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Friday, October 27, 2023

Chainlink leads the market with 61% weekly gain — What’s driving LINK price?

LINK price pulled off a shocking double-digit rally over the past week, but exactly what is behind the move?

The Chainlink’s (LINK) token surged by a substantial 61.3% from Oct. 20 to Oct. 25, reaching a peak of $11.78 and marking its highest point since May 2022. LINK price then stabilized around $10.50, prompting investors to question the sustainability of this new price level.

*Chainlink (LINK) token price, 12-hour, USD. Source: TradingView*

It's worth noting that this surge coincided with Bitcoin's (BTC) 23% gain during the same period. However, LINK's performance stands out in comparison to Ether's (ETH) 14% increase and Solana's (SOL) 28% rally, suggesting increased bullish sentiment toward Chainlink's leading oracle and decentralized computing solutions.

Chainlink partnerships and integrations back the rally

Several recent developments have contributed to LINK's outperformance of its peers. Notably, the announcement of Chainlink's upcoming native staking upgrade set for release in the next couple of months garnered significant attention. The initial staking pool was a resounding success, filling up in less than three hours, and the planned expansion promises greater flexibility through staking withdrawals, improved security guarantees, and dynamic rewards.

Additionally, Chainlink's integration into various blockchain networks has fueled optimism among LINK investors. For instance, on Oct. 15, Chainlink revealed its provision of services to Advanced Crypto Strategies DAO, a multi-chain yield optimizer and automated liquidity manager, and Equilibria, a yield booster for Pendle Finance.

By Oct. 22, Chainlink services had been integrated into Cobo Global, an institutional-grade digital custody solution, StaFi Protocol's liquid staking solution for Proof-of-Stake chains, Ethereum's on-chain derivatives platform Thales Market, and Xena Finance, which offers 50x perpetual futures on Coinbase's Base chain.

On Oct. 24, telecom giant Vodafone made a significant announcement, revealing its digital asset arm's involvement in the Chainlink network as a node operator. This came after completing a proof-of-concept with the Japanese trading and investment company Sumitomo for the exchange of trade documents across platforms.

FTX and Alameda Research bankruptcy liquidation fear dissipates

The price of LINK came under pressure following the Delaware Bankruptcy Court's approval of the sale of FTX and Alameda Research cryptocurrencies on September 13. Initially, there were concerns about the potential liquidation of $3.4 billion worth of digital assets, including LINK, which raised fears of a market crash. However, recent transfers from wallets associated with the bankruptcy estate have been gradual and had little impact on prices.

As the concerns related to the FTX and Alameda Research bankruptcy subsided and renewed interest in mid-capitalization altcoins emerged with Bitcoin's rise above $32,000 on Oct. 23, investor interest in LINK grew. Consequently, the demand for leveraged long positions in LINK reached a three-month high, as indicated by the funding rate.

A positive funding rate indicates that longs (buyers) are seeking increased leverage, while the opposite scenario arises when shorts (sellers) require additional leverage, leading to a negative funding rate.

*LINK average perpetual contracts 8-hour funding rate. Source: Coinglass*

It's worth noting that the current 0.014% 8-hour rate translates to a 0.3% cost over a seven-day period, which is not significant for traders building futures positions. Typically, when there is an imbalance driven by excessive optimism, the rate can easily exceed 1.0% per week.

In addition, the number of active addresses in the Chainlink network has reached an 11-month high, as reported by Messari and Coinmetrics data.

*Chainlink 1-day unique active addresses. Source: Messari/Coinmetrics*

Interestingly, the previous peak occurred on Nov. 7, 2022, when FTX exchange issues led to a six-month high in LINK's price at $38.32. This coincides with concerns surrounding FTX exchange's withdrawals and apprehensions about the impact of its native token FTT following Changpeng "CZ" Zhao's decision to liquidate Binance's holdings of FTT the previous day.

