Bitazza Crypto Weekly: The Battle Over Smart Contract Supremacy Wages On -

Crypto Weekly: 23 29 August 2021

After Ethereum closely followed Bitcoin’s recovery over the past month, other Smart Contract supporting altcoins such as BNB, Cardano, Solana, and Terra Chain have followed suit and have gone on to have robust recoveries.

Similarly, over the previous week, Smart Contract coins like PolkaDot, Polygon Chain, Near, and Avalanche have all begun trending upwards despite no real news or announcements that would otherwise spur a rally.

The market situation suggests that the competition over which Smart Contract protocol can become a true Ethereum-competitor is heating up. As these different altcoins seek to capture more of the market and grow their developer community, speculation has only increased, leading to some of these altcoins hitting all-time highs.

Meanwhile, the total market value of the digital asset market has risen above the $2 trillion level for the first time since the correction in April earlier this year. The recovery of the digital asset market has largely been spearheaded by Bitcoin, with BTC finally hitting the $49,000 level once more.

Additionally, Coinbase, the largest cryptocurrency exchange in the US, has announced that they will be purchasing $500 million in Crypto-assets and will be allocating 10% of future profits towards building a digital asset portfolio. Coinbase has also confirmed that it is partnering with Mitsubishi UFJ Financial Group in Japan to launch Coinbase Japan as part of its efforts to expand globally.

Furthermore, on-chain data suggests that Bitcoin mining revenue has increased by 57% since the Chinese government’s crackdown on Crypto-mining. Bitcoin’s mining power peaked at 180 EH/s this year before falling by more than 50% after the ban by the Chinese government. The increase in Bitcoin mining revenue is primarily accredited to the lessening of Bitcoin mining difficulty, resulting in revenue levels returning to mid-2020 levels as mining operations continue to migrate from China.

Finally, Bloomberg, alongside Galaxy Digital, has announced the opening of the Bloomberg Galaxy DeFi Index, which will measure the performance of the largest DeFi protocols by market value, including Uniswap, Aave, Maker, Compound, Synthetix, and more. Similarly, reports indicate that Wells Fargo and JPMorgan will be launching Bitcoin funds in collaboration with NYDIG aimed at their more prominent clients.

Weekly Technical Analysis: 23 – 29 August 2021

Bitcoin (BTC)

Despite hitting a slump, Bitcoin’s critical support remains intact, and BTC has still been able to create new highs. However, BTC’s upside is starting to look more limited in the short term as prices rise. Traders are advised against chasing the market and instead wait for prices to see a contraction before entering a BTC position.

Ethereum (ETH)

ETH is currently in the midst of a sideways trend as it fails to consistently create new highs. While ETH is trending sideways, keep a close eye on support at the $3,000 level. If this support can remain intact, there’s still a chance for ETH to return to an uptrend again. Overall, ETH is still in an uptrend; however, if support cannot remain intact, traders should consider decreasing the amount of ETH held in their portfolios. There is always a chance of ETH embarking on a downtrend if market sentiments turn bearish, which could prove costly depending on when traders bought into ETH.

Alpha Finance (ALPHA)

ALPHA has had a price breakout that pushed prices past last week’s resistance level at 35 Baht, reversing the DeFi protocol into an uptrend this week. Moving forward, support is set at 35 Baht, and ALPHA will be looking to challenge its new resistance at the 50 Baht mark this week.

Polygon Network (MATIC)

MATIC was able to successfully break through last week’s resistance at 52 Baht. If MATIC can remain above the 52 Baht level this week, look for the uptrend to continue as other altcoins, particularly from other Smart Contract-support protocols, continue to rise. MATIC will be looking to target an initial resistance set at the 64 Baht mark.

Trading and Investment Consideration For The Week

This past week Bitcoin made a high of $49,000 which exceeded all expectations. Despite its recovery, Bitcoin’s upside is looking quite limited at this juncture. Even if Bitcoin’s rally stalls and the market leader begins moving sideways, there’s a strong possibility that the rest of the digital asset market can continue moving upwards. However, if Bitcoin starts failing to make new highs keep an eye out for a potential correction and plan appropriate exits.

The fact that Bitcoin prices have risen so drastically while trading volume has not seen a commensurate growth indicates that this rally is not as robust as it could be. There could be large groups of traders or investors out there biding their time and waiting to buy when BTC sees a price correction.

In contrast, several altcoins have had strong rallies, with numerous tokens like ADA, SOL, and LUNA able to successfully set new highs over the past week. That being said, as these altcoins approach their peak, the upside is beginning to look limited, and traders may incur significant losses if the market sees a sudden correction before traders can exit their positions. This week, traders should keep a close eye on the market and focus on short-term trades with these tokens. Traders are advised to shift their portfolio from these altcoins that have already had strong rallies into tokens that are just beginning to see a recovery in order to maximize upside and profitability.

On a more global level, news that the US Federal Reserve (FED) is looking to taper Quantitative Easement (QE) caused the US dollar to strengthen, putting pressure on the price of assets like gold and stocks. Surprisingly, Bitcoin remained largely unaffected by the strengthening of the dollar.

If the FED’s upcoming Jackson Hole Economic Symposium doesn’t result in the announcement of any unexpected economic policy, the anticipated tapering of QE is unlikely to affect the digital asset market in any meaningful way moving forwards.

Despite the positive performance of the overall market, traders are still advised to remain cautious. Look for altcoins that are beginning to see reversals as these tokens will have significantly less risk than entering positions on tokens that have already had drastic recoveries. As usual, traders are cautioned against committing too much of their portfolio into just the digital asset market as it is very possible that the market phase we’re currently in right now is the end of a short-term bull run for the market.

*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 newsletter and 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.

Post Views: 1,097