Blockchain

Data shows the social media talk around Bitcoin has dropped to low levels recently, indicating that investors are paying attention to altcoins instead.

Bitcoin Social Dominance Has Declined To Just 17% Recently

According to data from the on-chain analytics firm Santiment, BTC-related discussions on social media have dropped recently. The relevant indicator here is “social dominance,” based on the concept of “social volume.”

The social volume of any asset is a measure of the degree of talk it receives on the major social media platforms. The metric makes this measurement through a text-based data collection that Santiment has procured from different websites.

A feature of the indicator is that it only counts the unique number of posts or messages that mention the coin. This means that if a thread receives many mentions of the cryptocurrency, its contribution to the social volume will remain just one unit.

This restriction helps the social volume provide a more accurate representation of the trend being observed throughout social media. The aforementioned social dominance is a metric that tells us what percentage of the combined social volume related to the top 100 assets by market cap is being contributed by any cryptocurrency.

Here is a chart that shows how the social dominance of Bitcoin has changed during the last few months:

As shown in the above graph, Bitcoin’s social dominance has registered a downtrend during the last few days, implying that the share of the social media discussions occupied by the number one cryptocurrency has shrunken.

This is perhaps a result of the asset’s price stagnating recently. Generally, investors don’t find such price action interesting, so they may stop paying attention to the coin during phases like this.

With the latest drop in the indicator, its value has dropped to 17%, meaning that 17% of the discussions related to the top 100 coins currently involve the topic of Bitcoin. This level of social dominance is the lowest it has been since June.

Naturally, this drop suggests that the altcoins have recently attracted some attention. Santiment notes that traders are looking elsewhere to FOMO right now, as some of the smaller projects in the market are observing a surge in talks.

Historically, the holders dropping BTC in favor of alts has been a sign of greed in the market. Such greed, however, is generally not favorable for the sector as a whole, as only weak rallies emerge in periods like these.

BTC Price

Bitcoin is trading around the $26,100 level after having decreased by more than 2% during the past 24 hours.

Cardano (ADA) has been experiencing a persistent downside trend since the start of 2023; the selling pressure has increased in the past week. However, network development continues to grow and could hint at a reversal for the cryptocurrency.

Cardano (ADA) trades at $0.24 with sideways movement on its weekend price action as of this writing. In the previous seven days, the cryptocurrency recorded a 4%, with the potential for further losses if the price of Bitcoin continues on its current trajectory.

Cardano Price Bound For A Change In Trajectory?

Data shared by Cardano’s leading developer, Input Output Global (IOG), and seen on the chart below, shows that while ADA has been trending to the downside, network activity is on the rise, with 75.3 million transactions processed, 79,182 token policies, and over 1,250 projects currently building on the network.

As seen above, 144 projects have been launched on Cardano with over 8.8 million tokens. This network has been one of the fastest growing in development activity in 2022 and 2023 upon implementing smart contract capabilities via the Hard Fork Combinator event dubbed “Alonzo.”

Currently, IOG is working to launch other core improvements to Cardano, including a fix for its consensus algorithm set to improve performance and scalability. In addition, the IOG team has continued to work on its smart contract platform, Plutus, and in the native crypto wallet, Lace.

Two of the most significant upcoming events for the blockchain are the introduction of Hydra to improve scalability and Mithril. IOG stated the following about the recent developments for these projects:

(…) the team made progress working on the aggregator performance bottleneck that occurs with high client traffic and started creating a new distribution.

The above, and the data provided by IOG, could have an impact on ADA. However, additional data provided by TokenTerminal paints a different picture.

The crypto analytics firm indicates that Cardano experienced a 6% decrease in its circulating market cap and a 35% loss in its annualized fees. Moreover, while the number of developers working on the network has increased by about 6%, the number of core commits is down 29% in 30 days.

As the chart below shows, the correlation between the number of commits to the project and the price of ADA has been decreasing. Yet, the token has seen some positive price action following an uptick in the former metric.

Cover image from Unsplash, chart from Tradingview

Data shows the Ethereum funding rates have been quite negative in recent days. Here’s what this could mean for the cryptocurrency’s price.

