Decentral Block Post

On July 26, Bitcoin (BTC) price dropped below $21,000, giving back the majority of the gains accrued in the previous week and returning to the $23,300 to $18,500 range that Glassnode analysts describe as “the Week 30 high and Week 30 low.” 

A handful of analysts and traders attribute the July 26 to July 27 Federal Open Market Committee (FOMC) meeting and the expected Federal Reserve rate hike as the primary reasons for the current sell-off.

Barring the announcement that the United States economy has entered a recession, a few traders believe that the expected 75 to 100 basis point (BPS) hike will be followed by a relief rally that could see BTC, Ether and other large-cap altcoins snack back to the top of their current range. Of course, this sentiment reflects more speculation than sound analysis, so take it with a grain of salt.

Given that BTC price is simply continuing to trade in the same range that it has been in for the past 42 days, the real question is whether the market will bring more consolidation or another round of capitulation.

In its July 26 on-chain newsletter, Glassnode analysts posit that investors can find their “conviction through confluence” of multiple technical and on-chain metrics which suggest the peak of capitulation has long past.

A new and relatively unknown DeFi token called BarnBridge (BOND) has rallied over 800% to reach $20 on July 26.

The BOND price surge comes more than a month after bottoming out at around $2.19. In comparison, top coins, Bitcoin (BTC) and Ether (ETH) have only rebounded by 18% and 54% in the same period, respectively.

Another pump and dump?

BarnBridge is a cross-chain risk management protocol that offers a suite of composable DeFi products for investors to hedge against interest rate fluctuations and price volatility.

Examples include SMART Yield — a product that enables investors to secure fixed rate yields from the debt pools of other projects such as Aave, Compound, Cream, or Yearn.finance — and SMART Exposure, which offers investors tools to rebalance portfolios.

BarnBridge's latest product, SMART Alpha, allows investors to hedge against price fluctuations and provides them leverage for bullish theses. Meanwhile, BOND serves as a governance token to the Ethereum-based DAO representing BarnBridge.

Bitcoin (BTC) fell below $21,000 for the first time in eight days on July 26 as Wall Street prepared for a decision on United States' anti-inflation policy.

Fed jitters test market resolve

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD ending a period of sideways action on the Wall Street open, hitting lows of $20,788 on Bitstamp.

Against its highs of $24,280 on July 20, the pair was now down over 14% as nerves across risk assets heightened in anticipation of the Federal Reserve's decision on interest rates due July 27.

The higher the base rate hike by the Fed, the more problematic the outlook for crypto investors as more tightening would mean more conservative conditions prevailing across the economy. 

"BTC has lost the Higher Low, which represented a lower timeframe technical uptrend," he told Twitter followers alongside an illustrative chart.

Solana-based decentralized finance (DeFi) firm Unstoppable Finance has argued that Solana is more decentralized than people make it out to be. However, there’s another side that believes that the blockchain platform is actually more centralized.

In a blog post, the DeFi firm lays out its arguments, citing the blockchain network’s active validator count, Nakamoto coefficient and support for validator hardware, which is often argued to be expensive, as reasons for the network’s decentralization.

According to the post, Solana’s validator count is much higher than most other chains, excluding Ethereum. Additionally, Unstoppable Finance points out that Solana’s Nakamoto coefficient, a metric that measures the distribution of staked tokens and decentralization, is much higher than protocols like Cosmos and Near Protocol.

Regarding the criticisms that Solana’s validator hardware is expensive, Unstoppable Finance argues that Solana has already created a server rental program that deals with the issue. Despite the arguments in favor of Solana’s decentralization, some community members cannot be convinced that the platform is decentralized.

Twitter user Les_teezy believes that Solana's network outages are not the main problem; instead, the network is “too centralized,” giving only a few the influence to shut down and restart the network. The Twitter user highlighted that without decentralization, the network is just the same as any traditional system.

Solana (SOL) dipped to a two-week low at around $35.50 on July 26, mirroring downside moves elsewhere in the crypto market. Nonetheless, technicals suggests that Solana's price flirts with the prospects of rising 40% in August.

SOL hits key inflection point

Ironically, the bullish setup for Solana emerges out of a classic bearish continuation pattern.

On the daily chart, SOL's price has been consolidating inside what appears to be a "bear flag," a technical pattern that develops during a downtrend and gets resolved after the instrument exits it with further price drops.

The so-called bear flag breakdown has not happened yet. Instead, SOL has been holding the lower trendline as support, raising possibilities of a sharp rebound toward the upper trendline, as illustrated in the chart below.

The rebound setup exposes SOL to a potential rally toward $49.50 in August, up 40% from today's price. The $49-$50 level had served as both support and resistance in May.