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Unveiling XRP's fate
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Bitcoin market dynamics shift as Grayscale sells off and MicroStrategy accumulates
Key points:
Grayscale is selling Bitcoin, while MicroStrategy has been accumulating.
Despite the sell-off by Grayscale, Bitcoin whale activity reflects growing confidence, with a significant increase in whale numbers observed.
News - With the highly anticipated Bitcoin halving approaching in April, the market is experiencing contrasting activity from major players.
Grayscale, the world's largest digital asset manager, has been actively selling Bitcoin, depositing over 3,600 BTC (worth $156 million) into Coinbase in the past 19 hours.
On the other hand, MicroStrategy, a prominent Bitcoin bull, has been accumulating. They bought 850 BTC between December 27th and February 5th, bringing their total holdings to 190,000 (worth $8.15 billion) and realizing a $2 billion profit.
What about other whales? Interestingly enough, Bitcoin whales are displaying confidence. Glassnode data revealed a significant increase in whale numbers, reaching 1,578 - the highest in nearly ten months. This signifies growing trust and accumulation among large investors.
However, short-term market sentiment might lean towards selling. CryptoQuant data showed over 7,000 BTC deposited to exchanges between February 5th and 6th, exceeding withdrawals during that period. This reveals that traders can expect a potential selling pressure in the near future. At press time, however, the king coin was trading at $44,508 with a 5.27% upside in the past seven days.
DeFi hits $60B TVL milestone, led by Lido Finance and restaking trends
Key points:
Restaking emerges as a novel DeFi narrative, allowing users to leverage ETH across multiple protocols.
Analysts warn of potential risks associated with restaking, urging caution amidst the excitement.
News - The decentralized finance space is experiencing a remarkable comeback, reclaiming its $60 billion total value locked milestone for the first time in 18 months. This resurgence reflects the renewed interest in DeFi, driven by innovations like liquid staking and the emerging "restaking" narrative.
What is the reason behind the surge? The DeFi TVL jumped an impressive 68% since October 2023, reaching $60.55 billion. This uptick is fueled by both the broader crypto market rally and exciting developments within DeFi, particularly in liquid staking and restaking.
Well, thanks to Lido Finance which enjoyed a commanding 37% market share and boasted a TVL of $22.65 billion. The protocol is nearing a landmark 10 million staked ETH, representing a staggering 72.13% of all liquid-staked Ethereum. The total liquid-staked Ethereum across the DeFi space has also grown significantly, reaching 13.20 million ETH valued at $31.17 billion.
What about restaking? Restaking is gaining traction in 2024. It allows users to leverage the same ETH across multiple protocols, enhancing the overall security of participating platforms. Despite lacking its own native token, EigenLayer has carved a niche within DeFi with a TVL of $4.07 billion, experiencing a remarkable 161% growth in just one month.
Key points:
The cash-creation model involves purchasing Ether equivalent to the order amount and depositing it into the trust's account to create shares.
Staking activities will involve the trust receiving rewards treated as income but also entail risks such as slashing and lock-up periods for staked ETH.
News - ARK 21Shares, the investment firm led by Cathie Wood, has tweaked its proposal for a spot Ethereum exchange-traded fund to align with the Securities and Exchange Commission's preferences. The updated plan involves a cash-creation model and the potential for staking a portion of the ETF's Ethereum holdings.
Cash creation model for easier approval - Following the successful launch of their cash-based Bitcoin ETF, ARK 21Shares is applying the same strategy to their Ethereum product. This means buying Ether directly with incoming investment cash and creating ETF shares accordingly, instead of using in-kind deliveries. Analysts believe this aligns with the SEC's current stance on crypto ETFs.
Staking for extra income - The revised proposal also introduces a novel element: staking a portion of the ETF's Ethereum holdings. This would allow the fund to earn additional income through rewards offered by Ethereum's Proof-of-Stake network. However, ARK 21Shares acknowledges potential risks associated with staking, such as slashing penalties and lock-up periods.
