Bitcoin Crypto News

First In History: Bitcoin Mayer Multiple Records Lower Value Than Last Cycle’s Low

The Bitcoin Mayer Multiple has recently sunk to a lower value than the bottom of the previous cycle. This is the first time in the history of the metric that such a trend has formed. Current Bitcoin Cycle’s Mayer Multiple Low Is Deeper Than Last Cycle’s As per data released from the analytics firm Glassnode, the current value of the BTC Mayer Multiple is around 0.478. Before seeing what the Bitcoin Mayer Multiple does, it’s best to look at a basic explanation of a “moving average” first. A moving average (or MA in short) is an analytical tool that averages out the value of any quantity over a specific period of time. As its name implies, it moves forward along with the quantity, and changes its value accordingly. An MA can be taken over any timespan, whether that be 100 days, 72 hours, or even10 seconds. Related Reading | Why Pain May Not Be Over For Bitcoin Holders Just Yet The bigger MAs are usually quite useful for long-term analysis as they smooth out any irrelevant short-term fluctuations. One popular moving average for Bitcoin is the 200-day MA, which has historically indicated a bear market whenever the price has went below it, and a bull market whenever the price has crossed over it. Now, what the Mayer Multiple does is measure how much the price of the crypto has deviated from this 200-day MA. The below chart shows the trend in the metric over the course of the history of Bitcoin: The value of the metric seems to have been below 0.5 in recent weeks | Source: Glassnode In the graph, the blue line is for the Bitcoin 200-day MA and the green curve represents the points where the Mayer Multiple would have a value of 0.5. As is apparent from the chart, the price of the crypto has sunk below this 0.5 Mayer Multiple line only a few times in the past. Related Reading | Bitcoin Coinbase Premium Gap Approaches Zero, Selloff Ending? In fact, out of the total 4163 trading days for the cryptocurrency so far, only 87 have been spent below the green line, which comes out to be about only 2%. A pattern that the Mayer Multiple followed before this cycle was that all successive cycles observed higher bottoms than the low of the previous one. In the cycle so far, the metric has already dipped to 0.478, which is less than last cycle’s bottom of about 0.511. This is a first occurrence in the history of Bitcoin. BTC Price At the time of writing, Bitcoin’s price floats around $21.2k, up 3% in the past week. Looks like the value of the crypto has moved sideways recently | Source: BTCUSD on TradingView Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Glassnode.com

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Algorithm Known for Outperforming Bitcoin and Crypto Markets Reveals New Altcoin Picks for the Week

A robot with a reputation for outpacing the crypto markets is presenting its latest portfolio allocations as Bitcoin (BTC) and Ethereum (ETH) attempt to stay afloat. Each week the Real Vision Bot conducts surveys in order to create algorithmic portfolio assessments consistent with a “hive mind” consensus. The bot’s newest data finds that traders’ risk […]

The post Algorithm Known for Outperforming Bitcoin and Crypto Markets Reveals New Altcoin Picks for the Week appeared first on The Daily Hodl.

