bitcoin: October 2022

Monday, October 31, 2022

Hong Kong financial regulator issues guidelines for crypto futures ETFs

The Securities and Futures Commission hinted it would follow in the CME’s footsteps by only initially allowing listings of ETFs linked to Bitcoin and Ether futures.

The Securities and Futures Commission of Hong Kong has set up requirements for entities considering a public offering of an exchange-traded fund (ETF) tied to cryptocurrency futures.

In an Oct. 31 circular, the SFC said that in addition to previously imposed requirements on unit trusts and mutual funds for authorization of a crypto futures ETF, management companies in Hong Kong would need to “have a good track record of regulatory compliance” as well as three years of experience managing ETFs, with consideration for similar investment vehicles. The financial regulator hinted it would follow in the Chicago Mercantile Exchange’s footsteps by only initially allowing listings of ETFs linked to Bitcoin (BTC) and Ether (ETH) futures.

“Only [virtual asset, or VA,] futures traded on conventional regulated futures exchanges are allowed, subject to the management company demonstrating that the relevant VA futures have adequate liquidity for the operation of the VA Futures ETF and the roll costs of the relevant VA futures contracts are manageable and how such roll costs will be managed,” said the SFC.

HKEX welcomes the SFC’s announcement today permitting the listing of ETFs with virtual assets as their underlying. This will support the continued growth of #HongKong as Asia’s premier #ETF marketplace, further strengthening Hong Kong’s role as an international financial centre. pic.twitter.com/zLRgAUV6iX
— HKEX 香港交易所 (@HKEXGroup) October 31, 2022

The financial regulator added that the net derivative exposure of any crypto futures ETF “shall not exceed 100% of the ETF’s total net asset value,” and companies should expect to adopt an active investment strategy to account for incidents including market disruptions. The SFC also said ETF issuers were to “carry out extensive investor education” before the launch of any crypto investment vehicle in Hong Kong.

The SFC circular came as part of a policy update from Hong Kong’s government, which announced on Oct. 31 that it was “ready to engage” with global crypto exchanges on regulatory issues. The government said it planned to launch a number of pilot projects, including those aimed at nonfungible tokens, green bond tokenization, and a digital Hong Kong dollar.

Christopher Hui, Hong Kong’s secretary for financial services and the reasury, said:

“We recognise the potential of DLT and Web 3.0 to become the future of finance and commerce, and under proper regulation they are expected to enhance efficiency and transparency. The Government is prepared to embrace this future, and we welcome the clustering of Fintech and VA community and talents in Hong Kong, and we will promote the sustainable development of financial services across the whole VA value chain.”

Hong Kong’s policy aims would seemingly put it on a different path than China, despite the political lines between the special administrative region and bordering nation becoming more blurred in recent years. The Chinese government has cracked down on crypto firms operating in the country but continues to move forward with piloting its central bank digital currency, the digital yuan.

from Cointelegraph.com News https://ift.tt/ILjvDTb

2 metrics signal the $1T crypto market cap support likely won’t hold

Despite the 8.5% weekly rally in cryptocurrencies, the lack of stablecoin premiums in Asia and futures markets activity shows buyers’ lack of confidence.

Cryptocurrencies broke the $1 trillion market capitalization resistance on Oct. 26, which had been holding strong for the previous 41 days. Despite Bitcoin’s (BTC) modest 5.5% weekly gains, the aggregate value of 20,000 listed tokens increased by 8.5% between Oct. 24 and 31.

*Total crypto market cap, USD (in billions). Source: TradingView*

The cryptocurrency market was positively impacted by a 6.3% weekly rally in the Russell 2000 mid-capitalization stock market index. Some encouraging news accompanied the positive tailwinds from traditional markets.

For instance, 55,000 BTC was withdrawn from Binance on Oct. 26, a record high. Typically, analysts consider the reduced number of coins deposited on exchanges a bullish indicator, as the immediate selling pressure eases.

Moreover, exchange and wallet provider Blockchain.com partnered with payment processing giant Visa to launch a crypto card. The cryptocurrency company revealed on Oct. 26 that there would be no sign-up or annual fees, no transaction fees and users would earn 1% of all purchases back in digital assets.

Instead of focusing on Bitcoin, cryptocurrency traders have spread their bets across altcoins. Consequently, comparing the winners and losers among the top 80 coins provides skewed results, as seven rallied 20% or more over the past week.

*Weekly winners and losers among the top 80 coins. Source:* *Nomics*

Dogecoin (DOGE) rallied 112% after Elon Musk, the billionaire CEO of SpaceX and Tesla, completed his acquisition of the Twitter social media network. Musk’s widely known passion for the memecoin inspired traders to raise expectations of potential payment integrations.

Mina Protocol’s MINA token gained 28% following its ecosystem update report on Oct. 27, which highlighted its zero-knowledge testnet. The protocol promises efficient layer-1 smart contract zkApps, adding unique privacy features and the ability to connect to external data sources.

The native tokens of smart contract networks Klaytn, Cosmos and Avalanche — KLAY, ATOM (ATOM) and AVAX (AVAX), respectively — rallied following Ether’s (ETH) 16.5% gains. Moreover, the Ethereum network has remained clogged, with average transaction fees above $3 for the past three weeks.

Stablecoin demand remained neutral in Asia

The USD Coin (USDC) premium is a good gauge of China-based crypto retail trader demand. It measures the difference between China-based peer-to-peer trades and the United States dollar.

Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, the stablecoin’s market offer is flooded, causing a 4% or higher discount.

*USDC peer-to-peer vs. USD/CNY. Source: OKX*

Currently, the USDC premium stands at 100.8%, flat versus the previous week. Therefore, despite the 8.5% cryptocurrency market capitalization increase, no additional demand came from Asian retail investors. However, such data should not be worrisome, as it partially reflects the total capitalization being down 56% year-to-date.

Futures markets show mixed sentiment

Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.

*Accumulated perpetual futures funding rate on Oct. 31. Source: Coinglass*

As depicted above, the accumulated seven-day funding rate is either slightly positive or neutral for the largest cryptocurrencies by open interest. Such data indicates a balanced demand between leverage longs (buyers) and shorts (sellers).

Considering the absence of stablecoin demand in Asia and mixed perpetual contract premiums, traders lack confidence even though the total crypto capitalization broke above the $1 trillion mark.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

from Cointelegraph.com News https://ift.tt/UtaO9Vs

Ethereum price hits $1.6K as markets expect the Fed to ease the pressure

ETH price rose to its highest level since September, but data shows whales lack an appetite for leverage longs.