The subsequent 30 days proved to be extremely negative for LINK's price, with the token plummeting by 51.7% to $18.50. Nevertheless, LINK enthusiasts need not be concerned this time, given the substantial developments in its ecosystem and the promising advancements in Chainlink's native staking solution.

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.

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Fed, BOE officials share continuing interest in CBDCs, stablecoin regulation

Sir Jon Cunliffe looks at payment solutions of the past and future in his last speech as deputy governor of the BOE.

The Federal Reserve Board continues to research a central bank digital currency (CBDC), or at least adjacent technologies, Vice Chair Michael Barr said on Oct. 27. He also touched on stablecoins at the Economics of Payments XII Conference, where his English colleague Sir Jon Cunliffe made his last speech as deputy governor of the Bank of England (BOE).

The Fed’s research is currently focused on “end-to-end system architecture,” such as ledgers and tokenization and custody models for an intermediated CBDC, Barr said in Washington. Barr repeated the Fed mantra of no digital dollar without a congressional mandate, but added that “learning from both domestic and international experimentation can aid decisionmakers in understanding how we can best support responsible innovation.”

Barr’s remarks are not controversial on the surface, but they bring to mind Representative Tom Emmer’s call for an end to the Fed’s “sketchy” CBDC research made in the House of Representatives in September.

Cunliffe, whose 10-year term in office ends on Oct. 31, spoke at the conference a day earlier. He, too, emphasized that no decision has been made in his country on a CBDC. But he said a consultation paper published in February “concluded that current trends and technological advances in payments […] made it likely that a Digital Pound would be needed by the end of the decade.”

The Deputy Governor of the BOE Sir Jon Cunliffe hiding his excitement of the coming CBDC

Can you read between the lines Anon? pic.twitter.com/RPq0Bv8J9P
— RŌNIN (@ronin21btc) December 30, 2022

The consultation paper received 50,000 responses, Cunliffe said. Privacy, programmability and the decline of cash were the top concerns among commenters. Further:

“I would observe, if only a little tongue in cheek, that criticisms of the Digital Pound have ranged from concerns that it would [...] disintermediate the banking system and threaten financial stability, to, at the same time, concerns that there would be no use for it and it would be a ‘solution looking for a problem.’”

Cunliffe envisioned that “private companies would be able to integrate and programme the Digital Pound, as the settlement asset, into the services they would offer to wallet holders.” The BOE will respond in “the coming months,” he added.

Cunliffe promised that the BOE would soon issue a discussion paper on stablecoin regulation. Barr also mentioned stablecoins, saying regulation was necessary. An asset of that type “borrows the trust of the central bank,” he said.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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Sam Bankman-Fried denies defrauding FTX users at trial

As the final witness in his defense case, the former FTX CEO placed some of the blame for the crypto exchange’s failure on Gary Wang and Nishad Singh.

The jury overseeing the criminal trial of Sam “SBF” Bankman-Fried listened to the former FTX CEO’s testimony for the first time, which involved largely denying knowledge of fraudulent activities at the crypto exchange.

According to reports from the New York courtroom on Oct. 27, Bankman-Fried suggested Wang, the former chief technology officer at FTX, had been partly responsible for creating the “allow negative” button for Alameda Research. The feature gave the crypto hedge fund the ability to trade more funds than it had available.

“At the time, I wasn’t entirely sure what was happened,” Bankman-Fried reportedly said regarding Alameda’s line of credit. “I thought the funds were being held in a bank account, or sent to FTX in stablecoins. If Alameda was keeping it, I figured it would be reflected as a negative number on FTX.”

On former Alameda co-CEOs Caroline Ellison and Sam Trabucco, Bankman-Fried reportedly said they were “a good team” but criticized Ellison’s experience:

“Caroline was a good manager, empathetic. She was not a software developer. She was good at doing research. She had not focused on risk management.”

This is a developing story, and further information will be added as it becomes available.

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Thursday, October 26, 2023

Prosecutors rest their case as Sam Bankman-Fried prepares to testify

Defense lawyers representing SBF called two witnesses, a Bahamas-based attorney and an expert from a litigation consulting firm, before the former FTX CEO’s testimony.