Bitcoin Crypto News

Crypto Liquidations Settle As Bitcoin Recovers Above $21,000

Crypto liquidations had ramped up following the market crash. Even with the recovery had come more liquidations as short calls had also taken a hit. However, with the recovery moving over the last week, the market has begun to regain some semblance of balance and so the liquidations have begun to settle. Crypto Market Liquidations Relaxes Although liquidations cannot entirely stop, the liquidations have begun to subside. It had fallen from over $1 billion in liquidations at the height of the market crash and has slowly but surely returned to normal levels. This is obvious in liquidations for the past 24 hours which continue to trend at around $150 million liquidated. Mostly, it has skewed towards long traders given that the market had recorded a dramatic dip in the early hours of Monday morning. Related Reading | Market Wallows In Extreme Fear As Bitcoin Struggles To Hold $20,000 As expected, bitcoin and Ethereum take the lead for the digital asset with the most liquidations in this time period. Bitcoin alone has recorded more than $43 million in liquidations while Ethereum liquidations have come out to more than 24K ETH liquidated, amounting to more than $29 million in liquidations in the past 24 hours.  Total market cap below $1 trillion | Crypto Total Market Cap on TradingView.com More than 74,000 traders have been liquidated in this time though, of which 69.73% were long trades. Okex and Binance exchanges have seen the highest liquidations. However, the largest single liquidation for the last day came from the Bitmex exchange on the XBTUSD with the trade coming out to $2.48 million. Market Takes A Nosedive Just as feared, the crypto market has lost most of the gains that it made last week. The swift decline in price had come following the return of faith in the market, indicating that the recent recovery had been a bull trap. Related Reading | Bitcoin May Not Reclaim All-Time High For Another Two Years, Binance CEO In this decline, Bitcoin had fallen sharply from above $21,000 where it had trended for the better part of the week and had fallen back to the $20,000 territory once more. The dip resulted in more than $500 lost from bitcoin’s value in a matter of minutes. As expected, this has triggered liquidations across various exchanges which brings the total value to $156 million liquidated. Bitcoin liquidations are ramping up on the one-hour chart with $28 million recorded over the same time period, coming out to 1,360 BTC liquidated. Featured image from Business Today, chart from TradingView.com Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Crypto News

ViaBTC Capital | Reasons Behind Solana’s Frequent Downtime: Design Flaws in the Gas Economy

