Bitcoin Consolidates but Remains Bullish, Ethereum Hints at a Breakout

Marina Meza
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<strong>Bitcoin Consolidates but Remains Bullish, Ethereum Hints at a Breakout</strong>

Bitcoin and Ethereum have not shown a strong correlation to the Nasdaq 100 which is one of the world’s preeminent large-cap growth indexes, or gold this month. Bitcoin continues to consolidate around $27K but remains in a longer-term uptrend.

On the other hand, Ethereum is showing signs of a bullish breakout today, which could open a door for a move up to $2,000 next.

Since crypto assets like Bitcoin and Ethereum have been widely investable, investors have debated where the asset class should be placed in a portfolio.

Investors and crypto experts have posed the following questions: Are they more similar to “store of value” commodities like gold? Or are they more like volatile risk assets like the Nasdaq 100?

Cynics would even argue that they are simply a bubble that will inevitably disappear. However, that argument becomes less and less convincing as Bitcoin approaches the 15th anniversary of its “Genesis Blockchain” on January 3, 2009.

Even for nearly a decade and a half, the answer remains elusive. Take the price action over the course of this month as an example: gold has struggled amid U.S. dollar strength, while the Nasdaq 100 has rallied after a strong earnings season, while Bitcoin and Ethereum remain essentially unchanged:

To put some numbers on this, Bitcoin’s 30-day correlation with the Nasdaq 100 has fallen to -.61, its lowest level since late 2022 (and June 2021 before that), and the equivalent correlation coefficient with gold stands at,30, near two -month lows.

Looking ahead, latent financial issues such as the US debt ceiling discussion and global banking sector tensions could boost crypto assets if they spill over in the coming days and weeks. Still, for now, interest and volatility in the cryptosphere remain subdued.

In the following section, there are technical analyses of Bitcoin and Etherum related to trading situations and how traders approach each of them.

h2 Bitcoin/h2 Technical Analysis

Looking at the Bitcoin charts, traders are waiting for a definitive breakout with the $27K level that has magnetically pulled prices back steadily over the past two weeks. The cryptocurrency is still holding above its rising 100-day and 200-day EMAs, suggesting that the long-term trend is still in favor of the bulls for now, so as long as support at the lower $26K range holds, swing traders can maintain a bullish bias.A break below that support zone would confirm a modified head and shoulders pattern and point to a deeper pullback towards the 200-day EMA near $25K at the very least.

h2 Ethereum/h2 Technical Analysis

Ethereum’s chart looks similar to its big brother, although today’s price action suggests a possible breakout of the recent consolidation range. For ETH/USD, a daily close near the current, a daily close near current levels would open the door for a continuation toward monthly highs near $2000, followed by 1-year highs around $2100 below. A reversal below the 100-day EMA near 1775 would erase the short-term bullish bias.

By Marina Meza

CMBS and its Role in the Inevitable Financial Crisis: How Will Bitcoin Behave?

Audy Castañeda
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<strong>CMBS and its Role in the Inevitable Financial Crisis: How Will Bitcoin Behave?</strong>

The United States is the main focus, although Europe could also be infected by Sweden. According to a renowned economist, the Fed would be forced to lower interest rates in September 2023.

As has been reported in the media, the limitation of redemptions from the Blackstone Real Income Trust fund had set off alarm bells from the regulator and from the market itself. Said limitation has not yet been lifted, and warnings about the danger posed by fixed income in the real estate sector continue.

Financial entities in this industry operate with high levels of leverage, as well as increasing financing costs. This was caused by the rise in interest rates that is taking a toll on your credit profile. In this sense, a global financial crisis seems to be closer than ever.

The bankruptcy of several US banks has contributed to the notable tightening of financing conditions. This has generated significant anxiety in the North American commercial real estate sector.

It is worth remembering the acquisition by Lehman Brothers of the Archstone apartment company in 2007, one of the reasons for the subsequent bankruptcy of the investment bank. The truth is that the sector faces sharp falls in the valuation of commercial premises, and a large debt about to expire.

Regional Banks in the United States Are Exposed to the Real Estate Market

According to data from the Mortgage Bankers Association, the total volume of debt in the commercial real estate market is approximately $4.5 trillion. The main concern in the banks’ commercial real estate loan portfolio is exposure to the office space and retail sectors.

