• Polygon Labs has unveiled plans to include Celestia’s data availability solution in the CDK.
• The move promises to reduce costs for projects that choose to use it.
• Integrating Celestia’s DA is the second big planned upgrade outlined for the CDK.

As Polygon Labs seeks to offer the preferred tech stack for Ethereum Layer 2 chains, the firm has placed significant focus on modularity to allow projects using its Chain Development Kit (CDK) to select from various options to create a tailor-made experience for their users.

In line with this goal, Polygon Labs has unveiled a new inclusion to the CDK that promises to drastically reduce costs for projects using the stack to spin out Layer 2 chains.

Polygon CDK To Integrate Celestia DA

On Tuesday, December 12, Polygon Labs announced that it would integrate Celestia’s data availability (DA) solution with the CDK as part of its available customization options for chains building with the stack.

Build whatever, with Polygon CDK @CelestiaOrg’s high-throughput, modular data availability (DA) solution will integrate with Polygon CDK, lowering the barrier for launching high-throughput Layer 2 chains on Ethereum.

The integration will enable fully onchain applications and… pic.twitter.com/EfDk5cYRbb

— Polygon (Labs) (@0xPolygonLabs) December 12, 2023

As highlighted by Polygon Labs, the move would drastically reduce costs for Layer 2 chains that opt to use the DA solution, as it would allow them to prove their transactions without needing to download this data to the Ethereum network, which typically incurs extra cost. Polygon Labs estimates that this cost reduction would lead to a 100 times reduction in fees for end users.

Commenting on the planned integration, Polygon Labs Executive Chairman Sandeep Nailwal likened what developers were trying to achieve with the CDK to what fiber optics did for the internet.

“This is the broadband moment for Web3. The ability to launch a high-throughput ZK-powered Ethereum Layer 2 as easily as deploying a smart contract will do for blockchain adoption what high-speed fiber did for Web2 applications,” Nailwal stated.

The Celestia DA integration is the second major update Polygon Labs has recently outlined for the CDK. On November 8, the team announced a collaboration with NEAR Foundation to make the transition to an Ethereum Layer 2 chain easier for Web Assembly (WASM) chains by developing a zkWASM prover.

So far, the CDK is already being used by projects like OKX, Astar, Canto, and Manta.

On the Flipside 

• The integration of Celestia’s DA solution with the CDK has yet to happen.
• In 2021, Polygon Labs incubated Avail, a DA solution firm like Celestia founded by Polygon co-founder Anurag Arjun. However, in March 2023, Polygon released Avail, citing a decision to focus on “Ethereum-native” solutions.
• The Ethereum developers are working to resolve congestion problems that have created the need for DA solutions through danksharding. The first upgrade in this roadmap, dubbed proto-danksharding, will likely roll out with the Dencun upgrade in Q1 2024.

Why This Matters

The addition of Celestia’s DA solution as a plug-in feature of the CDK makes it easy for developers looking to build Ethereum Layer 2 chains focusing on low fees. This feature can be particularly useful for payments-focused projects.

Read this for more on the Polygon CDK:
How Polygon’s Chain Development Kit Enables the 2.0 Vision

Learn about Polygon Labs’ latest product and how it helps users navigate the Polygon ecosystem in one interface:
Polygon Offers Seamless Asset Management with New Portal

Solana stayed above the $65 support and started a fresh increase. SOL price is likely setting up for more gains above the $75 and $80 resistance levels.

• SOL price started a fresh rally above the $68 resistance before the bears appeared against the US Dollar.
• The price is now trading above $68 and the 100 simple moving average (4 hours).
• There is a major bullish trend line forming with support near $65.50 on the 4-hour chart of the SOL/USD pair (data source from Kraken).
• The pair is up nearly 10% and might rally further above the $75 resistance zone.

Solana Price Signals Rally

In the past few days, Solana saw a downside correction from the $77.75 zone, like Bitcoin and Ethereum. SOL declined below the $75 and $70 support levels.

