Decentral Block Post

Nonfarm payrolls rose by 315,000 jobs in August, down from the July increase of 526,000 jobs. The report was just below the Dow Jones estimate of 318,000 jobs and the slowest monthly gain since April 2021. The S&P 500 rose in response to the report, but later erased its gains, indicating that bears continue to sell on rallies.

That may be because the U.S. dollar index (DXY), which had retreated from its Sept.1 20-year high, recovered part of its losses. The bears will have to pull the DXY lower to boost prices of stocks and the cryptocurrency markets as both are usually inversely correlated with the dollar index.

Although Bitcoin (BTC) has dropped more than 70% from its all-time high of $69,000, several traders have held on to their position. Data from trading analysis platform TipRanks shows that 62% of wallets have held Bitcoin for a year or more. The number of wallets holding Bitcoin for less than a month is only 6%. This suggests that investors are taking a long-term approach and holding on to their positions.

Could bulls push Bitcoin and altcoins above the overhead resistance levels? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin broke and closed above the downtrend line on Sept. 1, which is the first indication that the short-term corrective phase could be ending.

The price of CEL soared by nearly 50% as traders assessed its parent firm Celsius Network's inclination to return a portion of the locked funds to its customers.

No CEL-ling pressure for now

On the daily chart, CEL surged to its intraday high of $1.67 per token on Sep. 2 after lows of $1.15 the day before. However, the token's sharp rally accompanied lower trading volumes, suggesting a lack of conviction among traders about further upside moves.

CEL's gains appeared after Celsius Network filed a motion with the Bankruptcy Court, requesting that its clients with "certain Custody and Withhold accounts should be able to withdraw the amount of digital assets owed to them."

Celsius pulled itself up by taking cryptocurrencies from its clients and offering them mouth-watering returns by deploying their deposits in the broader crypto lending market.

But the market downturn this year created a $2.85 billion hole in Celsius's balance sheet, prompting the firm to freeze its clients' accounts, thus trapping billions of dollars of more than a million accounts. In July, Celsius filed for Chapter 11 bankruptcy.

From a bearish perspective, there's a fair probability that the crypto market entered a descending channel (or wedge) on Aug. 15 after it failed to break above the $1.2 trillion total market capitalization resistance. Even if the pattern isn't yet clearly distinguishable, the last couple of weeks have not been positive.

For example, the $940 billion total market cap seen on Aug. 29 was the lowest in 43 days. The worsening conditions have been accompanied by a steep correction in traditional markets, and the tech-heavy Nasdaq Composite Index has declined by 12% since Aug. 15 and even WTI oil prices plummeted 11% from Aug. 29 to Sept. 1.

Investors sought shelter in the dollar and U.S. Treasuries after Federal Reserve Chair Jerome Powell reiterated the bank's commitment to contain inflation by tightening the economy. As a result, investors took profits on riskier assets, causing the U.S. Dollar Index (DXY) to reach its highest level in over two decades at 109.6 on Sept 1. The index measures the dollar's strength against a basket of top foreign currencies.

More importantly, the regulatory newsflow remains largely unfavorable, especially after U.S. federal prosecutors requested internal records from Binance crypto exchange to look deeper into possible money laundering and recruitment of U.S. customers. Since late 2020, authorities have been investigating whether Binance violated the Bank Secrecy Act, according to Reuters.

Crypto investor sentiment re-enters the bearish zone

The risk-off attitude caused by Federal Reserve tightening led investors to expect a broader market correction and is negatively impacting growth stocks, commodities and cryptocurrencies.

Cardano (ADA) market has witnessed back-to-back pieces of good news since Aug. 31, from its listing on Robinhood, a U.S.-based retail investment platform, to the release of its first lending and borrowing protocol, Aada Finance.

Additionally, Cardano developer IOHK stated that they are close to clinching "three critical mass indicators" that would lead to the launch of their long-awaited Vasil hard fork in September. Vasil aims to improve Cardano's scalability and transaction throughput through pipelining.

The upgrade could also improve the decentralized application (DApp) and smart contract capabilities by changing the Plutus script, a programming language used for smart contracts on the Cardano blockchain.

But the uplifting updates have failed to attract adequate buyers as ADA's price trend in the last 24 hours reveals.

Bear market rally

On the daily chart, ADA's price rose to an intraday high of $0.462 on Sep. 1, a day after bouncing from its sessional low of $0.424, up nearly 9%.

Internet of Things (IoT) blockchain network Helium could transition to the Solana blockchain following a new HIP 70 governance proposal launched on Aug. 30. 

The Helium core developers said the need to “improve operational efficiency and scalability” was required in order to bring “significant economies of scale” to the network.