A $250 surprise rally took place between Oct. 25 and Oct. 26, pushing the price of Ether (ETH) from $1,345 to $1,595. The movement caused $570 million in liquidations in Ether’s bearish bets at derivatives exchanges, which was the largest event in more than 12 months. Ether’s price also rallied above the $1,600 level, which was the highest price seen since Sept. 15.

Let’s explore whether this 27% rally over the past 10 days reflects any signs of a trend change.

*Ether/USD 4-hour price index. Source: TradingView*

It is worth highlighting that another 10.3% rally toward $1,650 happened three days later on Oct. 29, and this triggered another $270 million of short seller liquidations on ETH futures contracts. In total, $840 million worth of leveraged shorts was liquidated in three days, representing over 9% of the total ETH futures open interest.

On Oct. 21, the market became optimistic after San Francisco Federal Reserve President Mary Daly mentioned intentions to step down the pace of interest rate hikes. However, the United States central bank’s previous tightening movement has led the S&P 500 stock market index to a 19% contraction in 2022.

Despite the 5.5% stock market rally between Oct. 20 and Oct. 31, analysts at ING noted on Oct. 28 that “we do indeed expect the Fed to open the door to a slower pace through formal forward guidance, but it may not necessarily go through it.” Furthermore, the ING report added, “It could be that we get a final 50bp in February that would then mark the top. This would leave a terminal rate of 4.75% to 5%.”

Considering the conflicting signals from traditional markets, let’s look at Ether’s derivatives data to understand whether investors have been supporting the recent price rally.

Futures traders kept a bearish stance despite the $1,600 rally

Retail traders usually avoid quarterly futures due to their price difference from spot markets. Still, they are professional traders’ preferred instruments because they prevent the fluctuation of funding rates that often occurs in a perpetual futures contract.

*Ether 3-month futures annualized premium. Source: Laevitas*

The indicator should trade at a 4% to 8% annualized premium in healthy markets to cover costs and associated risks. Hence, the above chart clearly shows a prevalence of bearish bets on ETH futures, as its premium stood in the negative area in October. Such a situation is unusual and typical of bearish markets, reflecting professional traders’ unwillingness to add leveraged long (bull) positions.

Traders should also analyze Ether’s options markets to exclude externalities specific to the futures instrument.

ETH options traders moved to a neutral positioning

The 25% delta skew is a telling sign of when market makers and arbitrage desks are overcharging for upside or downside protection.

*Ether 60-day options 25% delta skew: Source: Laevitas*

In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew indicator below -10%, meaning the bearish put options are discounted.

The 60-day delta skew had been above the 10% threshold until Oct. 25, and signaling options traders were less inclined to offer downside protection. However, a significant change happened over the following days as whales and arbitrage desks started to price a balanced risk for downward and upward price swings.

Liquidations show a surprise move, but minimal confidence from buyers

These two derivatives metrics suggest that Ether’s 27% price rally from Oct. 21 to Oct. 31 was not expected, which explains the huge impact on liquidations. In comparison, a 25% Ether rally from Aug. 4 to Aug. 14 caused $480 million worth of leveraged short (sellers) liquidations, roughly 40% lower.

Currently, the prevailing sentiment is neutral according to ETH options and futures markets. Therefore, traders are likely to tread carefully, especially when whales and arbitrage desks have stood on the sidelines during such an impressive rally.

Until there is confirmation of the $1,500 support level’s strength and pro traders’ increased appetite for leverage longs, investors should not rush to the conclusion that the Ether rally is sustainable.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

from Cointelegraph.com News https://ift.tt/iId5kuY

Luiz Inácio Lula da Silva wins Brazil’s presidential race — What does this mean for crypto?

The future president reportedly said that cryptocurrencies “deserved the attention of authorities,” calling for Brazil’s central bank to create a framework for digital assets.

In a close race with outgoing Brazilian President Jair Bolsonaro, Luiz Inácio Lula da Silva, also known simply as “Lula,” won the country’s presidential election following a run-off race.

According to data from Tribunal Superior Eleitoral, Lula defeated Bolsonaro in an Oct. 30 run-off election with 50.9% of the vote — roughly 60.3 million people to the soon-to-be former president’s 58.2 million. Though the election outcome showed Lula has the right to take office starting in January 2023, reports have suggested that Bolsonaro may intend to challenge the results.

Democracia. pic.twitter.com/zvnBbnQ3HG
— Lula 13 (@LulaOficial) October 30, 2022

Lula, who also served as the president of Brazil from 2003 to 2010, reportedly said in October that cryptocurrencies “deserved the attention of authorities,” calling for the country’s central bank to create a framework for digital assets aligned with international standards on Anti-Money Laundering and illicit practices. He is also allied with former central bank president Henrique Meirelles, who took an advisory role at crypto exchange Binance in September but reportedly may be considering a position in Lula’s government.

During his presidential campaign, Lula announced that his plan for Brazil’s government had been registered on the Decred blockchain as an example of “an innovative and incorruptible technology of records distributed by computers around the world that is also behind Bitcoin.” However, the future president has largely not publicly spoken on crypto and blockchain.

Cointelegraph reported that more than 12,000 Brazil-based companies held crypto as of August, suggesting that digital assets may play a larger role in the country’s economy in the future. Some lawmakers have also proposed bills aimed at making crypto payments legal in Brazil.

from Cointelegraph.com News https://ift.tt/1vWoS5J

Bitcoin fails to break the $21K support, but bears remain shy

BTC futures and stablecoin margin data shows a lack of appetite from buyers even as Bitcoin gained 7.5% in a week.

Bitcoin (BTC) rallied on the back of the United States stock market’s 3.4% gains on Oct. 28, with the S&P 500 index rising to its highest level in 44 days. In addition, recently released data showed that inflation might be slowing down, which gave investors hope that the Federal Reserve might break its pattern of 75 basis-point rate hikes after its November meeting.

In September, the U.S. core personal consumption expenditures price index rose 0.5% from the previous month. Although still an increase, it was in line with expectations. This data is the Federal Reserve’s primary inflation measure for interest rate modeling.

Additional positive news came from tech giant Apple, which reported weak iPhone revenues on Oct. 27 but beat Wall Street estimates for quarterly earnings and margin. Moreover, Apple chief financial officer Luca Maestri said services would grow year-over-year in the fourth quarter.