However, the bulls were active above the $65 support. A low was formed near $63.78 and the price is now attempting a fresh increase. There was a move above the $68 and $70 resistance levels. The price is up nearly 10% and there was a move above the 50% Fib retracement level of the downward move from the $77.72 swing high to the $63.78 low.

SOL is now trading above $68 and the 100 simple moving average (4 hours). There is also a major bullish trend line forming with support near $65.50 on the 4-hour chart of the SOL/USD pair.

On the upside, immediate resistance is near the $72.40 level. It is near the 61.8% Fib retracement level of the downward move from the $77.72 swing high to the $63.78 low. The first major resistance is near the $75.00 level.

Source: SOLUSD on TradingView.com

The main resistance is now near $77.75. A successful close above the $77.75 resistance could set the pace for another major rally. The next key resistance is near $80.00. Any more gains might send the price toward the $85.00 level.

Another Decline in SOL?

If SOL fails to rally above the $75.00 resistance, it could start a fresh decline. Initial support on the downside is near the $68.50 level.

The first major support is near the $65.50 level or the trend line, below which the price could test $63.50. If there is a close below the $63.50 support, the price could decline toward the $56.00 support in the near term.

Technical Indicators

4-Hours MACD – The MACD for SOL/USD is gaining pace in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for SOL/USD is above the 50 level.

Major Support Levels – $68.50, and $65.50.

Major Resistance Levels – $72.40, $75.00, and $77.75.

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

• Ankr has unveiled a new product dubbed Ankr Verify.
• Ankr Verify promises to clear the path to compliance for decentralized protocols.
• Right out of the gate, at least three projects are already leveraging the product.

As regulators worldwide race to rein in the fast-moving crypto markets, the immediate focus has been on stablecoins and centralized exchanges due to the Terra crash and the FTX collapse. However, it is clear that policymakers also intend to set their sights on DeFi eventually.

But with a lack of intermediaries and a focus on privacy, for many, it has remained unclear how regulators would ensure compliance in DeFi.

Enter Ankr Verify, the latest product from Web3 infrastructure firm Ankr. Ankr Verify promises to allow decentralized protocols to maintain privacy while also ensuring compliance with regulations.

Ankr Unveils Ankr Verify 

In a Tuesday, December 12, press release, Ankr announced the launch of Ankr Verify. The firm claimed that this product would allow decentralized protocols to set entry criteria through zero-knowledge-based user identity verification.

Introducing Ankr Verify – Empowering Zero-Knowledge ID Verification for Web3!

Ankr Verify allows any blockchain or DApp to set entry requirements seamlessly.

Enable a single, privacy-preserving passport for Web3 users powered by ZK tech.

Read more:… pic.twitter.com/FWNgbk3ZAi

— Ankr (@ankr) December 12, 2023

As explained by Ankr, the user identification product will allow users to be compliant without sacrificing user privacy. The product works with the help of Ankr’s KYC partner Synaps. 

To gain access to protocols using Ankr, all users have to do is provide proof of their identity to Synaps. However, Synaps will be the only one to access this data. All the protocol would get is a yes or no answer to validate whether the user has met the entry requirements. Ankr further noted that users would only need to go through this verification process once to use all Ankr Verify supported protocols.

Ankr Senior Product Manager Kev Silk noted:

“Ankr Verify is not only a useful tool for businesses and blockchain foundations to place permissions on their networks and applications. Rather, it’s a new standard for easy Web3 user identification similar to what single sign-on did for the web. With a single, secure passport to Web3, users can access decentralized experiences without the headache of continuously uploading documents with their vulnerable personal data.” 

Per the press release, projects like Eclipse, Tomi, and Mina Protocol are already using Ankr verify.

On the Flipside 

• Ankr’s use of a single KYC firm may spark centralization concerns.
• Ankr is not the only firm offering on-chain compliance solutions. micapass also offers a similar solution.

