more prominent wallets that offer support for the token.

A recent integration with the Phantom wallet has also brought fresh energy to the project as it will enable the creation of a robust NFT ecosystem on Solana. This brings one of the hottest sectors of the crypto market to the network. 

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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