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IOTA makes 40%+ move after $100M ecosystem foundation announcement

IOTA price saw a high volume surge that took the altcoin to a near 1-year high, but are there reasons to support further upside?

IOTA, an open-source distributed ledger and cryptocurrency focused on the Internet of Things (IOT), saw its native IOTA token rally 43% on Nov.

According to a press release from the project, the foundation will be seeded with $100 million in IOTA tokens, which will be vested over a four-year period and traders clearly perceived the announcement and funding plan as a short-term bullish catalyst.

Historically, ecosystem and developer incentives by blockchain and DeFi protocols tend to attract liquidity to the project and boost market participants sentiment.

In August 2021, Avalanche’s AVAX token went on a 1,400% tear after the announcement of the Avalanche Rush DeFi incentive program.

A similar outcome was seen with Trader Joe’s JOE token in the months following December 2022 after the DeFi protocol announced plans to establish a presence on Arbitrum.

Currently, the Arbitrum ecosystem is hosting liquidity and developer incentives and these initiatives align with the recent 62% resurgence in ARB token price.

Was IOTA’s price move another sell-the-news event?

On Nov.

Traders often interpret funding rates and longs-to-shorts ratios as sentiment gauges and indicators of how active investors are positioned.

Read more

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

Which altcoins will survive the SEC crackdown? Bitcoin OG explains

Bitcoin OG and educator Dan Held points out which crypto assets are most likely to avoid the ongoing SEC crackdown.

Proof-of-work coins that had a fair distribution at their launch are the most likely to avoid being labeled as securities by the U.S. SEC, according to Bitcoin OG and educator Dan Held. 

Last week, the SEC sued Binance and Coinbase, accusing them of offering a number of altcoins as  unregistered securities. As a result, many of the tokens mentioned in the lawsuit were delisted by major trading platforms which made their price tank.

According to Held, Tokens that “had fair or transparent launches”, such as Litecoin, Dogecoin and Monero, do not match the definition of a security that the SEC is following and therefore are likely to avoid the current crackdown. 

Related: SEC charges against Binance and Coinbase are terrible for DeFi

“It definitely seems like the SEC has carved that out as something that they won't be going after”, he said in an exclusive interview with Cointelegraph.

According to Held, the vast majority of the tokens classified as securities by the SEC in its lawsuit against Coinbase and Binance were proof-of-stake coins, or tokens who had a pre-mined distribution, which means they have a more centralized ownership.

As Held also pointed out, the current crackdown is mainly carried out by a single government entity, the SEC, which means the level of pressure on the industry is still far from reaching the maximum level.

Held also stated that only Bitcoin and a few other cryptocurrencies that are decentralized enough will survive in the long run, as they are the only ones that can survive an all-out government attack.

To find out more about which cryptos can resist the ongoing SEC crackdown, watch the full video on our YouTube channel, and don’t forget to subscribe!

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

How to find the next big altcoin before it pumps

Join us as we discuss the best way to find the next big altcoins before they pump and what every trader should be doing right now.

In this week’s episode of Market Talks, Cointelegraph welcomes Lark Davis, who has been actively involved in the world of cryptocurrency since 2017. He is a Bitcoin (BTC), crypto and stock investor and boasts over 1 million followers on Twitter and over 470,000 YouTube subscribers.

In today’s discussion with Davis, we first get to know him a little better by finding out how he got into crypto in the first place and why he is still so deeply interested. The answer might not be as simple or orthodox as you think.

With so many years of experience in the crypto space, Davis certainly has assessment criteria for determining what altcoins might be able to make it big and run with the kings in the space, such as Ether (ETH) and BTC. We get the details of what he looks for when analyzing altcoins and finding those hidden gems.

BTC might not reach a new all-time high in 2023, at least it doesn’t seem likely as of right now, but there might be some major events or catalysts that can propel it on an upward trajectory and lay the groundwork for new all-time highs. We get Davis’ opinion on what these events might be and what his price target is for 2023 and 2024.

Lastly, we discuss the most important things happening in crypto right now, whether it’s regulation, lawsuits, development or experiments in the space, Davis gives us his honest opinion. We also ask him what every new and experienced crypto investor should be doing in this current market. You dont want to miss it! 