Bitcoin futures data shows reluctant buyers

Retail traders usually avoid quarterly futures due to their price difference from spot markets. Still, they are professional traders’ preferred instruments because they prevent the perpetual fluctuation of contracts’ funding rates.

These fixed-month contracts usually trade at a slight premium to spot markets because investors demand more money to withhold the settlement. But this situation is not exclusive to crypto markets, so futures should trade at a 4%–10% annualized premium in healthy markets.

*Bitcoin 3-month futures premium. Source: Laevitas*

Bitcoin’s futures premium has stood below 2% for the past 30 days, signaling a complete lack of interest from leverage buyers. Furthermore, there was no significant improvement on Oct. 29 as BTC rallied toward the $21,000 resistance.

In a nutshell, derivatives traders are far from optimistic about Bitcoin’s price despite the low cost of adding bullish positions. Still, one must also analyze the BTC margin markets to exclude externalities specific to the futures instrument.

Derivative traders are unwilling to place bullish bets

Margin trading allows investors to borrow cryptocurrency to leverage their trading position, potentially increasing their returns. For example, one can buy Bitcoin by borrowing Tether (USDT), thus increasing their crypto exposure. On the other hand, borrowing Bitcoin can only be used to short it — betting on the price decrease.

Unlike futures contracts, the balance between margin longs and shorts isn’t necessarily matched. When the margin lending ratio is high, it indicates that the market is bullish — the opposite, a low lending ratio, signals that the market is bearish.

*OKX USDT/BTC margin lending ratio. Source: OKX*

The chart above shows that investors’ morale topped on Oct. 13 as the ratio reached 23.5, which is seldom sustainable for longer-term periods. From that point onward, OKX traders presented less demand for borrowing Tether, exclusively used to bet on the price uptrend.

Still, the ratio currently stands at 7.5, leaning bullish in absolute terms, as it favors stablecoin borrowing by a wide margin. It is worth highlighting that no sentiment change happened despite Bitcoin’s 7.5% weekly rally between Oct. 24 and Oct. 31.

A lack of excitement does not mean bearishness

Derivatives data shows no demand from buyers even as Bitcoin flirted with $21,000 on Oct. 29. Unlike retail traders, these experienced whales tend to anticipate movements by holding on to their conviction even when markets move the opposite way.

The above data suggests that traders expecting Bitcoin to break above $21,000 in the short term will likely be disappointed. However, on a positive note, there has been no sign of bears getting more confident, as both futures and margin markets remain neutral to bullish.

from Cointelegraph.com News https://ift.tt/modcJ1R

Sunday, October 30, 2022

An introduction to decentralized NFT catalogs

After last year’s hype over nonfungible tokens, people have been speculating about their potential. It created a bubble of unfounded expectations.

Over the last year, venture capitalists poured more than $4.6 billion into infrastructure and projects related to nonfungible tokens (NFTs). This infrastructure now needs users. They will come when people understand that they can apply these NFTs not just for speculative purposes but to design and structure their everyday activities. For these, they don’t need NFTs — they need to sort their lives out. And, decentralized catalogs are there to help them do it.

We can think about an NFT as a book someone owns, and this ownership is recorded on the blockchain. But what we’re actually missing is the library.

Not just a flower, but a garden

Multiple NFTs making up a collection form a system. This system has a structure through the standards it uses. If you’ve ever visited CryptoKitties, you’ve probably noticed the museum-like categorization of the Kitties and their attributes in their “catalog.”

However, each item in the collection means nothing without the collection itself. You can’t take a CryptoKitty out of the original smart contract. You can copy the image or create a fractional version of it, but you will not be able to transfer its value if the derivative version of your CryptoKitty isn’t linked to the original collection. This means that the value of each NFT is not determined by a stand-alone item in the collection but by the collection itself.

In simple words, if we take a step back from each item in almost any NFT collection, we’ll discover that the actual value is not in a single NFT itself but in a perfect system of multiple NFTs bound together by one smart contract. By doing this, we stop staring at a single flower and realize we are in a well-designed garden.

When applying all the standardization approaches and structuring all the data properly, we are creating systematic lists of items publicly stored on the blockchain — decentralized catalogs.

How decentralized cataloging can add new value

Everyone has heard of Guinness World Records, Michelin Guide or IUCN Red List. In a nutshell, they are all extremely valuable catalogs. Behind each of them is a managing authority that invests its brand and expertise in bringing value to every new iteration of the catalog. Even if the rules of adding new items to centralized lists are not transparent or even questioned, this approach is sustainable.

However, the biggest problem these catalogs present is an extremely high barrier to entry for new, valuable lists to enter the market. Through NFT infrastructure and a Web3 mindset, though, we can democratize the process of building valuable catalogs. The difference between a normal list and a decentralized catalog is the potential value it can accumulate.

When you own a CryptoPunk, you are a co-owner of the CryptoPunks collection. Yes, that CryptoPunk may represent your inner self, but on its own, it’s just a JPEG. As we have already discovered, the value is in the collection itself, and the value is created not only by the expertise that went into designing the character generator but also by the owners of the collection.

By building an economy powered by co-ownership, we can make future-proof and transparent catalog systems. While yet another restaurant list will hardly add something new to society, there are plenty of situations where decentralized cataloging makes sense.

The library

Let’s imagine the most basic use case of decentralized cataloging. You own a collection of books and you want to share these books with someone. You know, however, there’s a good chance that those you lend your books to will never return them. That’s life.

So, you start a very simple process of making a record of each book you’re sharing to the decentralized catalog; only each record is actually an NFT.

The person taking the book decides to use it to put his own books on the catalog and share them with someone else, and that person shares it with their friend, too. In a few years, your book-sharing club will become an internet phenomenon, with more and more people adding books to the catalog.

It’s only a matter of time before big publishers join in as well. Some publishers may start adding newly published books to distribute them through the catalog system you created. As we know about NFT compatibility, it’s clear that all the NFT marketplaces and infrastructure we have today will become handy tools and interfaces that will work right out of the box. No need for additional listing websites, centralized bookstores or payment solutions.

And it all started with you, who added the first book as an NFT to the shared collection of books.

The same approach is used in Cointelegraph’s Historical NFT Collection. It is a catalog of news from the largest crypto media outlet, and Cointelegraph readers are choosing which news should be added to it.

