Maker (MKR) Jumps 40%, But Technicals Suggest a Corrections Is Imminent

The DeFi market sector is booming. A glimpse at CoinMarketCap’s DeFi token rankings shows that the top 10 altcoins by market cap within this space are positing massive gains, except for Dai since it is a stable coin. Among all of these surging cryptocurrencies tokens is the decentralized governance token Maker, which is up over 30% in the past 24 hours. 

Coinmarkecap DeFi Rankings

Maker Surges Over 40% in the Last 24 Hours. (Source: CoinMarketCap)

Despite the significant bullish impulse that MKR has gone through, different on-chain and technical metrics suggest it is poised to retrace. 

A Pull Back Before Further Gains

The Tom Demark (TD) Sequential index supports the idea that Maker is bound for a steep correction. This technical indicator presented a sell signal in the form of a green nine candlestick on MKR’s 3-day chart. The bearish formation estimates a one to four three-day candlesticks correction before the uptrend resumes.

The TD setup has been incredibly accurate at predicting this altcoin’s local tops and bottoms, based on historical data. When looking at the 3-day chart, it even presented a sell signal in late February, just before prices crashed nearly 75%. Thus, the current pessimistic forecast must be taken seriously despite the hype around the ongoing rally.

Maker US dollar price chart

MKR Prepares to Retrace Based on the TD Setup. (Source: TradingView)

It is worth mentioning that each time the TD setup presented a sell signal on within this time frame, the bearish outlook was confirmed by a spike in sell orders. Given the recent price action, it is very likely that the decentralized governance token is in overbought territory and that it will indeed correct.

Stiff Resistance Ahead of Maker

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model adds credence to the bearish outlook. This on-chain metric reveals that for Marker advance further, it must turn the $845 resistance level into support. Doing so may no be as easy since 54 addresses had previously purchased nearly 8,700 MKR around this price level. 

This supply wall may have the ability to hold against any upward pressure because holders within this range would likely try to break even in the event of an upswing. Moving past it, however, increases the odds for the DeFi token rise towards $900 or higher. 

Maker Faces Stiff Resistance Ahead. (Source: IntoTheBlock)

On the flip side, the IOMAP cohorts show that in the event of a correction the most critical support level underneath Maker sits at $705. Here, over 720 addresses are holding more than 14,200 MKR. These investors may try to remain profitable in their long positions and even buy more tokens to avoid seeing their profitable investments turn into losses. 

If such buying pressure is strong enough, this supply barrier would likely hold and allow prices to rebound into higher highs. 

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Price tags: mkrusd, mkrbtc
Chart from TradingView.com

Ethereum DeFi’s “Yam” Protocol Encounters First Bug; User Funds Secure

Ethereum’s Yam Finance protocol has been the hottest crypto project of the past 24 hours. As reported by NewsBTC previously, the unaudited protocol managed to garner $400 million worth of value in under 24 hours, with investors throwing boatloads of capital at the project.

The token of the protocol, YAM, is behind this exponential explosion in activity and value in the DeFi space.

Unfortunately, it was just revealed that Yam’s developers found a bug in one of the contracts pertaining to the protocol. Fortunately, though, the funds of users should be safe for the time being.

Bug Found In Yam’s Rebasing Contract

According to a thread shared by Yam’s developers, a bug was just found in the rebasing contract. The rebasing contract is the platform through which the supply of YAM is recalculated and redistributed every 12 hours to bring the price of the asset towards $1.

The staking contracts, which hold over $400 million worth of value, are “safe, as this is an unrelated part of the protocol.” The YAM that users hold is also unaffected.

Yam’s developers say that the bug means more YAM than intended will be distributed: “Rebases following the initial rebase will mint more YAM than intended.”

To fix the issue, Yam’s developers are creating a two-part proposal that will pause YAM rebases for the time being and will “reset YAM in YAM reserves to zero [to eliminate] the over-inflated YAM in the reserves.”

The communicate has begun to band around the proposal from the developers, with Primitive Capital’s Eric Meltzer telling users of the platform to vote and approve the proposal.