We cover all of this and more, so make sure to stay tuned until the end. Market Talks airs every Thursday. Each week, it features interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, head on over to Cointelegraph Markets & Research’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

Can Bitcoin reach $25K again in March 2023? Watch Market Talks live

Join us as we discuss what March 2023 holds in store for Bitcoin. Will it touch $25,000 again or will it break past and flip it to support?

In this week’s episode of Market Talks, Cointelegraph welcomes Adrian Zduńczyk, or as he is known on Twitter, CryptoBirb. He is the founder and CEO of The Birb Nest, a trading community platform. He is also a chartered market technician, chemical engineer, entrepreneur, mentor and influencer with over 655,000 followers on Twitter.

We start things off with a simple question: What is Zduńczyk’s general approach or set of procedures that he goes through when he begins to connect with the markets in the mornings? How does he begin to decide if he should trade on any given day or stay away altogether? What are some comprehensive metrics that he looks at to gauge the overall market direction and sentiment, especially when studying altcoins? 

There was a lot of excitement at the start of 2023 with Bitcoin (BTC) finally breaking out of its sideways action and making a move toward the upside. Now that things have settled down a bit and the price of Bitcoin is lingering around the $23,000 range, we ask Zduńczyk how he feels about the market and if there are any coins that stand out to him during this time.

The next Bitcoin halving is still about a year and a month away, yet people are already starting to talk about it and formulate strategies for it. We get Zduńczyk’s insights into how he thinks this cycle might be developing.

It’s already March, and it seems that Zduńczyk thinks that it might not be as kind as February was for Bitcoin — we ask him for his reasoning behind this claim. Bitcoin seems to be touching the $25,000 mark and coming back down to hover around $23,000. What needs to happen for Bitcoin to flip $25,000 to support and move past it?

We cover all this and more, so make sure to stay tuned until the end because Cointelegraph Markets & Research will also be taking your questions and comments throughout the show, so be sure to have them ready to go.

Market Talks streams live every Thursday at 12:00 pm ET (5:00 pm UTC). Each week, it features interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, head on over to Cointelegraph Markets & Research’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

How Fantom and Optimism’s DeFi and DApp development directly affects FTM and OP price action

Despite similar price action, Fantom and Optimism ecosystems are moving in opposite directions and this is reflected in each token’s price.

The price action of Optimism (OP) and Fantom (FTM) tokens have been quite identical since the last quarter of 2022. The difference is, volatility is slightly higher for OP, which surged 240% year-to-date, compared to the 180% gains seen in FTM.

The Fantom Foundation has made several improvements since Q4 2022, which have catalyzed an uptrend in the token’s price. However, Fantom’s ecosystem remains primitive while its competitors expanded to support new use cases.

On the other hand, Optimism has shown robust community and decentralized application (dApp) development thanks to the loyalty of Ethereum developers and the Optimism Foundation’s effective strategy in aligning token incentives with governance.

OP/USD (orange) and FTM/USD (blue) price chart. Source: TradingView

Fantom’s ecosystem development stalls

The Fantom ecosystem received an adverse blow in early 2022 due to the departure of leading DeFi architect Andre Cronje. The blockchain’s ecosystem development stalled after Cronje’s departure. At the same time, Fantom’s competitors, like Polygon (ATOM), Arbitrum and Optimism continued to host various popular applications.

Cronje rejoined Fantom development efforts in November 2022, however, it appears it was too late by then. The lack of sustainable yields in a bear market has restricted liquidity inflows to Fantom.

Fantom TVL over time. Source: DefiLlama

The Fantom community also aimed to improve the quality of decentralized applications on the blockchain through an ecosystem development fund built by reducing the portion of burnt fees from 20% to 5% in December. While the number of smart contracts created on Fantom has spiked significantly since Q3 2022, the quality of dApps still needs to improve compared to its competitors.

Number of smart contracts created on Fantom. Source: Dune

The 30-day activity billboard from Nansen shows that top dApp activity on Fantom was limited to simple swaps, which is discouraging as other activities like derivatives trading, social media platforms and NFT trading are prospering on competing chains like Arbitrum, Polygon, and Optimism.

The most used dApps on Fantom between Jan. 20, 2023, and Feb. 20, 2023, is XEN Crypto, a free mint Ponzi scheme-like application. The application first appeared on Ethereum in October 2022 with a lot of excitement in the first few days of launch. However, the hype subsided after the mint became unprofitable as many users crowded the platform.