Attorneys representing the United States Justice Department rested their case against Sam “SBF” Bankman-Fried after more than three weeks of expert witnesses and testimonies from former FTX and Alameda employees.

According to reports from the courtroom on Oct. 26, the U.S. government’s last witness before resting was FBI agent Mark Troiano, who primarily testified on SBF’s involvement in more than 300 groups with the messaging app Signal. Following Toiano’s testimony, Bankman-Fried’s lawyers motioned to dismiss, which was quickly denied by Judge Lewis Kaplan.

SBF’s attorneys, Mark Cohen and Christian Everdell, presented two witnesses before Bankman-Fried. Krystal Rolle, a Bahamas-based attorney previously representing the former FTX CEO, testified she accompanied SBF to a meeting with the Securities Commission of the Bahamas in November 2022 and witnessed him transferring FTX assets to authorities.

Joseph Pimbley from litigation consulting firm PF2 Securities, the defense’s second witness, testified he had been paid more than $50,000 to extract data from Amazon Web Services on Alameda Research’s line of credit with FTX and data on roughly 9 to 11 million users of the crypto exchange. Attorneys with the Justice Department questioned Pimbley on whether he had any knowledge of how FTX funds were used or the “allow negative” button — the feature giving Alameda the ability to trade more funds that the firm had available.

Subscribe to our ‘1 Minute Letter’ NOW for daily deep-dives straight to your inbox! ⚖️ Be the first to know every twist and turn in the Sam Bankman-Fried case! Subscribe now: https://t.co/jQOIYUv6IW #SBF pic.twitter.com/gp7zJu5sgy
— Cointelegraph (@Cointelegraph) October 5, 2023

Based on reporting from the courtroom, Judge Kaplan often pushed back on questions posed by Everdell or Cohen to witnesses, saying, “This is not helpful” and “Can we get to the point?” At the time of publication, Bankman-Fried had not yet testified, but his lawyers said they expected him to be on the stand for roughly four hours.

Defense attorneys told Kaplan in an Oct. 25 conference call that they planned to have Bankman-Fried testify as part of their case defending the former FTX CEO. Prosecutors previously called former Alameda CEO Caroline Ellison, former FTX chief technology officer Gary Wang and former FTX engineering director Nishad Singh to testify on SBF directing efforts to have Alameda use FTX funds.

Bankman-Fried’s trial is expected to end within a few business days amid closing arguments and the judge considering any motions submitted by prosecutors or defense lawyers. However, the former FTX CEO is scheduled to face five more criminal counts in a second trial expected to begin in March 2024. He has pleaded not guilty to all charges in both cases.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Update (Oct. 26 at 4:50 PM UTC): This article has been updated to include information on the U.S. government's cross-examination of Joseph Pimbley.

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Bitcoin traders earmark key BTC price levels as $34K struggles to hold

BTC price is seeking retests of lower levels after Bitcoin bulls fail to push beyond recent 17-month highs.

Bitcoin (BTC) fell below $34,000 after the Oct. 26 Wall Street open as consolidation at 17-month highs continued.

*BTC/USD 1-hour chart. Source: TradingView*

$33,000 becomes do-or-die BTC price level

Data from Cointelegraph Markets Pro and TradingView showed BTC price behavior challenging intraday lows.

The largest cryptocurrency had attempted to push higher still the day prior, but sell-side pressure ensured that $35,200 remained untouched as a ceiling.

“We are going to have to wait for some candles to develop to see what the next move is, but we can gain some insight by continuing to monitor liquidity placement in the order book,” monitoring resource Material Indicators wrote in part of its latest X update.

“Historically, the side with the heaviest concentration of liquidity closest to the active trading zone wins the battle and right now those concentrations on both sides are very close with a slight advantage to the bid side.”