Why This Matters

Solutions like Ankr Verify are likely to play a key role in allowing DeFi protocols to maintain privacy while ensuring compliance as regulators hone in.

Read this for more on Ankr:

Ankr and Optimism Unite for Ethereum App Scaling

Polygon Labs is making a big addition to the CDK. Find out more:

Polygon Boosts Layer 2 Kit With Celestia Data Availability

Avalanche has seen its native token AVAX rise rapidly over the last 30 days to make its way into the top 10 tokens by market cap. This rally was not exactly out of the blue as activity had begun to pick up once more on the Avalanche network. During this time, the open interest has risen rapidly as well, eventually touching a new all-time high.

Avalanche Open Interest Rises To $413 Million

On Tuesday, the Avalanche open interest rose to the highest level since its launch following AVAX’s surge to $40. The open interest reached $413 million on December 12 after continuously rising for over a month. The surge happened in tandem with the price surge and has made daily highs almost every day in December.

The surge began in October after trailing around $70 million for the better part of a month. However, in November, there was a noticeable change in the open interest as traders began to take their positions in the digital asset.

Source: Coinglass

Between November and December, the AVAX open interest has risen by over 400%. On Tuesday alone, the open interest grew another 19%, bringing the total Avalanche open interest across all exchanges to 11.43 million AVAX.

73% of the total open interest is actually coming from only two exchanges; Binance and ByBit. According to data from Coinglass, Binance accounts for 44% of the total OI at $184 million (4.54 million AVAX), while ByBit accounts for 28.8% of the OI with $119.67 million (2.95 million AVAX). BingX, OKX, and Bitget make up the rest of the top 5 with $50.37 million, $43.7 million, and $41.8 million, respectively.

Token price retraces to $36 | Source: AVAXUSD on Tradingview.com

Rise In OI Sending AVAX Price To $100?

While the Avalanche open interest has soared to a new all-time high, there is still a long way to go for the AVAX price before it reaches its all-time high of $146. Nevertheless, the rise in open interest is still incredibly bullish for the price.

As proven by historical performance, the price of AVAX has often risen whenever the open interest has been on the rise. This was the case between 2021 and 2022 when the price of the altcoin rose above $100 before eventually crashing in 2022.

If the Avalanche open interest continues to rise from here, it is expected that AVAX will follow through. A break in OI over $500 million will no doubt see the altcoin clear the coveted $50 level once more. However, $100 still looks to be a long way from here and will likely be reached sometime in 2024.

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

• The Securities and Exchange Commission will not let Binance off its hook.
• The commission seeks to use the exchange and the former CEO’s guilty admission to push its case.
• The defendants have filed a response to the commission.

The Binance $4.3 billion settlement with the U.S. Department of Justice has seen the Securities and Exchange Commission (SEC) ramp up its enforcement actions against the exchange and its founder, Changpeng Zhao. On December 8, the commission contended that the guilt admissions made by both parties should be considered in its year-long case.

However, Binance remains resolute in rejecting the SEC’s approach, maintaining its stance against the commission’s maneuvers.  

Binance Responds to SEC’s Notice

In a filing to the District Court of Columbia on December 12, Binance and CZ  declared the SEC’s latest attempts to strengthen its year-long legal battle as “procedurally improper and impermissible.”

The defendants argued that the plea agreements with the Department of Justice, which show that Binance and Mr. Zhao violated the Bank Secrecy Act, do not automatically validate the SEC’s position on classifying the crypto assets or alleged violations under the Securities Act or the Exchange Act.

“The SEC’s effort to benefit from other agencies’ resolutions under a different statutory regime is another example of its refusal to accept Congress’s decision to assign authority over the kinds of assets at issue here to other agencies.”

Going further, Binance and CZ stated that no admission in the plea agreements supports the SEC’s claims that relevant transactions occurred within the United States.

The defendants emphasized that the SEC has failed to demonstrate the relevance of the resolutions with the Department of Justice and to any of its defective claims, urging the court to disregard the notice.

