Weekly Headline News
1. Ethereum will become the main asset for investors in 2021
2. Key metrics show this week’s $4B Bitcoin options expiry favors bulls
3. DeFi surge, rising TVL and new partnerships underpin Ren’s 100% rally
4. NFT boom and platform upgrades back Decentraland’s (MANA) 100% rally
5. Pro traders buy the dip as bears push Bitcoin price to the edge of $30K
● ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. The potential of Ether greatly exceeds Bitcoin, and the community is beginning to understand the value of ETH.
● There are very strong reasons to believe that Ether will continue to rise in price in 2021 and bring more profit to investors than the “most famous cryptocurrency,” Bitcoin. Ethereum is the number-one platform for building blockchain projects and launching decentralized applications. During 2020, more than $1 trillion worth of transactions were recorded on the Ethereum blockchain. These figures exceed the transaction volume of payments giants like PayPal.
● And it is Ethereum that is the main platform for the creation and launch of most new DeFi projects and stablecoins. The total value locked in decentralized finance since the beginning of 2020 has grown nearly 3,300%, from $687 million to $23.2 billion.
● A record $4 billion worth of Bitcoin options expire on January 29 and multiple indicators suggest bulls have the upper hand.
● Skew shows market makers are unwilling to take upside risk. While a $4 billion options expiry might be worrisome, nearly 74% of the options are already deemed worthless. Regarding the Jan. 29 expiry, bulls remain mainly in control due to its much larger adjusted open interest.
● Despite bulls having an overall advantage, the more bearish put options dominate expiries between $33,000 and $35,000. To conclude, as things currently stand, bulls seem in total control of Friday’s expiry, although incentives between $28,000 to $35,000 are reasonably balanced.
● The DeFi boom and search for projects offering interoperability recently sent Ren’s price and total value locked to new all-time highs. Over the past three weeks the price of REN has increased by more than 200%, going from $0.251 on Dec. 27 to a new all-time high of $0.778 on Jan. 20 driven by a record $369 million in 24-hour volume.
● Three reasons for the recent price surge in the price of REN include the announcement of a collaboration with Google, the continued increase in total value locked on the platform and the ability to earn passive income in multiple cryptocurrencies through the operation of a darknode.
● Google software pivot boosts sentiment, addresses RENvm scaling issues. The total value locked on the Ren platform reached a new all-time high of $653.6 million on Jan. 20 and a total of 14,670 BTC are locked on the platform to create renBTC.
● As activity on the network increases, the amount of fees generated will also increase, making it even more lucrative for token holders to operate a darknode. This has the potential to lead to further price appreciation from REN as every new darknode results in a direct decrease in its circulating supply.
● Decentraland’s new features, increased digital land sales and a booming NFT market are the driving factors behind MANA’s 100% rally.
● In the past few months, Decentraland has evolved to implement interactive applications, including payments and peer-to-peer communication. Decentraland has added a handful of new features to improve the user’s experience and support the growing NFT collectibles and digital real estate sector.
● After correcting 15%, the Bitcoin price dropped to $30,000 but derivatives indicators suggest pro traders are buying the dip. Data shows that the top traders at OKEx have been heavily buying the dip and the futures premium has held in an optimistic range. OKEx longs are 2.5 times larger than shorts. Exchange-provided data highlights traders’ long-to-short net positioning.
● The recent 6.5% peak is equal to a 29% annualized premium, indicating excessive buyers leverage. Currently, the BTC March contracts premium has stabilized near 2.5%, equivalent to a healthy 14% annualized basis.
● 20% crashes are the norm rather than the exception. It’s important to consider that Bitcoin holds a 60- day volatility of 4.2%. Therefore, these large corrections should be expected.