The real future of the NFT standard is ordinary, and that’s great. We use many ordinary things every day that were overpriced when they entered the market. As production and technology evolved, however, prices dropped and made them available for everyone.

The same thing will happen with NFTs. The only thing we need to do now is stop staring at the tulips and start designing a garden.

Ivan Sokolov is the founder of Mintmade, a project focused on building new asset classes that will power next-gen Web3 businesses.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

from Cointelegraph.com News https://ift.tt/y05VjWJ

The state of crypto in Northern Europe: Hostile Scandinavia and vibrant Baltics

The Nordics remain a cold place for crypto, but Estonia still leads as the public blockchain adopter.

Despite the turbulence that broke out in the crypto market this summer, there is an important long-term marker that should be considered in any complex assessment — the combination of adoption and regulation. The latest report by EUBlockchain Observatory, named “EU Blockchain Ecosystem Developments,” tries to measure this combination within the European Union, combining the data on each and every member country from Portugal to Slovakia.

As the original report counts more than 200 pages, Cointelegraph prepared a summary with the intent to capture the most vital information about the state of crypto and blockchain in Europe. Cointelegraph started from a group of countries that are usually labeled as Western European and continues with a review of Northern European states.

Sweden

Numbers: $39.9 million (40 million euros) raised in initial coin offerings (ICOs), 15 blockchain startups launched.

Regulation and legislation: According to the report, the country still lacks any definite crypto and blockchain legislation: “One must often use the existing legal framework and force blockchain to fit within that framework.” The principal supervisory authorities in the country are the Swedish Financial Supervisory Authority and the Swedish Data Protection Agency.

Taxes: While the report lacks any information about the tax regime regarding crypto in the country, the local tax advisers specify that capital gains from selling crypto are subject to a 30% tax.

Notable initiatives: The Swedish land-ownership authority Lantmäteriet began testing blockchain technology in 2016, which resulted in a pilot project to develop future real estate transactions by using smart contracts. In June 2018, developers completed the first successful transaction on the platform. Together with Nasdaq, one of Sweden’s major banks, SEB, initiated the Nordic Fund Ledger — a consortium to improve mutual fund trading by applying blockchain. An initiative should have been launched in 2020, but by the publishing time, there is no evidence it did.

Local players: 3Box, a decentralized user data storage system, AIAR, an Ethereum-based education platform, and Bitrefill, a digital gift card and mobile airtime provider that accepts crypto as a payment method.

Denmark

Numbers: $32.4 million (32.5 million euros) of total funds raised by blockchain projects, 24 blockchain startups.

Regulation and legislation: Denmark has no laws specifically addressing cryptocurrencies. In 2021, Danske Bank, the largest bank in Denmark, stated that it won’t offer any cryptocurrency services to customers itself, but also that it wouldn’t interfere with transactions coming from crypto platforms.

Taxes: According to Coincub, crypto gains incur an income tax of around 37%: “If you’re a high earner, your crypto gains — as part of your overall income — could go up to 52% tax.”

Notable initiatives: In 2018, Copenhagen-based shipping giant Maersk and IBM announced the launch of TradeLens, a blockchain-enabled shipping solution designed to promote more efficient and secure global trade.

Local players: As the report specifies, perhaps the most important names among the Danish crypto startups would be the ones that were established in the country but registered in other jurisdictions, such as Chainalysis, Blockshipping and MakerDAO.

Finland

Numbers: 18 blockchain startups

Regulation and legislation: The chief supervisory authority for everything crypto-related in the country is the Finnish Financial Supervisory Authority. In 2019, the Act on Virtual Currency Providers came into effect. It demands registration from any entity that aims at Finnish customers while providing or marketeering its crypto-related services. The Virtual Currency Act does not draw any distinctions between different types of digital currencies.

Taxes: Profits from the exchange or sale of crypto are subject to capital gains tax, which makes up 30% of the income not exceeding $29,922 (30,000 euros) and 34% on the excess above this limit.

Notable initiatives: Back in 2018, the Finnish government announced the collaboration with Essentia to build blockchain-based solutions for smart logistics.

Local players: SOMA (SOcial MArketplace), a decentralized peer-to-peer (P2P) platform on Ethereum for trading and exchange of physical goods, LocalBitcoins, a P2P platform for digital currencies, and Haja Networks, a developer of distributed and decentralized database solutions based on blockchain solutions.

Norway

Numbers: $26.9 million (27 millions euros) of total equity funding, 22 blockchain solution providers.

Regulation and legislation: The advisory and supervisory authorities regarding blockchain and crypto are the Norwegian Data Protection Authority, the Financial Supervisory Authority (FSA), Norges Bank and the Norwegian Tax Authority. The FSA has previously noted that a legal framework and rules for investor protection are needed if cryptocurrencies become a suitable investment for consumers. However, according to the report, “It is unlikely that Norway will enact additional legislation on cryptocurrencies until the EU adopts its flagship cryptocurrency legislation, the Regulation on Markets for Crypto-Assets (MiCA).”

Taxes: As in other Scandinavian countries, crypto assets in Norway are subject to the general capital gains tax. The annual tax rate for private individuals constitutes 22%; the same percentage goes for legal entities due to a flat corporate income tax rate. However, an individual would pay more if his yearly income exceeds certain levels.

Notable initiatives: In 2021, The FSA established a regulatory sandbox to encourage fintech innovation. The Central Bank of Norway is actively exploring a central bank digital currency (CBDC), which is now proceeding through a two-year phase of technical testing.

Local players: Choose, a cryptocurrency platform backed by CO2 emission permits, ViPi Cash, an online platform facilitating global money transfers using blockchain technology, and Diwala, a decentralized platform for skill verification of individuals through the decentralized ledger technology.

Latvia

Numbers: 15 blockchain startups

Regulation and legislation: Crypto remains largely underregulated in the country. In 2020, the chief local financial regulator, the Financial and Capital Market Commission, urged investors to “be particularly vigilant, as cryptocurrencies operate in an infrastructure that is currently characterized by lower regulation than in the financial and capital markets.”

Taxes: The Latvian PIT Act defines crypto as a capital asset subject to the general capital gains tax, which is 20%.

Notable initiatives: In 2019, the Economic Ministry of Latvia introduced two blockchain-based pilot projects. The first one should strengthen the supervisory capacity of the State Revenue Service and reduce the shadow economy through the implementation of a blockchain-based cash register. The second would ease the process of acquiring limited liability company status by using blockchain systems in the Enterprise Registry.

