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Bitcoin And Ethereum Plunge Brings The Whole Market Down

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Bitcoin And Ethereum Plunge Brings The Whole Market Down

The Merge hasn’t pushed crypto prices as expected. Instead, the third week of September has kicked off with more reds than greens. The entire market has plunged, and even the overall market cap dropped. 

Currently, many crypto assets are losing every hour. Many crypto exchanges are forcefully liquidating leveraged positions. According to Coinglass, the total amount liquidated already has reached $431.51 million, with 130,087 traders affected. 

Related Reading: These Two On-Chain Signals Precede Bitcoin Falls, Suggests Analyst

Bitcoin Price Plunged

Currently, the Bitcoin price stands at $19,326, indicating a 2.38% loss in 24 hours. Even though its one-hour price gain shows progress at 1.07%, BTC has lost 13.58% in one week. 

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Bitcoin traded above $20K from September 10 to 14 before the Ethereum Merge. A few minutes after the upgrade, it lost grip on the price mark and fell to $19,701. It maintained that level until September 17, when it closed the market once again above $20k 

But this third week of September pushed BTC to $19k as the overall market opened in the red. 

Bitcoin’s price is currently trading at above $19,000. | Source: BTCUSD price chart from TradingView.com

Ethereum Crashed After the Merge 

Today September 19, the Ethereum price stands at $1,359.13 after losing 4.26% in 24 hours. But this is not the whole story. ETH’s price crashed after the Merge on September 15. Before the upgrade, Ether traded above $1700K from September 10 to September 13 before plunging to $1574 one day before the merge. 

At the close of the market on September 15, the Merge day, Ether’s price fell to $1432 and continued at that price until September 18. The next day, the overall crypto market opened the market in red, pushing ETH price below $1400K. 

Ethereum price data shows that it has lost 21.52% in the whole week. Thankfully, its one-hour gain is green, indicating a ray of hope. 

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The whole Market is in Red, Why?

Market pundits have commented that macroeconomic factors caused the downtrend. The first factor is the last CPI data released this September. The figure indicates that inflation is still raging and will necessitate another interest rate hike by the Federal Reserve. Many market watchers are already mentioning that the Feds will pursue a 100-point, which hasn’t been reached in forty years. 

The fear of continuing inflation and the Feds’ aggressive effort to fight it has caused panic in the market. The ongoing liquidations across exchanges will not help matters at all. Instead, it might create more issues in the market. 

Related Reading: Investment Opportunity with new Cryptocurrency Miners

While some talk about the August CPI and imminent interest rate hike, many points out that the Ethereum merge did more harm than good. Some analysts have stated that the upgrade was overhyped, and recent events have proved that it was a “buy the rumor, sell the news.”

No one knows how the market will move in the next few days. But many people expect more bearish movements after the Feds meeting on September 21. 

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Featured image from Pixaby and chart from TradingView.com

Bear Market

ATOM price struggles but Cosmoverse showcases the strength of Cosmos ecosystem

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ATOM price struggles but Cosmoverse showcases the strength of Cosmos ecosystem

ATOM price struggles but Cosmoverse showcases the strength of Cosmos ecosystem Liam ‘Akiba’ Wright · 2 hours ago · 2 min read

Cosmoverse attracts the attention of LATAM as it emerges as the next potential hub for crypto innovation

2 min read

Updated: September 29, 2022 at 1:08 am

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Cover art/illustration via CryptoSlate

The final day of Cosmoverse in Medellin is coming to an end amid a party atmosphere in South America where few would believe a bear market was underway. Builders, investors, and fans of the Cosmos ecosystem came together in Colombia to celebrate the world of Cosmos and learn about the launch of ATOM 2.0.

However, community sentiment aside, the native token of Comos, ATOM, struggled to hold $14 and fell 12% against Bitcoin since the event’s start.

Source: TradingView

Cosmoverse: Everything you need to know

The first day started with an unforgettable rap by Cosmos Co-Founder Ethan Buchman and Sunny Aggarwal in a full suit of armor to argue for the need for mesh security across the Cosmos network.

The ATOM 2.0 whitepaper was announced and released on the first day of the conference, outlining the new economic model for the future of the token. In presenting the whitepaper, Buchman stated that

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“Cosmos is not competing with other Blockchains, we’re competing with legacy institutions to preserve values of sovereignty and interoperability to enable greater political and economic expression.”

Co-Founder of Sommelier, a yield optimization platform on Cosmos, Zaki Manian,  spoke passionately about the future of the ATOM token. Manian praised liquid staking, the allocation model, and cross-domain MEV within the new vision for ATOM, stating that “finally we know what is the right way to redirect the value within the Cosmos ecosystem back to ATOM.”

Other talks on day one covered the core development principles of Cosmos, the evolution of Medellin as a technology hub, the growth of web3 within LATAM, a P2P staking platform called Neutron, the integration of Komodo into the Cosmos ecosystem, and the launch of an interchain DEX from Persistence.

The event’s second day started with Quicksilver Co-Founder Joe Bowman talking about the importance of liquid staking within the Cosmos ecosystem. In a star-studded panel, Osmosis Co-Founder Hyung Yeon also put forward the concept of  blockchains collaborating to expand the DeFi ecosystem by creating a “multi-chain block, a single block connected to each other where IBC can be expanded as a feature.”

Other talks throughout the second day covered web3 privacy, carbon credits, building communities with NFTs, and web3 gaming on Cosmos.

