Cryptocurrency Market Overview 22.09.2023
News block
1. Busan will become a blockchain city
Busan, South Korea's second largest city, is developing its own blockchain compatible with major platforms such as Ethereum and Cosmos. The goal is to integrate blockchain-based services into a single platform and turn Busan into a blockchain city.
The city administration has allocated a budget of 100 billion Korean won ($75 million) for these purposes. The funds will be raised through investments of Busan state financial institutions, and about 100 private companies are also showing interest.
The official announcement notes that the city of Busan has been actively testing various options for using blockchain technology in its free trade zone. These tests showed that if most of the projects are implemented on different blockchains, this leads to an "uncomfortable experience" for business. Therefore, the city administration has focused on a public blockchain compatible with global networks such as Ethereum.
The long-term development plan for the blockchain city also includes the creation of the Busan Digital Asset Exchange in the first half of 2024. The digital exchange will include not only digital assets in the listing, but also tokenized precious metals and commodities. In the future, the administration intends to tokenize intellectual property rights and carbon dioxide emissions rights.
2. China is experiencing the worst capital outflow
The latest Bloomberg data shows that capital outflows from China in August reached $49 billion, which is the largest monthly outflow since December 2015, which could potentially lead to increased pressure on the yuan:
"The exchange rate of the US dollar to the yuan is trading at a 17-year high, as the US economy is actively growing, while the Chinese economy is showing weak dynamics," says Markus Thielen, head of research and strategy at Matrixport.
Thielen believes that the continued pressure on the yuan and the "lack of growth" among local companies may lead to investors looking for opportunities outside of China. And given the strict control over the movement of capital in the country, the cryptocurrency may turn out to be one of the few channels available for this.
In fact, a similar story happened with bitcoin at the end of 2016, when there were reports that investors in China were increasingly turning to BTC to withdraw capital from the country.
Overview of the crypto market
🔸 The current capitalization of the crypto market is $1.097 trillion
🔸 Trading volume for the last day is $66.0 billion
🔸 BTC dominance 47.4%
🔸 Fear and greed index:
- today 43, yesterday 47 a week ago 43
where 0 is extreme fear (may be a sign that investors are too scared - often it's a good time to buy), and 100 is extreme greed (the market needs correction).
The situation is not very positive for the crypto market right now. The yield on 10-year Treasury bonds rose to a 16-year high, and the DXY index briefly jumped to 106, the highest level since the peak of the crisis of regional banks in the United States in March 2023. As a result, US stock markets are falling, which puts pressure on cryptocurrencies as well.
Over the past day, the price of BTC has dropped to the level of $26600. Ether dropped below $1,600 and continued its downward trend against BTC, falling to a new 14-month low (critical support of 0.06 BTC was broken):
Now we have a situation where the sideways price movement on the BTC chart has been going on for the 27th week. Previously, similar situations were observed more than once:
Here are some interesting observations from the history of the price of the first cryptocurrency:
- This is the 11th period of sideways price movement;
- 6 out of 11 were pauses in a bullish rally;
- 2 out of 11 fell on the bear market downtrend;
- 2 out of 11 were at the bottom of the bear market;
- The longest period of lateral movement was at the bottom of 2015 and was 41 weeks (almost 1 year);
- The average period of such sideways is 27 weeks (just over 6 months);
- Most cycles have experienced 2 sideways periods before the bull market;
- Only 1 sidewall was not higher than the previous one.
Two main points that can be distinguished from this observation:
- The sideways price movement is likely to stop soon.
- The probability of a bullish trend is higher than a bearish one.
Optimism (OP)
Ethereum Scaling solution The Optimism network has revealed plans to sell 116 million OP tokens to seven private buyers. At current prices, the deal is estimated at $155 million.
Tokens for sale will come from the unallocated part of the Treasury of Optimism. At the same time, the tokens will be subject to a two-year blocking period, which means that buyers will not be able to sell them on the secondary market during this time period.
According to Optimism, this sale is part of the initial plan and is fully accounted for in the "initial operating budget of 30% of the initial token offering."
Previously on the Era of Change website: Growth Catalysts of Optimism