Read more on the Binance-SEC year-long legal showdown:
SEC Dismisses Binance Motion to Toss Lawsuit as “Theatrics”

The U.S. is tightening regulatory measures on crypto entities within the region. Read more:
Senator Warren Labels Crypto a Threat to the United States  

Bitcoin seems to be undergoing a period of consolidation and profit-taking after eight weeks of phenomenal price growth. The world’s largest crypto has had incredible growth this year, with a special surge starting in the middle of October. 

However, after hitting a yearly high of $44,500 on December 8, the price of Bitcoin has pulled back about 6% as some investors look to be taking profits. According to on-chain data provider Glassnode, several of its on-chain pricing models suggest Bitcoin’s fair value is currently between $30,000 and $36,000.

Bitcoin’s Price Rally Pauses As After A Resistance At $44,500

Bitcoin’s price appreciation this year led to a 150% gain which pushed it above $44,500, but on-chain data shows the hot streak has cooled off a bit after forming a resistance at this price level. 

This has led to many short-term investors taking profit from their holdings. According to data from Whale Alerts, there have also been various instances of large BTC transactions into crypto exchanges in the past few days, suggesting some whale addresses might also be participating in the selloff.

658 #BTC (26,893,152 USD) transferred from unknown wallet to #Binancehttps://t.co/QzyF0MRiHT

— Whale Alert (@whale_alert) December 13, 2023

A short-term correction was inevitable, according to crypto data firm Glassnode’s fair value models. Their analysis based on the investor cost basis and network throughput suggests the fair price is lagging behind the current market spike.

A metric cited was the Active Investor Realized Price, which monitors the degree of HODLing across the network. According to this model, Bitcoin’s spot prices are currently trading above its realized price (fair value). 

Taking a look at historical trends shows it has taken between 14 to 20 months between the realized price and the creation of an all-time high. The path to the creation of a new ATH has also always involved major spot price fluctuations of ±50% around the Active Investors Realized Price.

Source: Glassnode

The crypto asset is now 11 months into the break, with spot prices fluctuating between -38% and 21% of the realized price. If history repeats itself, we could see another few months of movements around the current fair value of $36,000. 

This price point correlates with a social media post by crypto analyst Ali Martinez. While noting IntoTheBlock data, the analyst noted strong support between $37,150 and $38,360, backed by 1.52 million addresses holding 534,000 BTC.

In case of a deeper correction, #Bitcoin finds solid support between $37,150 and $38,360. This zone is backed by 1.52 million addresses holding 534,000 $BTC.

Also, watch out for two resistance walls that could keep the #BTC uptrend at bay: one at $43,850 and another at $46,400. pic.twitter.com/NGm1XpMOLf

— Ali (@ali_charts) December 11, 2023

BTC bulls try to recover losses | Source: BTCUSD on Tradingview.com

Another technical pricing model cited by Glassnode was the Mayer Multiple. The Mayer Multiple indicator is now at a value of 1.47, close to the 1.5 level which often forms a level of resistance in prior bull cycles. 

Glassnode’s report also looked at various other pricing models, including the NVT Premium indicator which evaluates the utility of the network throughput in terms of a USD value. According to the NVT Premium, the recent rally is one of the biggest spikes since Bitcoin’s all-time high in November 2021, suggesting an overvaluation in relation to the network throughput.

What’s Next For Bitcoin?

Bitcoin is trading at $40,963 at the time of writing. Although the crypto is now down by 6% in a 7-day timeframe, it is still monitoring gains of 8.5% from its December open of $37,731. The $44,500 level is now a crucial level for the asset, as the industry continues to wait for a bullish run after the approval of spot Bitcoin ETFs in the US. 

The crypto market is still in bullish sentiment, with Coinmarket’s Fear & Greed Index pointing to a 73 greed. A power through $44,500 would signal the resumption of the bullish trend for Bitcoin. Another resistance level to watch after the break would be the $46,400 level.