The final day is ongoing at the time of press and will sure to be packed with phenomenal content, and you can catch it all live on YouTube.

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Analysis

Bitcoin retakes $20,000 fueling speculation of bull market return

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Bitcoin retakes $20,000 fueling speculation of bull market return

Bitcoin retakes $20,000 fueling speculation of bull market return Samuel Wan · 6 hours ago · 2 min read

A 6% upside swing in the last 24 hours has renewed talk of the end of the bear market market, but on-chain metrics suggest otherwise, at least in the near term.

2 min read

Updated: September 27, 2022 at 11:43 am

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Cover art/illustration via CryptoSlate

Having broken through $19,300 resistance at the fourth time of asking, Bitcoin moved higher during the early hours of Tuesday (UTC) to peak at $20,400.

Bull exhaustion sees the $20,170 level providing support in the meantime. However, the significant gains over the past 24 hours have renewed calls for an end to the bear market from some.

Trader and the host of the Wolf of all Streets Podcast, Scott Melker, remarked that today’s Bitcoin price action is highly unusual given that stocks have gone the other way.

Bitcoin up big on a day when stonks are down.

In 2022 that’s like seeing a unicorn riding a three legged elephant through the halls of Valhalla from the window of your billion dollar luxury penthouse on Uranus.

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— The Wolf Of All Streets (@scottmelker) September 27, 2022

What’s further perplexing is that this comes at a time when major currencies, including the EUR and GBP, are losing significant ground to the USD.

Although the rally has brought a degree of market optimism, what do on-chain metrics show?

Futures Open Interest

Open interest refers to the number of futures contracts over a particular period. A contract is created when both a buyer and seller agree to it. In general, an increase in open interest and a price increase confirm an upward trend.

The Glassnode chart below shows Futures Open Interest soaring as the Bitcoin price rallied overnight. However, at this time, based on a data point of one day, it is unclear whether the pattern will sustain.

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Source: Glassnode.com

Futures Perpetual Funding Rate

As perpetual contracts can be held indefinitely, the Futures Perpetual Funding Rate refers to a mechanism that keeps perpetual contracts markets tied to the spot market price.

During periods when the funding rate is positive, the price of the perpetual contract is higher than the marked price. Therefore, long traders pay for short positions. In contrast, a negative funding rate shows perpetual contracts are priced below the marked price, and short traders pay for longs.

The chart below shows a surge in futures traders willing to pay a premium for longs. Similar to Futures Open Interest, the lack of data points and relatively muted magnitude of the move call for caution in declaring an end of the bear market.

Source: Glassnode.com

Can this Bitcoin rally continue?

Analysis of spot market volume shows a slight drop-off in volume from the buyers compared to the previous day.

The peak hourly volume was 6,000 as of press time on Sept. 27. This is significantly less than on Sept. 21, when hourly volume hit over 25,000, and BTC peaked at $19,900.

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Source: data.bitcoinity.org

Based on the above, this latest Bitcoin rally was driven by derivatives traders rather than spot buyers.

However, macro factors continue to weigh heavily across all markets. And with spot buyers wary, the bear market is unlikely to end.

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Bear Market

Maple Finance launches $300M lending pool for Bitcoin mining firms

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Maple Finance launches $300M lending pool for Bitcoin mining firms

Maple Finance launches $300M lending pool for Bitcoin mining firms Christian Nwobodo · 6 hours ago · 2 min read

The lending pool is open to mid-sized bitcoin mining providers. Real-world assets will be required for the loan which is repayable over a 12-18 months period.

2 min read

Updated: September 21, 2022 at 2:29 am

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Cover art/illustration via CryptoSlate

Institutional crypto lending protocol Maple Finance teamed up with Icebreaker Finance to launch a $300 million lending pool to finance accredited bitcoin mining firms across North America, Canada, and Australia.

The lending pool launched on Sept. 20 and targeted mid-sized bitcoin mining and infrastructure providers. The loans will be repayable over a 12-18 months period at an interest up to 20%.

According to Maple Finance, borrowers will be required to provide real-world assets, like mining rigs, power transformers, and other infrastructure assets, as collateral.

Maple Finance CEO Sidney Powell expressed optimism that the liquidity pool will provide a viable opportunity for miners to increase their liquidity amidst the declining market conditions.

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Miners play an essential role in growing the crypto ecosystem and local economies, and we are proud to extend a new financing vehicle to direct capital where it is needed the most.”

The institutional liquidity provider has issued up to $1.8 billion in loans to the accredited institution since May 2021. 

Bitcoin miners in the crypto winter 

Bitcoin miners are perhaps among the worst hit by the crypto winter. Many miners have opted to sell off their BTC holdings and equipment to finance their growing debt. 

A recent study by CoinDesk revealed that accreditated crypto miners across North America are faced with a debt burden of up to $4 billion. Many of these were incurred in their quest to construct bigger facilities during the peak of the bull run.

However, as the value of their mining output declined alongside the price of BTC, many miners are selling off their bitcoin and equipment to repay the loans.

Crypto miner Bitfarm sold 1,500 of its bitcoin holding to raise $34 million to pay up its loan from Galaxy Digital, back in June. The firm also turned to New York Digital Investment Group (NYDIG) to raise another $37 million by pledging some of its mining equipment.

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NYDIG has been instrumental in offering loans that help sustain bitcoin mining operations. Argo Blockchain moved to borrow an additional $70 million to expand its mining rig in Texas. At the moment, Argo owes NYDIG a cumulative of $97.2 million.

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