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First Mover: Twelve-Fold Gains for Aave’s LEND Token Might Be More Than DeFi Hype

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There’s one thing that all investors like: doubling, tripling, or even quadrupling their money. How about a 12-fold increase? 

That’s what traders have reaped this year from the decentralized lender Aave’s LEND token, up about 1,200% on a year-to-date basis.

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Other tokens from the realm of decentralized finance, known as DeFi, are up by triple-digit percentages, including Synthetix’s SNX, Thorchain’s RUNE and Kyber’s KNC. Bitcoin, the biggest cryptocurrency by market capitalization, is up just 28%. 

It would be easy to write off such outsize gains as just another example of the speculative hype of cryptocurrency markets, where big price swings are common. But in the case of the LEND token, the price rise may have been fueled by an increase in actual usage. 

Some $158 million of value have been deposited as collateral in Aave’s lending protocol, just six months after the project went live in January. By comparison, Compound, another decentralized lender, had just $27 million in its protocol at its six-month mark in March 2019. Compound has since gone on to increase the figure, known as total value locked, by 25-fold to $684 million, to become the largest lending protocol, according to DeFi Pulse, which tracks the industry.  

“The main reason I suspect LEND has received so much attention is simply because, after launching the mainnet early this year, usage on Aave has grown incredibly fast,” Jack Purdy, an analyst with digital-asset research firm Messari, told First Mover in an email. 

fm-july-13-btc-vs-lend
Year-to-date performance of Aave’s LEND token compared with Bitcoin
Source: CoinDesk Research

Last week, Aave rolled out a new feature, “credit delegation,” which effectively allows users to set up credit lines that could then be drawn down by other users, in a form of peer-to-peer lending. Under the program, investors can deposit stablecoins – digital tokens backed by U.S. dollars or other government currencies – and then delegate the right to borrow against that collateral to another user. 

The delegator can set terms of the loans, such as interest rates and amount of capital that can be drawn. Since the ultimate borrower isn’t posting collateral via the platform, the delegator is bearing most of the risk, and might be able to charge higher interest rates. 

“Aave’s introduction of credit delegation is groundbreaking,” Su Zhu, CEO of the Singapore-based digital-asset fund Three Arrows Capital, told First Mover in a Telegram message.  

Aave CEO Stani Kulechov told First Mover in a Discord chat that the “market capitalization of LEND has been following mostly our protocol growth.”

“Most of the traction comes due to our wide asset selection that you can use as collateral and the ability to borrow flash loans without collateral, which has become a popular tool,” Kulechov wrote. 

In a Tweet last week, Kulechov wrote that credit delegation could help push DeFi into “financial debt markets worldwide,” making it a “liquidity backbone.” Borrowers could be cryptocurrency exchanges, market makers, lenders, institutions, businesses, non-governmental organizations or governments, he wrote.

fm-july-13-credit-delegation
Schematic showing how Aave’s “credit delegation” feature works
Source: Aave

Not that LEND isn’t benefiting from speculation at all: Some traders might be extrapolating how Aave’s usage might increase going forward, giving the token’s price an additional lift. 

Aave is positioned squarely within the fast-growing DeFi industry, and some industry executives that these autonomous or semi-autonomous systems could ultimately challenge or displace banks, brokerage firms, insurance companies and money managers.   

“Overcollateralized lending is capital inefficient, and uncollateralized lending has been one of key missing pieces to DeFi lending,” Messari analysts noted in a July 7 blog post. “Assuming it works, it has the potential to significantly scale DeFi lending.”

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Bitcoin watch

BTC: Price: $9,280 (BPI) | 24-Hr High: $9,349 | 24-Hr Low: $9,170

2020-07-13-12-27-01

Trend: Bitcoin jumped 2.53% in the seven days to July 12, snapping a four-week losing streak, which was the longest since November 2019. 

The weekly gain confirmed a bullish breakout from a period of indecision signaled by the preceding week’s doji candle. As such, one may expect the cryptocurrency to challenge resistance at $9,920. That level is currently housing a trendline connecting the December 2017 and June 2019 highs. 

The daily chart MACD histogram, an indicator used to gauge trend strength and trend changes, is supporting the bullish case with an above-zero reading. 

Options traders, too, are anticipating a bullish move, and look to be buying call options or bullish bets, as suggested by the negative one-month put-call skew. The three-month and six-month skews are also hovering below zero, according to Skew, a crypto derivatives research firm. The metrics indicate that calls are in greater demand that puts, or bearish bets. 

The bullish case, however, would weaken if the cryptocurrency finds acceptance below $8,905, the low seen in the first week of July. Acceptance under that level would shift the focus to the 50-week moving average at $8,599.

At press time, bitcoin is trading largely unchanged on the day at $9,280.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/first-mover-aave-lend-token-defi-hype

Blockchain

TA: Bitcoin Hesitates Above $13.2K, But 100 SMA Could Trigger Another Increase

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Bitcoin price traded to a new monthly high at $13,352 before correcting lower against the US Dollar. BTC is currently trading nicely above the 100 hourly SMA and it could attempt another increase.

  • Bitcoin is trading nicely above the $12,800 and $13,000 support levels.
  • The price is holding gains above the 100 hourly simple moving average, with a positive angle above towards $13,300.
  • There is a crucial bullish trend line forming with support near $12,900 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to continue higher as long as it is above the 100 hourly SMA and $12,800.

Bitcoin Price Is Showing Positive Signs

Bitcoin price remained well bid above the 13,000 resistance and extended its rise. BTC even broke the last high at $13,250 and traded to a new monthly high at $13,352.

Recently, there was a downside correction and the price broke the $13,000 support. The decline found support near the $12,800 zone and the 100 hourly simple moving average. There is also a crucial bullish trend line forming with support near $12,900 on the hourly chart of the BTC/USD pair.

