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Ethereum’s High Time Frame Structure Looks “Great” Due to Technical Support

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  • Ethereum has undergone a strong correction from the 2020 highs near $490.
  • The leading cryptocurrency currently trades for $345, down 30% from the aforementioned highs.
  • Many investors have pointed to this correction as the start of a longer-term bearish trend for ETH.
  • This may not be the case: analysts say that Ethereum’s long-term outlook is still positive.
  • They cite pivotal technical factors, including but not limited to a strong set of technical levels below ETH’s current price.

Ethereum Still in a Bullish Long-Term Position, Analyst Says

Analysts are still optimistic about Ethereum despite a strong drawdown from the local highs. One cryptocurrency trader recently shared the chart below, noting that while ETH has faced a correction, it remains above a series of exponential moving average supports.

“Personally with so much uncertainty in the market it is very possible we see a $300 region retest, that said honestly HTF structure is looking great, lots of EMA support below us… In 2018/2019 the 55 EMA was consistently resistance, price now trending well above!”

Chart of ETH's price action over the past few years with analysis by crypto trader Crypto Cactus (@TheCryptoCactus on Twitter). 
Chart from TradingView.com

This came shortly after Logan Han, a top trader on Binance, also shared an optimistic opinion about Ethereum. Both analysts shared extremely similar charts, as they both showed that the cryptocurrency has extremely notable technical supports below its current price.

Han also noted that ETH has formed a medium-term falling wedge, which is likely to break higher. A falling wedge is a textbook bullish pattern that often occurs in the middle of uptrends.

Image

Chart of ETH's price action over the past few years with analysis by crypto trader and leading Binance analyst Logan Han (@loganhan_ on Twitter). 
Chart from TradingView.com

Positive Fundamental Trends

Ethereum has positive fundamental trends that may drive the coin higher over time despite any short-term technical weakness.

As reported by Bitcoinist previously, Glassnode data indicates that over the course of September, Ethereum miners collected $166 million in transaction fees. Over that same time frame, Bitcoin miners collected a relatively small $26 million in transaction fees.

Analysts see this as positive for the blockchain as it shows that it is easily dominant over other networks like Tron, EOS, or Solana.

Featured Image from Shutterstock
Price tags: ethusd, ethbtc
Charts from TradingView.com 
Ethereum's High Time Frame Structure Looks "Great" Due to Technical Support





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Ethereum

Price analysis 11/27: BTC, ETH, XRP, BCH, LINK, LTC, ADA, DOT, XLM, BNB

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Bitcoin’s recent correction is healthy, but several altcoins have lost momentum and could remain range-bound for a few days.



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Compound liquidator makes $4M as oracles post inflated Dai price

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The crypto market suffered a powerful crash on Thursday morning UTC, which sent prices of major currencies like Bitcoin (BTC) and Ether (ETH) tumbling in excess of 10%.

When traders rush for the exits, the price of stablecoins generally increase as the demand for stability rises. In today’s crash, however, the effect became particularly pronounced on Dai (DAI), which briefly traded for $1.3 between 7 and 8 AM UTC.

Dai/USD price on Coinbase, courtesy of TradingView

Most notably, DAI traded at this inflated valuation only on Coinbase and Uniswap, while other exchanges including Kraken and Bitfinex seem to have maintained a relatively stable price.

Dai/USD price on Bitfinex, courtesy of TradingView

Coinbase and Uniswap are the two exchanges used by Compound’s Open Price Feed oracle. The former acts as the baseline, while the latter is used as a sanity check and anchor. Nonetheless, it appears that Uniswap failed in its function and also posted a much higher price than normal.

Compound’s liquidation this morning amounted to $89 million, of which about $52 million came from DAI, according to data from DuneAnalytics.

One liquidation in particular is notable for its extremely large size of 46 million DAI repaid.

As DeFi researcher Sam Priestley explained, this liquidation was performed on a leveraged COMP farmer, who used USD Coin (USDC) and DAI collateral to power recursive borrowing in the same currencies. The apparent increase in DAI price put the account below the liquidation threshold.

The liquidator seized almost 2.4 billion cDAI, worth approximately $50 million with a price of $0.0209, while returning just $46 million in DAI. This is expected behavior given Compound’s current liquidation incentive of 8%.

The transaction in question involved the use of a flash swap from Uniswap and calls to update Compound’s oracle. Another four transactions issued by the same liquidator removed an additional $6 million in debt.

The event highlighted the dangers of relying on just a few data points for oracles, Chainlink (LINK) founder Sergey Nazarov told Cointelegraph. “We predicted this very exploit of centralized oracles and poor data quality over a year ago,” he said, mentioning his explanation of the risks of using a single exchange. He continued: 

“DeFi protocols that rely on centralized oracles that pull data from single exchanges, DEXes or otherwise, are inadvertently putting user funds at risk. […] The Chainlink network was unaffected by this exploit because we source data from multiple leading data providers and hundreds of exchanges, making sure we capture the real-world price of a cryptocurrency through proper market coverage.”

While there is no evidence to suggest active manipulation, the fact that DAI price jumped specifically on the exchanges used by Compound’s oracles could draw suspicion. In general, the liquidation adds to the recent flash loan hacks to highlight DeFi’s excessive reliance on just a few data sources as oracles, Nazarov concluded.





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Yearn Finance announces another ‘merger’ with the Cream lending protocol

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Two days after Yearn Finance (YFI) and Pickle Finance joined forces in DeFi’s first effective merger, Yearn founder Andre Cronje published details of another upcoming integration with Cream, a lending protocol similar to Compound and Aave.

The blog post, published on Thursday, outlines how the two protocols will cooperate for the launch of Cream V2. As part of the partnership, the teams will merge development resources and introduce several symbiotic interactions between the two protocols.

Yearn users will be able to put their vault tokens — their share in a yield farming strategy fund — as collateral to borrow on Cream. Furthermore, the farming strategies will be able to access leverage on the platform, potentially increasing their yield.

The cooperation will continue with future releases, with Cream specializing in lending products. Stable Credit, an upcoming lending platform built by Yearn, will be launched through Cream. A zero-collateral protocol that would allow more flexibility in lending was also teased as a future development.

Unlike with Pickle Finance though, the governance and token economics of Cream will remain unchanged. The two protocols will remain largely separate, with synergies more resemblant of a very close partnership, rather than an outright merger.

The community had raised concerns about not being consulted before the Pickle Finance merger, suggesting that the matter should have been put up for a vote. A team member later clarified that it technically did not require approval since most of the integrations were on Pickle’s side.

Chris Blec, a DeFi researcher who often takes an adversarial view of events, believes that these decisions highlight that governance tokens offer less control than people expect.

In a conversation with Cointelegraph, he clarified that these types of decisions would likely fall under the umbrella of “facilitating business development and integrations,” one of the decision-making powers that YFI holders granted to the core team in August.

The Yearn community has so far reacted positively to the Cream integration, but most have yet to process the announcement.

While the core team seems to be within their rights to approve partnerships and mergers, these actions may trigger further discussion of the role of the YFI token holders in the Yearn ecosystem.