What is the gas fee? In the blockchain world, the gas fee is a fee that users have to pay to the blockchain network for each transaction. For example, when a user makes a transfer on Ethereum, miners must package his transaction and put it on the blockchain to complete the transaction. This process consumes the computing resources of the blockchain, and the fee paid to miners is called the gas fee. Gas economy Imagine that each public chain is a society or a city, and gas would be the currency that users need for various activities in the city, and the economic designs of gas have far-reaching impacts on the public chain’s future development. Today, we will illustrate the significance of the gas economy from the perspectives of performance and value capture. Performance – The frequent network congestion of Solana In early May, Solana’s mainnet lost consensus, and block generation was suspended for 7 hours. The mainnet was down due to the NFT minting of a new NFT project. Users turned to bots for sending transactions as much as possible to increase their success rate of minting. This led to 6 million transactions per second on the Solana mainnet, which jammed the network. Moreover, as Solana transmits consensus messages as a special transaction message between validators, the heavily congested network also disabled the normal transmission of consensus messages, eventually leading to the loss of consensus. This is not the first downtime of Solana. Last September, the public chain suffered a 17-hour downtime due to the massive trading volume created by on-chain bots during the launch of the hit project Raydium. A 30-hour Solana downtime incident happened at the end of January 2022 when the BTC price plunged from $44,000 to $33,000 during a market crash and created plenty of arbitrage opportunities. Meanwhile, the liquidation/arbitrage bots on Solana, which center on DeFi, kept creating massive transactions, which resulted in network downtime. When comparing Solana to a conventional IT system, we can tell that the downtime resembles a DDoS attack. 「A DDoS (distributed denial-of-service) attack refers to adding traffic from multiple sources to exceed the processing capacity of a network so that real users would not be able to acquire the resources or services they need. Attackers often launch a DDoS attack by sending more traffic to a network than it can handle or sending more requests to an application than it can manage.」 Instinctively, many people would think that Solana’s downtime is rooted in its public chain designs: the monolithic design of Solana inevitably leads to downtime. At the moment, mainstream public chains use two kinds of designs: the modular and the monolithic. The modular architecture refers to a modularized deployment where consensus, storage, and execution are implemented separately so that the collapse of the execution layer will not compromise the security of the consensus layer. At the same time, mainstream designs adopted by Avalanche’s Subnet, ETH 2.0, and Celestia’s Rollup can all diverge massive transactions. On the other hand, although Solana as a whole is designed to enable fast transactions, scalability and security were sacrificed. However, the modular design of a public chain is not the key because although the consensus stayed secure, the individual rollup could still suffer from downtime when facing overwhelming transactions in a very short period. In other words, the modular design just lowered the systemic risks (e.g., a certain rollup could halt but the rest can survive) for the public chain. The gas design is the real reason behind Solana’s downtime, and more network downtime is on the way if the design is not improved. – The gas mechanisms of different chains The figure below shows the gas designs of three mainstream public chains. On Solana, the gas fee is based on the number of signatures. The more signatures a transaction uses, the higher the gas fee. However, the maximum memory capacity of each transaction is fixed, and so is the maximum gas fee per transaction, which helps users easily calculate the cost of sending massive transaction requests. Moreover, transactions on Solana are not sequenced, which means that when the cost of sending massive requests is lower than the profit (arbitrage, NFT minting, etc.), users would use bots to send transactions on a large scale to increase the likelihood of the execution of their transactions. This is also the reason behind the downtime events that took place on Solana. Ethereum and Avalanche share similar gas designs. Both feature the base fee and the priority fee, which creates an inherent sequencing issue because transactions with a higher priority fee would be first executed. As such, although users can still use bots to create massive transactions on Ethereum and Avalanche, their transactions will not be executed no matter how many requests are sent when the priority fee becomes insufficient, and they have to wait in line. Considering the cost of gas, such a design eliminates the possibility of network downtime arising from massive transactions at the economic level. Source[1] – Improvement by Solana Economic isolation has always served its purpose better than methodological isolation. Solana has already started to build its own Fee Market by introducing a concept similar to the priority fee. Meanwhile, Metaplex, Solana’s NFT market, will also adopt a new concept called Invalid Transaction Penalty, which means that users will have to pay a fee for invalid transactions when minting NFTs. Value capture Value capture is the reflection of a gas economy via the market cap of the gas (the native crypto of the chain). The market cap of a native coin is roughly determined by two factors: cash flow and monetary premium. – Cash flow When it comes to charging the gas fee, most public chains follow the same approach: lower the gas fee as much as possible to attract users from Ethereum. From the perspective of cash flow, such an approach is unsustainable. Of the three mainstream public chains, only Ethereum stands with a considerable net cash inflow, although the network is still issuing more Ethers. If we consider additional issuance as a type of subsidy, then the net expenditure of Ethereum per day would be about $25.7 million if the annual issuance rate stands at 3.21%. Solana and Avalanche, on the other hand, have an income of $6,250 and $42,000 a day on average, with a daily net expenditure of $4.6 million and $1.86 million and a yearly issuance rate of 6.93% and 5.22%. The high net expenditure & high issuance rate significantly dilute the market cap of the public chain coins. Source[2] Let’s turn to the destinations of cash flows. Under Ethereum’s current mechanism, the base fee is burned, while the priority fee is offered to miners. Compared with the gas burning and distribution mechanisms of Solana and Avalanche that offer the gas fee to validators, the miner reward is a design that compromises value capture. Ethereum uses the PoW design for block generation, and most of the miners adopt a business model under which tokens that have been mined are sold to cover the mining cost (such as electricity fees and maintenance costs). Therefore, the part of the gas fee paid to miners will most likely go out from the ecosystem. It would be better to give the gas fee to validators because the cost of running a node is not as high as operating a mining factory. Since there are not significant ongoing operating cost, validators are more likely to invest the rewards they’ve received in the nodes, which makes the ecosystem safer without diluting the value of the native coin. Burning fees might be the most direct and effective way to capture valuee and benefits both node stakers and token holders. In addition, MEV constitutes another major source of revenue for public chains. According to statistics from Flashbots, from 2020 to now, $600 million worth of MEV has been paid to miners, which is a conservative estimate. Source[3] – Monetary premium Monetary premium refers to the appreciation of a public chain coin in terms of its practical value and value storage. Most existing public chain coins are carrying out massive issuance, which makes them poor value storage, and the practical value forms the backbone of their market cap. The growth of the ecosystem of a public chain coin will create scenarios where it can be used as a payment method. For instance, most NFT transactions are settled with public chain coins. Meanwhile, most emerging public chains also consider the practical value as the primary means of appreciation, which is why they have set negligible gas fees to attract traffic and new users. Meanwhile, some public chains have built foundations worth hundreds of millions of dollars to encourage more developers to build DApps in their ecosystem. The logic behind such an approach is to make big investments to attract users in the initial stage and try to recover the cost later. Conclusion To sum up, the gas design of a public chain will have profound impacts on the future development of a public chain, and a poor design could lead to poor value capture and even performance bottlenecks. When evaluating a public chain project, we can also get a rough picture of its development strategy and future growth through its gas designs.   [1] https://docs.solana.com/implemented-proposals/transaction-fees#congestion-driven-fees,https://ethereum.org/en/developers/docs/gas/,https://docs.avax.network/quickstart/transaction-fees/ [2] https://cryptofees.info/,https://moneyprinter.info/,https://solanabeach.io/ [3] https://docs.solana.com/implemented-proposals/transaction-fees#congestion-driven-fees,https://ethereum.org/en/developers/docs/gas/,https://docs.avax.network/quickstart/transaction-fees/