Featured image from Chainalysis, chart from Tradingview.com

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

• Bitcoin dominance recorded a yearly high last week.
• Bitcoin dominance has since been fading.
• Some expect altcoins to pop amid stalling Bitcoin dominance.

Cryptocurrency markets have seen tremendous capital inflows recently, sending Bitcoin briefly to $45,000 on December 5. However, the bellwether crypto has struggled since then, with its price retreating and market dominance sliding. If Bitcoin dominance continues falling, altcoin investors are poised to reap the benefits.

Pull Back in Bitcoin Dominance

Bitcoin dominance reached a year-to-date high of 55.3% on December 6 but has since been falling, plunging over 5 consecutive days before finding support at around 53% on December 12. However, after hitting support, Bitcoin dominance rose to an intra-day high of 53.2% at the time of writing, potentially signaling a comeback for the market leader

Zooming out, Bitcoin dominance bottomed at 38.9% in September 2022, followed by a period of stability before breaking into a macro uptrend by late November 2022, as the FTX collapse fostered a narrative around Bitcoin being a safer bet versus altcoin investing, leading to significant gains in Bitcoin dominance throughout 2023.

Commenting on the reversal in Bitcoin dominance’s uptrend, crypto consultant Nebraskagooner posited that a break of the 53% support level may send altcoins much higher.

Although 53% support was successfully defended, several altcoins have recorded strong seven-day performances, suggesting that altseason is brewing in the background.

Select Altcoins Already Booming

The top 10 altcoin performers in the biggest 100 tokens by market cap show a mixture of blue chips and more obscure offerings. BitTorrent (BTT) leads the pack, which has skyrocketed 167% over the past week, suggesting that demand for decentralized storage solutions is winding up. 

Large-cap offerings see Avalanche and Cardano among the top 10 gainers, adding 79% and 48% in value, respectively. Avalanche is benefiting from a series of partnerships involving real-world assets and gaming, while Cardano is coming into its own as a serious contender for DeFi.

These strong altcoin performances demonstrate that investors are increasingly plowing capital into alternative offerings as speculation around Bitcoin’s staying power ramps up. 

On the Flipside

• Institutions prefer the regulatory certainty of dealing with Bitcoin, which is generally considered decentralized and exempt from securities requirements.
• The altseason metric from the Blockchain Center has a current reading of 55. The company states that a score of 75 and above equates to an altseason.
• Although low-cap altcoins have the highest potential for percentage gains, they also carry a higher risk of failing to gain traction.

Why This Matters

Despite a 2% drop since December 6, Bitcoin dominance has been on a 13-month uptrend, and the macrostructure remains intact. The recent strong performances of select altcoins demonstrate that investors want to diversify as Bitcoin stalls.

Read about November’s top-performing altcoins here:
5 Altcoins That Dominated the Top 50 Cryptos this Week

Find out about the SEC’s efforts to serve Richard Heart with court papers here: 
SEC Serves Richard Heart over Crypto Securities Violations

In decentralized finance (DeFi) and trading, Uniswap has long reigned as a dominant force. However, a recent analysis by Lark Davis, a Bitcoin (BTC) investor, seems to suggest Trader Joe, a decentralized exchange (DEX) on Avalanche–a highly scalable blockchain and Ethereum’s competitor, could eventually emerge as a formidable competitor, even overtaking Uniswap.

Is Trader Joe Undervalued Relative To Uniswap?

In a post on X on December 12, Davis noted a discrepancy in the relative valuation between JOE and UNI, which serve as governance tokens of Uniswap and Trader Joe. Specifically, the investors noted that Trader Joe’s handles around $300 million daily trading volume on Avalanche alone.

On the other hand, Uniswap processes approximately $1.6 billion in daily volume across the Ethereum mainnet and Arbitrum, the largest layer-2 platform by total value locked (TVL) by Ethereum.