Material Indicators flagged $33,000 as the key level to hold, as “any wicks below that level before (or after) the Monthly candle close would invalidate this attempt at a Bull Market breakout.”

“Based on how this market tends to operate, I can envision a short squeeze to $36k and potentially up to $40k before a dump, and I'll be happy to scalp any long setups that come my way, but remaining cautious until we retest $33k,” it added.

*BTC/USD order book data for Binance. Source: Material Indicators/X*

As Cointelegraph reported, $36,000 is already on the radar as a target to overcome as part of a breakout that could see $45,000 return next month.

Other popular market participants, including Michaël van de Poppe, founder of trading firm MNTrading, had similar BTC price zones of interest.

Still interesting to keep an eye on #Bitcoin.

Fighting $34.7K as resistance, through which a breakout there should lead to $37-38K.

On the other hand, areas between $32.6-33.1K, if we get there, areas of longing.

Corrections are usually quite swift in upwards trends. pic.twitter.com/DTOYcoCQIK
— Michaël van de Poppe (@CryptoMichNL) October 26, 2023

“Current price action is very predatory,” popular trader Daan Crypto Trades continued in part of his own analysis.

“Really punishing any longs or shorts that are over-extending. Looks to be in chop mode overall until $33K or $35K breaks.”

*BTC/USD chart with open interest. Source: Daan Crypto Trades/X*

An accompanying chart tracked the ongoing relationship between open interest, or OI, and recent BTC price “squeezes.”

No $20,000 CME gap fill?

Zooming out, trader and analyst Credible Crypto, known for his optimistic takes on the BTC price outlook, took one bearish theory in particular to task.

This involved concerns of a return to $20,000 — the site of the only nearby "gap" in CME Group Bitcoin futures markets.

As Cointelegraph reported, these gaps form when BTC/USD starts a new week in a different place to where it traded the Friday prior, and the result is often a magnet for the market.

Some believe that $20,000 is very much on the cards due to the gap, but Credible Crypto told X subscribers not to wait for capitulation.

"I said some months ago that we would likely leave that gap behind," he commented, adding that "gaps are often left unfilled during parabolic advances."

He linked to a chart showing historical gaps originally uploaded in March this year.

*CME Group Bitcoin futures chart with gap information as of March 2023. Source: Credible Crypto/X*

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Wednesday, October 25, 2023

Polygon launches POL token contract on Ethereum to eventually replace MATIC

The team migrated the POL token contract to the Ethereum network, paving the way for it to replace MATIC in the future.

Polygon Labs has launched the Ethereum contract for the new Polygon token, POL, according to an October 25 announcement. The new token is intended to replace the ecosystem’s current token, MATIC. However, the team said users presently don't need to exchange their MATIC for POL.

The POL token upgrade is now live on Ethereum mainnet.

Polygon 2.0, released this summer, is a roadmap for scaling Ethereum to build the Value Layer of the Internet. POL unlocks that future.

POL is a next-generation token that can power a vast ecosystem of ZK-based L2 chains.… pic.twitter.com/gmrsu0ZqLz
— Polygon (Labs) (@0xPolygonLabs) October 25, 2023

According to blockchain data, the new token was created on October 25 at 09:06 a.m. UTC. Its full name is the “Polygon Ecosystem Token.” In the announcement, the Polygon team claimed that POL would “power a vast ecosystem of zero knowledge-based Layer 2 chains” by implementing a 're-staking protocol' that allows token holders to stake it on multiple chains, performing multiple functions in the process.

The token’s launch will now pave the way for other aspects of the Polygon 2.0 roadmap to be implemented, including the launch of a new staking layer for the Polygon ecosystem, upgrading the current Proof of Stake (PoS) network to zkEVM layer-2, and creating a shared liquidity protocol for all Polygon networks, the post stated.

The team emphasized that POL is not currently being used for any systems in the Polygon network. Staking on both Polygon PoS and Polygon zkEVM is still being performed via the old token, MATIC, and gas fees on the PoS network are still being paid for with MATIC. So, users, validators, and app developers do not need to exchange their MATIC for POL at present.

