The crypto market's volatility is nothing new, but recent declines in Bitcoin and Ethereum have inve
The crypto market's volatility is nothing new, but recent declines in Bitcoin and Ethereum have investors on edge. Bitcoin's struggles to maintain its position after reaching an all-time high in December are largely due to the strengthening US dollar, with which it has an inverse correlation. Ethereum, on the other hand, has underperformed Bitcoin, a common trend during market downturns ¹.
Despite today's rebound, fueled by optimism and expectations of a declining Dollar Index, the possibility of a "bull-trap" remains a concern. Tomorrow's US inflation data release will be crucial, with expectations of core inflation remaining at 3.3%. If inflation exceeds expectations, it could lead to a market correction, while lower inflation might trigger a positive market reaction.
To navigate this uncertainty, it's essential to consider key macroeconomic indicators, such as GDP, inflation rates, market indices, and Federal Reserve interest rates. These indicators can significantly impact the crypto market, influencing trader sentiment, risk appetite, and regulatory environments ².
*Key Factors Influencing the Crypto Market:*
- _US Dollar Strength_: The strengthening dollar has negatively impacted Bitcoin's price due to their inverse correlation.
- _Fed's Monetary Policy_: Interest rate decisions can significantly impact the crypto market, influencing overall market liquidity and risk sentiment.
- _Inflation Rates_: Higher-than-expected inflation could lead to a market correction, while lower inflation might trigger a positive market reaction.
- _Market Indices_: The performance of traditional market indices, such as the S&P 500, can influence crypto market sentiment.
Remember, the crypto market remains volatile, and significant price fluctuations are possible. Always conduct thorough research and consult with a qualified financial advisor before making investment decisions.
Bitcoin Renaissance has sparked interest in BTCfi
In the last year, the Bitcoin Renaissance has sparked interest in BTCfi, or Bitcoin Decentralized Finance applications. Despite the buzz, only a few of these apps have lived up to their promises or attracted a substantial number of active users. For instance, a popular platform like Liquidium allows users to borrow against their Runes, Ordinals, and BRC-20 assets. Borrowers pay interest to lenders just like any other loan, with the loans being overcollateralized by the Bitcoin assets for security. The scale of Bitcoin DeFi currently varies depending on how you view it. Over the past 12 months, Liquidium has facilitated over 75,000 loans, totaling more than $360 million with over $6.3 million paid in BTC interest to lenders. To be considered truly “real,” Bitcoin DeFi needs to see exponential growth and reach levels comparable to Ethereum or Solana. However, the belief is that eventually, economic activity will largely center around Bitcoin, making such comparisons irrelevant. Impressively, Liquidium, a protocol barely a year old, is outperforming competitors like NFTfi, Arcade, and Sharky in terms of loan volume on the Bitcoin network. Bitcoin’s evolution is ongoing, without requiring changes to its core protocol, marking a significant development in the industry. Source: Liquidium Landing Page After initial challenges, Runes now dominate the loan market on Liquidium, surpassing Ordinals and BRC-20s. The Runes protocol is more efficient, with a lighter load on the Bitcoin blockchain and a better user experience. The user-friendly nature of Runes simplifies processes for existing users and attracts new users interested in on-chain lending in a more straightforward way compared to BRC-20’s complexities. The presence of financial infrastructure like P2P loans is enhancing the usability and adoption of Runes, and potentially other Bitcoin-backed assets in the future. Source: Liquidium’s Dune Dashboard The loan volume on Liquidium has continually risen, with Runes now dominating activities on the platform. Source: Liquidium’s Dune Dashboard With Runes now the primary asset backing Bitcoin loans, it begs the question – why is this important? Is it beneficial for Bitcoin? Regardless of personal opinions about Runes or the current on-chain activities, the trust in the Bitcoin blockchain for decentralized Bitcoin-denominated loans signals a significant milestone for advocates of freedom. This progress showcases that Bitcoin’s security features are unmatched, leading to increased on-chain economic activities. This is undoubtedly a positive sign. All transactions are directly secured on the Bitcoin blockchain, emphasizing the simplicity and purity of the Bitcoin system. Supporting developers building in this manner is crucial. This write-up serves as a Take. The opinions expressed belong solely to the author and do not necessarily represent those of BTC Inc or Bitcoin Magazine. The post Runes: Bitcoin DeFi is Achieving Product-Market Fit appeared first on Crypto Breaking News.$BTC $DEFI
Today, the price of Bitcoin and that of Ethereum are in strong recovery.