Another concern is the concentration of commercial real estate loans on the balance sheets of regional banks. According to Bank of America data, of the banks’ commercial real estate loan portfolio, regional banks hold approximately 65% ​​of non-multi-family commercial real estate loans.

Swedish Case Would Serve as Precedent for Europe

Sweden is in the firing line of the European real estate slowdown, as commercial property owners face sharp declines in valuation, a veritable mountain of maturing debt, and tense bondholders.

Currently, financing costs are skyrocketing, with the central bank raising interest rates from 0 to 3% in one year. According to Capital Economics, it is estimated that the borrowing costs of real estate companies stand at an average of 7% in the bond market. This is well above the 3.9% return they might expect on rentals, based on current prices.

Stagnant rents and falling valuations will make it difficult to refinance past-due debt. The consequences in Sweden will set the tone for the rest of Europe.

How Will Bitcoin Behave in the Face of Interest Rates?

A major global financial crisis that will drive the introduction of CBDCs seems inevitable. For JP Morgan analyst Seamus Mac Gorain, a recession is inevitable in the United States, which would force the Fed to lower interest rates in September 2023.

If this were the case, the first interest rate cut by the US Fed it would cause the price of bonds to rise and the stock market to collapse in the face of the demonstrated recession.

Eventually, it will be necessary to see if Bitcoin ends up behaving as an indicator, or as a monetary asset. Time will tell.

By Audy Castaneda

Who Really Has Control of Aptos Network Right Now?

Audy Castañeda
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<strong>Who Really Has Control of Aptos Network Right Now?</strong>

In their latest tweet, Aptos listed several new features that came along with their Move v1.3 update. APT price declined nearly 3% last week and market indicators were bearish.

Aptos [APT] posted a Twitter thread on May 23, highlighting new network features and improvements in their latest Mover v1.3 update. The new features looked promising, and they could fuel further Blockchain adoption and growth in the coming months.

The latest Aptos Move v1.3 came with multiple new features that added a lot of value to the network. For example, with the update, developers can now access and manage heterogeneous assets using account-independent global storage.

Another update was related to the Multisig v2 account. Compared to the first multisig account design, the new account offers stronger functionalities.

The tweet thread also mentioned that Aptos’ inline functions accept lambda expressions as parameters. This allows developers to define popular higher-order functions in Move, improving readability and reducing overhead.

Network Activity Increases

Aptos also mentioned that it was seeing a drop in gas fees on its network. About 90% of transactions in Aptos are seeing a 10-fold reduction in gas rates, and run-gas usage is down as much as 100-fold.

Furthermore, Aptos “introduced gas-efficient data structures through smart vectors and smart tables, plus improvements to the storage footprint through how we handle Move resources.”

Thanks to the reduction in gas tariffs, network activity on the Blockchain was picking up again. According to the Artemis chart, after a sharp drop, the number of daily transactions on APT was increasing. The same trend was also followed by the number of daily active addresses, which seemed optimistic.

Investors Are Not Happy with Aptos

The Blockchain’s health looked good, but the same cannot be said for its native token. During the last 30 days, the APT price witnessed a significant reduction, thanks to the bearish market condition.

According to CoinMarketCap, the APT price has fallen by more than 2.5% in the past seven days. At press time, it was trading at $8.30 with a market capitalization of more than $1.6 billion.

Santiment’s chart revealed that APT’s trading volume also plummeted. This meant that investors were less interested in trading the token.

APT’s popularity also took a hit, as evidenced by the decline in its social dominance. However, APT development activity remained high, which is generally a positive sign for a Blockchain.

A Few Slower Days Ahead

APT investors might have to wait longer for a bullish rally as Bollinger Bands revealed that APT’s price was entering a zone of low volatility.

The money flow index (MFI) also registered a fall, which diminished the chances of an uptrend in the short term. However, the MACD showed a bullish edge in the market, which may turn things around.

According to CryptoPredictions, Aptos started in May 2023 at $10,462 and is expected to end the month at $9,243. During May, the expected APT price maximum is $10,113 and the minimum is $6,877.

CryptoPredictions forecasts that the APT price for today (24.05.2023) will be in the price range of $7,127 – $10,481. The Aptos price is expected to end today at $8,385.

By Audy Castaneda

Hong Kong Announces Delivery of Licenses to Crypto Exchanges

Audy Castañeda
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<strong>Hong Kong Announces Delivery of Licenses to Crypto Exchanges</strong>

Hong Kong authorities announced the upcoming start of the licensing process for centralized crypto exchanges.