The Helium network operates by users installing a Helium Hotspot to provide decentralized wireless 5G network coverage for internet users in their area. Helium uses a unique consensus mechanism — proof-of-coverage to verify network connectivity and distribute HNT tokens to Helium Hotspot providers when coverage is verified.

The proposal comes as Helium developers have emphasized the need to fix a number of technical issues in order to improve the network’s capabilities:

In the last several months of the network, both have been challenging for network participants with much reduced Proof-of-Coverage activity due to network size and blockchain/validator load, and packet delivery issues.

The decentralized application industry pushed above $40 billion in smart contract deposits in February 2021, and currently the figure stands at $59 billion. To date, “real money” continues to flow into the sector, and on Aug. 29, gaming startup Limit Break raised $200 million. The project gained popularity after the successful launch of its DigiDaigaku free-mint NFT collection.

According to a report by Dove Metrics and Messari, the crypto industry saw $30.3 billion in funds raised in H1 2022. This amount surpassed the $30.2 billion seen in 2021. Excluding the $10.2 billion in funding raised for the centralized finance sector leaves a whopping $20 billion that was invested in DApps, nonfungible tokens (NFTs) and Web 3 infrastructure.

One might question how much of that money has effectively been deployed or reinvested in ventures owned by the same investment groups. Of course, there are a handful of clever ways to overextend those announcement numbers without breaking any regulation, but there's undoubtedly a great deal of money flowing toward decentralized applications.

There’s always been a healthy amount of distrust in the actual number of active users on DApps, but so far, no hard evidence of cheating has been presented. So what tools can retail users employ to detect inflated activity? Well, it turns out there are at least three: active users, community engagement and liquidity.

Comparing registered users to active users

Most proof of stake (PoS) networks charge minimal registration fees and many are free to use. This leads to troves of “fake” active addresses that interact with the DApp and it creates incentives for developers and investors to boost their numbers.

Bitcoin (BTC) price continues to struggle at $20,000 and repeat dips under this level have led some analysts to project deeper downside in the short-term. Earlier in the week, independent market analyst Philip Swift tweeted that the Crypto Fear and Greed Index had dropped back to back to “Extreme Fear,” reflecting softening sentiment among investors. 

On Aug 29, analytics firm Delphi Digital highlighted Bitcoin open interest hitting a new record-high and said:

“The Futures Open Interest Leverage Ratio for BTC reached its highest level ever recorded at more than 3% of BTC market cap, following the market-wide collapse on August 26th.”

According to Delphi Digital, “higher values suggest that open interest is large, relative to market size. This implies a higher risk of market squeezes, liquidation cascades or delivering events.”

Exactly what might catalyze such an event remains unknown, but any continuation of the current downtrend in stocks which saw the Dow and S&P 500 wrap up a fourth day of decline to end August at a loss could continue to weigh on Bitcoin price. Data from CNBC shows the Dow closed August down 4.1% and the S&P 500 and Nasdaq closed the month with 4.2% and 4.6% losses.

Bitcoin (BTC) price has been trying to change course while the S&P 500 is still giving up gains on a daily basis. Even though the United States equities markets have been grinding lower since Aug. 26, Bitcoin has managed to hold on to the $20,000 mark. 

However, investor interest seems to be shifting away from Bitcoin. That has led to a reduction in assets under management (AUM) for Bitcoin investment products, which dropped 7.16% in August to $17.4 billion, according to a new report by CryptoCompare.

In comparison, the AUM for Ethereum (ETH) products increased 2.36% to $6.81 billion during the same period, indicating that investors are positioning themselves in Ethereum products ahead of the Merge.

Even though prices are down across the ecosystem, bear markets at least offer attractive opportunities to long-term investors. To capitalize on this opportunity, Reddit co-founder Alexis Ohanian’s venture capital firm Seven Seven Six is aiming to raise $177.6 million for a crypto investment fund. On similar lines, former executives from Galaxy Digital and Genesis are looking to raise a $500 million fund.

Although the near term looks uncertain, long-term investors may be looking for bottom fishing opportunities. Could Bitcoin and major altcoins stay above their immediate support levels? Let’s study the charts of the top-10 cryptocurrencies to find out.

Avalanche (AVAX) bulls snubbed the sensational claims made by a self-proclaimed whistleblower website that the project's parent firm, Ava Labs, paid lawyers to damage its competitors' reputation.

Avalanche price recovers from serious allegations

AVAX's price established an intraday high of $19.75 on Aug. 30, two days after bottoming out locally at $17.50, amounting to a 15% rise. The token's modest recovery followed selloffs incurred by a sensational CryptoLeaks report.