Top Fantom dApps by usage in the last 30 days. Source: Nansen

Optimism developers find success with new use cases

At the same time, Optimism has successfully attracted liquidity and activity to its ecosystem after launching the Optimism token and accompanying airdrop campaigns. In April 2022, the Optimism team stated there would be a “season of airdrops,” and launched an Optimism Quest campaign.

The layer-2 network saw increased usage from users for collecting its non-fungible tokens (NFTs), which would likely make them eligible for the airdrop. The Quests ended in January 2023, following which there was a steep decline in activity. However, the DeFi liquidity remained sticky.

The total liquidity on Optimism. Source: DefiLlama

Moreover, the list of most used decentralized applications on Optimism includes yield platform Pool Together, derivatives platforms Synthetix and Perpetual Protocol and leading lending platform Aave.

Optimism also hosts a decentralized blogging platform, Mirror, which allows content writers to issue their articles as NFTs. The platform has gained significant usage, with 2.7 million hits on its website.

Top Optimism dApps by usage in the last 30 days. Source: Nansen

Comparing the tokenomics of FTM and OP

One drawback of the Optimism token is that it is only a governance token and doesn’t entitle users to real yields in gas fees. The OP tokens’ supply will inflate at 2% per year, along with investor and team unlocks, starting April 2023.

However, the Optimism team has incentivized participation in governance, which improves the protocol’s governance and also aligns incentives with its intended use, i.e., higher voter participation.

Optimism’s governance has proved more efficient than competitors like Uniswap (UNI) and Compound (COMP) in promoting decentralization. The layer-2 network’s ecosystem is also expanding by supporting diverse applications. Optimism also stands to benefit from Arbitrum’s native token launch, which can likely add fuel to the layer-2 token narrative, pushing the OP token’s price higher.

Related: Vitalik shows support for Optimism’s governance structure and OP gas proposal

For Fantom, despite implementing a burn feature in its protocol, the real yield of the platform is still negative, around -0.93%. The blockchain’s fees and liquidity must improve considerably to enhance the value of FTM. Otherwise, it risks becoming irrelevant alongside many other layer-1 protocols in the market.

Technically, FTM can see more upside while it holds support above $0.38 and target the $0.95 support and resistance area. A breakdown below $0.38 could see it dropping toward $0.19.

FTM/USD weekly chart. Source: TradingView

For OP, its price surged above its previous peak of $2.30, which will now act as a support for further upside as it experiences a price discovery. On the flipside, a breakdown below this level could see the token’s price drop toward $1.30.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

$24K Bitcoin — Is it time to buy BTC and altcoins? Watch Market Talks live

Join us as we discuss whether it’s time to consider stacking some sats and buying into some attractive altcoins.

In this week’s episode of Market Talks, Cointelegraph welcomes Michaël van de Poppe, a full-time day/swing trader in cryptocurrencies based at the Amsterdam Stock Exchange who’s interested in everything related to blockchain in combination with the current financial system. He is also the CEO and founder of Eight Global, a cryptocurrency education and consultancy platform.

We kick things off by getting van de Poppe’s take on the current market and how he’s feeling about things at the moment. 

Generally, everyone’s views on external macro factors that impact crypto prices are mostly United States-centric. Since van de Poppe is based in Amsterdam, we find out what other macro and geopolitical factors he regularly considers when assessing the markets.

After the news about the U.S. Securities and Exchange Commission cracking down on stablecoins and exchanges and also the not-so-hot Consumer Price Index (CPI) report, Bitcoin (BTC) made a move that was opposite to what many market participants were expecting. Van de Poppe shares hi thoughts and reasoning for this. 

We get into the nitty-gritty about van de Poppe’s approach to investing in altcoins and how the two large-cap cryptocurrencies, Bitcoin and Ether (ETH), impact his decisions, if at all. 

The Ethereum Shanghai upgrade is on everyone’s minds, and everyone has their own thesis on what will happen once the upgrade is complete. We ask van de Poppe what his play on Ether is over the next six months and how he plans on trading the upgrade.