Bitcoin Price

Source: BTCUSD on TradingView.com

Bitcoin is currently rising and trading above the $13,000 level. There was a break above the 50% Fib retracement level of the recent decline from the $13,352 high to $12,834 low.

An immediate resistance is near the $13,150 level. It is close to the 61.8% Fib retracement level of the recent decline from the $13,352 high to $12,834 low. To continue higher, BTC must gain momentum above the $13,200 level.

If there is a daily close above the $13,200 level, the price is likely to accelerate higher above $13,350. The next major resistance on the upside is near the $13,500 level.

Downside Break in BTC?

If bitcoin fails to climb above the $13,150 and $13,200 resistance levels, there could be a fresh decline. The first major support is near the 100 hourly SMA at $13,000.

The main support is near the trend line at $12,900, below which the bulls might even struggle to protect the $12,800 support level in the coming sessions.

Technical indicators:

Hourly MACD – The MACD is slowly gaining momentum in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 50 level, with a positive angle.

Major Support Levels – $13,000, followed by $12,900.

Major Resistance Levels – $13,150, $13,200 and $13,500.

Source: https://www.newsbtc.com/analysis/btc/bitcoin-hesitates-above-13-2k/

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Blockchain

Bitcoin Just Marked New 2020 High, But This Indicator Signals Correction Incoming (BTC Price Analysis)

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Starting by looking at the bigger picture, Bitcoin price had made a remarkable run since October began, gaining almost $3000 to its value.

Looking at the following long-term weekly chart, we can see this week’s greenish candle that will be closed later today. From a technical point of view, as long as the candle close price is above the $12,500 area (previous high) – we can safely say that BTC is on a healthy uptrend.

btc_oct25_w-min
BTC/USD weekly. Chart by TradingView

The Good and The Bad: New 2020 High but Bearish Divergence

Just a few hours ago, Bitcoin price recorded a new 2020 high close to $13,400 (on Binance Futures); however, the primary cryptocurrency could not hold there, and quickly slumped to $12,700 in a matter of one hour.

Looking at the shorter-term chart, the 4-hour, we can identify a bearish divergence on the RSI. This is a bearish pattern and might indicate that the buying power is fading away.

This happens when the price goes through a higher-high, but the RSI indicator is doing the opposite and going through a lower-high.

Another worrying sign is the trading volume. Since its peak volume on October 20-21, four days ago, the trading volume decreased even though the BTC price had actually gone up.

BTC Support and Resistance Levels To Watch

As mentioned above, if BTC were to correct, then the first major level of support lies at the current levels around $12.9 – $13K. If Bitcoin breaks here, then the first significant level lies at $12,700, followed by the previous 2020 high from August at $12,400 – $12,500.

From the bullish side, if Bitcoin holds the $13,000 – then the first levels of resistance lie at $13,200, followed by today’s high around $13,400. Bitcoin will be looking to break the 2019 high from June – at around $13,880.

Total Market Cap: $400 billion

Bitcoin Market Cap: $240 billion

BTC Dominance Index: 60%

*Data by CoinGecko

BTC/USD BitStamp 4-Hour Chart

btc_oct25_4h-min

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/bitcoin-just-marked-new-2020-high-but-this-indicator-signals-correction-incoming-btc-price-analysis/

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Blockchain

Bitcoin Breaks New 2020 High As Total Market Cap Topped $400 Billion (Market Watch)

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Bitcoin continues with the 2020 records and just a few hours ago marked a fresh high of above $13,350. Most alternative coins followed suit with impressive increases, but the market has calmed since then. The entire cryptocurrency market clocked at above $400 billion.

Bitcoin To Yet Another 2020 High

CryptoPotato reported a few days ago that the primary cryptocurrency exceeded the August 2020 high of about $12,500 and reached $13,200. What followed was a slight retracement to about $13,000 and stagnation yesterday.

Nevertheless, the volatility returned in the past 24 hours, and BTC headed towards new highs. This time, Bitcoin broke above $13,350. In fact, according to data from Bitstamp, BTC’s new 2020 high is at $13,362.

Another sharp rejection followed, and the asset tanked briefly below $13,000. Nevertheless, the bulls have since driven it above the coveted mark, and BTC trades at about $12,940.

A compelling chart recently revealed that Bitcoin is forming an inverse head and shoulders pattern. If it’s to play out, the cryptocurrency could soon skyrocket even further and top its all-time high of $20,000.

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If this scenario is indeed to materialize, Bitcoin would have to break above the resistance lines at $13,420, $13,500, $13,815, and $14,000 before reaching new records.

btcusd_chart
BTC/USD. Source: TradingView

Altcoins Follow Up And Calm Down

Most alternative coins experienced similarly increased volatility as Bitcoin. Ethereum surged to a new 7-week high of nearly $420. However, ETH quickly retraced and is now hovering around $409 again.

Ripple’s highest level came at about $0,26, but XRP has since decreased to below $0.253.

Thus, on a 24-hour scale, most larger-cap altcoins have remained essentially at the same positions as yesterday, despite the brief price jumps. Chainlink and Litecoin have registered the most gains of about 3.6%. LINK trades close to $12.35, and LTC is positioned at $56.3.

heatmap
Cryptocurrency Market Heatmap. Source: Quantify Crypto

The most impressive gainer since yesterday is Filecoin. After the recent controversy and continuous price slump, FIL has surged by 45% in the past 24 hours.

Ocean Protocol (18%), Quant (17.5%), THETA (10.2%), Reserve Rights (10.2%), and Ampleforth (10%) have also increased by double-digit percentages.

SPECIAL OFFER (Sponsored)

Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/bitcoin-breaks-new-2020-high-as-total-market-cap-tops-400-billion-market-watch/

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