In 2021, the national air carrier airBaltic added Dogecoin (DOGE) and Ether (ETH) as payment options. It started to accept Bitcoin (BTC) as early as 2014.

Local players: Blockvis, a blockchain development and consulting group, Velvet, a blockchain-powered solution for online identification, and Soft-FX, a software developer, which collaborated with a list of major cryptocurrency platforms such as Binance, Bifinex and others.

Lithuania

Numbers: 31 blockchain startups, $1.09 billion (1.1 billion euros) raised by local startups

Regulation and legislation: The report calls Lithuania “one of the most pro-blockchain countries in Europe.” It became one of the first countries to issue regulations on ICOs back in 2018. From 2019, every digital assets provider needs to be registered with the country’s Centre for Registers.

Taxes: Corporate tax for the crypto companies stands at 15% and the same flat rate goes for the individual’s income.

Notable initiatives: In 2018, the Bank of Lithuania launched a digital currency sandbox called LB Chain, which is envisioned to become a prototype for central bank-issued blockchain-backed coins.

Local players: DappRadar, a market intelligence vendor for decentralized applications (DApps), Bankera, a blockchain-backed digital bank, and BirDegree, a blockchain-based and gamified online education platform.

Estonia

Numbers: $284 million (285 million euros) raised, 200+ blockchain solutions providers

Regulation and legislation: Estonia was the first European country to provide clear regulations and guidelines for digital currencies. The local law recognizes digital currencies as “value represented in digital form that is digitally transferable, preservable, or tradable, and that natural persons or legal persons accept as a payment instrument.” However, digital currencies are not considered legal tender and do not otherwise possess the legal status of money.

Taxes: Digital currencies are qualified as property and their exchange is subject to a capital gains tax of 20%.

Notable initiatives: The blockchain-enabled e-Residency program allows anyone to start and manage an EU-based company completely online and, according to the report, “has proven a significant facilitator of blockchain business activity in the country.” However, it should be noted that when the country tightened the definition of virtual asset service providers (VASPs), more than 1,000 licenses were revoked from crypto firms.

The country utilizes a highly scalable and privacy-focused keyless signature infrastructure blockchain, which is being used in healthcare, property, business and succession registries, along with the state gazette and the country’s digital court system.

Local players: Idealogic, a full-cycle software development firm with strong expertise in product design and custom software development in Fintech, Cryptodevelopers.net, a developer of cryptocurrency wallets, and Solve.care, a healthcare blockchain technology company.

Key takeaways

Discussing the report takeaways with Cointelegraph, Kristina Lillieneke, CEO at BlackBird Law and a member of EU Blockchain Observatory, explained the rather low numbers demonstrated by Scandinavian countries regarding the crypto industry. While she agreed with the important factor of high taxes, Lillieneke pointed out such regional problems as regulatory uncertainty and fear-mongering among banks and media.

“Most banks have been blocking their customers from trading in crypto and founders of crypto companies have had their bank accounts forcibly closed. As most people are still dependent on the fiat banking system in the Nordics this is a strong deterrent to making innovations,” she said.

The expert drew the example of Sweden, where the local financial authority, Finansinspektionen, leads a non-stop crusade against Bitcoin. Erik Thedéen, the head of Finansinspektionen, has written numerous articles sharply criticizing Bitcoin and claiming it is only used by criminals to launder money and finance terrorism and is a large threat to the environment.

Recent: What the Russia-Ukraine war has revealed about crypto

Lillieneke expressed pessimism regarding any possibility of a U-turn in the Nordics, even with the upcoming pan-European MiCA framework. In her opinion, MiCA itself doesn’t contain any cure for the familiar problems:

“The regulations in Europe seem only to aim at limiting the market and innovation around everything that is decentralized and has the potential of empowering people while it favors centralized solutions run by the states, the EU or big-tech.”

More controversy comes with the recent transformation of Estonia, which has been one of the earliest blockchain adopters in the world and conducted a crypto-friendly policy until 2021, when the new guidelines for VASP licensing demolished all the previous gains for the industry. However, speaking to Cointelegraph, Marianna Charalambous, research project manager at the University of Nicosia and member of the EU Blockchain Observatory, noted that the country still remains one of the leaders in public blockchain implementation.

“Estonia remains an advocate of public sector blockchain initiatives on a national and European level, as a wide number of blockchain applications are being implemented in the public sector. Looking at the use of blockchain on an institutional level we can identify a different approach compared to the private sector which has been affected by the new legislation,” she stated.

from Cointelegraph.com News https://ift.tt/oBTiMwc

Tech talent migrates to Web3 as large companies face layoffs

Web3 companies continue to hire amidst a bull market as tech giants undergo layoffs and hiring freezes.

As inflation continues to grow, coupled with a looming recession, many tech firms are having to cut portions of their staff. To put this in perspective, data from Layoffs.fyi found that over 700 tech startups have experienced layoffs this year, impacting at least 93,519 employees globally. It has also been reported that tech giants like Google, Netflix and Apple are undergoing massive job cuts.

While many of these layoffs are likely due to an economic downturn, this has resulted in an overwhelming amount of talent flocking to early-stage Web3 companies. For example, Andrew Masanto, a serial entrepreneur who has founded a number of startups, told Cointelegraph that he recently launched Nillion, a startup specializing in decentralized computation, to help ensure privacy and confidentiality for Web3 platforms.

Although Nillion is still in its early stages, the technological innovation behind the company has already proven to be appealing. Since the company’s inception in October this year, leading talent from companies like Nike, Indiegogo and Coinbase have joined the growing startup.

For instance, Slava Rubin, founder of the crowdfunding website Indiegogo, told Cointelegraph that he had recently joined Nillion as the company’s chief business officer based on the opportunity to join a startup with an innovative business model.

“The tech behind Nillion is massively innovative, as it focuses on advancing secure multiparty computation (MPC). MPC is known for being slow and unable to work for certain use cases. The risk of failure doesn’t concern me here since it’s such a huge opportunity to solve this problem,” he said.

The notion of building technology to advance MPC also attracted Lindsay Danas Cohen to Nillion. Cohen previously served as associate general counsel at Coinbase before joining Nillion this year as the company’s general counsel.