This week, the Hong Kong regional authorities announced that they will allow access to digital assets to retail investors. To do this, they will license crypto trading platforms, or exchanges, within their jurisdiction. According to the Securities and Futures Commission (SFC), the authorizations would begin to be delivered shortly.

With this new step, the authorities ascertained their interest in turning the province into a world epicenter for trade with digital currencies. The autonomous characteristics of this province allow it to make a difference from the central Chinese mainland government. Consequently, for Beijing, the use of cryptocurrencies is classified as a financial crime.

Thus, on Tuesday, the regulators said that those companies that wish to comply with the guidelines can apply for the license. Likewise, the authorities showed signs that the regulations will be harsh, as they are not willing to allow actions outside the legal risk of investments.

Crypto Exchanges to Opt for Licenses Soon

It is remarkable that the Hong Kong authorities welcome crypto trading platforms (or exchanges) with open arms. This would begin the opening of the Chinese province to these assets under a clear and strict regulatory framework. Some companies may even consider it stricter than appropriate.

In any case, the guidelines for digital asset exchanges include security and custody requirements. Added to this are cybersecurity standards, as well as the separation of assets from clients and others. For some players in the area, these measures are positive, since they provide a clear perspective for companies in the sector.

This scenario contrasts with the reality of the United States, where the authorities of various agencies claim the right to govern cryptocurrencies. This creates confusion in the industry, and the main representatives of the area ask for a clear regulatory framework, or else they could leave the country.

In the North American nation, the federal government and local governments act on the sector according to their particular conveniences. For mining companies, for example, this causes confusion and frustration from the country’s authorities with the greatest hash power within its borders.

Hong Kong’s move to license exchanges saves the crypto sector a headache. Although regulations may be strict, clarity allows companies to adapt.

Guidelines Take Effect in One Week

Starting next June, the guidelines of the new regulation for digital retail will come into effect. It will then begin the slow process of consigning license applications by crypto exchanges, review, and approval.

The aforementioned announcement by the regulators highlighted that up to now almost all of the platforms are not properly registered. Consequently, the agency adds that those companies that do not wish to comply with the guidelines, but now have access to the public, must follow some steps, including the organized withdrawal of their operations from the Hong Kong market.

With this in perspective, the provincial authorities convert the licensing process to crypto exchanges as a step in the announced direction. The next thing will be to present themselves as attractive matches for other companies, since Hong Kong’s possibility of becoming a global epicenter for virtual assets depends on it.

By Audy Castaneda

Some Details of the Tornado Cash Governance Attack

Audy Castañeda
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<strong>Some Details of the Tornado Cash Governance Attack</strong>

This past weekend, the DAO, Tornado Cash, received a malicious governance attack that ended up plunging the Torn token by more than -40%.

This Saturday, the DAO (Decentralized Autonomous Organization), Tornado Cash, suffered a governance attack by one or more hackers. Through a malicious proposal, the attackers managed to take control of the organization. The result could be opening a cash drain.

Thus, the management operations of this DAO, as well as the funds and future plans, passed into the control of the unidentified attacker. According to CoinDesk, DAOs allow token holders to lock up their holdings as votes for proposing changes to a project, which can range from deploying treasury funds to purposes that benefit the project to expansion on other networks.

Either way, this Saturday, the attacker managed to submit a malicious proposal with a hidden code feature that now puts him in complete control. The latter through false votes that enable him to manage various aspects of the DAO.

Tornado Cash Seeks to Recover from Governance Attack

This governance attack suffered by Tornado Cash makes an effective recovery difficult since it deals with usurped votes. “Now that they have all the votes, they can do whatever they want,” a security researcher quoted in the same media said on Twitter.

Among the aspects that are now under the control of the attackers is the management of the Torn retained in the main governance contract. Basically, this was allowed through proposal submission. It imitated a previous version.

The big difference is that it contained malicious code that allowed an update of logic and gave the attacker control of all governance votes. “In this case, they withdrew 10,000 votes like Torn and sold them all,” explains the aforementioned security researcher.

Consequently, this governance attack against Tornado Cash becomes very difficult to reverse due to the power gained by the attacker. The Tornado community thinks of some proposals that allow us to get out of the bad moment.

