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IAccording to Whalemap, an on-chain analysis firm that focuses on Bitcoin (BTC) whale activity, short-term clusters are present at $10,570.
Whale clusters form when whales accumulate Bitcoin and do not move the BTC. Areas that have large amounts of unspent BTC become an area of interest, typically a resistance level. Analysts at Whalemap explain:
“Bubbles show locations where unspent bitcoins were accumulated. The larger the bubble, the more unspent bitcoins are located there. P.s. Unspent means these bitcoins have not been moved since they were ‘inflowed’ to a whale wallet.”
The two biggest whale clusters line up with technicals
The two biggest whale clusters in the short term are found at $10,570 and $11,800. Unsurprisingly, the two levels are also key resistance areas for BTC in the immediate term.
“In case bitcoin dips, coinbase has some fat orders below. Coinbase added bids, from 10200 to 10000, there are ~2500 BTC in bids now.”
On-chain metrics swaying cautiously bearish
“Currently, almost 10% of all #Bitcoin miner fees are spent on transactions that deposit $BTC to centralized exchanges. This is a 2x increase since the beginning of the year, and levels we haven't seen since late 2017.”
SushiSwap blew up on the promise of outsized rewards for those who got in before the automated market maker (AMM) actually started making markets: 1,000 SUSHI tokens per block for liquidity providers (LPs) who committed before it went live.
It was a deal good enough to lure in almost $1.6 billion worth of various crypto assets, but now those heady days of outsized rewards are over. As planned, each block reward has dropped to 100 SUSHI as of 23:10 UTC or Ethereum block 10850000.
All about yield
Crypto denizens want to change the world, sure, but what they really want is money.
Giving away a fresh token has become an obvious way for new protocols to compete with the market leaders. Liquidity mining is a category of yield farming where liquidity providers (LPs) earn an additional token beyond whatever fees they earn from the underlying protocol. The growth hack was pioneered by DeFi lending platform Compound in June, with its COMP governance token kicking off cascading innovations in the following months.
SushiSwap’s community wants to further refine block rewards but they have been stymied so far.
The project’s pseudonymous (and controversial) creator, Chef Nomi, apparently had a vision that the tokenomics of SushiSwap would remain relatively fixed, and that the main governance question for the community would be how fast to add new pools.
The rapid growth of the decentralized finance sector (DeFi) took a shock after the recent 17.5% drop in Bitcoin (BTC) price. However, it is likely that the DeFi sector will continue to grow as Bitcoin recovers, especially as users continue to look for high-yield strategies as a means to earn interest on their Bitcoin and crypto holdings.
If the sector continues to grow as it did in the first half of 2020, the Ethereum network will find itself between a rock and a hard place. In recent times, the network has shown several symptoms of being overloaded and unable to scale.
These symptoms include exponential increases in gas usage which lead to higher fees and slower confirmation times. This in turn has made some smart contracts pretty too expensive to use and also causes significant challenges to leveraged DeFi investors and borrowers who are unable to quickly adjust their collateral to avoid liquidations.
What are layer 2 solutions and how do they work?
Ethereum 2.0. has recently begun testing on the Medalla testnet but after a bumpy launch there is still a long way to go before it can be used. Vitalik Buterin has also recently stated that the project has revealed itself to be harder to execute than anticipated.
“It doesn’t feel like there is a lot of adoption of these layer 2 solution taking place. I think the market is waiting to get clarity on Ethereum 2.0. If there are more delays then there may be more engagement from DeFi dapps, otherwise they’ll spend their efforts on Ethereum 2.0 integration.”
There are multiple layer 2 solutions available or being worked on with some of the most popular iterations being OMG, Loopring and ZKsync. Although these projects work with the same premise they employ the concept in different ways.
DeFi scaling is the next frontier
As Ethereum co-founder Vitalik Buterin stated in a recent tweet, the options are there, they just need to be used. Buterin said:
“To those replying with "gas fees are too high", my answer to that is "well then more people should be accepting payments directly through zksync/loopring/OMG". Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to... use it.”
Morgan Stanley Investment Management’s chief strategist and head of emerging markets has recommended bitcoin as an alternative investment to stocks amid central banks’ massive money printing policies. He says that alternative assets, like gold and cryptocurrency, could keep doing well while stocks struggle.
Morgan Stanley’s Strategist Discusses Stocks, Gold, and Bitcoin
Head of Emerging Markets and Chief Global Strategist at Morgan Stanley Investment Management Ruchir Sharma discussed stocks, gold, and also bitcoin in an interview with CNN on Tuesday. The Indian investor and fund manager joined Morgan Stanley in 1996.
Generally I think what that’s telling you is that there is this lingering feeling out there that given what central banks are doing in terms of printing so much money there is a search for alternative assets, I think that these assets could keep doing well.
Nonetheless, Sharma still feels that in the next three to five years, “gold is relatively ok.” Reiterating that “central banks are printing so much money and we want some safety out there,” he elaborated:
To have about 5% or so of your portfolio in gold is not a bad idea, and if you’re a bit more adventurous, and I guess it’s more to do with demographics, then obviously search for bitcoin and other cryptocurrencies.
DeFi (decentralized finance) could boast of only USD 1bn in total value locked in as recently as the beginning of June. This rose by a whopping 860% in the three months to September 2, hitting USD 9.6bn.
These figures haven’t escaped their fair share of scrutiny, however. Collected by DeFi Pulse, they’ve been questioned by people within the crypto industry, who suspect that much of the total value locked in is being double-counted (or even “double, triple, quadruple-counted underlying capital”).
Meanwhile, Scott Lewis, Founder of DeFi Pulse, claims that the company works "really hard to remove double counted assets from [DeFi Pulse] exactly to avoid this problem."
Dollar value versus total number of assets
It also needs to be remembered that total value locked in can increase simply because crypto prices have increased relative to the US dollar.
Short-termism may crash the system
Regardless of just how big it is exactly, DeFi’s growth appears to be driven by more high-powered, experienced users.
“For now, a lot of activity is focused on short-term gains rather than the actual functionality/utility of the projects,” he noted