Decentral Block Post

The public blockchain sector grew from less than a few million dollars in the last decade to a $1 trillion industry. However, one thing that the space has yet to solve is a decentralized and secure interoperable solution.

Let's take Ethereum (ETH) to Bitcoin (BTC), the largest blockchain network, for example. Till today, centralized exchanges are the only viable solution for shifting from one chain to another.

A centralized solution provider, BitGo, provides the largest pool of liquidity for Ethereum users to gain BTC exposure via Wrapped Bitcoin (WBTC). The BitGo IOU accounts for over 93.6% of the Bitcoin bridged to Ethereum. Users must rely on BitGo partner platforms like centralized exchanges or CoinList to exchange BTC and WBTC.

The dominance of WBTC exposes it to evident centralization and regulatory risks. RenBTC, a platform managed by Alameda Research, dissolved in December after FTX's collapse, and the same might happen with BitGo. The recent regulatory crackdown on Paxos for issuing a USD-backed token, BUSD, could also eventually bring services like BitGo into the U.S. SEC's crosshairs.

The interoperability between smart contract platforms and other application-specific blockchains must also be developed. Sidechains and rollups in Polygon (MATIC), Arbitrum and Optimism comprise 90% of the cross-chain bridge volume from Ethereum. Near's (NEAR) Rainbow and Fantom (FTM) bridges are the only independent blockchains with a notable total value locked (TVL) on bridges with Ethereum.

The public blockchain sector grew from less than a few million dollars in the last decade to a $1 trillion industry. However, one thing that the space has yet to solve is a decentralized and secure interoperable solution.

Let's take Ethereum (ETH) to Bitcoin (BTC), the largest blockchain network, for example. Till today, centralized exchanges are the only viable solution for shifting from one chain to another.

A centralized solution provider, BitGo, provides the largest pool of liquidity for Ethereum users to gain BTC exposure via Wrapped Bitcoin (WBTC). The BitGo IOU accounts for over 93.6% of the Bitcoin bridged to Ethereum. Users must rely on BitGo partner platforms like centralized exchanges or CoinList to exchange BTC and WBTC.

The dominance of WBTC exposes it to evident centralization and regulatory risks. RenBTC, a platform managed by Alameda Research, dissolved in December after FTX's collapse, and the same might happen with BitGo. The recent regulatory crackdown on Paxos for issuing a USD-backed token, BUSD, could also eventually bring services like BitGo into the U.S. SEC's crosshairs.

The interoperability between smart contract platforms and other application-specific blockchains must also be developed. Sidechains and rollups in Polygon (MATIC), Arbitrum and Optimism comprise 90% of the cross-chain bridge volume from Ethereum. Near's (NEAR) Rainbow and Fantom (FTM) bridges are the only independent blockchains with a notable total value locked (TVL) on bridges with Ethereum.

It might seem like forever and a day ago when the Bitcoin (BTC) price was trading below $18,000, but in reality, it was 40 days ago. Generally, cryptocurrency traders tend to have a short-term memory and, more importantly, they attribute less importance to negative news during bull runs. A great example of this behavior is BTC’s 15% gain since Feb. 13, despite a steady flow of bad news in the crypto market.

For instance, on Feb. 13, the New York State Department of Financial Services (NYDFS) ordered Paxos to "cease minting" the Paxos-issued Binance USD (BUSD) dollar-pegged stablecoin. Similarly, Reuters reported on Feb. 16 that a bank account controlled by Binance.US moved over $400 million to the trading firm Merit Peak — which is supposedly an independent entity also controlled by Binance CEO Changpeng Zhao.

The regulatory pressure wave continued on Feb. 17 as The United States Securities and Exchange Commission (SEC) announced a $1.4-million settlement with former NBA player Paul Pierce for allegedly promoting "false and misleading statements" regarding EthereumMax tokens on social media.

None of those adverse events were able to break investors' optimism after weak economic data signaled that the U.S. Federal Reserve (FED) has less room to keep raising interest rates. The Philadelphia FED Manufacturing Survey displayed a 24% decrease on Feb. 16 and U.S. housing starts increased by 1.31 million versus the previous month, which is softer than the 1.36 million expectation.

Let's take a look at Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market conditions.

Bitcoin (BTC) rose more than 11% last week and is trading near the pivotal resistance at $25,000. Monitoring resource Material Indicators highlighted in its latest update that large volume traders were “thinning” overhead resistance, which could spark a rally. As the prices rise, retail traders may get sucked in and the whales could use this opportunity to sell their positions that were accumulated at lower levels.