Polygon Labs first announced it was developing a new layer-2 ecosystem on June 29. It called the new ecosystem “Polygon 2.0.” On September 14, the team announced that Polygon 2.0 would use a new token, POL. But at the time, the token was just a proposal and had not been deployed to Ethereum.

Polygon’s proposed layer-2 ecosystem will use zero-knowledge proofs to validate transactions between networks. It will face competition from the Optimism ecosystem proposed by Optimism Labs, which will use optimistic rollup technology to secure messages between networks.

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Why is Ether (ETH) price up today?

Ethereum's price is stabilizing around $1,800, a psychological resistance level for months, amid growing ETF approval buzz.

Ethereum's native token, Ether (ETH), is up today, mirroring gains elsewhere in the cryptocurrency market as investors go bullish on a potential spot Bitcoin ETF approval in the U.S.

On Oct. 25, ETH's price stabilized around $1,800, a psychological resistance level, after rallying nearly 9% this week. The cryptocurrency's upside moves accompanied a rise in daily trading volumes, indicating strong interest in Ether from buyers.

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

Let's look close at the factors that have driven the price of ETH up in the past few days.

A win for Grayscale's spot Ethereum ETF

On Oct. 24, the U.S. Securities and Exchange Commission (SEC) acknowledged Grayscale Investment's application to convert its Ethereum trust into an ETF.

SEC has acknowledged Grayscale's spot ether ETF filing...

This would be conversion of $ETHE into ETF. pic.twitter.com/JMmutgbakZ
— Nate Geraci (@NateGeraci) October 23, 2023

The commission's move is a response to a direct court order that mandates it to review Grayscale's pending ETF applications. So far, it has not confirmed a spot crypto ETF but has approved similar investment vehicles linked to Bitcoin and Ethereum futures.

However, the market anticipates that the SEC will approve a spot Bitcoin ETF in early 2024. Once that happens, many crypto analysts see a spot Ethereum ETF approval on the cards.

ETH is probably the best 6 to 12m long among large cap assets now when BlackRock applies for spot ETH ETF 6 to 12m down the road. Ethereum's ESG friendliness and native staking yield will be appealing to institutional investors should BTC spot ETF turn out to be a success.
— Arthur (@Arthur_0x) October 24, 2023

Ethereum whale transactions hit 3-month high

The growing ETF buzz coincides with an increase in whale activity across the Ethereum ecosystem.

Notably, the whale transaction count of Ether transactions exceeding $100,000 has jumped 15% in a week to reach its highest level since June, data on Santiment shows. Bitcoin (BTC), Cardano (ADA), and DAI have witnessed similar growth in whale transactions.

*Ethereum whale transaction count exceeding $100K in value. Source: Santiment*

The whale accumulation has accompanied a rise in Ether prices, indicating that most whales have backed the Ethereum rally. Further evidence comes from whales' ETH withdrawals from exchanges, meaning they have the least likelihood of trading the cryptocurrency for other assets in the future.

1 hour ago, Fresh Whale withdrew 8.31K $ETH ($15.09M) from #coinbase at $1816.

There have been 3 Fresh Wallets jointly accumulated a total of 47.76K $ETH ($82.97M) in the last 24H.

Bullish pic.twitter.com/sIzlMci76V
— The Data Nerd (@OnchainDataNerd) October 24, 2023

Short liquidations push ETH price to $1,800

Ethereum's price increase recently has coincided with short liquidations totalling over $70 million in Ether futures contracts. Meanwhile, only about $41 million worth of long positions were liquidated in the same period.

*ETH total liquidation every 24 hours. Source: Coinglass*

Short sellers were forced to close their positions by purchasing futures contracts at any price, leading to a price rise above $1,850 on Oct. 24.

Ultimately, Ethereum bulls have reasons to feel more optimistic as hopes for new avenues of investment through traditional stock market brokers are emerging.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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