Ethereum Funding Rates Have Been Under The Zero Mark Recently

As explained by an analyst in a CryptoQuant post, a short squeeze may be a possibility for the asset currently. The “funding rate” is an indicator that keeps track of the periodic fees that traders on the futures market are exchanging with each other.

When the value of this metric is positive, it means that the long contract holders are paying a premium to the short holders right now. Such a trend implies the longs outweigh the shorts currently, and hence, a bullish mentality is the dominant force in the sector.

On the other hand, negative values suggest the majority of the futures market users share a bearish sentiment at the moment as the shorts are the ones paying a fee.

Now, here is a chart that shows the trend in the Ethereum funding rates over the past week:

As displayed in the above graph, the Ethereum funding rates had been positive until just a couple of days back, implying that the majority of the futures traders had been betting on the asset’s price to go up.

The metric’s value has plunged to the negative zone during the past day or so, however, suggesting that a complete flip in mentality has occurred among the investors.

This bearish sentiment, though, may not necessarily be bad for the price. This is because the more the mentality has become skewed in one direction historically, the more probable the price of the cryptocurrency has become to show a sharp move in the opposite direction.

One major reason why this happens is that mass liquidation events, which are popularly called “squeezes,” are more likely to involve the dominant side of the futures market.

During a squeeze, a sudden swing in the price ends up liquidating a large amount of contracts at once. Such liquidations only provide fuel for the price move that caused them, thus amplifying it further. This can lead to a cascade of more liquidations.

As shorts have piled up in the Ethereum futures market recently, the probability of a short squeeze occurring would be elevated. Naturally, if such an event does take place, the asset’s value could see a sharp rebound.

This doesn’t necessarily have to happen, of course, and if it does, it may not be soon. From the chart, it’s visible that the funding rate had remained at notable positive values for a while before the ETH price finally registered its plunge.

ETH Price

Ethereum has taken a hit of more than 3% during the past week as the asset’s price is now trading under the $1,600 level.

Ethereum holders have been subject to uncertainty over the last few months as bulls and bears have struggled for control. With the bears winning at a much higher rate than the bulls, Ethereum holders have found their holdings have continued to lose value. This time around, the plunge has sent the number of investors losing money to a new all-time high.

Number Of Ethereum Addresses In Loss At ATH

On-chain data tracker Glassnode Alerts on X (formerly Twitter) has revealed a shocking development regarding Ethereum addresses. According to the tracker, the number of addresses seeing losses on a 7-day moving average (MA) has jumped to its highest level ever.

This metric takes note of the price at which the ETH coins being held on addresses were last moved. Then it is compared to the current price of the altcoin to figure out if the addresses are seeing gains or losses. The metric had been rapidly climbing in 2023 due to the bear market, culminating in a new all-time high.

According to Glassnode’s report, the total number of addresses in loss is now sitting at 49,939,211.006, rising from its previous all-time high of 49,921,736.464 that was reached on September 15. If the price of ETH continues to drop, then this figure will likely hit another all-time high soon.

Other ETH Metrics Flashing Bearish

Ethereum’s open interest in perpetual futures contracts had also taken a hit with the price struggles. It dropped to a one-month low $445,789,354, just weeks after hitting a previous one-month low of $450,965,900 on September 13.

Accumulation also seems to be dropping among mid-sized investors in the meantime. Glassnode also reports that the number of addresses holding at least 10 ETH had plunged to a 3-month low of 347,825. This suggests that these investors may be offloading their holdings to prevent more losses.

Small investors are also not left out of this trend. Another metric that tracks the number of Ethereum addresses holding at least 0.1 ETH also showed a decline in recent months. This has led to a 5-month low for the metric, with only 5,120,950 addresses holding 0.1+ ETH.

These declines come as no surprise as the ETH price had lost support above $1,600. With the bears dragging the price below $1,600, the losses for holders had climbed rapidly as the altcoin’s price fell to two-week lows.

Founder Vitalik Buterin had also made transactions carrying a significant amount of ETH toward centralized exchanges. This has sparked speculations that the founder is selling, which in turn could influence investors to sell as well.

