Premium Fundamental Technical Weekly Report For The Cryptocurrency Market

By Rubikav® on The Capital

Published in

The Dark Side

7 min readAug 17, 2020

Weekly closing of Bitcoin preceded by the opening of a candle of possible price correction and in contrast to the decline in volume that is being triggered.

From our point of view, and in the first instance, we could touch 50% of the Fibonacci retraction line at 11429 and from there, complete what everyone expects: the end of wave 3 of Elliot.

Not Everything Are Resistances

Most important support to consider in case of price correction: historical low trend line together with tekan sen in 10545.

We will tell you the truth! We don’t like to get into an asset that is overbought in most charting times. That is the case that is happening within Bitcoin. It is also important to recognize that the zone between 12k and 14k is not a safe trading zone if we analyze the weekly chart.

The above is said by the fact that according to past action prices, we see a large settlement area that is represented by the shadows of the candles since the last price increase in 2019.

A Suspicious Long Position

For now, we are studying the possibility of opening a long in the price range of 12358 and 12467 with an approximate stop loss at 11910.

Personally we want to wait for how Bitcoin behaves in this large settlement zone and see what happens, due to the high risk. Other assets have the same problem. Another important point that we must consider is that the monthly candle begins to show closing signals.

Bitcoin UTXOs Are In Profit

According to the last glassnode report, The percentage of bitcoin UTXOs in a state of profit has surpassed 97% as BTC’s price continues to increase.

Historically, when the percentage of UTXOs in profit crosses the 95% threshold, BTC sees significant gains over a short period of time — usually around 2–3 months, although sometimes shorter.

The fact that over 97% of UTXOs are currently in profit means that less than 3% were created when the price was higher than it is now. Extended periods at this level and above are characteristic of bull runs as BTC moves toward new all-time highs (at which point the metric reaches 100%).

Ethereum Daily Transaction Soar

The last tradeblock report says that daily transactional count on the Ethereum blockchain is nearing a new all-time high after seeing a surge in activity brought on by DeFi applications.

As we have frequently discussed, DeFi applications have seen a record-high increase in users with more than $6 billion in digital currencies deposited in DeFi smart contracts. Ethereum is the base layer platform for a majority of these applications. In the figure below, we diagram the market cap overtime of the ten largest DeFi tokens.

As the growth in DeFi has accelerated, the demand for ether for use in transactional activities has increased.

The previous all-time high in daily transactions on Ethereum occurred in early 2018. In the figure below we diagram Ethereum daily transactions alongside TradeBlock’s ETX Ethereum price index.

Unlike in 2018, when ether trading and transfers were one of the primary transactional use cases, today a large portion of Ethereum transactions are utilized in DeFi applications.

In addition to the above, the recent price for ether is mostly explained by the increased demand for ether for use as gas in these growing transactional activities. Ethereum gas fees reached a record high last week as network congestion increased.

MicroStrategy Buys Bitcoins

Bitcoin’s narrative as an inflation hedge to the US dollar increased this past week, with MicroStrategy (MSTR) announcing that the company bought $250 million in bitcoin to hold in its treasury reserve as an inflation hedge, says the tradeblock report.

Traditionally, most large companies hold cash and cash equivalents (short term money market securities) in their treasury reserves. Immediately after MicroStrategy’s bitcoin announcement, the company’s shares traded up more than 10%.

MicroStrategy is the first public company to allocate such a large portion of its treasury reserves to holding bitcoin. Other institutions have recently looked towards bitcoin to offer similar inflation protections.

Open interest on the CME’s bitcoin options product recently reached an all-time high, indicative of increased institutional interest. Additionally, Paul Tudor Jones's flagship investment fund allocated ‘a low single-digit percentage’ to bitcoin as an inflation hedge.

Big Money Maker

Messari says on the last market review that at the beginning of 2020, the most widely known and celebrated DeFi project by a country mile was MakerDAO. Eight months and a once-in-a-century pandemic later, Maker is no longer the undisputed king of DeFi.

While DeFi tokens like COMP, LEND, and SNX have mooned, MKR has significantly underperformed the rest of the DeFi sector.

Maker’s Challenges

To refresh your memory, MakerDAO is a lending protocol that produces the stablecoin, DAI. It’s been a popular way for ETH bulls to lever up by depositing ETH into a Maker contract (CDP) and then receiving Dai to trade with.

Maker’s first challenge has been that, fundamentally, it does not scale with demand for Dai. We saw this first play out following March’s Black Thursday event when the market crash sent people scrambling for stability in the form of Dai.

Since the price of ETH was crashing, ETH depositor CDPs were getting liquidated, which removes Dai from circulation. The lower supply coupled with higher demand caused Dai’s peg to blow out well above its $1 USD target.

After briefly settling back down towards $1 USD three months later, Dai lost its peg once again following Compound’s liquidity mining launch as yield farmers piled into Dai to farm COMP. Dai remains above its $1 target to this day.

Maker’s second challenge lies in the intense competitive pressure coming from newer lending protocols. Compound and Aave have exploded in popularity (and price) in large part because they offer more attractive credit facilities — more collateral options, lower collateralization ratios, and better incentives. Basically, Maker is no longer the only DeFi game in town.

The Great Divergence

Another thing that the report says is that there is a silver lining to all of this for Maker. Heightened demand for Dai, particularly for its use in liquidity mining, has Dai total supply up 263% YTD with more than $407 million Dai outstanding.

Holders of MakerDAO’s governance token, MKR, earn interest on Dai loans. This means that there is $407 million in debt that MKR holders can potentially earn interest from.

The problem is that MKR holders have opted to keep interest rates at zero to help restore Dai’s peg (low rates = more loans = more Dai supply to meet demand). Thus, MKR holders are not being rewarded for the growth of Dai demand.

Historically, Maker interest rates have been driven by the price of ETH. When ETH is rising, investors are bullish and want to leverage their positions, sending interest rates up. When ETH is falling, bearish investors want to deleverage, which lowers rates.

Binance Highest Web Traffic

Crypto exchange Binance had the highest number of visitors among its peers in July, coming in at 25 million visitors. This was followed by Coinbase and BitMEX, with 22.5 million and 6.9 million visitors, respectively, according to data collected by The Block Research.