While moves are being made to amend the issue, YAM has dropped by 33% since the thread was published.

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Charts from TradingView.com
Ethereum DeFi's Yam Protocol Encounters First Bug; User YAM Secure

This Massive Ascending Triangle Could Send Bitcoin Rocketing Higher

Bitcoin’s turbulent price action over the past few days hasn’t offered too many insights into its near-term trend, as the crypto has yet to break above or below any key technical levels.

Analysts are now pointing to the emergence of a highly bullish pattern that may have major implications on its near-term outlook.

This ascending triangle has been formed over the past couple of weeks, with the upper and lower boundaries of the pattern both being confirmed on multiple occasions.

If validated, this pattern could allow the benchmark cryptocurrency to post significantly further gains in the coming weeks once it is able to break above its upper boundary at $12,000.

This pattern also comes as Bitcoin begins flashing some signs of overt strength due to its strong reaction to its support at roughly $11,200 that was tapped overnight.

The confluence of this pattern with a strong market structure seems to indicate that a breakout rally is imminent.

Bitcoin Shows Signs of Strength Following Overnight Plunge

At the time of writing, Bitcoin is trading up just under 2% at its current price of $11,550. This is around where it has been trading at following its overnight rebound.

The selloff faced yesterday evening led it to lows of $11,150 before it met a massive influx of buying pressure.

This sharp decline nearly invalidated the strength that the crypto has built over the past week, but it appears that bulls have prevailed over bears.

It now seems that the crypto may see further near-term upside, as one analyst is explaining that the ongoing break above $11,550 is technically significant.

He notes that a sustained bout of trading above this level could open the gates for “another crack at breaking $12,000.”

“Bitcoin: Took out the highs then took out the lows into demand, all within the range of the candle that started the month with a HTF retest. Above the pivotal zone and swing high at $11550 and we should have another crack at breaking $12k.”

Bitcoin

Image Courtesy of HornHairs. Chart via TradingView.

This Ascending Triangle May Propel BTC Significantly Higher

While speaking about Bitcoin’s near-term outlook, one analyst explained that a recently formed ascending triangle might be enough to boost it significantly higher.

“Certainly not out of the woods, but BTC setting up really nicely on the 4h with this back to back doji/tweezer look. A reversal here starts to setup a nice look at a possible ascending triangle, which I’ve drawn a lot of lately, but they just keep painting.”

Image Courtesy of Jonny Moe. Chart via TradingView.

Unless Bitcoin retraces the gains it has posted throughout the past several hours, it does appear that it is poised to see further upside.

Featured image from Unsplash.
Charts from TradingView.

Compound (COMP) Explodes By 35% Intraday, But What’s Fueling The DeFi Token’s Rise?

Compound (COMP) one of the primary DeFi tokens that sparked the start of the crypto market’s hottest trend in years, is suddenly booming once again. The altcoin token has sharply risen by 35% intraday, as part of an ongoing over 90% climb so far in August.

But what’s driving the sudden resurgence in the DeFi token, and will gains in the cryptocurrency continue to compound?

Yield Farming, And The Unstoppable Decentralized Finance Trend

Compound’s launch on Coinbase in late June set the crypto market afire with a new buzzword: yield farming.

The asset allowed crypto holders to lend out their tokens in return for an APY. The potential profitability in lending sent the asset’s valuation into the stratosphere. But soon, a great rotation of capital took hold across the crypto market, prompting investors to seek out the next hot new DeFi superstar, and the altcoin corrected.

Analysts warned of this behavior, and it resulted in some traders getting burned when several projects crashed from their unstoppable surges. Still, the decentralized finance mini-bubble has yet to fully burst, and it may have prompted capital to rotate back into Compound where the trend first began.

compound compusd daily

COMPUSD Daily Price Chart - 35% Intraday ROI | Source: TradingView

Compound Continues To Provide Massive Crypto Returns, Over 35% Intraday

Over the last 24 hours, Compound surged by over 35% from under $200 a token to over $265 per COMP. Buzz surrounding a new YAM token may be causing the pump, however, it also could be from profit-taking in other projects perhaps making its way back into the DeFi token.