The crypto market cap has declined over 1% in the last 24 hours, transmitting losses across the market. Top coins like Bitcoin and Ethereum have taken the hit, losing 3% and 4% of their past week’s gains, respectively. 

However, Chainlink (LINK) resisted the prevailing bearish market forces amid this onslaught, holding 6.51% gains on the weekly chart. Also, the token has recorded a 1.68% price increase in the last 24 hours. 

Amid the upturn, LINK has broken past the $7 price mark; could it ride the prevailing bullish waves to record new highs? Let’s find out.  

ChainLink’s Daily Active Addresses Hits A 2-Month High 

LINK’s price uptick comes amid a significant increase in active unique addresses on the network. Data from leading on-chain analytics firm Santiment shows that Chainlink’s unique addresses exceeded 3,900 for the first time since July 21. 

Furthermore, this uptick indicates increased network activity and engagement, reflecting the rising community interest and involvement. Moreover, increasing unique active addresses is often synonymous with increased usage and adoption of the network’s native token, LINK. And this could be seen in the increase in LINK’s market value over the past seven days. 

In addition, an update on Chainlink adoption shows four of the network’s services integrated across six different chains. These chains include Arbitrum, Avax, BNB Chain, Etherem, Optimism, and Polygon. 

Again, these integrations further reflect a wider usage of the LINK token and increased participation in the Chainlink ecosystem. It shows that more people are adopting Chainlink, exerting a higher buying pressure on LINK, a plausible explanation for the ongoing price uptick.

Chainlink (LINK) Breaks The $7 Resistance; What’s Next?

The daily LINKUSD chart below suggests that LINK is gearing up to hit $8 as it conquers critical barriers while buy pressure remains high.

After posting notable gains over the past eight days, LINK trades above two key support levels, $5.72 and $6.595. The token’s price oscillated between these key price levels from mid-August to September 18. 

Meanwhile, all this time, LINK traded below two critical points, the 200-day and 50-day moving averages ($6.488 and $6.706), before a sharp spike pushed it above $6.8. It maintained the momentum through the past few days, breaking the $7.00 barrier, and now targets the $7.8 resistance level.

LINK now trades above the 50 and 200-day price levels, indicating a strong bullish momentum in the market. If the ongoing buy frenzy continues, LINK could reclaim the year-high of $8.898, recorded on November 7, 2022. And if the buying strength continues to increase, the token could even set a new record high in the coming days.

However, while LINK has regained over 21% of its past month’s gains in the ongoing rally, the token remains 9% down from its year-high, and he bulls must increase momentum for the token to reclaim this level.

Featured image from Pixabay and chart from TradingView.com

In an era where crypto analysis is ever-evolving, some sentiments retain their significance. This was underscored when XRP influencer Crypto Eri delved into a statement from Ripple’s CTO, David Schwartz, that, although over five years old, still echoes pertinently within today’s cryptocurrency discourse.

When Crypto Eri shed light on this older response from Schwartz, she revisited a debate on XRP’s value dynamics. The query, which originated on Quora, surrounded the speculation that institutions might prefer XRP’s price to remain low for optimizing transaction processes. However, Schwartz’s comprehensive clarification brought forth an opposing perspective.

Ripple CTO Weighs In On XRP Price And Liquidity

Schwartz articulated that the presumption of banks or financial entities wanting a subdued XRP price is an overreach. He pointed out a fundamental relationship, stating, “Higher prices tend to correlate with higher liquidity, which means cheaper payments.” To elucidate further, he ventured into the intricacies of how XRP functions as a payment medium.

Drawing an analogy with Bitcoin, Schwartz offered a more vivid understanding. If one were to transact $1 million at a time when Bitcoin was valued at a mere $100, the liquidity constraints would induce significant price volatility. As Schwartz elaborated, “… trying to buy enough Bitcoin to buy the house, you’d push the price up significantly. And when the recipient tried to convert those bitcoins into their local currency, they’d push the price down significantly.”

However, as Bitcoin rose and crossed the $10,000 threshold (at the time of Schwartz’s contribution), its vulnerability to price fluctuations for larger transactions had decreased. Schwartz attributed this stability to the increased value, which requires a smaller share of total assets to facilitate significant transfers.