Although Coinbase announced in June that it was cutting its staff by 18%, Cohen explained in a recent blog post that she left Coinbase to join Nillion due to the opportunity to help advance privacy and data sharing through MPC. “This would be a true zero-to-one innovation,” she wrote.

While the crypto industry continues to face a bear market, it’s clear that the projects being built during this period are seen as an exciting opportunity. “I built Indiegogo during the 2008 bear market, and I think we will see the same thing in this market. In about three to five years, we will see some very strong companies emerge that know how to use capital efficiently,” Rubin remarked.

Indeed, well-funded Web3 companies continue to hire, while large tech companies face layoffs and hiring freezes. Sebastien Borget, co-founder and chief operating officer of The Sandbox, told Cointelegraph that the popular metaverse platform currently has a total of 103 job openings. “The excitement of working in the front row of Web3 is big, and we are enjoying this interest towards our open positions,” he said.

According to Borget, The Sandbox has grown to 404 employees this year, almost doubling in size from its 208-employee workforce it had in December 2021. Borget added that The Sandbox’s virtual real estate known as “LANDs” is now worth over $1 billion in total market cap.

Moreover, as Web3 companies continue to bring on both new and acquired talent, young jobseekers seem to be displaying a greater desire to obtain the skills needed to join these firms.

Priyanka Mathikshara Mathialagan, president of the Stanford Blockchain Club, told Cointelegraph that she has seen an increasing number of undergraduate students at Stanford taking blockchain-focused courses in preparation for careers after graduation.

Recent: What the Russia-Ukraine war has revealed about crypto

“This year, we had more students enrolled in professor Dan Boneh’s cryptography class than those enrolled in traditional computer science courses,” she remarked.

Despite the bear market, Mathialagan also believes that there have been significant improvements made within the Web3 space, resulting in a more positive outlook toward the sector. For example, she mentioned that the Ethereum Merge that took place on Sept. 15 has helped ensure a more energy-efficient platform, creating appeal for students that may want to leverage the Ethereum network for Web3 projects. Mathialagan added that while a numerous amount of theoretical research has been performed for years within fields like computer science, Ph.D. students are considering Web3 due to new opportunities for advancement. She said:

“The math used in theoretical computer science and cryptography is similar to the math needed to advance zero-knowledge proof-based applications. There is now an industry that wants to pay Ph.D. students for their research and put these findings to use. For example, there is a large demand for distributed system engineers since every single blockchain is really a distributed system. These are the people who can design consensus algorithms and new architectures for scalable and secure blockchains.”

This seems to be the case, as Masanto shared that Nillion has hired 10 engineers within the last six months. Borget added that The Sandbox is currently hiring 17 engineers, along with game designers, architects and other individuals capable of supporting brands building in the company’s metaverse.

Skepticism remains

While it’s notable that Web3 companies are actively hiring, a number of concerns remain. For instance, although companies remain focused on building during a bear market, fundraising may be problematic.

Given this, it’s important to point out that Nillion is currently being bootstrapped by its founding team. A spokesperson from Delphi Digital, a crypto-focused research firm, also told Cointelegraph that while the company is currently hiring across the board, no funds have been raised.

“We have been completely bootstrapped up until now.” While impressive, running a company based on personal finances or operating revenue may be concerning for job seekers. For instance, Mathialagan noted that students starting a career in Web3 want to be assured that the company will exist two to three years down the road.

Jessica Walker, chief marketing officer of Fluid Finance — a fintech company focused on revolutionizing banking with blockchain — further told Cointelegraph that it is a waiting game to see what companies have the strongest communities and teams capable of withstanding the crypto winter, adding:

“It’s important for organizations to build partnerships and roll out products, while also being able to budget their overhead costs during this time.”

Moreover, Mathialagan believes that it’s challenging for students, along with individuals within the Web2 sector, to get connected with Web3 companies. For instance, while companies like Nillion have brought on individuals from organizations like Coinbase, Indiegogo and Nike, Masanto shared that he already knew a handful of these people prior to hiring.

Recent: Does the IMF have a vendetta against cryptocurrencies?

Walker also remarked that due to the bear market, recruiters need to pay additional attention to detail when onboarding new team members. “Some uncertainty comes from new hires about the security of their role, especially during a bear market. At Fluid, we often try to hire from our community first,” she said.

Although strategic, Mathialagan mentioned that the Stanford Blockchain Club is compiling a list of job postings to help students connect better with Web3 firms as more hiring takes place: “For students, hiring remains the biggest single problem even beyond security issues faced by Web3 companies today.”

from Cointelegraph.com News https://ift.tt/P1KoVIk

Saturday, October 29, 2022

Vitalik Buterin ‘kinda happy’ with ETF delays, backs maturity over attention

Sharing his opinion around crypto regulations, Buterin spoke against the regulations that have an impact on the inner workings of a crypto ecosystem.

The co-founder of Ethereum (ETH), Vitalik Buterin, believes that the crypto ecosystem needs to mature and be in tune with the regulatory policies that allow crypto projects to operate internally freely.

Sharing his opinion around crypto regulations, Buterin spoke against the regulations that have an impact on the inner workings of a crypto ecosystem.

Considering the current circumstances, he believed it was better to have regulations that allow inner independence to crypto projects, even if it hampers mainstream adoption. Buterin opined:

“I'm actually kinda happy a lot of the exchange-traded funds (ETFs) are getting delayed. The ecosystem needs time to mature before we get even more attention.”

The use of know-your-customer (KYC) on decentralized finance (DeFi) frontends was another concern pointed out by Buterin. However, he highlighted the need for KYC on crypto exchanges, which has seen wide-scale implementations. According to the entrepreneur:

“It (KYC on DeFi frontends) would annoy users but do nothing against hackers. Hackers write custom code to interact with contracts already.”

In this regard, Buterin made three recommendations, as shown below.

On an end note, Buterin recommended using zero-knowledge proofs to meet regulatory requirements while preserving users' privacy, stating that “I would love to see rules written in such a way that requirements can be satisfied by zero knowledge proofs as much as possible.”

Google recently added a search feature that allows users to view ETH wallet balances by searching their addresses.

Acknowledging the recent Ethereum Merge upgrade, Google embedded a countdown ticker dedicated to Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism.

from Cointelegraph.com News https://ift.tt/IpKrWwP

Celsius Network’s bungling showed why centralization can’t protect privacy

Celsius’ bankruptcy proceedings resulted in 14,000 pages of customer data leaking to the public. The incident displayed the pitfalls of centralized finance.

