Howdy, Hodlers!

It’s been quite the week for the Bitcoin and the cryptocurrency industry, to say the very least. Along with intense volatility in the prices of digital assets, we were treated a with a slew of headlines that may catch your fancy.

Read on!

What Happened in the Crypto Market This Past Week?

Ouch. After consolidating above $11,000 for a number of weeks, Bitcoin crashed below this level over the past week. As we pen this newsletter, our favorite orange coin trades for $10,200, over 20% below the year-to-date high. At the worse of the drop, BTC changed hands for $9,800.

In the extremely short term, Bitcoin has formed a clear consolidation pattern between $9,900 and $10,400. (That consolidation is as clear as day in the chart seen below!)

A decisive close above $10,400, analysts say, will trigger a move to $11,200, while a drop and daily candle close under $10,000 will give BTC fuel to retrace to the CME futures gap at $9,600.

The weakness in the price of Bitcoin comes as the stock market and the price of gold, along with other financial markets, have undergone steep retracements. During Tuesday’s trading session alone, Tesla shares corrected over 20%. It seems that for the time being, BTC’s price action is being controlled by legacy markets. Oh, the irony.

While there are legacy markets pressing down on Bitcoin, there are some analysts that the cryptocurrency is more likely to recover that correct lower.

Willy Woo, an on-chain analyst and former partner at Adaptive Capital, recently remarked that Bitcoin could be nearing a near-term bottom:

“Local on-chain switching bullish (looking at the next few weeks out), not calling this has bottomed, even though it may have. Playing the big swings it’s not a bad time to buy back in.”

He added in his replies that there’s a legitimate chance Bitcoin front-runs the CME futures gap at $9,600. BTC front-running that level would mean that the bottom is imminent as opposed to much lower than current price action.

“I also wonder about the gap being front run, to fill longs with solid liquidity. Whales on derivative exchanges have enough dominance to make that so,” Woo said on the potential of the level being front run.

Woo’s comments come after he predicted the ongoing Bitcoin retracement at the end of August. In a Twitter thread at the end of August, the analyst noted that there were technical and on-chain signals indicating a correction to the high-$9,000s was likely… And here we are.

In terms of Bitcoin’s long-term outlook, one prominent Wall Street veteran Raoul Pal revealed that he is

Anyway…

On to altcoins.

it’s been a bloody week for a majority of altcoins, including the otherwise-resilient Ethereum. The leading cryptocurrency tumbled from last week’s highs of $490 to a low near $315 as there was true capitulation in the altcoin market.

While Ethereum’s price action was stunning in itself, there were altcoins that fared even worse.

Most decentralized finance altcoins — AaveMakerSynthetix, and more — crashed by over 30-40% from their local highs, resulting in carnage, with hundreds of millions and even billions of dollars worth of crypto market value wiped within moments.

Ari Paul, the founder of BlockTower Capital, opined that the strong correction is simply a byproduct of parabolic trends and their subsequent retracements:

“A basic trading rule is that when true parabolic advances break, you don’t look to buy until most of the parabolic move is reversed. In BTC tops, that’s meant waiting for 75%+ dips. In alts, 85%+. BTC had a clear parabola in 2017. A less clear one in 2019. Defi just had one burst.”

Although Paul’s comment indicates that DeFi coins are poised to halve again, economist and cryptocurrency trader Alex Kruger isn’t so sure. On his personal Twitter account, the noted analyst explained that he’s “confident alts bottomed,” citing the absolute capitulation seen in this segment of the market over the past three days:

“Market experienced an Alts Apocalypse. Won’t happen again even if $BTC were to go down. $BTC down 5% with alts down 20-50% was extraordinary. Multiplier is usually in the 1.5-3x, not 4-10x.”

