The US Dollar Index (USDX) fell to its second low of 2020. Asia seems to be Latin America’s largest trading partner in the Bitcoin market.
After surpassing the USD 12,000 mark in recent days, Bitcoin peaked at USD 12,418. The release of Federal Reserve minutes confirming a bleak outlook for the US economy may have created the bullish momentum.
The crossing of the USD 12,000 barrier coincided with a further drop in the US dollar index, which reached a new low of 92.15 on August 18th, after 2 years. However, Bitcoin recorded a sharp setback earlier that day and then fluctuated around USD 11,600. At the time of writing this article, Bitcoin is trading at USD 11,770.
When examining the flow of BTC in the hands of miners during the last week, CryptoQuant recorded a growth of daily movements towards cryptocurrency exchanges, which reached levels close to 2,000 BTC per day. This increase could partly explain the decline in the price of BTC from USD 12,000, by increasing the supply offered for sale.
The last week concluded with a net retracement of the BTC price of 1.4%. However, the drop is more important in the case of the total capitalization of the cryptocurrency market and in the capitalization of altcoins, which have decreased by 3.3% and 3.9%, respectively.
Concerning the new low of the US dollar index this year (calculated against a basket of seven national fiat currencies), it reached 92.15 on August 19th. The minimum that it reached last August 3rd was 92.63.
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Dutch institutional investor PlanB, creator of Bitcoin’s stock-to-flow model, notes that the price of Bitcoin is “elegantly” moving away from the 200-week moving average curve. Moving averages derive from calculating the average price of an asset over a certain period. For instance, among the most used are the 50- or 200-day moving averages, which refer to the last 50 or 200 days.
In this case, work takes place in 200 weeks, a little less than four years. PlanB says that the current value on the resulting curve is USD 6,400, and it grows by USD 200 every month. “Best of all, the monthly close for BTC has never been below the 200WMA curve,” says PlanB. Another interesting detail is that each point of contact of the price curve with the curve of this moving average index corresponds to the bottom of a valley.
Asia is Latin America’s Partner on Bitcoin
According to the last report by the blockchain analysis firm Chainalysis, Asia is the continent that sends the largest amount of Bitcoin to Latin America. Countries such as China, Japan, and South Korea have become the most important trading partners in the Latin American ecosystem.
Between July and June, East Asia sent more than USD 10 billion worth of cryptocurrencies to addresses in Latin American countries. In this way, the Asian continent becomes the largest provider of Bitcoin and other cryptocurrencies for companies and users in Latin America.
Actual Size of DeFi on Ethereum
In recent months, the growth of decentralized finance (DeFi) platforms has been explosive. They reached the first USD 1 billion worth of locked value, in collateral or loan guarantees last February and in early June, after markets dropped on March 12th.
Tracking the noticeable DeFi boom in June and July, it is possible to see that the total value locked doubled and tripled. This occurred particularly due to the positive impact of the introduction of the COMP token on the Compound lending platform.
More recently, the introduction of the Curve DAO token helped Ether cross the USD 400 barrier and lift the value locked on DeFi platforms above USD 6 billion. This is a very noticeable growth, with a six-fold increase in locked value since February this year.
However, DeFi barely exceeds the value of institutional investments in BTC, considering only Grayscale’s Bitcoin fund. Investments in GBTC are about 75% of the locked value in DeFi. On the other hand, these investments in DeFi are equivalent to 3.1% of the market capitalization of Bitcoin.
By Willmen Blanco