But this is crypto – a speculative asset class – and the recent DeFi and Uniswap boom by the day more closely resembles a bubble. Investors are irrational, money is being made around every turn, but it could all come crashing down if and when the bandwagon begins to teeter off course.

compound compusd august

COMPUSD Daily Price Chart - 96% Month-To-Date ROI | Source: TradingView

The difference between decentralized finance and past crypto bubbles is the fact that DeFi is a sustainable trend offering the market real value and an alternative to traditional finance. But as crypto investors tend to do, expectations far outweigh what’s realistic, and eventually, valuations receive a reality check.

When it comes to Compound, however, technicals suggest the altcoin’s rally has a lot more left to go. The Average Directional Index, a popular trend strength measuring tool, indicates that the bull trend hasn’t truly even begun.

compound adx

COMPUSD Daily Price Chart - Average Directional Index and DMI | Source: TradingView

According to the indicator, trends don’t truly begin to pick up strength until the indicator rises to a reading above 20. Currently, Compound is just below it at 18, but ready to push higher. A bullish crossover of the Directional Movement Index accompanying the ADX also points to further bullish momentum in the DeFi token.

With so much going for it, the cryptocurrency looks to be a diamond in the rough of a sea of DeFi projects vying for crypto capital.

Ethereum’s Latest DeFi Craze Is Storing $400m In Crypto 1 Day After Launch

While Bitcoin has retraced since its highs, Ethereum’s decentralized finance ecosystem is still in a clear phase of growth.

Case in point: a DeFi protocol launched yesterday has already garnered hundreds of millions of dollars worth of value. This comes in spite of the fact that the protocol’s code is unaudited by professional auditors.

This, to many, shows how much interest there is in DeFi and Ethereum-based assets. This should act as a boon for the cryptocurrency and its respective blockchain in the long run.

Ethereum’s Yam Protocol Secures $400M Less Than 24 Hours Off Launch

Yesterday, a number of developers launched what is known as “Yam,” a DeFi protocol whose native governance token is YAM.

The protocol is an experimental one that is attempting to mesh the DeFi concepts of “yield farming,” governance, and price elasticity. The following is an excerpt from the blog post announcing the project:

“Yam is an experimental protocol mashing up some of the most exciting innovations in programmable money and governance. Built by a team of DeFi natives, it features: an elastic supply to seek eventual price stability, a governable treasury to further support stability, fully on-chain governance to enable decentralized control and evolution from Day 1, and a fair distribution mechanism that incentivizes key community members to actively take the reins of governance.”

While the team describes the Ethereum-based platform as “experimental” and “unaudited,” it has garnered much interest in the DeFi community.

According to DeFi analyst Camila Russo, there is now $400 million worth of cryptocurrency locked in the protocol. This is more assets locked than “Balancer, Curve, and Yearn,” as Russo explained.

She added that this large migration of funds is being triggered by users seeking to maximize their profits: “TVL in these platforms is sliding as farmers are apparently cycling their crypto into the highest-yielding crops.”

Effect on the Prices of Crypto Assets Involved

What has been especially notable about the launch of Yam is that it has had a tangible effect on the price of cryptocurrencies involved. To generate YAM, users can stake one of eight Ethereum-based assets: Wrapped Ethereum, YFI, Chainlink, Maker, LEND, Synthetix Network Token, Compound, and the ETH-AMPL Uniswap Pool Token.

As can be seen in the chart below, the launch of Yam has boosted Compound by around 45%.

Chart of COMP's price action since the launch of Yam from TradingView.com
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Price tags: ethusd, ethbtc
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Ethereum's Latest DeFi Craze Is Storing $400m In Crypto 1 Day After Launch

Chainlink Jumps 9% on the Day Crypto Market Loses $8bn; Here’s Why

Chainlink (Ticker: LINK) rebounded from its short-term corrective downtrend on Wednesday as its price surged 9 percent on a 24-hour timeframe.