Even still, there were some altcoins that performed rather well this week. or at least better than others… And they are:

  •  Cream (CREAM): The native governance token of Cream, a new DeFi money-market protocol backed by a number of prominent Ethereum investors, has surged over 100% in the past seven days. This comes after it fell as low as $20 in late August due to liquidity mining incentives that rapidly devalued the coin. CREAM is rallying due to the launch of a new product called “Swap,” which allows users to trade Ethereum-based cryptocurrencies within the platform.
  • OriginTrail (TRAC): OriginTrail, an OG altcoin from the last cycle, has gained 20% in the past seven days as the project is looking to utilize the Polkadot Network.
  • HXRO (HXRO): HXRO has gained 20% in the past week. It isn’t exactly clear why this is the case but the company did announcement a partnership with Nervos, a public blockchain ecosystem, late last week. “Excited to announce we will be partnering with China’s largest public blockchain to build a series of Asia focused gamified market products!”

Hyped Headlines of the Week

💸 Watch Out for the New Ethereum Ponzi Scheme: Forsage

There’s a new crypto Ponzi scheme in town after PlusToken majestically collapsed last year, taking $2-4 billion worth of Bitcoin, Ethereum, XRP, and EOS with it.

Dovey Wan, a founding partner at Primitive Capital, broke the news this week when she wrote:

“just for whoever lives in CT bubble: the ETH price floor is not from a few foodcoin scams or potential defi vault explosion, sadly is from the liveness of Forsage, the ongoing $ETH version Plustoken. This one started in Philippine and is quite popular in English speaking world as well, just Youtube/Google will find many info.”

The scam has been going on for a number of months and has gained so much traction in Asia that the Philippines’ Securities and Exchange Commission issued a warning about Forsage and other crypto scams earlier this year.

Wan, along with other analysts and traders that know of the scam, fear that the collapse of the pyramid could cause a crash in the crypto market.

Some reports suggest that Forsage has garnered $200 million worth of Ethereum that will be dumped once money stops coming in.

If you want to read more about this story, click here.

🍣SushiSwap Co-Founder “Exit Scams,” But the Show Goes on 

A week after launching, a co-founder of SushiSwap, a decentralized exchange heavily based on Uniswap, “exit scammed,” stealing around $15 million worth of Ethereum by withdrawing funds from the developer fund and pulling liquidity from Uniswap’s SUSHI/ETH market.

We won’t comment on who the co-founder may or may not be, but many in the space saw this move as a disingenuous one: the co-founder a week earlier pledged not to sell any coins he made from the project without prior notice.

Still, despite what some have dubbed an “exit scam,” SushiSwap has continued to perform well.

The co-founder handed over keys to the project to the CEO of FTX, Sam Bankman-Fried, who has since distributed the keys to a number of community members in a multisignature setup.

The multisig setup has begun migrating liquidity from Uniswap to SushiSwap, making the latter exchange, despite it being a fork, the biggest decentralized exchange in the world.

If you want to read more about this story, click here.

💗 Adam Curry Shills Bitcoin in Joe Rogan Podcast

Adam Curry, a a podcaster and media personality, recently took to the Joe Rogan Experience to converse with the world-famous podcaster. Funnily enough, the conversation eventually shifted to Bitcoin.

Curry began this segment of the conversation by discussing how Silicon Valley’s fintech startups are starting to gain prominence, arguing that this is opening the door to negative interest rates. The personality added that the “Apocalypse” is coming, seemingly referencing the fallout of new monetary policies and/or the ongoing pandemic.
To hedge against this “Apocalypse,” Curry explained, one needs Bitcoin:

“You need at least one coin. I was very anti-Bitcoin until I sold a shitload of them at like $900… I denied it, then I looked at the 10-year chart… It’s a store of value for me.”

If you want to read more about this story, click here.


Media That Caught Our Interest

As we don’t want to make this newsletter too long, here are a few links to articles, tweets, and other crypto-related media from the past week or so that the LiveCoinWatch team found interesting. If you have some time after you read this newsletter, check them out.

  • Link: Bloomberg Editor and Bloomberg TV host Joe Weisenthal (who has been following Bitcoin for almost a decade now) explains “THE PROBLEM FOR BITCOIN THIS YEAR.” That’s his emphasis by the way, not mine.
  • Link: Is the founder of Uniswap, the original SushiSwap, hinting at launch a token real soon is it just me?
  • Link: Dave Portnoy explains his ongoing crush on the crypto industry.

LEAVE A REPLY

Please enter your comment!
Please enter your name here