After continually failing to break above $10,000, the price of BTC/USD has now briefly dipped below $9k and is struggling to hold a position above the support level. Now it looks increasingly likely the price could recede to the lower support level at $8,100 or even $7,600.
According to popular Twitter trader and LevelInvest founder @NebraskanGooner, BTC is now on track to follow a pattern determined by the Wyckoff distribution schematic which would take it down to $8k or lower. It’s a sentiment held by many other traders as faith in a Bitcoin rally begins to wane. However, it’s not all bad news: even if Bitcoin does reach lower levels over the coming weeks it seems a rally in the future is imminent.
Glassnode recently released new data showing the amount of Bitcoin that hasn’t moved in over a year, which is 61%. According to the blockchain statistics firm, the last time that amount of BTC hadn’t moved was in early 2016 before Bitcoin’s biggest bull run to date. Historically, bull runs tend to follow Bitcoin halvings like the one this past May, which might be precipitating the increase in investors holding larger stores of Bitcoin.
DeFi Boom sweeps the crypto world
Interest in decentralized finance, or DeFi, has taken over the attention of crypto traders and investors the past few weeks and looks likely to continue. DeFi mostly involves the lending and borrowing decentralized crypto tokens on platforms like Compound, Uniswap, and Balancer. The most recent trend that has drawn attention is “yield farming”, a process of earning interest on DeFi tokens by providing liquidity to decentralized applications (dApps) like those built on Ethereum or EOS. A new DeFi lending protocol, Compound (COMP), has exploded in popularity and price, rising by 170%. Its platform, Compound.finance, allows DeFi tokens holders to lend and borrow tokens like BAT, DAI, Augur (REP), 0x, USDT, and USDC for large amounts of interest, sometimes as high as 25%.
Even the famous Silk Road inventor Ross Ulbricht has gotten involved, penning a blog post about MakerDAO’s stablecoin DAI from prison.
The increased interest in DeFi as driven a surge in the price of Ethereum (ETH) as many DeFi protocols are built on the Ethereum blockchain and require GAS to use. Ethereum daily transactions recently surpassed one million for the first time since 2018, with ETH now one of the few top coins in profit over the past 30 days. However, despite the increased activity, the price has still fallen foul to bearish sentiment lately. Earlier today, ETH/USD dropped below the 50-day SMA for the first time since April, indicating a possible trend reversal to the downside. After bouncing off $218 earlier today, the price has recovered to $224 but will need to hold its place above $220 long-term to avoid a sell-off to $200 or below.
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