Bitazza Crypto Weekly: Can Ethereum Retain The DeFi Crown? -

Crypto Weekly: 27 December 2021 – 2 January 2022

Ethereum’s previously undisputed position as the leading Smart Contract platform is facing stiff challenges from the next generation of platforms. A report by CNBC has revealed that the total value locked (TVL) in the Ethereum blockchain across all DeFi protocols, NFTs, and dApps has been steadily declining since August.

Some of the hottest Smart Contract platforms vying to challenge Ethereum’s dominance over DeFi include Binance Smart Chain, Terra Chain, Solana, and Avalanche. The prices for the native tokens of these platforms have skyrocketed in 2021, thanks to their ability to solve the conundrum of Ethereum’s high gas costs and relatively slow transaction speed.

However, the Ethereum Foundation has announced the deployment of the Kintsugi public test network. The move is one of the final public testnets before Ethereum 2.0 launches, which proponents hope will successfully transform Ethereum into a proof-of-stake blockchain. The Kintsugi testnet allows the community to experiment with ETH 2.0 and identify any potential issues before the mainnet transition, which is hoped to address the problems users currently have with Ethereum’s high fees and network congestion.

It remains to be seen if Ethereum can recapture its market shares that it has lost the next-generation networks that have emerged. While Ethereum developers are hard at work to transform ETH into a faster, cheaper, and more sustainable platform, competing platforms are attempting to surge ahead and capture the throne of Smart Contract dominance.

Meanwhile, Binance has officially announced the implementation of its new BNB Auto-Burn protocol that will take the place of its current quarterly burn mechanism. This update should provide more transparency and predictability to the BNB community, as Binance works towards its commitment of burning 100 million BNB from the total circulating supply. When the circulating supply of BNB falls below 100 million, the Auto-Burn will be discontinued.

Also of note is Terra surpassing BSC as the second-largest DeFi protocol in terms of TVL. The TVL in Terra Chain has exceeded the $20 billion mark, with most of the money locked in protocols like Anchor, Lido, and Terraswap.

Polygon Network is partnering with Seven Seven Six, a venture capital firm led by Reddit co-founder Alexis Ohanian to create a $200 million initiative aimed at backing Web3 social media projects that utilize blockchain technologies.

Finally, according to Google Trends analytics, Google users are searching for “NFT” more than ever. Google search queries for NFTs have eclipsed that of “Dogecoin” as well as “Ethereum” and is on pace to surpass even “Bitcoin” and “Crypto” soon. The NFT space has grown exponentially this year, with the keyword search data indicating that demand and interest in NFTs are at an all-time high.

Weekly Technical Analysis: 27 December 2021 – 2 January 2022

Bitcoin (BTC)

BTC’s outlook is looking more positive following its break out above the $50,000 level. Look to see if the market leader can successfully challenge resistance at $52,000 to confirm a bull trend this week. Support is still set at $42,500, which will have to remain intact for BTC’s recovery to continue.

Ethereum (ETH)

ETH has begun to rally following BTC’s recovery. ETH is starting to make higher lows, but to confirm an upwards reversal, ETH will have to break through resistance at $4,500. If ETH can successfully challenge resistance, ETH will likely have enough momentum to set a new ATH. Support is set at the $3,900 level.

Fantom Network (FTM)

FTM successfully reversed into an uptrend and generated 67.1% returns from last week. This week, FTM has short-term support set at 75 Baht which can be used as a buy-on-dip entry point. FTM will be looking to continue its rally and challenge resistance at 88 Baht, its current ATH.

AAVE

AAVE is up by 46.4% from last week. The lending protocol token could potentially enter a longer-term uptrend if it successfully breaks through resistance at the 10,400 Baht level. Support is set at 8,400 Baht this week, and traders should consider buying the dip if there are any price contractions. AAVE has been the top-performing DeFi token coming into this week.

Trading and Investment Considerations For The Week

Bitcoin was able to rally to the $50,000 mark, uplifting the entire Crypto market. Despite showing signs of a recovery, the market has not yet become a true Bull market; however, some altcoins, particularly NFT Game tokens and Smart Contract platform tokens, are beginning to surge once again.

SAND is the clear leader of this NFT Game token surge, while LUNA has led other Smart Contract platform tokens coming into this week. Other similar tokens such as MANA, GALA, AVAX, and MATIC haven’t had as noticeable gains yet; however, they could be poised for a breakout soon, making now a prime entry point to accumulate.

With the holiday season in full swing, we will unlikely see any negative news from traditional markets that will affect the Crypto world. Despite initial uncertainty, it seems that fears regarding the Omicron variant have largely subsided, with the markets having absorbed the impact of the new COVID strain. With no anticipated news likely to affect the Crypto market too much, traders are advised to keep a close eye on the graphs as sound technical analysis remains the best way to plan your trades.

For tokens that are already generating outstanding returns outperforming the market by a significant margin, traders are advised to adopt a short-term trading strategy and enter on price dips. For Smart Contract and NFT Game tokens that have not yet had a breakout, these could be appealing tokens to accumulate for the medium term over the next few days.

Overall, the Crypto market is beginning to trend positively as the year comes to a close; however, Bitcoin’s recovery must be sustained to ensure bullish conditions for the rest of the digital asset market. Keep an eye on whether BTC can break through and remain above resistance at $52,000 this week, as this may inform us on what market conditions will be like entering 2022.

*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.

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