When drawing parallels, he emphasized that XRP behaves similarly. Therefore, a rising XRP price would undoubtedly make it a superior channel for high-value transactions for the Ripple payment solutions.

Schwartz Clarifies (More) Rumors

Beyond this age-old yet continually relevant perspective, Schwartz remains active in enlightening the community on diverse XRP-related queries. Addressing a recent Twitter proposition about XRP potentially bolstering the top 1%, Schwartz replied with a rebuttal, “I’m not sure I understand this claim. The top 1% of what exactly? XRP empowers anyone who wants to use the ledger to track the ownership and exchange of assets. What kind of control is he talking about exactly?”

On speculations of the Department of Homeland Security’s capability to ‘hack’ XRP, Schwartz demystified, “I’m not sure what a hack of XRP would even mean. The ledger contents are public. The rules are public… No such bug is known, of course. And any exploited bug would be fixed, so you couldn’t hack it the same way twice.”

Lastly, when probing the connection between an old patent of his and XRP’s architectural design, Schwartz elucidated, “I can’t see any real connection between my patent and XRPL design… the patent became mostly irrelevant.”

At press time, XRP traded at $0.4952.

Last week was a quiet one for Bitcoin, as the US dollar continues to gain ground in the foreign exchange market. Price action, in particular, has had Bitcoin breaking below the $26,500 support, indicating a potential risk of more losses below the $26,000 support in the near term. 

Some analysts, however, are still betting on a new Bitcoin bull run in the near future. According to crypto analyst “Titan of Crypto”, the Bitcoin price is poised for a huge surge over the next year that could see it double in value or more.  

Crypto Analyst Predicts 100% Bitcoin Price Increase

The crypto analyst, who goes by the X handle @Titan of Crypto, believes Bitcoin is poised for massive gains leading up to the next halving event in 2024 based on historical price patterns. 

According to the analyst, Bitcoin’s price action has been consistent with the 78.60% Fibonacci retracement level in the months leading up to the three previous halving events in 2012, 2016, and 2020.

#Bitcoin $48,700 before Halving.

You might want to bookmark this one.

Never in history the halving occurred without #BTC reaching the 78.6% Fibonacci retracement level.

1st cycle, price reached it 4 months before halving.
2nd cycle, it was 2 months before.
3rd… pic.twitter.com/9Qc5RCteG5

— Titan of Crypto (@Washigorira) September 23, 2023

The price chart shared by @Titan of Crypto shows Bitcoin’s price had reached the 78.60% Fibonacci retracement level two months before the 2012 halving, two months before the 2016 halving, and 12 months before the 2020 halving. 

Of course, past performance is no guarantee of future results. However, if history repeats itself, the price of Bitcoin could double from $26,130 to $48,700 based on the analyst’s prediction. A similar prediction from the analyst puts the next peak for Bitcoin’s current cycle at $108,000.

The Bitcoin halving, which cuts the block reward for miners in half, has been known to have a bullish effect on Bitcoin. A similar prediction by equity research firm Fundsrat to its clients predicted the next halving to have a bullish effect on the price of Bitcoin. While the next halving isn’t slated to occur until April 2024, analysts have predicted Bitcoin rising before then. 

Another analyst who goes by the X handle @100trillionUSD also predicted a series of events before the next halving, with a Bitcoin price rise being one of them.

This checkbox has been marked, as Bitcoin has risen from $18,000 since the beginning of the year. According to him, the 2024 halving should meet Bitcoin at a price greater than $32,000 and a bull market will push Bitcoin above $100,000. 

To be clear, I still stand by my January 12 prediction:

Nov 2022 $15.5k was the bottom
Bitcoin will rise towards 2024 halving. BTC already rose from $18k to $27k since Jan 12.
2024 halving will be >$32k ($32k-$66k IMO)
2025 bull market >$100k ($100k-$1m IMO) https://t.co/V74Y8VYCVo pic.twitter.com/VBjsHObMMl

— PlanB (@100trillionUSD) September 18, 2023

This bullish stance, however, is not shared by everyone. While the industry awaits the implication of the Fed’s recent decision on interest rates and its implication on the crypto market, analyst Nicholas Merten has warned of a potential $440 billion decline in overall crypto market capitalization. 

