Wednesday, 27 July 2022

Market Summary

Market Summary 27 July 2022

Bitcoin Price: US$ 21,254.67 (-0.26%)
Ethereum Price: US$ 1,449.12 (+0.58%) 

 

On-Chain Indicator Presents Alluring Data for ETH, Intro to DeWi Wars

  • MVRV Z-Score is an on-chain metric that is defined as the ratio between the difference of market cap and realized cap, and the standard deviation of market cap. Further, realized cap is a variation of market cap that uses the price at which tokens were last moved, instead of current market price.
  • Simply put, when the MVRV Z-Score falls below zero, it means that majority of ETH is trading at a loss as the market price is now trading below the realized price. MVRV Z-Scores below zero have previously indicated market bottoms.
  • More recently, the metric began trending below zero since June 10th of this year, reaching a low of -0.587 on June 18th. The metric has been trending upward this week, almost rising up to zero on July 24th.
  • For perspective, the metric indicated a market bottom when it touched -0.459 on March 16th, 2020, during the coronavirus-induced flash crash. During the following months, we experienced the start of DeFi Summer and a corresponding rise in ETH price.
  • Even as the MVRV Z-Score seems to indicate the formation of a market bottom, other indicators must be used in tandem to conduct a meaningful analysis. With a macro-driven market, further downside or consolidation period may be required to establish a proper bottom.
  • Decentralized Wireless (or DeWi) seeks to build out physical wireless communication infrastructure (5G CBRS antennas) through incentivizing individuals to deploy hardware at homes or businesses and backhauled through an ISP.
  • Helium and Pollen are in a real estate competition across two vectors: (1) the real estate within one’s home or business to deploy a 5G node, and (2) to occupy the first eSIM slot on users’ devices.
  • The DeWi thesis is as follows: If one can properly encourage the general public to set up antennas in their residence or on their property then a fully functional wireless communication network can be deployed in any area regardless of population density and without a corporation needing to invest large sums of money into further physical infrastructure.
  • Traditional telecom companies outsource their infrastructure needs to tower companies (e.g. American Tower – $120B market cap, Crown Castle – $75B market cap) who manage big, high powered antennas that can cover a large area to provide 3G and 4G. These antennas communicate with an end user’s device.
  • Once the antenna receives communication from an end user, it relays it to a data center (such as Equinix – $60B market cap, Digital Realty – $36B market cap) and then ultimately the internet via a physical channel such as a fiber optic cable.
  • DeWi works similarly except the 5G antennas cover less range (meaning more antennas are required to cover the same area as a traditional telecom antenna) and the data the antenna receives is backhauled to the internet through the antenna owner’s Internet Service Provider (ISP) as opposed to traveling through a telecom company’s channels.
  • While data flows in these two models seem rather similar, DeWi initiatives make use of special parts of the spectrum, use unique protocols to secure their networks, and use third party technologies to transmit their data.

 

Binance CEO sues Bloomberg subsidiary alleging defamation

  • Binance CEO Changpeng Zhao is suing Bloomberg Businessweek in Hong Kong, accusing the outlet of defamation.
  • On Monday, the Binance CEO, known by the crypto community as “CZ,” sued Bloomberg Businessweek’s Hong Kong publisher Modern Media Company Limited. Modern Media is an independent entity that licenses Bloomberg content.
  • The filing contained defamation claims which stem from a translated Chinese article that alleged the exchange boss was running a crypto Ponzi scheme.
  • The filing documents claimed that Modern Media published a report that “contained false, malicious and defamatory statements about Zhao and his company, Binance Holdings Limited.”

 

‘Extreme demand’ for BTC at $20K creating new support levels: Glassnode

  • “Extreme” demand at the $20,000 price point for Bitcoin (BTC) appears to have forced the coins back into the hands of investors who care less about price while creating a new realized price level.
  • In the latest The Week OnChain Newsletter published on Monday, Glassnode’s UkuriaOC pointed to “extreme demand” around the $20,000 region, noting that each psychological price level from $40,000 to $30,000 to $20,000 creates a new group of short-term holders (STHs).
  • The Glassnode analyst noted that much of the supply that new STHs bought during that drawdown has not been sold even though prices are significantly down. This may be due to less price-sensitive buyers or those who care more about Bitcoin fundamentals than investment gains, driving demand.

 

FOMO Pay taps Ripple’s liquidity solution for treasury management

  • Singapore-based institutional digital payment solution provider FOMO Pay has become the latest fintech firm to integrate Ripple’s liquidity solution called on-demand liquidity (ODL).
  • FOMO Pay would use the popular crypto enterprise technology to improve its cross-border treasury settlements. Earlier, the firm used the traditional payment system for cross-border settlement of euro and United States dollar trades, which took up to two days. However, with ODL integration, the firm aims to achieve an instant settlement with very low transaction costs.
  • Louis Liu, founder and CEO of FOMO Pay said:
  • “We are excited to partner with Ripple to leverage On-Demand Liquidity for treasury management, which allows us to achieve affordable and instant settlement in EUR and USD globally.”
  • Ripple’s ODL service has gained a lot of popularity in the private banking and payment sector. The enterprise solution uses Ripple (XRP) as a bridge between two currencies, eliminating pre-funding of destination accounts and reducing operational costs. The tech has proven a great success in Asia, where cross-border transactions are among the highest.

 

IMF recession warning sees Bitcoin dip under $21K amid fresh $1M BTC price forecast

  • Bitcoin can still rise to seven figures within five years, PlanB claims, calling for investors to ignore short-term “noise.”
  • Elsewhere on macro, the International Monetary Fund (IMF) released its July 2022 World Economic Outlook, forecasting a significant slowdown in global growth, which should average 3.2% this year and 2.9% in 2023.
  • “The risk of recession is particularly prominent in 2023, when in several economies growth is expected to bottom out, household savings accumulated during the pandemic will have declined, and even small shocks could cause economies to stall,” it read.
  • “For example, according to the latest forecasts, the United States will have real GDP growth of only 0.6 percent in the fourth quarter of 2023 on a year-over-year basis, which will make it increasingly challenging to avoid a recession.”
  • Eyeing daily timeframes, popular trader and analyst Rekt Capital warned that with the Fed event still to come, Bitcoin had already lost its uptrend.

 

Uncertainty around French laws prompted F1 racers to remove crypto branding: Report

  • Many Formula 1 international racing teams reportedly removed or covered branding and logos from crypto-related sponsors in response to uncertainty around France’s advertising regulations.
  • According to a Tuesday report from RacingNews365, Crypto.com’s logos were not on display during the French Grand Prix on Sunday — the crypto exchange has been a global partner with the racing series starting in July 2021. The team behind the Alpine Formula 1 car also reportedly removed branding representing crypto exchange Binance from its cars, drivers’ clothing and letterhead.
  • “Knowing about the regulations here in France as for cryptocurrency, after discussions with our partner, it was decided to avoid any advertising on French soil,” said a spokesperson for Italian F1 team AlphaTauri, which partnered with blockchain platform Fantom Foundation in January.
  • Luxury car manufacturer Alfa Romeo, which participated in the French Grand Prix, reportedly removed branding related to crypto lender Vauld and meme cryptocurrency Floki Inu (FOLKI), citing possible legal concerns:
  • “The team is complying with all French regulations with regard to crypto partner advertising on the car. We have been advised that, in order to display a cryptocurrency partner logo in France, the cryptocurrency brand must be registered at the AMF, which is not the case of two of our cryptocurrency partners.”

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