In Celsius Network’s recent court filing, the billion-dollar centralized finance (CeFi) platform exposed more than 14,000 pages of customer identity and on-chain transaction data without user consent — a prescient reminder that privacy absent decentralization is no privacy at all.

As part of its bankruptcy proceedings, CeFi lending giant Celsius Network disclosed names and on-chain transaction data of tens of thousands of its customers in an Oct. 5 court filing. While Celsius’ user base complied with standard Know Your Customer (KYC) procedures in order to open personal accounts with the CeFi platform, none consented to nor could have anticipated a mass disclosure of this scope or scale.

In addition to doxxing the multi-million dollar withdrawals of Celsius founder Alex Mashinsky and chief strategy officer Daniel Leon just before Celsius’ bankruptcy announcement, the disclosure directed tens of thousands of CeFi users to reconsider what resolute privacy protections entail and how systems that incorporate any degree of trust or centralization stand to compromise those protections.

To protect privacy, any degree of centralization or specialized authority that exchanges use in the future must eschew the bungled Celsius model. Otherwise, privacy will be rendered yet another false promise teased out in the fine print.

Uncharted territory

While unsavory, at the very least, Celsius’ mass data dump points to more than an outright distrust of authority and opaque organizations. As per usual, at the intersection of on-chain finance and law, there’s a lot of gray area.

An emergent and nascent industry, the blockchain space has already spun up a mess of unprecedented conflicts and disputes that neither existing legislation nor established case law has developed a reliable methodology to navigate. Even in the heavily nuanced legal environment of 2022, courts are not adequately prepared to uphold established legal principles in the on-chain domain.

In defense of their customers, Celsius’ legal representatives allege that they issued requests to redact private customer data from their disclosures. However, their requests were ultimately rejected by the court on the grounds that all Chapter 11 Bankruptcy proceedings require a complete and transparent “Creditor Matrix.” Obviously, such a bankruptcy rule was penned and passed several eras before the emergence of distributed on-chain lending protocols; a time when financial institutions did not have 14,000 pages worth of supposed creditors.

To make matters more unclear, Celsius legal officials have also claimed that, as per Celsius’ terms of service, all user funds deposited in the platform essentially belong to Celsius. Thus, as a self-regarded de-facto owner of all customer deposits, Celsius’ public release of customer transaction data treads further into hazy legal territory as to the parameters that define ownership — and, therefore, privacy protections — in the on-chain space.

Whatever the case, Celsius’ customers have permanently lost their privacy. The only sure verdict is that there can be no certainty in depending on an unprepared legal system to uphold privacy rights in fluid and uncharted territory.

Celsius isn’t alone

Although dramatic, Celsius’ meltdown is only the most recent in a stint of CeFi industry bankruptcies. The platform’s billion-dollar deficit presented in bankruptcy filings has been much less the exception than the rule.

Once one of crypto’s dearest and most powerful CeFi platforms, Celsius’ rise and downfall serve as a painful reminder to crypto critics and advocates alike that a core team can become a singular point of failure at any time. And further, centralized KYC procedures always carry some risk of exposure in legal proceedings.

The predicament tens of thousands of innocent crypto investors now face points to a much broader principle: that privacy cannot be truly conferred nor absolutely protected within the confines of a centralized system. Even with the best intentions in mind, professionals on both sides of the court have little legal precedent to draw from as they navigate the novel and perplexing territory.

As on-chain data analytics become more sophisticated, hackers more conniving and personal data ever more valuable to marketing agencies and authorities, privacy-conscious individuals must exercise the utmost prudence in determining which crypto platforms best align with and protect their interests.

After all, Google, Meta, and the rest of the Web2 platforms that the crypto community has since dismissed as exploitative and archaic are about as private as Celsius and its CeFi counterparts. Each provides privacy as a service. Meanwhile, its users’ search histories, account information and browsing preferences are private to almost everyone — except, of course, the platform itself. As Celsius’ bankruptcy proceedings have proven, even the most well-intended custodians are not a sufficient substitute for decentralized architecture.

The true promise of systems built on blockchain is that what they confer, be it asset ownership, scarce monetary units or permissionless contracts, cannot be regulated, erased or modified on a whim. Their constitutions are written in code. Any and all modifications are coordinated and executed by decentralized autonomous organizations ( DAOs). There is no trust between counterparties, only a shared belief in the permanence of principle and the wisdom of the collective.

In the same way, privacy has been a prerequisite for personal freedom and self-expression since time immemorial, decentralization is today a prerequisite for privacy online — and, to that end, on-chain.

Alex Shipp is the chief strategy officer at Offshift, where he contributes to platform tokenomics, produces content and conducts business development on behalf of the project. In addition to his industry role as an expert in private decentralized finance (PriFi), he has also served as a writer at the Elastos Foundation and as an elected ecosystem representative on the Cyber Republic DAO.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

from Cointelegraph.com News https://ift.tt/K2tduga

Musk fires Twitter execs, research stirs blockchain energy debate and CFTC brass shares crypto concerns: Hodler’s Digest, Oct. 23-29

Coming every Saturday, Hodlers Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in one link.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $20,485, Ether (ETH) at $1,536 and XRP at $0.46. The total market cap is at $994.97 billion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Klaytn (KLAY) at 77.92%, Dogecoin (DOGE) at 46.52% and TerraClassicUSD (USTC) at 18.72%.

The top three altcoin losers of the week are Chain (XCN) at -23.33%, Maker (MKR) at -13.67% and Casper (CSPR) at -9.28%.

For more info on crypto prices, make sure to read Cointelegraphs market analysis.

Most Memorable Quotations

Blockchain is not simply a technological change but also one that enables socio-political change.

Yat Siu, co-founder and executive chairman of Animoca Brands

The U.K. government has a policy vision that the U.K. will become an international hub of cryptocurrency and digital assets.

Lisa Cameron, member of U.K. Parliament

Traditional assets are driven by economic growth, Fed policies, inflation. Crypto is driven by the technology itself, millennial adoption.

Mark Yusko, CEO and founder of Morgan Creek Capital Management

I do believe that the IMF is an implacable foe of crypto.

David Tawil, co-founder and president at ProChain Capital

When [China] loves crypto, the bull market will come back. It will be a slow process, but the red shoots are budding.

Arthur Hayes, former CEO of BitMEX

Knowledge drives empowerment and confidence.

