The Shiba INU platform to stabilize the SHIB price had earlier introduced a burn mechanism after Ethereum’s ETH 2.0 with EIP 1559 upgrade went operational. However, the burn mechanism does not appear to have fueled the price rally as both SHIB price and ETH price are drowning in the same bearish well, despite the fact that the tokens continue to burn as per the algorithm.
Recently, Shiba INU recorded a milestone of burning nearly 12.6 billion SHIB tokens in a day worth nearly $123,551. Despite the burn rate spiked by more than 5000% yet, the price remained largely un-impacted. A similar instance has been recorded with the ETH price. According to the burn portal, more than 2,340,000 ETH has been burnt since its inception. Moreover, the burnt tokens were far ahead of the tokens issued on the same day.
Therefore, when the burn mechanism has not led to any major impact on the second-largest token, Ethereum and the most popular memecoin Shiba INU, How fine will it be for the LUNA price?
As the entire community currently is after burning the excess minted tokens when UST got heavily de-pegged. LUNA tokens in circulation are closely related to the UST’s peg. As the stablecoin lost its peg, new LUNA tokens were minted and flooded into the market. The circulating supply sky-rocketed from just 1.46 billion to as high as 6.53 trillion at the press time. This impacted the price heavily which is around $0.000134 and hence the community is constantly asking to burn the tokens instead of a fork or LUNA V2.
Considering the previous history of very popular tokens, which were merely impacted by the burn mechanism, burning LUNA tokens may also not be the one-stop solution to stabilize the LUNA price. And hence the team behind the tokens may have to have a strong plan to stabilize both LUNA and UST prices at the same time.
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What of Ethereum now that $1.4B worth of ETH are sold
Ethereum [ETH], the king of altcoins has failed to register any significant improvement in the month of June. It is still stuck with the bears at the $1k level. Notably, this level was previously visited by the coin at a time when the market crash wiped out 46.4% of the ETH’s value. But with Q3 of 2022, circumstances might take a positive turn for ETH holders.
Ethereum needs a boost
Observing the entire Ethereum network, one can simply say that Ethereum needs a boost from its investors. Well, on the fundamental level, the network is making progress in all directions. Evidently, the arrival of ETH 2.0 and anticipation of ‘Merge’ has somewhat failed to accelerate ETH’s growth.
Thus, it’s important that the broader market cues turn positive at once since ETH is currently dependent on it. The bearishness prevalent in the market over the past couple of weeks has blocked Ethereum’s all attempts to rally. Consequently, investors have been forced to sell and prevent further losses.
In the month of June alone, about 1.3 million ETH worth over $1.45 billion was sent back to exchanges, most of which was a part of panic selling that was triggered by the crash of 9 June.
However, most of this selling did not come from Ethereum’s loyalists, the long-term HODLers. Primarily, because the HODL waves made it evident that the one-month to three-month cohort took the charge of selling.
Their control over the supply reduced from 14% to a little over 9%, resulting in an increase in the domination of the HODLers who have held their supply for less than a month.
What is ETH looking for?
What Ethereum needs now is some patience from investors and a quick market-wide recovery. Patience because the investors need to hold off on moving their supply around until the mark price is at level with the buy price.
Doing the opposite of that may result in transactions that would be conducted at a loss, and such transactions combined have caused the spent output profit ratio to fall below 1.0.
Trading at $1,092 at press time, ETH needed to retrace its steps back to pre-June levels at the least to correct this decline, which may take a while considering the alt’s price decline of 5.2% in the last 24 hours.
FTT: Unraveling implications of recent drawdowns on technicals
FTT’s bearish break below the $28.7-level led the alt to retest and eventually breach the $25-support (now immediate resistance). The recent patterned break took a plunge below the seven-week trendline resistance (white, dashed) on the 4-hour timeframe.
A compelling close below the $25-level could expose FTT toward a downside before any bullish revival chances.
Due to the relatively high correlation with Bitcoin alongside the broader sentiment, the altcoin could see trend invalidations. At press time, FTT was trading at $25.127, down by 8.12% in the last 24 hours.
FTT 4-hour Chart
From a near-term outlook, FTT’s rising wedge breakdown has pulled the alt below its 20 EMA (red) and the 50 EMA (cyan). Furthermore, a convincing bearish crossover of these EMAs could impair the near-term buying efforts.
A close below the $25-level could aid near-term selling efforts to test the $23-$24 range in the coming sessions. However, an immediate bounce-back from the $25-zone could delay the bearish tendencies. In this case, the buyers would aim to test the 20 EMA near $26 before a reversal.
FTT Daily Chart
In this timeframe, FTT saw a strong reversal from the 38.2% level. sustained close below the 23.6% level could propel a low volatility phase in the $24-$25 range in the coming days. Thus, the potential shorting targets would remain in the $24-zone. Also, with increasing trading volumes, the 24-hour losses depicted a rather strong bear move.
The Relative Strength Index (RSI) plunged below the midline after barely sustaining itself above the 50-mark. Looking at its south-looking tendencies, the buyers still had a long way to alter the broader outlook in their favor.
Also, the CMF dipped below the zero-line and reaffirmed the bearish strength. But any comebacks along its trendline support can aid near-term recovery efforts.
Given the break below the $25-level on the H4 alongside the patterned break and bearish indications on the daily timeframe, FTT could test the $23-$24 range. The targets would remain the same as mentioned above.
Any bearish invalidations should likely find a rebounding region in the $26-zone. Also, investors/traders must keep a close eye on Bitcoin’s movement as FTT shares a 58% 30-day correlation with the king coin.
Solana [SOL] traders going short can take-profit at this level
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the opinion of the writer.
In a previous article, we explored how crucial the $37-$39 area was for the bulls to defend. If the bulls had been able to defend this demand zone, a move higher could have been on the cards for Solana. Yet, the selling pressure behind Bitcoin acted as a catalyst and sent many major altcoins reeling. Solana had been fighting to break above $42.5. At press time, it appeared to be headed back to a support level where the rally to $42 had begun.
SOL- 1 Day Chart
On the daily timeframe, some important levels close to the price were marked. The low of May, the swing high of June as well as the swing low, were all likely to be important levels in the weeks to come. A hidden bearish divergence (orange) developed just as the price knocked on the $42.5 mark. This signaled a continuation of the former downtrend, and SOL came tumbling down in recent days.
The swing low of May at $37.37 has acted as support and resistance over the past month. It was expected that the bulls would attempt to defend this zone, which was a support zone on lower timeframes.
Yet, the price crashed right through it and reinforced a bearish bias for Solana. Given the fact that Bitcoin also faced selling pressure, it appeared that the direction for SOL in the next few days would be southward.
SOL- 2-Hour Chart
The 2-hour chart showed the price to slip beneath the 38.2%retracement level and cruise lower. The $37.37 was broken and was not yet retested as resistance. The RSI approached oversold territory, while the Stochastic RSI was in the oversold region. Hence, a possible bounce toward the $37 area could occur before a subsequent drop in prices.
There is also the possibility of a move lower without a bounce from $33.75. The A/D line has been going lower and lower, and the selling pressure could see SOL drop without a bounce.
The $32 region was a good area for short positions to take-profit at. A bounce to $37 could offer an ideal entry. Short positions can use the Supertrend indicators to set a stop-loss. Both the daily and the hourly timeframes showed selling pressure behind Solana.
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