AVAX's price fell 3.5% on Aug. 26, the day on which CryptoLeaks released an unverified video showing Kyle Roche, the partner at Roche Freedman, saying that he could sue Solana, one of Avalanche's top rivals, on behalf of Ava Labs.

Related: Ava Labs CEO denies CryptoLeaks' claims as 'conspiracy theory nonsense'

The token fell by another 7.5% the next day after the whistleblower website released the full report, including another unverified video featuring Roche.

For nearly a year now, a mysterious Axie Infinity wallet has been quietly amassing billions of Smooth Love Potion (SLP), the in-game cryptocurrency powering one of the industry’s most popular play-to-earn (P2E) crypto games. 

Today, the anonymous whale wallet now holds a little over 22 billion SLP — more than 50% the total circulating supply of the token.

The problem? No one knows who it belongs to and what their intentions are.

The wallet in question was brought to Cointelegraph’s attention by Axie Infinity player and tech co-founder Michael Benko, who first caught wind of this mysterious wallet on Aug. 25.

Should we be worried?

Benko told Cointelegraph he became concerned about the wallet given the amount of SLP it had gathered in a relatively short amount of time, which could potentially wreak havoc on the game’s ecosystem.

Decentralized lending platform Compound has been plagued by a code bug in a recent governance proposal to update its price feeds. 

The code error has “temporarily frozen” the Compound ETH (cETH) market, causing cETH transactions to revert, but Compound Labs stated that despite the front end not working, “funds are not immediately at risk.”

Compound Labs announced on Aug. 31 that the code bug came from Proposal 117: Compound Oracle Upgrade v3, which was implemented a couple of hours ago to update the oracle contracts on the Compound protocol to a new version that uses Uniswap V3 instead of V2 for price feeds.

In response to the cETH market temporarily freezing, Compound Labs said it aimed to revert to the previous price feed via Proposal 119: Oracle Update. The new proposal was created less than one hour after Proposal 117 had been executed, however it now needs to go through  seven-day governance process before taking effect.

According to an update from Security Solutions Architect Michael Lewellen of OpenZeppelin, the code bug came from the “getUnderlyingPrice” function, which did not update the price of cETH tokens, which would return empty bytes and cause the call to be reverted.

Ether (ETH) is the second largest crypto by market capitalization and the absolute leader in decentralized applications by deposits. Becoming a victim of its own success, the network experienced a fee hike in November 2021 when the average transaction costs surpassed $50. 

That's precisely why the Merge is a critical step to implementing a fully functional scaling solution. The confirmation of a transition to a proof of stake (PoS) consensus was the main driver for the rally toward $2,000 on Aug. 15.

Investors were partially excited about the reduced issuing schedule and likely a transition to a deflationary scenario, but there's also the expectation of upcoming forks. As a result, hardforked coins may be awarded to Ether holders on different blockchains, even though there's no guarantee those will find traction or sufficient liquidity.

From one side, there's the temptation of free money and even bonus non-fungible tokens (NFTs) as the forked chain will initiate with the same state of the original Ethereum network, meaning each address will hold the exact same contents in terms of tokens and transaction history.

On the other hand, there's also a sense of disappointment after Ether’s agonizing 29% correction that took place after the $2,000 resistance proved to be more challenging than expected. It’s possible that as investors realized that the practical utility of the forks would be much lower than anticipated, the exuberant expectation of free money dissipated, and reality kicked in.

Interoperability-focused blockchain Flare Network has partnered with software infrastructure firm Lena Instruments to implement a crowdfunding mechanism that lowers the risks associated with startup investing. 

Lena Instruments announced what it called a “CloudFunding" launchpad that lets Flare investors allocate a percentage of the rewards that they earned into investments to new crypto startups without moving their initial investments.

Apart from providing a low-risk investing solution for its contributors, the platform also aims to help projects that have launched on the platform have regular cash flows during the reward distribution periods.

Hugo Philion, the CEO of Flare Network, believes that the new mechanism is a good way for developers to get early access to community funding. He explained that this creates a “win-win situation” for all parties involved. He said:

“New projects get early access to community funding and support, and Flare token holders get the opportunity to join new exciting projects with zero risk to their principal.” 

Binance marked its presence among the Middle East investors by running various licensed operations in Abu Dhabi, Dubai and other regions. Targeting efforts in United Arab Emirate's (UAE) mainstream corporate sector, Binance partnered with business lender Virtuzone, allowing new entrepreneurs to repay loans using cryptocurrencies.

Virtuzone joins the list of mainstream businesses in the UAE, such as JA Resorts and Hotels and Majid Al Futtaim, to officially accept cryptocurrencies after integrating Binance Pay into its payment gateway. In addition, by providing businesses the option to repay seed and other forms of funding through cryptocurrencies, the company intends to reduce barriers to entrepreneurship and support the startup communities.