Davis further noted that despite this “small” difference in trading volume, Trader Joe’s has a market capitalization of only $238 million. Meanwhile, Uniswap has a market cap of $3.6 billion, according to CoinMarketCap data. 

Even with relatively narrow average trading volume, the huge difference in market capitalization suggests that JOE is significantly undervalued relative to UNI. Accordingly, this gap will likely be narrowed in the future, with JOE appreciating versus UNI, possibly benefiting holders.

JOE Yields Versus UNI’s Governance: Which Token Has An Edge?

Davis also pointed out JOE’s potential, saying the token rewards holders with USDC yields. This is different from UNI, where holders can vote on proposals and nothing else. In the investor’s preview, besides the undervaluation, this feature could further enhance JOE’s appeal, even contributing to its upside potential. 

As the crypto market recovers, Avalanche might also present additional advantages to traders and, therefore, Trader Joe. The modern blockchain is scalable and has relatively low fees regardless of network activity. With crypto prices expanding, Ethereum gas fees have been rising in tandem, discouraging mainnet transfers. This has rerouted activity to layer-2s like Arbitrum and competing platforms, including Avalanche. 

When writing on December 12, DeFiLlama data shows that Trader Joe has a TVL of $149 million, of which most assets are tied to Avalanche. Only $1 million is on Ethereum. JOE has been on an uptrend, rising 170% from October 2023 lows. The token is cooling off, looking at price action on the daily chart.

Feature image from Canva, chart from TradingView

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

• Memecoin Bonk soared by 8,422% amid Layer-1 Solana’s run to $77.
• BONK hit an all-time high of $0.00001464 on December 9, 2023.
• Professional crypto analyst betokens a likely price trend reversal.

Surprisingly, the first-ever dog-themed memecoin on Solana’s blockchain went mainstream after months of trading in a severely downward parallel channel. First emerging in the early days of 2023 to save Solana (SOL) from shortly falling to single digits for a token, Bonk (BONK) now enjoys a renaissance with 417% gains in the last 30 days.

Momentarily plummeting to single-digit market capitalization, BONK almost exited the TOP 1000 by global market capitalization in October. However, the memecoin regained mass appreciation along with Solana’s magnificent strike of 430% yearly gains amid the exponential growth of Solana’s DeFi ecosystem and the release of the SAGA Web3-focused smartphone.

Is there anyone who hasn’t made it to the #memecoin leg recently?

Just want to say don’t fade away on $BONK; more partnerships await, and BONKswap is making a buzz.

BONKmas, BONKsquad, and many other utility programs for the $BONK‘ers to get the most of it.

Don’t let the… pic.twitter.com/UvPzCS5IH0

— Mr. APE aka GEM Hunter (@deg_ape) December 12, 2023

Is BONK’s 8,422% Run About to Cool Down?

Meanwhile, professional crypto chart analyst Ali Martinez called to forecast a phased market correction for BONK. BONK has successfully entered the TOP 100 by global crypto market cap, but a price trend reversal pattern could halt this extraordinary bull run.

At press time, Bonk is changing hands at $0.00001246  with a 7% upswing in the last 24 hours. Notably, Bonk has been listed by major crypto exchanges in the last few months, including KuCoin and Bybit. 

The breakthrough in adoption speared Bonk’s global market capitalization to unprecedented heights, claiming an all-time high of $877 million on December 9, 2023. However, the 9-fold TD Sequential crypto trading tool, displayed in effect by Martinez, points to a ‘Sell’ signal based on the weekly BONK charts. The TD Sequential marks a price trend reversal unless the crypto price breaks above the expected boundaries.

The main reason behind this is a phased market correction, which could last one to four weeks. Despite this theory, Bonk holds above the critical resistance line of $0.0000115. Following this achievement, BONK outpaced rival memecoins Floki (FLOKI) and Baby DogeCoin (BABYDOGE), Pepe (PEPE), and ApeCoin (APE) by global market capitalization.

