Decentral Block Post

On Feb. 1 and Feb 2. Bitcoin’s (BTC) price surpassed even the most bullish price projections after the U.S. Federal Reserve announced plans to raise interest rates by 25 basis points. 

Even though Fed chair Jerome Powell told investors not to wait for interest rate cuts in 2023, during his press conference he did clearly state that the employment data is currently the main focus.

The results of the ADP payroll survey revealed on Feb. 1 that U.S. private-sector hiring was significantly slower in January. ADP’s measure of private sector payrolls was 106,000, well below the 160,000 market consensus. This data fueled investors’ expectations of future interest rate hikes by the Fed going forward.

After testing the $22,500 support on Feb. 1, Bitcoin gained 6.5% in five hours and has since been flirting with the $24,000 level. While the recent gains are exciting, traders should note that the improvement in crypto market sentiment tracked the risk-on attitude seen in traditional markets.

Stocks with negative operating margin presented significant gains on Feb. 2, including Coinbase (COIN) 20%, Cloudflare (NET) 15%, Unity Software (U) 12% and DoorDash (DASH) 10%. That factor alone should be a warning sign that the gains of the last few weeks might not be sustainable. It’s also important to remember that Bitcoin’s 40-day correlation to the S&P 500 remains above 75%.

The memecoin phenomenon didn’t prove as effective in the last month's start of year crypto market rally, as the gains of the top cryptocurrencies in this category barely outperformed Bitcoin. The monthly gain of BTC stood at 44.5%, while the top two meme-based coins DOGE and SHIB gained 27% and 40.7%, respectively.

Doge needs a market moving catalyst

Dogecoin is losing its popularity as its most prominent supporter Elon Musk is reportedly developing an independent Twitter Coin instead of integrating his favorite cryptocurrency with the social media platform owned by the entrepreneur.

For the greater part of 2022, DOGE/USD performed poorly except for when Elon Musk acquired Twitter. The acquisition raised hopes in the Dogecoin community about increased cryptocurrency usage.

However, without any tangible announcements or reports from Twitter hinting at Dogecoin usage, the 100% price surge from October 2022 reversed in the following two months. The Google search volume for the token has also subsided since Q1 2022.

Dogecoin is losing its popularity as its most prominent supporter Elon Musk is reportedly developing an independent Twitter Coin instead of integrating his favorite cryptocurrency with the social media platform owned by the entrepreneur.

The memecoin phenomenon didn’t prove as effective in the last month's start of year crypto market rally, as the gains of the top cryptocurrencies in this category barely outperformed Bitcoin. The monthly gain of BTC stood at 44.5%, while the top two meme-based coins DOGE and SHIB gained 27% and 40.7%, respectively.

Doge needs a market moving catalyst

Dogecoin is losing its popularity as its most prominent supporter Elon Musk is reportedly developing an independent Twitter Coin instead of integrating his favorite cryptocurrency with the social media platform owned by the entrepreneur.

For the greater part of 2022, DOGE/USD performed poorly except for when Elon Musk acquired Twitter. The acquisition raised hopes in the Dogecoin community about increased cryptocurrency usage.

However, without any tangible announcements or reports from Twitter hinting at Dogecoin usage, the 100% price surge from October 2022 reversed in the following two months. The Google search volume for the token has also subsided since Q1 2022.

Dogecoin is losing its popularity as its most prominent supporter Elon Musk is reportedly developing an independent Twitter Coin instead of integrating his favorite cryptocurrency with the social media platform owned by the entrepreneur.

According to blockchain security firm CertiK, the damage caused to decentralized protocol BonqDAO on Feb. 1 may have been much less than initially thought. 

As told by CertiK, the attacker first borrowed 100 million BEUR, a euro stablecoin, with less than $1,000 in collateral due to a lack of controls on the collateralization ratio. If users set the parameter to zero, then the platform defaults to returning the "maximum value of uint256," allowing an astronomical sum of loans to be issued.