Dogecoin (DOGE) has been ensnared in a prolonged period of stagnation, hinting at the ongoing battle between the bulls and bears for market control. This extended phase of inactivity has been persistent for over a month, signifying a short-term consolidation stage. Against the backdrop of a tumultuous cryptocurrency market, DOGE enthusiasts and investors are eagerly seeking cues for the coin’s next move.

A meticulous examination of the daily chart in a price analysis unravels two distinctive patterns that have been shaping DOGE’s price trajectory. There is a range formation with defined limits at $0.068 and $0.056, anchoring the coin’s recent price movements. In addition, an ominous descending resistance trendline looms large, presenting an additional hurdle for DOGE’s potential ascent.

Bearish Dogecoin Impediments And Crucial Thresholds

In light of the recent downturn in the broader crypto market, DOGE is currently grappling with formidable supply pressure around the $0.063 mark. The persistence of the descending trendline is emboldening sellers, increasing the likelihood of a retest of the enduring support at $0.059. Should this crucial level be breached, validated by a daily candle close, it could potentially intensify bearish sentiments, setting the stage for a 5.5% downturn toward the $0.056 level.

However, amidst this challenging terrain, the $0.059 support level converges with an ascending trendline, generating a region of heightened significance. Should the buyers seize this juncture of market indecision, a successful breakthrough above the descending trendline could breathe fresh life into bullish sentiment. A confirmed breakout has the potential to usher in a rally, potentially propelling DOGE by an estimated 10%.

Market Snapshot And Insights From Analysts

Presently, the global crypto market capitalization stands at $1.06 trillion, witnessing a marginal 0.41% decrease over the last day. DOGE is currently trading at approximately $0.060725 according to CoinGecko, with a 24-hour decline of 1.3% and a seven-day loss of 1.6%. 

Total market capitalization for #Crypto fights the resistance here of the 200-Week EMA.

I think it’s just a matter of time until we flip above it. Probably 1-2 weeks if Ethereum ETF Futures could be approved and Uptober begins. pic.twitter.com/UyKNjgUgf1

— Michaël van de Poppe (@CryptoMichNL) September 21, 2023

Meanwhile, crypto analyst Michael Van de Poppe posits that the overall crypto market capitalization is currently testing the resistance level of the 200-week EMA. He asserts, “I believe it’s only a matter of time before we breach it, possibly within 1-2 weeks if Ethereum ETF Futures gain approval and Uptober commences.”

Dogecoin is currently at a critical juncture, navigating a consolidation phase in a market filled with uncertainty. Traders and investors are closely observing the developments, eagerly awaiting cues that will shape DOGE’s path forward. Both bullish and bearish possibilities are on the horizon, making the upcoming weeks pivotal for DOGE and the broader cryptosphere.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from iStock

In recent discussions surrounding Bitcoin (BTC) and its potential future price trajectory, crypto-enthusiasts and analysts alike are finding new correlations to dissect. Most notably, a correlation with the EURUSD pair (the euro against the US dollar) has come into the spotlight due to a Twitter thread by esteemed analyst Josh Olszewicz.

Olszewicz begins by setting the stage, drawing attention to the widely acknowledged inverse correlation between Bitcoin and the DXY (US Dollar Index). He notes, “Most are aware of the strong historic BTC-DXY inverse correlation. DXY is a USD index against a basket of currencies which has a EURUSD weighting of around 58%. So the BTC-EURUSD correlation should also be relatively high.”

Will Bitcoin Price Follow EURUSD?

What’s intriguing here is the observation Olszewicz makes about the BTC-EURUSD correlation in the period following the pandemic and the last Bitcoin halving. He mentions that the “post-pandemic (post-halving) EURUSD pair has led BTC in both the bullish and bearish direction by anywhere from a month to a full year.”

This pattern, if it continues to persist, might spell some bearish tendencies for Bitcoin. Olszewicz goes on to suggest that, “If this relationship continues to hold, BTC should break down towards the BTFP low of $20k.” This statement is a significant one, indicating a potential substantial drop from its current position, all based on the movement patterns of the EURUSD.