Flashback to just before $BONK‘s 8,422.58% bull run – the TD Sequential indicator had presented a buy signal on the weekly chart!

Now, the same indicator is showing a sell signal. This suggests #BONK might be heading into a correction period lasting one to four weeks. pic.twitter.com/qjEHO9ss0o

— Ali (@ali_charts) December 11, 2023

On the Flipside

• New utility cases and rising social sentiment for the memecoin Bonk (BONK) could be among other key factors influencing BONK’s price movement.

Why This Matters

Solana’s Layer-1 blockchain thrived this year with institutional money inflows, briefly overtaking the largest Proof of Stake (PoS) chain, Ethereum, by active users.

Read DailyCoin’s top crypto news:
FIFA NFTs Offer Shot at World Cup Final Tickets, Memorabilia
China Advances Blockchain-Based Identity Verification Program

On-chain data shows an increasing trend of Bitcoin moving to exchanges, a typical bearish sign, but another signal still remains optimistic for the bulls.

Bitcoin Exchange Inflows Are Up, But So Are USDT Deposits

According to data from the on-chain analytics firm Santiment, BTC has been flowing into exchanges recently. The relevant indicator here is the “supply on exchanges,” which keeps track of the percentage of a cryptocurrency’s total circulating supply that’s currently sitting in the wallets of all centralized exchanges.

When the value of this metric goes up, it means that the investors are making net deposits of the asset into these platforms, while a decline implies outflows are taking place.

What effect either of these trends might have on the market depends on the type of cryptocurrency in question. Santiment has shared the below chart, which shows how the supply on exchanges has recently changed for four assets: Bitcoin, Ethereum (ETH), Tether (USDT), and USD Coin (USDC).

The trends in the exchange supplies of the different top cryptocurrencies | Source: Santiment on X

As displayed in the above graph, the Bitcoin and Ethereum exchange supplies had both been on the decline earlier, but recently, BTC has diverged from this downtrend and registered some net deposits.

These deposits first started after BTC finished its rally to $44,000 and took to sideways movement. Generally, one of the main reasons why holders might deposit their coins to exchanges is for selling purposes, so these recent inflows can be a sign that selling has been taking place.

The uptrend in the supply on exchanges also became a bit sharper in the leadup to the asset’s latest plunge, suggesting that the inflows have indeed been adding to the selling pressure.

From the chart, it’s also visible that the Bitcoin supply on exchanges hasn’t yet reversed its trend, a potential indication that selling hasn’t completely exhausted yet.

Meanwhile, Ethereum has continued to see supply exit these central entities, implying that investors of the cryptocurrency are possibly still participating in net accumulation.

Something that could prove to be positive for BTC, though, is the fact that the Tether supply on exchanges has risen since the plunge. Investors usually make use of stablecoins like USDT and USDC whenever they want to escape the volatility associated with coins like BTC and ETH, but such investors generally only do this as a temporary measure.

When the holders plan to leave the cryptocurrency sector as a whole, they do so through fiat instead. Opting for stablecoins instead, thus, means that they intend to stay in the market and possibly eventually return back towards the volatile side.

Sizeable swaps from stables into Bitcoin and others can naturally provide a buying boost to their prices, so exchange inflows of them can be a bullish sign for these volatile assets.

The most bullish combination is when BTC rallies while the USDT exchange supply does the same, as such a trend suggests that fresh capital is entering into the sector.

In the current case, the Tether exchange supply has gone up at the expense of BTC’s price, so only a rotation of capital has occurred. Nonetheless, the fact that not all capital has exited the sector as a whole can still be an optimistic sign for the rally’s return.

BTC Price

Bitcoin had plunged towards $40,000 yesterday, but the coin has already made some swift recovery as it’s now trading around the $41,700 level.

Looks like BTC has made some recovery from its lows | Source: BTCUSD on TradingView

Featured image from Shutterstock.com, charts from TradingView.com, Santiment.net

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.