However, CertiK said that despite the attacker borrowing 100 million BEUR (around $120 million at the time of attack), the hacker only managed to withdraw around $1 million due to a lack of liquidity on the platform. Previously, blockchain security firms such as PeckSheild stated that around $120 million was lost during the attack.

Bonq is a fork of Liquity Protocol, which, similar to that blockchain, uses Troves to represent isolated debt positions. However, Bonq reportedly implemented a Community Liquidation Feature where 45 Troves with BEUR exposure were liquidated due to the incident. According to CertiK, the attack also impacted Troves containing approximately 110 million Alliance Block tokens (ALBT). That said, none of the Alliance Block smart contracts were breached during the incident, and the project has said it will airdrop new tokens to compensate affected holders.

Although a lack of liquidity appears to have mitigated damages to BonqDAO during the incidents, others were not so lucky. On Oct. 12, DeFi protocol Mango Markets initially lost $116 million after hacker Avraham Eisenberg manipulated the price of the MNGO token price, driving it up 30 times via enormous perpetual future contracts within a short period. This was possible as a relatively small initial capital was required to manipulate MNGO due to low liquidity. 

Ether (ETH) has been struggling with the $1,680 resistance since Jan. 20. Still, the ascending triangle pattern and improvements in investor sentiment in ETH derivatives provides hope that Ether price could reach $1,800 or higher by the end of February. This, of course, depends on how the Ether price behaves as it reaches the pattern deadline by mid-February. 

From one side, traders are relieved that Ether is trading up 33% year-to-date, but the repeated failures to break the $1,680 resistance coupled with negative newsflow might give bears the power to cancel the bullish triangle pattern.

According to a Jan. 30 report from Axios, New York State's Department of Financial Services is reportedly investigating cryptocurrency exchange Gemini over claims that the firm made regarding assets in its Earn lending program. The suspicions followed reports that multiple Gemini Earn users believed their assets had been protected by the Federal Deposit Insurance Corporation (FDIC).

On Jan. 12, the U.S. Securities and Exchange Commission charged the Gemini exchange with offering unregistered securities through Earn. In addition, Gemini co-founder Cameron Winklevoss has claimed that Genesis and DCG owe $900 million to Gemini's clients.

Several United States senators have reportedly penned a letter requesting answers from Silvergate Bank, according to a Jan. 31 Bloomberg report. The policymakers were not fully satisfied with the bank's previous answers about its alleged role in handling FTX user funds. Silvergate reportedly cited restrictions on disclosing "confidential supervisory information."

Ether (ETH) has been struggling with the $1,680 resistance since Jan. 20. Still, the ascending triangle pattern and improvements in investor sentiment in ETH derivatives provides hope that Ether price could reach $1,800 or higher by the end of February. This, of course, depends on how the Ether price behaves as it reaches the pattern deadline by mid-February. 

From one side, traders are relieved that Ether is trading up 33% year-to-date, but the repeated failures to break the $1,680 resistance coupled with negative newsflow might give bears the power to cancel the bullish triangle pattern.

According to a Jan. 30 report from Axios, New York State's Department of Financial Services is reportedly investigating cryptocurrency exchange Gemini over claims that the firm made regarding assets in its Earn lending program. The suspicions followed reports that multiple Gemini Earn users believed their assets had been protected by the Federal Deposit Insurance Corporation (FDIC).

On Jan. 12, the U.S. Securities and Exchange Commission charged the Gemini exchange with offering unregistered securities through Earn. In addition, Gemini co-founder Cameron Winklevoss has claimed that Genesis and DCG owe $900 million to Gemini's clients.

Several United States senators have reportedly penned a letter requesting answers from Silvergate Bank, according to a Jan. 31 Bloomberg report. The policymakers were not fully satisfied with the bank's previous answers about its alleged role in handling FTX user funds. Silvergate reportedly cited restrictions on disclosing "confidential supervisory information."