The LINKUSD exchange rate established an intraday high near $14.11 on Binance exchange, up 21.95 percent from its week-to-date low. The pair’s gains appeared despite a broader sell-off in the cryptocurrency market, wherein the overall valuation fell by more than $8 billion.

DeFi, cryptocurrency, LINKUSD, LINKBTC, Chainlink

Chainlink chart on TradingView.com shows its bullish continuation bias.

What helped the Chainlink token during the turbulent 24-hour period is the growing demand for DeFi assets. Traders increased their bids for LINK, COMP, MKR, and other decentralized finance tokens after the launch of Yam Finance.

Staking Craze

The new “yield farming protocol” went live on August 11. It issued about 2 out of 5 million of its native YAM tokens so to make them available as yields for users who stake the following assets:

  • COMP
  • LEND
  • LINK
  • MKR
  • SNX
  • WETH
  • YFI
  • ETH/AMPL Uniswap LP tokens

The announcement led to a new wave of a buying frenzy in the DeFi space. Like Chainlink’s LINK, Compound’s COMP token rallied by more than 35 percent in just 24 hours. Aave’s LEND jumped 16 percent – and Maker’s MKR climbed 24 percent within the same period.

DeFi, LEND, Aave, Chainlink, LINK, Compound, COMP

Index from Messari shows DeFi tokens' performances in the last 24 hours

Non-DeFi tokens were not that lucky. The benchmark cryptocurrency Bitcoin fell 1.91 percent on rising US Treasury yields. Other proof-of-work assets that had the least probability of becoming a staking token for a DeFi pool, also fell, with Ethereum, XRP, and Litecoin plunging by 2-5 percent.

It is also possible that traders left the top brass to seek hedge in the booming DeFi market, especially after the launch of Yam Finance. Each of the DeFi token listed above surged by more significant margins against Bitcoin in the last 24 hours, according to data provided by Messari.

Chainlink Technically Overblown

On technical parameters, the Chainlink token was extending its stay inside an overbought area, according to its Relative Strength Indicator. That amounted to a price correction–and between August 11 and 12, the cryptocurrency fell by about 17 percent.

Its latest rebound solely came on the staking hype as discussed above. That also established $11, the level from where LINKUSD retraced to the upside, as a reliable support level. Michaël van de Poppe, a cryptocurrency analyst, called it “a good bounce,” adding that the pair could now retest $14.

DeFi, cryptocurrency, LINKUSD, LINKBTC, Chainlink

Chainlink bounce brings $14-retest back into the view. Source: TradingView.com, Michaël van de Poppe

Investment analyst Timothy Peterson doubled up the bullish call, noting that the Chainlink token would keep rising until $32 by the end of 2020. But there will be a catch.

“Did some quick analysis of Chainlink’s network growth rate and historical deviations in price put LINK at $32 by the end of the year, but that price would not be sustainable,” said Mr. Peterson. “Investors who buy at high levels risk losing 50% of their investment or more. Most growth priced in already.”

LINK was trading at $13.9 at the time of this writing.

Compound Rallies 35% Following YAM Farming Launch; Time for Caution?

COMP, the native token of Ethereum-based lending platform Compound, blasted through the roof on increasing bids for decentralized finance (DeFi) assets.

The latest wave of buying sentiment in the DeFi market followed the launch of Yam Finance. The so-called “yield farming” project surfaced with the promise of offering an elastic supply crypto-asset called YAM as a reward for staking COMP and similar tokens.

“We have employed a fork of the Compound governance module, which will ensure all updates to the Yam protocol happen entirely on-chain through community voting,” the announcement added.

Yam Finance’s proposal turned up demand for the DeFi cryptocurrencies. The ticker COMPUSD rallied 35 percent to circa $231 on a 24-hour adjusted timeframe. Meanwhile, Aave’s LEND, Chainlink’s LINK, Maker’s MKR, and other tokens also surged higher within the same period.