One major topic that seems to generate a lot of debate in the crypto space is whether or not the current bullish price action has a limited shelf life or if it’s here to stay and will continue. We get the professional’s take on the matter and also how he thinks 2023 is going to play out for the global markets and U.S. stock markets.

We cover all this and more, so be sure to tune in live by clicking here.

Make sure to stay tuned until the end because Cointelegraph Markets & Research will also be taking your questions and comments throughout the show, so be sure to have them ready to go.

Market Talks streams live every Thursday at 12:00 pm ET (5:00 pm UTC). Each week, it features interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, be sure to head on over to Cointelegraph Markets & Research’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

5 altcoins that produced double-digit gains as Bitcoin price rallied in January

Bitcoin’s strong monthly performance translated to outsized gains in APT, GALA, T, MANA and SOL, making them the top performing altcoins in January.

The rally in cryptocurrency markets started in early January with a spike in heavily-shorted altcoins and Ethereum (ETH) liquid staking derivative (LSD) tokens due to the upcoming network upgrade in March. Soon gains started to show across the board as buyers started to play catch up. 

The improving macroeconomic conditions, such as reduced inflation and a stable job sector in the United States, provided additional tailwinds for the positive rally. Bitcoin (BTC) is en route to its most impressive closing for January since 2013. Its price has gained 40% year-to-date from the opening value of $16,530.

Another important catalyst for January 2023’s rally was a short squeeze across the crypto market. After the FTX debacle and the lack of bullish narratives for the niche space, most investors expected growth to slow down in 2023.

There are unresolved issues such as potential a Digital Currency Group fallout, geopolitical tension between Russia and Ukraine, and recession risks due to Fed’s aggressive quantitative tightening policies. Thus, most traders didn’t expect strong price rallies so early into the year.

As it turns out, negative sentiment and crowded positions in the futures market continued to fuel more upside. There’s a strong chance of a pullback soon after steep gains. It remains to be seen if the pullback levels are attractive enough for buyers to turn it into a medium-to-long-term bullish trend. Let’s take a look at the top performing cryptocurrencies for January.

Top crypto market gainers in January. Source: CoinMarketCap

Aptos (APT)

Launched in October 2022, Aptos is a relatively new blockchain in the space which leverages the technology of Facebook’s (Meta) discarded project, Libra. It carries significant face value based on its executive team, composed of former Meta engineers, who also built the Move programming language to make the chain scalable and decentralized.

While the project carries much reputation, its fundamentals do not justify the price. The disbelief among investors is part of the reason behind the APT price rally. A market capitalization of $3 billion for a four-month-old project has surprised many onlookers. There’s also suspected market manipulation in the APT/KRW pair on Upbit, giving rise to the Kimchi premium. It is difficult to pinpoint a specific factor driving its demand in South Korea.

APT/USD broke above its previous peak of around $10, recorded around its launch. Technically, the token is in price discovery mode right now. Thus, there are few sell-side resistance levels besides the latest peak of $20 and the psychological level at $25. Unless the positive catalysts in the negative funding rate for perpetual swaps and the Kimchi premium cool off, the rally may still have wings.

The price momentum indicator, Relative Strength Index (RSI), has spiked to oversold territory, suggesting the possibility of a pullback. The Moving Average Convergence Divergence (MACD) indicator shows a slight bullish deviation with a less steep rise in the metric compared to the price. Still, the presence of buying volume is reassuring for APT bulls. The support for the token lies at $14.75 and $10.40.

APT/USD daily price chart with RSI and MACD indicator. Source: TradingView

Gala (GALA)

Similar to Aptos, Gala (GALA) also benefited from the excess negative positioning in the futures market. The gain in GALA/USD from $0.02 to $0.07 can be primarily attributed to wipe out of short positions.

GALA price (yellow) and funding rate. Source: Coinglass

The token suffered significant inflation of around 17,123,286 GALA daily, which accounts for around $28.2 million monthly at current prices. It raised concerns that the recent price pump could be short-lived.

On Jan. 25, Gala’s team introduced a new roadmap of the project in which they seek to update the tokenomics to reduce inflation and introduce a new burn mechanism. They are working on an independent Gala chain, where GALA tokens will be used to pay transaction fees.

On top of that, the daily issuance of GALA may also reduce after a vote is passed to change the time-based halving schedule to a supply-based one to bring halving closer than July 203.

