Synopsis
Maker’s DAI facing speculation with investor sell-off and regulatory climate
Awaiting BASE – What to expect from the BASE mainnet launch?
Major Setback for Curve Finance following the recent hack
Biggest winner and loser of the week
Key Observations
The market is sitting on the resistance of $1.12T. These levels should hold as the market appears to be prepared to move sideways. We expect it to consolidate before making a move on either side. In the event of a downtrend, we can assume the market to meet support at $1.11T.
Analysis
Uncertainty Over Maker’s DAI
MakerDAO has been in the news! On-chain analysis shows that a16z, a long-time MakerDAO investor, recently sold all their MKR holdings sparking speculations of significant events ahead. It does not sit right that the protocol is offering 8 percent yields in a bear market!
Furthermore, it seems that Circle (the company that manages USDC) or an associated entity has been reducing its involvement with MakerDAO, leading to a sharp decline in USDC backing DAI in circulation. CZ’s tweet also has people looking out at MakerDAO which has created FUD surrounding the project.
The apprehensions surrounding MakerDAO revolve around the possibility of real-world assets backing DAI at risk of seizure or freezing by regulators. This comes after the SEC has gone to freeze assets of certain players in the crypto space.
Bridge out from BASE now!
Base, Coinbase’s Ethereum layer 2 solution gears up for its upcoming public launch. For those familiar with Base, the current one-way bridge will soon become a thing of the past. With the public launch scheduled for this Wednesday, users will gain the ability to bridge crypto in and out.
The launch could potentially trigger a resurgence of memecoin mania, similar to what we’ve witnessed over the past month with BALD, COIN, and other tokens. Be wary of new rug pulls!
CRV Crisis – Here’s what went down!
Curve Finance faced a severe blow as panic selling and withdrawals caused its Total Value Locked (TVL) to plummet by 50% to $1.6B. The CRV token price also dropped to $0.50.
The crisis began with hackers exploiting a dormant zero-day vulnerability in older versions of Vyper, used by Curve and other protocols, stealing around $70 million from various pools.
The CRV/ETH pool was hit twice due to broken balances. A white hat hacker, c0ffeebabe.eth, mitigated some losses.
However, the situation became more precarious when users realized the impact on CRV’s price could trigger a chain reaction. CRV’s founder had taken a $100 million loan backed by 47% of its circulating supply. Egorov has attempted to lower his debt and the utilization rate twice, repaying a total of 4m FRAX over the past 24 hours. However, the market’s utilization rate remains at 100% as users rush to remove liquidity as soon as he repays. It remains to be seen how CRV fares in this environment.
Top gainer of the week: XinFin Network (XDC) up by 22%⬆️
XinFin Network (XDC) functions as a hybrid blockchain platform that adopts the positives of both public and private blockchains. XDC, equipped with state-of-the-art infrastructure, aims to bring forth the transparency found in public blockchains alongside the swiftness and security offered by private networks.
Opinion
Fundamental Analysis:
XDC has increased and this surge is likely attributed to its recent partnership with Singapore’s Infocomm Media Development Authority’s TradeTrust. The collaboration aims to ensure that digital trade documents comply with the Model Law on Electronic Trade Records.
Technical Analysis:
The market sentiment is neutral. We expect it to break through the resistance and continue it’s leg up with bulls driving the movement.
Oscillator indicators: 3 bearish, 7 neutral, 1 bullish
Moving average indicators: 1 bearish, 1 neutral, 11 bullish
Biggest loser of the week: Ripple (XRP) down by 12% ⬇️
Opinion
Fundamental analysis: XRP saw a massive rally following the SEC verdict. This was followed by weeks of correction. It remains to see how the community reacts to this and influences the price action.
Technical analysis: XRP has experienced a decline over the past week. We will monitor this situation closely. For now, XRP seems likely to consolidate.
Oscillator indicators: 3 bearish, 7 neutral, 1 bullish
Moving Average indicators: 1 bearish, 1 neutral, 11 bullish
Conclusion
The cryptocurrency market continues to be influenced by stablecoin action and institutional involvements. The past week showcased the uncertainty looming collateral backed stablecoins and how large institutions are positioning themselves.The two way bridge launch of BASE layer and the CRV hack were the highlights of this week. The activity in the market suggests that the market shall move sideways.