DeFi, LEND, Aave, Chainlink, LINK, Compound, COMP

Index from Messari shows DeFi tokens' performances in the last 24 hours

Out of its 5 million supply, two million of YAM tokens went live on August 11. They remain available as yields for users who stake

All-Time High

The YAM launch helped to push COMPUSD to its yearly high in the early Tuesday trading session. As of 0100 UTC, the pair was trading at $247.49, its year-to-date top. As usual, the jump also pushed the Compound token into an overbought territory, which now amounts to a severe downside correction.

DeFi, cryptocurrency, COMPUSD, COMPBTC, COMP, Compound

The Compound chart on TradingView.com shows COMPUSD correcting lower following the YTD hit.

And it appears to have taken place, albeit prematurely. COMPUSD dropped by as much as 17.34 percent from its local top on profit-taking sentiment among daytraders. But an equally strong demand at the buying side caught the falling knife, sending the pair back above towards the $247-mark.

It is evident that more and more traders are locking their COMP into the YAM and similar staking pools, thereby taking its good portion out of circulation.

Meanwhile, the yield farming hype is creating an aggressive demand for the token. It overall explains why COMPUSD has surged 35 percent in the last 24 hours – and about 66 percent in the last seven days.

Next Price Targets for Compound

The technical parameters demand a strong downside correction. It means COMPUSD could test $235-250 range as resistance for a pullback move. The RSI readings also show an imminent bearish action. An ideal target sits near $212, a level that Compound tested as support earlier Tuesday.

Meanwhile, a hype-led continuation in the COMPUSD’s upside moves would lead the pair towards its all-time high at $273. A further bullish extension would leave the Compound token in untested territory. Thereon, it will be without a concrete price ceiling.

It’s “Do or Die” For Bitcoin: Here’s Why Analysts Think So

After peaking at $12,000 this weekend, Bitcoin dove off a cliff, plunging to $11,300 as of this article’s writing. The cryptocurrency followed the price of gold lower, which is down around 7% in the past 24 hours.

Bitcoin is still holding above the pivotal $10,500 level but analysts say that the asset is in a “do or die” position. BTC failing to hold current levels could precede a strong leg lower, potentially kickstarting a full-blown bear trend.

BTC’s recent price action has not impressed investors, who noted just days ago that the cryptocurrency was poised to see new year-to-date highs.

Bitcoin Is in Make of Break Territory, Say Analysts

According to a cryptocurrency trader, Bitcoin is currently in make or break territory as it slides towards the ever-important $11,000 support. Referencing the chart below, which shows that BTC is effectively on the edge of a cliff, the trader in question wrote:

“Starting to look pretty bad, but given we’re still above $11k and around support, it’s not all over yet. Bulls really don’t want to see these levels fall otherwise it’s a short way back in the old range. This is do or die IMO so bulls better do. I’m still leaning bearish.”

Image

Chart of BTC's price action over the past few weeks with a range analysis/price level analysis by trader DonAlt (@CryptoDonAlt on Twitter). Chart from TradingView.com

Bitcoin bouncing here, though, could indicate that the cryptocurrency remains in a macro uptrend.

Other analysts are especially eyeing the $10,400-10,600 region. That region acted as a point at which three separate BTC rallies have topped in the past 12 months: one in October 2019, one in February 2020, and one just months ago in June.

Bitcoin losing that level would not be good for the bull case, to say the least.

Long-Term Bull Case Still Intact

While Bitcoin’s price is exuding weakness in the near term, analysts are certain that the long-term bull case is intact.

Dan Tapiero, the founder of Gold Bullion Int. and a prominent Bitcoin bull, recently commented that the cryptocurrency is poised to go parabolic this cycle:

“Tremendous long term Log Chart of #Bitcoin projects up 5-10x on this run. Just breaking up NOW. Should last a few years as 2.5yr consolidation is fantastic base for catapult up. Break of old highs will have explosive follow through. Time to sit and be patient.”