The upgrade announcements have added to the buying pressure in GALA/USD, evident in a spike in buying volume. The token is trading above its 200-day exponential moving average at $0.052. If buyers build support above this level, the price can run toward the July 2022 breakdown levels near $0.164.

GALA/USD daily price chart. Source: TradingView

Threshold (T)

Threshold was born from the merger of two projects, Keep Network and NuCypher, which have combined their technologies to build a decentralized bridge network. Node operators on the Threshold network stake the platform's native token, T and Ether, to validate the transfers between Bitcoin and Ethereum. This technology was borrowed from Keep Network, while NuCypher adds a layer of privacy to the protocol.

In January, the project's native token nearly tripled in price, benefiting from the V2 launch and Coinbase's listing announcements. The upgraded version of the Threshold protocol will enable tBTC (threshold Bitcoin) mints on Ethereum, which are backed by Bitcoin and pegged 1:1 to the BTC price.

The beginning of tBTC mints on Ethereum via Threshold Network will likely increase the network's total locked value, aka TVL, making Threshold nodes more valuable. Initially, the project will launch a semi-decentralized version, Optimistic Minting, and gradually move to a decentralized system of nodes.

There's a significant market opportunity for Threshold after the dissolution of RenBTC. Wrapped Bitcoin (WBTC) currently commands a dominant share of 93.6% of the total Bitcoin bridged to Ethereum.

Still, the recent 190% increase is starting to show signs of a buy-the-rumor, sell-the-news type of event, especially factoring in the Coinbase-led rise. The support for buyers lies at $0.027, with the next level of resistance at $0.145.

Decentraland (MANA)

The metaverse-themed projects Decentraland (MANA) and The Sandbox (SAND) witnessed a revival of the VR narrative as Apple is rumored to launch its VR headset collection in spring 2023. More recently, the Decentraland’s team released its manifesto for the current year, highlighting a focus on growing its developer and creator community.

While Decentraland is one of the earliest metaverse projects with a massive opportunity to capture the future Web3 market, the present rally is showing overbought characteristics in the short-term.

The RSI indicator shows a reading above its bullish resistance. The MACD indicator shows a divergence with little to no-change in the metric to complement the Jan. 28 surge of 16.5%.

MANA/USD daily price chart. Source: TradingView

Nevertheless, the breakout above 200-day moving average and resistance from the FTX breakdown levels at 0.70 is encouraging for technical buyers. It remains to be seen if the surge was a just stop hunt of short orders or stemming from actual demand. Support for the token lies at the 50-day EMA, current at $0.54, and 2022 lows of $0.27.

Solana (SOL)

Solana (SOL) benefited from excessive negative sentiment around the blockchain’s future. The price rally was a classic case of a short squeeze in the futures market. While the fundamentals pointed towards a death spiral in its price, the market played out the better of sellers. By leveraging low liquidity conditions, buyers were able to push the prices higher until few sellers remained.

The market maker and venture capitalist entity, Alameda Research, was the primary source of liquidity for Solana’s DeFi projects. It was also one of the largest backers of its ecosystem projects. The DeFi community will face significant challenges within Solana due to a lack of liquidity.

Solana developers and the foundation have been working hard to make the network stable and more decentralized. While the network remained stable through the FTX debacle, it appears to have lost the market’s trust thanks to frequent downtimes. Moreover, Alameda/FTX owns around 10.7% of the total supply of SOL, which will likely add to the selling pressure for the next few years.

Their NFT space, while placed second in terms of trading volume across blockchains, is starting to see the departure of top performers like DeGods, y00ts, and most recently, F Studio. It remains to be seen if the community can build back up. The task will be challenging without the support of its most prolific backers.

On long timeframes, the $30 level is a crucial resistance and support level for SOL/USD. If buyers consolidate above this level, the positive momentum in the token’s price will likely stretch into Q1 2023. However, given that the rally is mainly driven by a short-side wipeout in the futures market, there’s a higher likelihood for a significant correction, followed by a period of accumulation, until a meaningful run can take form.

Last but not least, the LSD-narrative tokens deserve a mention in the monthly winners list. The native tokens of Ethereum LSD platforms nearly doubled in price across the board thanks to the upcoming Shanghai upgrade.

