AI tokens face unexpected hurdle

August 29, 2024

Reading time: 5 minutes

Bitcoin Layer-2 Network Stacks begins Nakamoto upgrade for faster transactions

Key points:

  • Stacks is upgrading its blockchain to accelerate transaction speeds.

  • The upgrade, named Nakamoto, introduces a new consensus mechanism based on proof-of-transfer.

News - Stacks, a layer-2 blockchain built on Bitcoin, has initiated its Nakamoto upgrade. This significant update aims to accelerate transaction speeds by decoupling Stacks' block production schedule from Bitcoin's.

What is Nakamoto upgrade though? The Nakamoto upgrade, named after Bitcoin's anonymous creator, introduces a novel approach to block production. Instead of relying on Bitcoin's block times, Stacks will now utilize a proof-of-transfer consensus mechanism. This means users can burn Bitcoin to mine Stacks blocks and earn rewards.

To prepare for the upgrade, network operators have a two-week window to implement the necessary changes. Following this period, a hard fork will finalize the transition.

What is Stacks aiming for? Stacks aims to introduce smart contracts and other decentralized finance applications, leveraging Bitcoin as a secure and reliable foundation.

To facilitate this, Stacks is also developing sBTC, a bridge asset that allows users to transfer their Bitcoin to the Stacks ecosystem.

AI tokens take a hit as Nvidia's earnings fall short of expectation

Key points:

  • AI tokens experienced a significant decline following Nvidia's Q2 earnings report.

  • Nvidia's revenue, while impressive, fell short of market expectations.

News - AI-related cryptocurrencies experienced a significant downturn following Nvidia's second-quarter earnings report. Despite surpassing market expectations, Nvidia's performance failed to impress investors, leading to a sell-off in AI crypto tokens.

FET, Bittensor (TAO), and Render (RNDR) saw notable declines in their prices, mirroring the negative sentiment surrounding Nvidia's stock.

How does Nvidia affect AI tokens? The close correlation between Nvidia's performance and the AI crypto market has been evident in previous quarters.

Investors often use Nvidia as a barometer for the broader AI industry, and its earnings reports can significantly impact the sentiment surrounding AI-related assets.

Despite the short-term downturn, analysts remain optimistic about Nvidia's long-term prospects. The company's strong demand for its AI-related products and the continued growth of the cloud computing industry are seen as positive indicators for its future performance.

Increased on-chain activity sparks hope for Polygon's recovery

Key points:

  • MATIC's dormant tokens have begun to move, suggesting growing interest.

  • The number of active addresses interacting with Polygon has also surged.

News - Polygon is registering increased on-chain activity of late, suggesting a potential reversal in its price trajectory.

Blockchain analytics platform Santiment has identified a significant surge in dormant token movement and a spike in active addresses interacting with the Polygon network. This indicates a growing interest in the platform.

What’s more? While Polygon's on-chain activity has been declining in recent months, the recent uptick could be a positive sign for the future. However, it's important to note that Polygon remains in a bear market, and the price of MATIC has experienced a significant drop from its all-time high.

Besides the recent price decline, Polygon has faced several challenges. A security breach on the Polygon community's Discord channel and the upcoming network token migration have added to the uncertainty surrounding the project.

At press time, MATIC was changing hands at $0.4324 with a 17.44% loss in value over the last seven days.

Ethereum ETFs break outflow streak, while Bitcoin funds continue to bleed

Key points:

  • Ethereum ETFs saw net inflows for the first time in nine days.

  • Bitcoin ETFs continued to experience net outflows.

News - The US spot Ethereum exchange-traded funds (ETFs) experienced a much-needed respite from outflows on Wednesday. After a nine-day streak of selling pressure, these funds recorded net inflows of $5.84 million.

Grayscale's Ethereum Trust (ETHE) continued to see outflows, but this was offset by significant inflows into BlackRock's spot ether fund and Fidelity's FETH.

While the total trading volume for Ethereum ETFs remains lower than its peak in late July, the recent inflows suggest a potential shift in investor sentiment.

What about BTC ETFs? In contrast, spot Bitcoin ETFs in the US continued their downward trend, reporting net outflows of $105.19 million. Ark and 21Shares' ARKB, along with several other Bitcoin ETFs, experienced significant selling pressure.

Despite the outflows, Bitcoin ETFs have still seen substantial net inflows since January, totaling $17.85 billion.

The price of Bitcoin has remained relatively stable, while Ethereum has seen a slight increase over the past 24 hours.

Interesting facts

  • In the United States, people making over $100,000 annually constitute over 25% of all crypto-holders, but only 15% of the general population.

  • Over 21K cryptocurrencies have entered circulation since Bitcoin’s inception.

  • According to Digiconomist, 1 BTC transaction’s carbon footprint is equal to over 760K Visa transactions.

Top 3 coins of the day

Aptos (APT)

Key points:

  • At press time, APT was trading at $6.73.

  • It was up by 5.43% over the past week.

What you should know - Aptos (APT) is currently trading at $6.82, maintaining a tight range between $6.60 and $6.96. Its daily chart shows consolidation, suggesting that APT is in an accumulation phase after a period of decline. The near-term resistance level can be found at $10.22, which represents a significant hurdle for any upward movement. The MACD indicator shows signs of slight bullish momentum, but it remains close to the zero line, indicating limited strength in the current uptrend. Volume has been relatively stable, signaling a lack of strong buying pressure. For APT to break out of this range, a sustained increase in volume and momentum above $7.00 is necessary. Failure to do so might lead to further sideways trading or a retest of lower levels.

Immutable (IMX)

Key points:

  • IMX traders can expect short-term gains.

  • IMX increased by 2% over the last day.

What you should know - IMX is currently trading at $1.503, reflecting a 4.23% increase. The recent price action shows the bulls attempting a recovery, pushing toward the resistance zone around $2.00. The price has moved above the 20-day moving average, indicating a potential bullish trend. The Bollinger Bands are beginning to widen, suggesting an increase in volatility, which could lead to more significant price movements. The RSI is at 61.40, nearing the overbought territory, but still within a neutral zone, indicating that there might still be room for growth. A break above the $2.00 mark would confirm bullish momentum. However, failure to breach this level could result in consolidation.

Dogecoin (DOGE)

Key points:

  • Since 26 July, DOGE has been trading at a discount.

  • On-chain metrics hint at a possible trend reversal.

What you should know - Dogecoin (DOGE) is trading at $0.10126, showing a modest gain of 1.63%. The price is struggling below the 20, 50, 100, and 200-day EMAs, indicating a bearish trend in the short to medium-term. The Awesome Oscillator remains in negative territory, suggesting prevailing downward momentum. DOGE attempted to recover but faced resistance around $0.14, and the price has since corrected by 32.80%. A support level is forming near $0.10; a break below this could push DOGE toward the $0.08 level. Conversely, a sustained move above $0.12, accompanied by increasing volume, could indicate the start of a bullish reversal.

How was today's newsletter?

Login or Subscribe to participate in polls.