This strong sentiment has been echoed by other market participants, including many in and out of the cryptocurrency space.

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Price tags: xbtusd, btcusd, btcusdt
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It's "Do or Die" For Bitcoin: Here's Why Analysts Think So

Fifth Largest DeFi Protocol Aave’s LEND Token Listed on OKEx

The leading crypto exchange and trading platform, OKEx has extended support to the popular DeFi platform, Aave by listing its LEND tokens. According to yesterday’s announcement, LEND spot trading against BTC, ETH and USDT went live on OKEx at 9:00 AM UTC, August 12, 2020 – a day after LEND deposits were allowed on the platform.

Aave, formerly known as ETHLend has been around since 2017, enabling the creation of money markets by offering crypto deposits and lending facilities. ETHLend transitioned to Aave lending platform at the beginning of 2020 with a market scale of over $630 million, making it one among the top 5 DeFi protocols in terms of total locked value. Backed by a 100k+ strong community, Aave continues to register strong growth, as many expect the DeFi project to breach the $1 billion mark in terms of market scale soon.

Recent surveys indicate an increased interest in the Aave lending platform in the past few months. ICO analytics report shows a 63% rise in visitors since June 2020 which makes it the seventh-largest decentralized trading platform in terms of web traffic. Aave’s positioning in the market makes it an important player in the industry capable of promoting the use of DeFi among the masses. Its collaboration with OKEx, which is also a strong proponent of DeFi further enables both the parties to collectively create an environment where financial services over blockchain could address the issues faced by the unbanked population.

The CEO of OKEx Jay Hao, while reiterating the importance of decentralized lending projects like Aave in the DeFi ecosystem said, “In the existing DeFi ecosystem, lending projects occupy approximately 14% of the market share and are one of the largest spaces. Compared with the traditional credit system, DeFi lending has significant advantages in terms of trustless transactions, low barriers of entry, and simple procedures. We believe that lending will become an important engine for the development of DeFi.”

Mr. Hao also hinted on a possible extended partnership with Aave, “As one of the earliest participants in the lending space, Aave has made significant contributions to the development of DeFi. Stay tuned for our upcoming CEO roundtable later this month, as OKEx is very pleased to join forces with Aave to promote the further growth of decentralized finance.”

LEND is the governance token of the Aave platform, and the backbone of what the project calls, ” Aavenomics”. With the token now available to the global trading community, Aave will continue to support LEND staking while using a portion of revenues to implement LEND token buyback-and-burn scheme.

LEND withdrawals will be activated on OKEx from 9:00 AM UTC on August 13, 2020.

XRP (Ripple) vs XLM (Steller) vs ADA (Cardano): Which Altcoin Reigns Supreme?

Some of the best cryptocurrencies to prospect on are also some of the best values. What if we were to tell you three altcoins — currently priced in the low cents — are all potential sleepers?

 

In the case of XRP (Ripple), XLM (Stellar), and ADA (Cardano), all three altcoins have unique growth potential on the crypto market.

Ripple, for example, has a rich history in e-payments dating back to the days of ripplepay.com, as an early competitor to PayPal.

In 2011, crypto-mogul Jed McCaleb (more on him later) joined Ripple, and XRP was launched two years after. Ripple’s network is centralized and non-distributed, and, technically, not a true blockchain. While it has some skeptics in the community, Ripple also has vast support from top financial institutions (e.g., AMEX, Santander) through RippleNet.

Stellar Lumen (XLM), meanwhile, was created by McCaleb in 2014 after jumping ship from Ripple. The open-sourced coin is more community-oriented and focused on targeting the unbanked, making it different from FI-friendly Ripple. Stellar boasts its speed, claiming it can handle over 1,000 transactions per second.

Finally, Cardano (ADA) is viewed as third-generation crypto after its 2015 launch. Built by a global team of leading academics and engineers, Cardano’s goal is to learn from past cryptocurrency mistakes with a big commitment to scientific philosophy and research.

Want to learn more about these promising altcoins? Check out the video above.

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