Further supporting this projection, he highlights a technical pattern observed in both BTC and EURUSD, stating, “the EURUSD has completed a bearish H&S, similar to BTC, providing technical fuel for further downside.” A ‘bearish H&S’ refers to the bearish ‘head and shoulders’ pattern, a chart formation that predicts a bullish-to-bearish trend reversal.

However, it’s not all gloom and doom. Olszewicz does provide a glimmer of hope for Bitcoin bulls. He posits, “If you’re bullish on BTC here, you’re either hoping this relationship weakens/breaks, or the EURUSD begins to strengthen instead of continuing to weaken.”

BTC’s Second High Does Not Fit

Olszewicz also touches upon some “tin foil” speculations, discussing how the BTC-EURUSD correlation had been seemingly disrupted during Bitcoin’s second high in November 2022. He suggests that the continued fall of EURUSD did not immediately impact Bitcoin’s bullish trend, speculating that actions from major crypto players like 3AC, FTX/Alameda, and the Anchor BTC reserve might have played a role.

He states, “It is both possible and likely that the funny business behind the scenes by 3AC & FTX/Alameda, as well as the Anchor BTC reserve, helped delay the inevitable bearish trend by about a year.”

While correlations can provide insight, they are by no means a guarantee of future market movements. Investors should exercise caution and conduct their own research when making investment decisions. Rose Premium Signals added, “interesting observation about the BTC-EURUSD correlation. It’s essential to consider multiple factors in crypto analysis. The relationship could indeed evolve, impacting BTC’s future movements.”

At press time, BTC stood at $26,180.

The Terra Luna Classic (LUNC) community has voted overwhelmingly, with nearly 60% in favor, to cease the minting and reminting of Terra Classic UST (USTC) tokens. The drastic decision, in a decisive move aimed at rescuing the beleaguered Terra Classic stablecoin, comes in the wake of Terra’s collapse in May 2022, which had sent shockwaves through the crypto market, leaving USTC’s value in shambles.

The proposal to halt USTC minting and reminting is part of a comprehensive plan to facilitate the re-pegging process of the stablecoin. To accelerate this process, members of the Terra Classic community are actively encouraged to participate in the burning of USTC tokens, effectively reducing the token’s circulating supply.

Before the catastrophic events of May 2022, Terra’s blockchain network allowed users to seamlessly swap between USTC and LUNA, Terra’s native cryptocurrency. However, as the network crumbled and USTC lost its peg to the US dollar, the system began minting LUNA coins in a desperate attempt to restore stability. 

This emergency measure led to an oversupply of LUNA tokens and a cascading effect on its price, dragging USTC’s value far below its intended $1 mark.

Terra Luna Burning Challenge

The community’s primary objective with this proposal is to expedite the burning of LUNA tokens, ultimately driving up their value. The burning process, where tokens are permanently removed from circulation, has been sluggish so far, with only 75 billion LUNC tokens successfully incinerated. This leaves the circulating supply at approximately 5.9 trillion LUNC, out of a total supply of 6.84 trillion.

As more LUNA tokens were minted to restore the USTC peg, the oversupply put immense downward pressure on LUNA’s price. Consequently, USTC’s value suffered a steep decline from its initial $1 valuation.

Accumulation Signals Amidst Uncertainty

Despite the tumultuous journey thus far, there are positive indicators that offer a glimmer of hope for the Terra Luna Classic community. According to CoinGecko, the current price of LUNC stands at $0.00006150, reflecting a 2.9% increase in the past 24 hours and a promising 6.6% surge over the past seven days.

Key momentum indicators observed within a 24-hour window show signs of approaching overbought levels. LUNC’s Relative Strength Index (RSI) stands at 53, indicating moderate strength, while its Money Flow Index (MFI) is at 76, suggesting robust accumulation. This shift in sentiment indicates that the community’s efforts to restore value may be gaining traction.

The Terra Luna Classic community’s bold decision to halt USTC minting and reminting signifies a concerted effort to revitalize the ailing stablecoin. With a renewed focus on burning LUNA tokens and correcting the supply-demand imbalance, the community aims to steer USTC back on course towards its $1 peg, providing a glimmer of hope amidst a challenging journey of redemption.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

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