Every uptrend witnesses several pullbacks and Bitcoin is no exception. However, the price action of the past several months shows a large basing pattern, which may be about to break out to the upside. If that happens, Bitcoin will signal a potential trend change.

There are very few occasions when all the indicators turn bullish. If traders keep waiting for that to happen, they may miss a large portion of the rally. Therefore, it is better to watch the price action closely and trade according to the individual’s money management principles. Usually, successful strategies are simple and easy to follow.

Could Bitcoin and select altcoins continue to outperform the United States equities markets in the near term? Let’s study the charts to find out.

SPX

The S&P 500 index (SPX) bounced off the 20-day exponential moving average (4,080) on Feb. 10 but the bulls could not push the price to the overhead resistance at 4,200. This emboldened the bears who pulled the price below the 20-day EMA on Feb. 17. A minor positive for the bulls is that lower levels attracted strong buying as seen from the long tail on the day’s candlestick.

Conflux Network (CFX) is up nearly 500% in the past week with CFX emerging as one of the best-performing crypto assets in 2023 as China appears to be warming to cryptocurrency trading. 

What is Conflux Network?

Interestingly, Conflux Network, also known as Shanghai Tree-Graph Blockchain Research Institute, is the only regulatory-compliant, public and permissionless blockchain in China. Conflux is a layer-1 blockchain operating on a hybrid proof-of-work and proof-of-stake mechanism.

CFX's price has rallied nearly 1,335% year-to-date (YTD) to reach $0.3254 as of Feb. 24, its highest level in fourteen months. In comparison, the combined market capitalization of crypto assets has surged approximately 45% YTD.

Why is Conflux Network price rallying?

Strong fundamentals have primarily driven the CFX price higher in 2023.

For instance, the CFX price increased by more than 90% on Jan. 26, two days after Conflux Network's partnership with Little Red Book, a China-based social media platform, to provide nonfungible token (NFT) services.

Conflux Network (CFX) is up nearly 500% in the past week, with CFX emerging as one of the best-performing crypto assets in 2023 as China appears to be warming to cryptocurrency trading. 

What is Conflux Network?

Interestingly, Conflux Network, also known as Shanghai Tree-Graph Blockchain Research Institute, is the only regulatory-compliant, public and permissionless blockchain in China. Conflux is a layer-1 blockchain operating on a hybrid proof-of-work and proof-of-stake mechanism.

CFX’s price has rallied nearly 1,335% year-to-date (YTD) to reach $0.3254 as of Feb. 24, its highest level in 14 months. In comparison, the combined market capitalization of crypto assets has surged approximately 45% YTD.

Why is Conflux Network’s price rallying?

Strong fundamentals have primarily driven the CFX price higher in 2023.

For instance, CFX’s price increased by more than 90% on Jan. 26, two days after Conflux Network partnered with Little Red Book, a China-based social media platform, to provide nonfungible token services.

Bitcoin (BTC) spent another day tackling $25,000 on Feb. 20 as analysts continued to warn over market manipulation.

Bitcoin buoyed by "Notorious B.I.D."

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD making up losses from around the weekly close to approach the $25,000 mark again at the time of writing.

Bulls remained unable to spark a resistance-support flip, however, and whale activity on exchanges kept suspicions high.

In its latest update, monitoring resource Material Indicators revealed that large-volume traders were artificially “thinning” resistance overhead, making it more likely that BTC/USD would move higher.

Co-founder Keith Alan referenced a wall of bid liquidity buoying spot price, something he called the “Notorious B.I.D.”

The price of Ethereum’s native token, Ether (ETH), has surged by more than 40% year-to-date to around $1,750, the highest level in seven months. However, ETH’s price is not out of the woods yet despite several bullish cues in the pipeline, such as the Shanghai upgrade.

Ether’s rise aligns with similar upside moves elsewhere in the crypto market, responding to lowering inflation that reduces the Federal Reserve’s likelihood of continuing to raise interest rates.

At the same time, warnings about an imminent bull trap in the markets have emerged, which may wipe out recent profits. Due to its long-term correlation with stocks and Bitcoin, Ether faces similar risks.

Let’s take a closer look at several potential bullish and bearish catalysts for the price of Ethereum below.

ETH becomes most deflationary since Merge

The issuance rate of Ether has dropped to its lowest level since the network’s transition to proof-of-stake (PoS) via “the Merge” in September, 2022.