The Frax DAO was the highest gainer among LSD tokens, benefiting from a strong rise in the staked Ether on its platform. The platform is able to attract liquidity by providing additional yield on staking ETH through leveraging its position on Curve Finance.

The Frax DAO is the largest owner of CVX tokens, which gives them priority control over Curve emissions. Currently, staking frxETH on Curve earns around 9-10% annual yield, which is two times higher than the average LSD yield of around 4%.

Given that Ethereum’s Shanghai upgrade is still a month away and there’s room for growth of LSD platforms, the attention toward LSD tokens could likely sustain through February.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

AI altcoins are pumping — Is this the beginning of the next bull market? The Market Report

On this week’s episode of The Market Report, Cointelegraph’s resident experts discuss artificial intelligence altcoins, what they are, and whether they could lead us into the next bull market.

This week on The Market Report, the resident experts at Cointelegraph discuss what artificial intelligence (AI) altcoins are, what their potential benefits are, how they work, and whether they can be a catalyst for a 2023 bull market.

We start off this week’s show with the latest news in the markets:

BTC price 3-week highs greet US CPI — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a new week on a promising footing, with BTC price action near one-month highs — but can it last? The move precedes a conspicuous macroeconomic week for crypto markets, with the December 2022 Consumer Price Index (CPI) print due from the United States. Jerome Powell, chair of the Federal Reserve, will also deliver a speech on the economy, with inflation on everyone’s radar. Inside the crypto sphere, FTX contagion continues, with Digital Currency Group (DCG) at odds with institutional clients over its handling of solvency problems at subsidiary Genesis Trading. Our resident experts take a look at these factors and more as the second trading week of January gets underway.

Digital Currency Group under investigation by US authorities: Report

Crypto conglomerate Digital Currency Group, or DCG, is under investigation by the U.S. Department of Justice’s Eastern District of New York and the Securities and Exchange Commission, according to a Bloomberg report. 

The authorities are digging into internal transfers between DCG and its subsidiary crypto lending firm, Genesis Global Capital, according to the report, which cited people familiar with the matter. Prosecutors have already requested interviews and documents from both companies, while the SEC is running a similar early-stage inquiry.

We discuss what impact this could have on the crypto market. Could this put a damper on the current positive trend in the crypto space, which is finally starting to see some green?

5 sneaky tricks crypto phishing scammers used last year: SlowMist

We take a look at some of the most common phishing techniques crypto scammers used on victims in 2022 to help you be more aware and cautious when dealing in the space and hopefully save you from any possible scams or rug pulls in 2023.

Our experts cover these and other developing stories, so make sure you tune in to stay up-to-date on the latest in the world of crypto.

Next up is a segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Chasing the whale.

Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down.

Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. Our analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week, so make sure to tune in to find out which ones made the cut.

Do you have a question about a coin or topic not covered here? Don’t worry — join the YouTube chat room and write your questions there. The person with the most interesting comment or question will have a chance to win a one-month subscription to Markets pro worth $100.

The Market Report streams live every Tuesday at 12:00 pm ET (5:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

A sharp drop in TVL and DApp use preceded Avalanche’s (AVAX) 16% correction

AVAX price gave up recent gains after correcting by 16% and the network’s declining TVL and DApp use suggest that the protocol is losing ground versus its competitors.

After an impressive 73% rally between July 13 and Aug. 13, Avalanche (AVAX) has faced a 16% rejection from the $30.30 resistance level. Some analysts will try to pin the correction as a "technical adjustment," but the network’s deposits and decentralized applications reflect worsening conditions.

Avalanche (AVAX) index, USD. Source: TradingView

To date, Avalanche remains 83% below its November 2021 all-time high at $148. More data than technical analysis can be analyzed to explain the 16% price drop, so let’s take a look at the network’s use in terms of deposits and users.

The decentralized application (DApp) platform is still a top-15 contender with a $7.2 billion market capitalization. Meanwhile, Solana (SOL), another proof-of-work (PoW) layer-1 platform, holds a $14.2 billion market cap, which is nearly twice as large as Avalanche's.

Avalanche’s TVL dropped 40% in two months

Some analysts tend to give too much weight to the total value locked (TVL) metic and although this might hold relevance for the decentralized finance (DeFi) industry, it is seldom required for nonfungible token (NFT) minting, digital item marketplaces, crypto games, gambling and social applications.