Today, the price of Bitcoin and that of Ethereum are in strong recovery. After the struggles of recent days, today in the crypto markets there seems to be a wave of optimism, although it cannot be ruled out that it is just a passing thing. The trend of the Bitcoin price After reaching the all-time high on December 17th, above $108,000, the price of Bitcoin was unable to maintain the psychological threshold of $100,000. To tell the truth, it had tried on January 6, but within a day it had immediately fallen back below. The problem is that starting from December 18, the US dollar began to strengthen, and this weakened Bitcoin, given that the price trend of BTC in the medium/long term tends to be inversely correlated to the Dollar Index. On December 18, suddenly the Dollar Index broke through the resistance of 108 points, and since then it has risen further, reaching for a brief moment 110 points yesterday. Just yesterday, in fact, it was the worst day for Bitcoin since it recorded new all-time highs shortly after mid-December. If already on January 7 the price of BTC had fallen below $97,000, until yesterday it had remained substantially around $93,000, even though with a brief excursion below $92,000 on January 9. Yesterday, however, it not only fell below $91,000, but for a brief moment it even fell below $90,000. Yesterday’s point is the lowest reached by the price of Bitcoin since December 17 onwards. The trend of the Ethereum price The price of Ethereum has even done worse. Taking as a reference the ratio between the market capitalization of Bitcoin and that of Ethereum, a month ago it was less than 4.3 times, but it was already on the rise. On January 5th, however, it was just above 4.4 times, so quite in line with that of a month ago. Starting from January 6, however, the trend of Ethereum’s price began to underperform significantly compared to Bitcoin, so much so that the ratio between the two market capitalizations rose to 4.7 times already on January 8, when Bitcoin was below $97,000 and Ethereum below $3,400. Things then from this point of view have worsened even further, up to the maximum peak of this period reached just yesterday at over 5 times, with Bitcoin dropping to $92,000 but Ethereum dropping even below $3,000. Compared to a month ago, the price of Bitcoin is losing 4%, but that of Ethereum is losing 11%. It should be remembered, however, that often during the difficult phases of the crypto markets, altcoins, including Ethereum, underperform Bitcoin. Just consider that in the last thirty days the overall market capitalization of all altcoins combined has dropped from 1,600 to 1,400 billion dollars. The rebound of Bitcoin and Ethereum prices Today, however, a wave of optimism seems to have arrived in the bull and bear crypto markets. The price of Bitcoin has returned to $97,000, while that of Ethereum has returned to $3,200. The ratio between market capitalizations, however, is still high (4.9), and this suggests that in the event of a bullrun recovery, Ethereum could even outperform Bitcoin for a certain period, although this has not yet occurred. The rebound today seems to be explained only by an advance of optimism regarding what might happen in the crypto markets in the coming days, or in the coming weeks. In fact, in the coming days, a decline in the Dollar Index is expected, which could favor a rise in the price of Bitcoin, which in turn could bring along Ethereum and the altcoins. Furthermore, often in phases like this at the end of January, a bullrun has started, and there seem to be many who hope that this can happen. There are, however, also those who argue that today’s rebound could be just a bull-trap, meaning a trap for those who are opening long positions, perhaps on leverage. All eyes on tomorrow Tomorrow, Wednesday, January 15, 2025, the data regarding inflation in the USA for December will be released. The key data, which could have consequences on the Fed’s monetary policies, is the one concerning core inflation. The markets are pricing in that the data to be released tomorrow will be in line with that of December: 3.3%. On the other hand, since September, the annual core inflation in the USA has been stuck at 3.3%, therefore it is even too easy to predict that it may have remained the same in December. However, it is not certain that the data to be released tomorrow will be exactly 3.3%. If it were to be higher, even slightly, the markets might react poorly, because they might start to imagine that the Fed could be forced to make its current monetary policy more restrictive, already restrictive for many months now. If, on the other hand, after three consecutive months of stagnation from this point of view, the December figure were to be in decline, the markets could react well, because at that point it would become more likely that the Fed might make its monetary policy less restrictive. Today it almost seems that the markets are daring to anticipate precisely this second scenario, which, however, in the current state of affairs, does not actually seem particularly likely. If they were wrong, an important correction could occur tomorrow.$BTC $BITCOIN
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Dalam 24 jam terakhir, skor sentimen media sosial untuk cVault.finance adalah 3, dan sentimen media sosial terhadap tren harga cVault.finance adalah Bullish. Skor media sosial cVault.finance secara keseluruhan adalah 10,024, yang berada di peringkat 218 di antara semua mata uang kripto.
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Di Twitter, ada total 1 cuitan yang menyebutkan cVault.finance dalam 24 jam terakhir. Di antaranya, 0% bullish terhadap cVault.finance, 0% bearish terhadap cVault.finance, dan 100% netral terhadap cVault.finance.
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