ARK 21Shares isn't alone in pursuing a spot Ethereum ETF. Major players like BlackRock and Grayscale have also submitted proposals, with varying approaches. The SEC is expected to decide on several Ethereum ETF applications by May 2024.
XRP faces price drop amidst rising negative sentiment, analysts predict trend reversal
Key points:
Despite falling prices, XRP's MVRV ratio suggests a potential for a trend reversal.
XRP's price was down 11% in 30 days, dragging sentiment to a six-month low.
News - Ripple's XRP token has faced a rough month, dropping 11% in value and triggering negative sentiment among investors. However, amidst the red, some analysts see signs of a potential comeback.
This decline has also impacted sentiment, with Santiment reporting a six-month low in XRP's Weighted Sentiment score. Other major tokens like Cardano (ADA) and Solana (SOL) have also seen sentiment decline recently.
MVRV ratio sparks hope - Despite the price dip, one key metric suggests potential improvement. AMBCrypto's analysis reveals a rising MVRV ratio for XRP, indicating the possibility of a trend reversal. This aligns with predictions made by popular crypto analyst Ali, who sees a potential buy signal on the weekly chart.
Technical analysis hints at an uptrend - Looking at the daily chart, AMBCrypto observed XRP's price approaching the lower Bollinger Band, which typically precedes a rebound. The MACD indicator hinted at a possible bullish crossover, suggesting upward momentum that could last for a few weeks.
More stories from the crypto ecosystem
Interesting facts
Because anyone can make their own cryptocurrency, there are some really weird ones out there. Some of them have names like Vodka Coin, Jesus Coin, and Cabbage. Then there are coins like Putincoin, Garlic C, and plenty of others.
The Silk Road, an infamous online marketplace for illegal goods and services, was one of the first platforms to accept Bitcoin as payment.
Several cryptocurrencies, such as Monero and Zcash, prioritize privacy and anonymity by implementing features like ring signatures and zk-SNARKs to obfuscate transaction details.
Top 3 coins of the day
Uniswap (UNI)
Key points:
At press time, UNI was 85.65% down from its all-time high of $44.68. However, it was 88.84% up from its cycle low of $3.40.
The 1-Y Return on Investment (ROI) metric stood in the negative territory.
What you should know - Zooming in on the 1-D chart of UNI gives us a positive signal about its price action even though the coin has been trading within a range for over three months now. After 4 February, demand has been resurgent. If UNI continues its pace, the price could easily climb up to its liquidity zone of resistance near $7-$8. On the contrary, an increase in bearish pressure could see UNI dip down to a support zone of $5. RSI, at press time, looked in favor of buyers with a reading of 55, following which UNI exchanged hands at $6.40.
BNB
Key points:
After seven months of sideways movement, BNB initiated an uptrend in December with sellers losing their control to buyers.
At the time of analysis, over 4.15 Billion transactions had taken place on the BNB Chain.
What you should know - A bullish pennant was seen to be forming on the BNB chart, which suggested a continuation of an upward trend. It typically forms after a sharp price increase, followed by a brief period of consolidation within a narrowing price range. Even leading indicator MACD supported this narrative - At the time of writing, it was at a crossover with the signal line poised to move up in the next trading session. Market sentiment looked cheerful with sellers at the back seat. Interestingly enough, the volume also noted an uptick over the last two days.
Optimism (OP)
Key points:
OP reached its All-Time-High (ATH) at $4.22 on 12 January 2024. Thus, cheering up its long-term investors.
At press time, the price was in the overbought territory, a trend reversal could be expected soon.
What you should know - After reaching its ATH point, OP investors have been going through a lot of unexpected volatility. At press time, the token was near its upper Bollinger Band. When the price approaches the upper band, it suggests the asset is trading above its average price, potentially indicating increased buying pressure and overbought conditions. However, it's not a guaranteed signal to sell - the price could further keep rising. Anyway, the support level was noted at the $2.59 mark, and the resistance zone stood near $3.65.
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