Using the layer-2 solution Polygon (MATIC) as a proxy, it currently holds a $2.2 billion TVL while MATIC’s market cap stands at $7.2 billion; thus, a 3.3x MCap/TVL ratio. Curiously, the same ratio applies to Avalanche, which currently holds a similar $2.2 billion TVL and $7.2 billion capitalization.

Avalanche Total Value Locked, AVAX. Source: DefiLlama

Avalanche's primary DApp metric began to display weakness in late July after the TVL dropped below 110 million AVAX. In two months, the current 85.4 million is a sharp 40% cut and signals that investors have been withdrawing coins from the network's smart contract applications.

The chart above shows how Avalanche's smart contracts deposits peaked at 175 million AVAX on June 13, followed by a constant decline. In dollar terms, the current $2.2 billion TVL is the lowest number since September 2021. This number represents 8.2% of the aggregate TVL (excluding Ethereum), according to data from DefiLlama.

Initially, the data seems disappointing, especially considering Solana’s network TVL reduced by 27% in the same period in SOL terms, and Ethereum’s TVL declined by 33% in ETH deposits.

DApp use has also underperformed competing chains

To confirm whether the TVL drop in Avalanche is troublesome, one should analyze a few DApp usage metrics.

Avalanche DApps 30-day on-chain data. Source: DappRadar

As shown by DappRadar, on Aug. 18, the number of Avalanche network addresses interacting with decentralized applications declined by 5% versus the previous month. In comparison, Ethereum posted a 4% increase and Polygon users gained 10%.

Avalanche's TVL has been hit the hardest compared to similar smart contract platforms and the number of active addresses interacting with most DApps only surpassed 20,000 in one case. This data should be a warning signal for investors betting on this automated blockchain execution solution.

Polygon, on the other hand, racked up 12 decentralized applications with 20,000 or mo active addresses in the same time period. The findings above suggest that Avalanche is losing ground versus competing chains and this adds further reason for the recent 16% sell-off.

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.

Grayscale Investments Submits Revised Application for Spot Ethereum ETF

DeFi’s downturn deepens, but protocols with revenue and fee sharing could thrive

It’s too early to know if DeFi is “dead,” but platforms that share revenue with liquidity providers and token holders could be the ones that survive the bear market.

At the moment, liquidity is hard to come by, but crypto traders and protocols still need inflow and revenue to remain functional.

As the crypto winter drags on, savvy crypto investors have realized that one of the reliable sources of passive income that still exists can be found on protocols that generate revenue and share some of it with their respective communities.

Let's take a look at some of the protocols that continue to thrive in the current down market.

DeFi might be dead, but platforms with revenue will thrive

Data from Token Terminal shows revenue positive platforms are primarily the nonfungible token (NFT) marketplaces like LooksRare and OpenSea.

Top dapps based on cumulative protocol revenue in the past 180 days. Source: Token Terminal

Aside from a few select protocols including MetaMask, Decentral Games, Axie Infinity and Ethereum Name Service, the majority of the remaining protocols with the highest revenue are decentralized finance platforms, showing that while DeFi is down, it's not out of the game.

Fee sharing helps to lure liquidity

DeFi protocols and decentralized applications (DApps) that offer fee sharing to token holders and liquidity providers are also revenue positive.

As the bear market continues to batter prices and eliminate unprofitable and poorly managed platforms, protocols that offer token holders passive income streams have a higher chance of enduring until the next bull market begins.

Related: DeFi Summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

Synthetix (SNX) makes a comeback

A good example of how fee sharing can help boost a token and DeFi protocol was recently seen with Synthetix (SNX), which made waves when it partnered with Curve Finance to create Curve pools for several of its Synths assets.

Since the cross-chain collaboration was established, the protocol revenue for Synthetix has seen a tremendous increase that coincided with a rise in the price of SNX from $1.56 to its current price at $2.59.

SNX daily price vs. protocol revenue in the past 180 days. Source: Token Terminal

The increase in revenue did not go unnoticed by crypto Twitter, which was quick to point out the rapid turnaround for the platform.

How it all plays out for Synthetix in the long run, is anyone’s guess. For now, the platform is demonstrating that generating revenue and sharing some of that revenue with token holders is one way to retain market share during a market downturn. 

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.

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