With blockchain venture capital funding going down over 43% in July, entrepreneurs are on the lookout for obtaining funds for new crypto ventures amid an ongoing bear market. In addition to serving this need, Virtuzone also revealed plans to expedite Web3 adoption in the Middle East. On this note, speaking to Cointelegraph, Richard Teng, head of Binance Middle East and North Africa (MENA), stated:

“The market that is developing in the UAE around the Web3 industry, thanks to a number of government initiatives, is one that will become a global hub for investors in digital assets.”

Binance also expects the MENA region to enjoy strong demographic growth in the next three decades. However, Teng believed that entering the untapped market requires the introduction of a regulatory framework for crypto and digital assets.

The United States equities markets are attempting to stabilize after the carnage on Aug. 26. On similar lines, Bitcoin (BTC) is also witnessing a see-saw battle near the psychological level of $20,000 with both the bulls and the bears vying for supremacy. 

Although several analysts are bearish on Bitcoin in the near term, it has not stopped the whales from accumulating at lower levels. Data from on-chain research firm Santiment shows that the number of whale addresses holding between 100 to 10,000 Bitcoin has risen by 103 in the past 30 days.

In bear markets, rumors spread fast and could result in quick declines, but many times, the fears are unfounded. Mt. Gox creditors confirmed on Twitter that the rumor of a 137,000 Bitcoin dump spread on social media was false. The creditors said that the infrastructure needed to start the repayment was still not there in place.

Could Bitcoin and major altcoins sustain the rebound? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin closed below the psychological level of $20,000 on Aug. 28 but the bears could not build upon their advantage. Buyers have pushed the price back above $20,000 on Aug. 29, which shows strong demand at lower levels.

Bitcoin (BTC) regained some lost ground at the Aug. 29 Wall Street open amid talk of an imminent short squeeze.

Shorts lose out in modest squeeze higher for BTC

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing to near $20,400 on Bitstamp as United States equities began trading.

The move signaled welcome relief for hodlers, who had looked on as the pair dove increasingly below $20,000 during the weekend.

Now, with the market “aggressively short positioned,” conditions appeared to favor a further relief bounce to burn those nursing short trades.

“You know what is next,” popular Twitter account Il Capo of Crypto warned, reinforcing his belief that the bounce would be followed by a deeper retracement.

The cryptocurrency market overall endured a bad summer on back-to-back pieces of bad news, ranging from Terra's collapse to the Celsius Network's liquidity crisis. But some tokens have bucked the downtrend and have actually seen their valuations go up over the summer.

Specifically, the last 90 days have seen these so-called alternative cryptocurrencies, or "altcoins," outperforming top coins like Bitcoin (BTC) and Ether (ETH). Here are three among them

Chiliz (CHZ)

Chiliz's (CHZ) return in the last 90 days comes to be above 80%, the highest among the top-cap cryptocurrencies. Moreover, CHZ is down only 26% year-to-date compared with BTC and ETH losing 57% and 60%, respectively. 

On the daily chart, CHZ's price reached $0.20 per piece on Aug. 29, and was looking to close the month in profit. Conversely, from a technical perspective, the Chiliz token stares at a potential 55% correction to $0.09 in September, based on the setup shown below.

Originally, the CHZ price rally started amid a rebound witnessed across the crypto market. But Its upside move picked momentum on a flurry of optimistic updates, including a partnership with crypto exchange Huobi Global and a nearly 25% acquisition of FC Barcelona's Barça Studios.

Ripple CEO Brad Garlinghouse took to Twitter to deny recent explosive claims made by Crypto Leaks, an online publication focusing on corruption and fraud-related news in the crypto ecosystem.

Crypto Leaks published a report on Friday containing a series of short videos from an unknown source. The report claimed that Ava Labs formed a secret pact with the law firm to use the American legal system “gangster style” to “attack and harm crypto organizations."

The same report also alleged that Ripple CEO Brad Garlinghouse funded a law firm to target competitor firms. The report claimed Roche, who founded Roche Freedman, was earlier working with Boies Schiller Flexner, a firm that was representing Ripple in its lawsuit against the United States Securities and Exchanges Commission (SEC).

Roche allegedly approached Garlinghouse to invest in a law firm that would target competitor crypto firms with lawsuits quite similar to what Ripple was facing at the time. And Kyle claimed that Garlinhouse agreed to his proposal.

“For whatever reasons Brad Garlinghouse invested in Kyle Roche and supported him on his current path, it certainly didn't save him from the SEC.”