Flori Marquez, co-founder and chief operating officer of BlockFi

Prediction of the Week

Analyst puts Bitcoin price at $30K next month with breakout due

Early in the week, Bitcoin traded sideways between $19,000 and $20,000 with relatively little price fluctuation. On Oct. 25, the asset began moving up toward $21,000, finding resistance at the level on Oct. 26 before retracing back toward $20,000 on Oct. 27, according to Cointelegraphs BTC price index.

On Oct. 25, Eight CEO Michal van de Poppe forecasted a possible near-term surge up to $30,000 for BTC. Within 2-3 weeks, #Bitcoin will break out significantly, he tweeted, adding: My take is the upside. My guess is probably $30K.

FUD of the Week

CFTC commissioner compares crypto contagion risk to 2008 financial crisis

Commodity Futures Trading Commission head Christy Goldsmith Romero recently requested additional power from the United States government to ensure crypto problems do not affect mainstream finance. Romero drew parallels between the 2008 financial crisis and the current atmosphere by citing Terras downfall as a contagion risk for mainstream markets. She noted that the crypto sector could negatively impact mainstream finance due to increasing crossover activity between the two worlds.

3Commas issues security alert as FTX deletes API keys following hack

Following investigations, crypto exchange FTX and digital asset trading bot service 3Commas found the cause of suspicious DMG cryptocurrency trading on FTX. Hackers phished victims out of their FTX API keys via fake websites that looked like 3Commas’, resulting in unauthorized trades for DMG asset pairs on FTX. Other methods, including malware, may also be at fault.

Bithumb ex-chairman could face 8 years in prison over alleged $70M fraud

Bithumb ex-chairman Lee Jung-hoon faces fraud charges in South Korea for allegedly defrauding prospective Bithumb buyer Kim Byung-gun out of $70 million. Jung-hoon allegedly received $70 million from Byung-gun as a down payment for the purchase of the Bithumb exchange. However, the deal was contingent on Bithumb listing crypto asset BXA, which allegedly never occurred. If deemed guilty on Dec. 20, Jung-hoon could face eight years in prison.

Best Cointelegraph Features

Crypto City: Guide to San Francisco Bay Area

There were a lot of cypherpunks at those early Bitcoin meetups that I went to.

Building community resilience to crises through mutual aid and Web3

Were going to use whatever seems easiest whatevers going to work. And when its not working, were going to ditch it.

Ethereum at the center of centralization debate as SEC lays claim

Ethereums transition to PoS was celebrated as a key upgrade. However, a month after the move, centralization concerns are mounting high.

from Cointelegraph.com News https://ift.tt/OjPwLWQ

Dogecoin price rallies 150% in 4 days, but DOGE now most 'overbought' since April 2021

DOGE price could drop 60% by the end of this year as it reaches its most overbought level since April 2021.

The Dogecoin (DOGE) price rally extended further on Oct. 29 in hopes that the cryptocurrency would get a major boost from Elon Musk's Twitter acquisition.

Elon Musk boosts Dogecoin price again

Dogecoin price jumped by nearly 75% to reach $0.146 on Oct. 29, the biggest daily gain since April 2021.

*DOGE/USD daily price chart. Source: TradingView*

Notably, the meme-coin's massive intraday rally came as a part of a broader uptrend that started earlier this week on Oct. 25. In total, DOGE's price gained 150% during the Oct. 25-29 price rally.

The surge was also accompanied by a decent increase in its daily trading volumes. That coincided with a spike in the number of DOGE transactions exceeding $100,000, according to Santiment. Both indicators sugges a growing demand for Dogecoin tokens among rich investors, or so-called "whales."

*Dogecoin whale transaction count. Source: Santiment*

The jump across Dogecoin's key metrics reflect investors' excitement about Elon Musk's Twitter acquisition on Oct. 27. Earlier this year, the billionaire entrepreneur had flirted with the idea of making Dogecoin a payment method to purchase the Twitter Blue subscription.

Musk's Tesla and SpaceX already accept DOGE payments for their merchandise.

$DOGE, the official currency of Twitter.
— David Gokhshtein (@davidgokhshtein) October 28, 2022

Shiba Inu, meme-coins follow DOGE

Shiba Inu (SHIB), the second-largest meme token by market capitalization, posted a copy-cat rally as well.

On Oct. 29 alone, SHIB's price jumped by 30% to $0.00001519, its highest level since August 2022. Like Dogecoin, Shiba Inu's rally came as a part of a broader uptrend that started on Oct. 25. Since then, its price has gained 53%.

*SHIB/USD daily price chart. Source: TradingView*

Additionally, other meme coins have jumped massively in the said period, including Dogelon Mars (ELON), which rallied 140%.

*Meme coins performance on hourly, daily, and weekly timeframes. Source: CoinMarketCap*

Dogecoin most overbought since April 2021

Dogecoin's ongoing price rally is starting to look overstretched, however, according to a classic technical indicator.

The relative strength index (RSI), a momentum indicator determining the degree of recent price changes to analyze overbought or oversold levels, has risen to 93.69 on the daily Dogecoin chart. This is the highest level since April 2021, a month before the DOGE price rallied to its record high of $0.75.

Therefore, the "overbought" conditions do not necessarily mean an immediate bearish reversal. But they do reflect the current euphoric buying momentum in the market, which sooner or later prompts the price to trend either sideways or correct downward.

Dogecoin's 2018-2020 bear market on a weekly chart sheds light on similar price action. Notably, DOGE crashed by almost 95% almost two years after peaking at $0.0194 in January 2018.

The token's correction period saw it trending inside a descending channel. It broke out of the range to the upside in July 2020 but followed the upside move with a sideways consolidation trend — between its 0 Fib line of 0.0022 and 0.236 Fib line of $0.0054 — until December 2020.

*DOGE/USD weekly price chart. Source: TradingView*

In comparison, Dogecoin's ongoing bear market is shorter but shows a similar trend trajectory to the 2018-2020 period, as shown above. Therefore, DOGE may fluctuate inside its current 0-0.236 Fib line range (or the $0.055-$0.176 range) following its descending channel breakout.

In other words, DOGE could correct toward $0.055 by the end of this year, down about 60% from current price levels, if the fractal plays out as intended.

Conversely, an immediate breakout above the 0.236 Fib line could have DOGE eye $0.25 as its next upside target.

from Cointelegraph.com News https://ift.tt/y834DXk