Some Characteristics of the Attack

Like all attacks carried out by hackers, this governance attack against Tornado Cash has one target: Money. In that sense, the attacker would have minted 1 million tokens (Torn) for him. These are worth $4 million dollars approximately.

It is important to keep in mind that this attack did not affect the current Tornado protocol, as it was not a breach of smart contracts or any sensitive technology for the operation of Tornado Cash.

In any case, the proposal sent today by an address linked to the attackers contemplates the elimination of the malicious code that the attacker integrated. This would restore the governance of the DAO. According to specialized portals, the proposal would be approved when the voting closes on May 26. However, it is not yet clear when it will be implemented if approved.

It is worth noting that this governance attack against Tornado Cash should be taken as a reminder of user security measures. In other words, before engaging in any DAO proposal, security and logic aspects should be considered.

The attack comes as a reminder to crypto investors to examine the descriptions and logic of the proposals. Maintaining high vigilance is critical for DAOs, as this can deter attackers, who choose more likely victims for themselves.

By Audy Castaneda

Cryptoverse: Busy Bitcoin Gives Birth to a New Cryptocurrency Generation

Marina Meza
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<strong>Cryptoverse: Busy Bitcoin Gives Birth to a New Cryptocurrency Generation</strong>

Daily transactions have ascended to an all-time high of 682,000 this month, according to Glassnode data, nearly 40% higher than the previous peak in 2017. Bitcoin’s dominance, or its share of the $1.16 trillion full cryptocurrency market, has increased to 44% from 38% at the beginning of the year.

What’s Happening?

BRC-20 is the first class of crypto tokens to be built on the Bitcoin blockchain, in addition to Bitcoin itself. Nearly 25,000 of the experimental coins have already been minted this year, which has boosted transactions.

Gordon Grant co-head of trading at Genesis Buying and Selling said that BRC-20 tokens are a phenomenon we haven’t seen before.

Primarily due to the creation of these tokens, the average number of daily transactions over seven days is more than 531,000, nearly double what it was a month ago, according to data from Blockchain.com.

This new class of cryptocurrency has no specific use beyond speculation, very similar to memecoins. However, its nascent popularity points to interest in Bitcoin not only as a store of value or method of payment but as the foundation for developing new currencies and applications, previously considered the domain of more modern blockchains such as Ethereum and Solana.

Some investors and developers see the Bitcoin blockchain as a more secure long-term basis for creating tokens and applications in the wake of the crypto carnage that followed the collapse of high-profile firms such as FTX and a standard flight from riskier assets, according to market players.

Alex Miller, chief executive of bitcoin developer purple Hiro commented that People have seen what’s possible with other blockchains and they want it in Bitcoin, as the oldest purple, bitcoin has a track record that people can trust. Still, the BRC-20 frenzy has been volatile.

The total value of these tokens, which are generally traded on secondary markets, particularly decentralized exchanges, topped $1 billion in early May but has since fallen back to $446 million, according to tracker BRC-20.io.

Enrolled in Satoshi

Since the bitcoin blockchain was not originally developed to support a crypto ecosystem, unlike Ethereum and Solana, BRC-20 tokens are created using ordinal theory, which allows data to be inscribed into each satoshi, the smallest bitcoin denomination, or hundred millionth.

CJ Reim, a contributor at blockchain firm CoreDAO said that there’s not a lot of utility when it comes to BRC-20 tokens and ordinals, though he sees the trend as “promising” in terms of interest in building products on the bitcoin blockchain.

The race to create these new coins has not had a significant impact on the price of Bitcoin, which has been trading below $30,000 since mid-April.

The rapid creation of BRC-20 tokens has not been without controversy, with detractors saying that the issuance of these tokens has made things more difficult for users who want to use Bitcoin for the purposes originally intended.

“Gasoline” fees, or transaction costs on the Bitcoin blockchain, have risen steeply over the past month, with total dollar-denominated fees paid per day approaching a new all-time high of $17.8 million per day, according to Glassnode data.

Pink also slowed considerably. Congestion was so acute that the world’s largest cryptocurrency exchange, Binance, had to briefly pause bitcoin withdrawals on May 7th.

Nauman Sheikh, head of treasury management at digital asset investment manager Wave Electronic Assets indicated that while congestion has eased somewhat, it is still high and, at its peak, users were waiting more than 30 hours for transactions to be confirmed.

By Marina Meza

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