Crypto News

Cardano Formed This Pattern On Its Chart, Where Is The Coin Headed?

Cardano was bullish on the chart, as market movers picked up optimistic price movement, so did ADA. Over the last 24 hours, the coin rose close to 6% and in the last week, and in the past week ADA secured a 12% gain. The coin has been trading between the range of $0.46 and $0.51 over the last few days. Price of Cardano has steadied itself at the $0.51 price level. Both Bitcoin and Ethereum also logged double digit gains in the past week. Technical of ADA pointed towards bullishness, however, it is crucial that the coin moves past its rigid resistance of $0.51. A move above the $0.51 mark can help Cardano secure another 6% appreciation. Buying strength had grown over the past few trading sessions, however, if ADA continues to remain at the current price mark then buyers can exit the market. The coin noted a slight fall in buying strength on the four hour chart. Cardano Price Analysis: Four Hour Chart ADA was trading at $0.51 on the four hour chart. The coin has been facing considerable resistance at the $0.51 mark and it hasn’t been able to move past it despite daily gains. The next price ceiling for the coin stood at $0.53, if ADA manages to trade above that then the bulls could stick around for long. A fall from the current price level will push ADA to trade near the $0.48 level. Cardano portrayed bullishness and it formed an ascending triangle pattern in agreement with the same. Trading volume of the coin has remained low indicating that there has been a fall in buying pressure. Technical Analysis ADA formed an ascending triangle but it also noted a fall in buyers in the market. If there is continued fall in buying strength then the altcoin’s price can soon walk on a bearish trajectory. The Relative Strength Index was parked above the half-line which is a sign of increased buying strength, however, there was a small downtick on the indicator. Despite the downtick, Cardano was above the 20-SMA line, which meant that there was significant buying strength and buyers were driving the price momentum in the market. Related Reading | Why Pain May Not Be Over For Bitcoin Holders Just Yet ADA’s buying strength fell but the coin displayed a buy signal. The Awesome Oscillator portray the price direction and the trend of the coin. AO depicted green histograms which can be construed as buying signal for the coin. Directional Movement Index outline the price direction of the altcoin and also highlights the change in the same. DMI was positive as the +DI was above the -DI line which indicates bullishness on the chart. Suggested Reading | Sandbox (SAND) Blows Up 20% Over Last 24 Hours Following ‘Takeover’ Rumors Featured image from Unsplash.com, chart from TradingView.com