Bitazza Crypto Weekly: Growth of Layer 2 Blockchains Surging -

Crypto Weekly: 23 – 29 January 2023

Data analysis from The Block reveals that popular Ethereum Layer 2 protocol Optimism has surpassed Arbitrum in transaction volume. Through using the Optimism network’s native token OP, users are able to make relatively cheap and fast transactions.

The growth of Ethereum Layer 2 networks is expected to continue in 2023. Layer 2 networks are built on top of the Ethereum blockchain and are designed to increase the scalability and speed of the Ethereum network. According to analytics provider Token Terminal, Polygon leads the pack with 313,457 daily active users as of 17 January, a metric that spiked to over 600,000 daily active users earlier in January. Arbitrum and Optimism are the two largest L2 networks, with Arbitrum having 52% of total value locked (TVL) at $2.55 billion and Optimism having 30% of TVL at $1.46 billion, accounting for more than 80% of all collateral locked in Layer 2 platforms.

Shiba Inu will soon launch a public beta for its Shibarium Layer 2 network with BONE as its native token. Shibarium transactions will also include shib token burns.

A new DappRadar report on blockchain and DApp adoption in 2022 revealed that NFT sales last year reached 101 million, a 67.57% increase from the previous year. The Ethereum ecosystem holds the top spot in the NFT ecosystem, with 21% of the market share and over 21.2 million transactions processed. It is followed by Wax (14.5 million), Polygon (13.3 million), and Solana (12.9 million). Both the Solana and ImmutableX ecosystems saw massive growth from the previous year in terms of transaction activity, with a 440% and 315% increase, respectively.

According to the Australian Financial Review, the National Australia Bank is launching a stablecoin called AUDN in the middle of 2023, allowing business customers to settle transactions in Australian dollars. The stablecoin will launch on the Ethereum network and the Algorand blockchain initially and will be backed one-to-one with Australian fiat held by the bank.

According to local news outlet News1, Busan, South Korea will establish a decentralized digital commodities exchange. Officials said the platform is scheduled to start operations this year and will support local cultural content via digital assets. The exchange will leverage Busan’s strengths, such as the Busan International Film Festival. It will include the tokenization of intellectual property rights in the film and game fields, gold, precious metals, agricultural and livestock products, ships, real estate, and more. This move will enable the city to establish itself as a hub for blockchain innovation and digital assets and will also help in the digitization of various city services.

In a 16 January press briefing, Seoul Mayor Oh Se-hoon announced the launch of the first phase of Metaverse Seoul following beta testing of the project. According to the mayor, the online environment will be a “place of communication for citizens” of the capital city, allowing them to virtually visit many of Seoul’s attractions, access official documents, file certain complaints and receive answers to questions on filing municipal taxes.

Weekly Technical Analysis: 23 – 29 January 2023

Bitcoin (BTC)

BTC continues to create new highs and lift its lows, managing to break through resistance at $21,500, BTC’s new support level moving forward this week. BTC will look to challenge the $25,000 resistance zone. Despite positive performances relatively, RSI indicators suggest that BTC is in the overbought zone, and a correction may be imminent, making caution while trading a necessity.

Ethereum (ETH)

ETH has been consistently creating new highs and is targeting $1,800 and $2,000 as short-term and medium-term resistances, respectively. For now, support is set at the $1,400 level. If support can remain intact, ETH still has the opportunity to continue on its upwards trend. Similar to Bitcoin, ETH’s RSI suggests that it is in the overbought zone, and a price correction could occur soon.

Axie Infinity (AXS)

AXS is up by +43.5% over the past week, surging past its previous resistance at 340 baht, which will function as a critical support level moving forward. If support can remain intact, AXS has the chance to challenge resistance at 560 baht this week.

Velo (VELO)

VELO is up by +37.1% over the past week. As VELO attempts to manage an upwards reversal this week, short-term support is set at 0.08 baht. If support can remain intact, VELO’s short-term resistance target is at the 0.14 baht level.

Trading and Investment Considerations For The Week

The market is beginning to shift its concerns from FED monetary policy to concerns of a potential US recession, as published figures indicate that inflation may have bottomed out. The earning reports of companies in the US stock market, particularly tech companies, could have significant ramifications on the crypto market, with bullish performances likely benefiting the crypto market as a whole.

Later this week, Microsoft and Tesla are set to release their earning reports on Tuesday and Wednesday, respectively. It is highly possible that this should have some impact on the crypto market, especially considering Tesla’s significant Bitcoin holdings.

On 26 January, the US Department of Labor is set to release Jobless Claims figures, and on 27 January, the US Bureau of Economic Analysis will be publishing PCE price index figures. Both of the metrics above could affect the US dollar as well as Bitcoin.

During this period, it is advised that traders exercise high caution as many tokens have seen dramatic price surges, causing RSI indicators to enter the overbought zone. A potential purchasing strategy is identifying projects/tokens with robust fundamentals that have yet to have a price surge or strong rally yet.

Disclaimer:
-Cryptocurrency and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.
– Past Returns/Past Performance does not guarantee future returns/performance.

*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.

Sources:

https://cointelegraph.com/news/brazil-passes-law-to-legalize-crypto-as-a-payment-method

https://cointelegraph.com/news/russias-sber-bank-integrates-metamask-into-its-blockchain-platform

https://cryptopotato.com/animoca-brands-unveils-2b-metaverse-fund/

https://cryptopotato.com/lines-crypto-exchange-bitfront-to-shut-down-amid-bear-market

https://finbold.com/telegram-set-to-build-crypto-exchange-in-response-to-ftx-collapse/

https://www.theblock.co/post/191352/decentralized-crypto-exchange-volumes-nearly-double-in-november-amid-ftx-debacle

https://cointelegraph.com/news/uniswap-launches-nft-marketplace-aggregator

https://www.theblock.co/post/190900/opensea-nft-creators-earned-1-billion-royalties

https://cointelegraph.com/news/opera-crypto-browser-to-enable-instant-nft-minting-through-launchpad

https://cointelegraph.com/news/avalanche-to-power-alibaba-cloud-s-infrastructure-services-in-asia

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