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BTC/USD Analysis: Bitcoin’s New Hope

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This Monday, January 11, will be remembered by the many. Bitcoin dropped nearly 20% as the US Dollar gained amid rising US Bond yields.

Bitcoin was not able to take over the rock-solid $42K resistance, and after a short steady period, bears took over and Bitcoin witnessed one of the heaviest drops. The US Dollar was able to add up 0.60% to its value today, causing several other assets traded against the USD to lose in value. Despite developments in the US, rising Covid cases, US Indices drop, rising Volatility Index, both Gold and Bitcoin were giving up grounds against the US Dollar.

Some investors and traders were waiting for this correction, as the Bitcoin’s latest uptrend was weaker, despite the breaking of ATHs. The only question was where the correction is going to end and accounting for the levels and diagonals we have in this analysis, it looks like the correction just ended.

Bitcoin price on Overbit

As seen on a 4Hour chart of BTC/USD the price tested the dynamic resistance of December 11 – 15, 2020 as a support. The previous similar test on January 4 this year with a high lower wick of the candle, signalled a bullish uptrend of Bitcoin. The uptrend is supported by the RSI and MA100, although MACD indicators MACD and signal line are yet far from each other.

Bitcoin price on Overbit

These are the levels to watch when trading Bitcoin. Currently the pair is consolidating between EMA50 and MA100 and the price is above the two important static supports $32 900 and $32 200, and if bears are able to push the price below these levels, Bitcoin will probably drop down to $29 470 and $28 186 below that. The bullish sentiment will only be confirmed if Bitcoin closes above $34 440. The uptrend might be supported by an appreciation of Bakkts merger, which will help the exchange to get listed on NYSE and the weak US CPI data released this week, as well as the continuing spread of the Covid-19 and its new variance, which forces countries to get back to last years restrictions.

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3 reasons why the price of Curve DAO Token (CRV) tripled in a week

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Over the past two weeks the entire DeFi sector has been in a strong uptrend and many of the top market cap tokens rallied by double and triple-digits.

Curve DAO’s governance token CRV has been a standout performer, coming off a low at $0.54 on Jan. 11 to a 2021 high at $1.78 on Jan. 17.

CRV/USDT 4-hour chart. Source: Tradingview

Three reasons for this latest surge in volume and price for CRV are a new collaboration with the Yearn.finance (YFI) ecosystem, positive regulatory developments in the U.S. and an increase in engagement boosting the total value locked on the platform.

Yearn.finance collaboration

The noticeable uptick in trading volume for CRV began on Jan. 14 after Yearn.finance creator, Andre Cronje, tweeted a gif that read:

“Curve.fi presents, in collaboration with Yearn.Finance, permissionless pool creation. Stablecoin pools in 3 clicks. Crv.finance.”

Similar to the days when any partnership or integration announcement from Chainlink (LINK) would provide an immediate boost in volume and price, collaborations with YFI have tended to casue sharp breakouts in DeFi token prices. Take for example, Cream Finance and SushiSwap, which both rallied by more than 100% after Yearn.finance partnership announcements.

CRV’s trading volume increased from $59 million to $350 million following the Cronje’s tweet and a follow-up tweet on Jan. 15 provided an update on the progress of the collaboration stating, “crv.finance updated; Permissionless pool creation added, anyone can create a curve pool that can swap to DAI, USDC, or USDT.”

This pushed the 24-hour trading volume as high as $478 million and boosted the price to $1.23.

CRV price vs. Reported trading volume. Source: TheTIE

Crypto friendly regulation creates opportunity for Curve

A second reason CRV has more than tripled since the beginning of 2021 relates to the recent stablecoin announcement from the United States Office of the Comptroller of the Currency.

According to the OCC, banks will be able to “use new technologies, including INVNs and related stablecoins, to perform bank-permissible functions, such as payment activities.” Banks will soon be able to utilize various blockchain platforms to conduct stablecoin transactions as well as provide custody services for those assets, and this means a trusted stablecoin ecosystem and oracle provider is needed.

The Curve DAO platform is one of the larger decentralized exchanges for stablecoins that uses an automated market maker (AMM) to manage liquidity so as this shift occurs, more people may look to the platform as the preferred option.

Increasing user activity and total value locked boost fundamentals

A key factor in the success of any cryptocurrency project is the engagement of its community. For CRV, this is represented by metrics such as total value locked (TVL) on the platform and the volume of transactions per day.

Total value locked on Curve.Finance. Source: Defi Pulse

Data from defipulse shows that the TVL on Curve received a noticeable increase since Jan. 4 after remaining relatively flat throughout December.

Curve.finance has also seen a steady increase in the total volume per day transacted on the platform as shown in the following chart from Dune analytics.

Daily volume on Curve.fi. Source: Dune Analytics

Another positive development for Curve was the Jan.17 announcement that “cross-asset swaps via Synthetix.io are now live.”This kicked off another wave of high volume trading volume and hours after the announcement CRV hit its 2021 high at $1.78.

As the total value locked on Curve reaches new highs and daily volume soars, future collaborations such as these are likely to be met with similar enthusiasm.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.