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DeFi Emerges Strong as Diamond Hands Shepherd their Bitcoin to Safer Pastures

Under the shadow of next-level misdoings revealed during FTX bankruptcy proceedings, DeFi, hard wallets, and self-custody protocols managed to become intensely popular destinations for shaken crypto investors. The domino effect caused by SBF’s unbelievable carelessness and alleged fraud continues to reverberate across the cryptosphere.

At a glance:

  • DeFi usage and new addresses are way up
  • FTX bankruptcy proceedings reveal “unprecedented” failure
  • US banks to test drive a CBDC
  • Coingecko begins listing exchange reserves
  • Circle adds Apple Pay functionality for USDC

Top Market Trends

  • Traders flocked to DeFi protocols as the number of users shot up in the last week. MakerDAO addresses increased by 33%, with Aave and Curve addresses jumping 70% and 63% respectively.
  • Centralized exchange outflows hit record highs as investors fled to self-custodial wallets in the wake of FTX’s collapse. Hard wallets Trezor and Ledger saw growth surges over the last seven days with Trezor’s website traffic jumping 350% and Ledger reporting its biggest user uptick this year.
  • FTX bankruptcy proceedings revealed an “unprecedented situation” defined as a “complete failure of corporate controls and such a complete absence of trustworthy financial information.” The filing cited the lack of an accurate list of bank accounts and signatories, an audit performed on FTX by an auditor claiming to be working out of the Decentraland metaverse, a $1 billion loan to SBF, and corporate funds being used to buy real estate for FTX team members.
  • Mastercard, Citigroup, HSBC and BNY Mellon joined the Federal Reserve Bank of New York to begin testing a tokenized USD with a 12-week proof-of-concept pilot program.

Movers and Shakers

Top 7-day Gainers:
TWT +91.6%
CHZ +16.6%
GMX +16.5%
XCN +15.9%
TON +10.5%

Top 7-day Losers:
TKX -28.5%
CRO -26.3%
EVMOS -26.8%
HT -25.8%
MKR -23.7%

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Technical Summary

Bitcoin Pulse
Bitcoin experienced a mass exodus from centralized exchanges and into safer havens as diamond handers moved to protect their assets. Some analysts are suggesting that recent events may push Bitcoin into a hyperbitcoinization phase, where adoption grows exponentially as awareness around the problems with other money systems becomes mainstream.

  • Over 115,000 Bitcoin (~$2.4 billion) has left exchanges since last week as investors sought safety from FTX-related liquidity events.
  • El Salvador's President committed publicly to buying one Bitcoin every day beginning November 18th.
  • BTC stabilized around the $16,475 zone and began to retrace to $16,800 by Thursday.

BTC - Low Timeframe
As we can see, BTC price continues to accumulate with characteristic sideways price action, pulling in both buyers and sellers who are fueling up for the next aggressive directional move.

”Bitcoin_Micro_TA="75%"Will BTC price break out of the 4H range we’ve been trapped in?

Given that, within the current 4H range we have already taken:

  1. Buy/Sell side liquidity
  2. Extreme Bullish/Bearish Order-blocks
  3. Bullish/Bearish fair-value gaps
  4. Premium/Discount

We have met conditions for the price to now break out of the 4H range that we’ve been trapped in. When this will take place... nobody knows, but the likelihood that this will be initiated after a news catalyst is highly probable.

Short-term, however, we are likely to see a bullish move into the $17,500 region before pullbacks back down into discount, or a bearish move into the $16,000 region before a bullish move into premium.

As we can see, the 50 EMA is currently being disrespected and its significance is highest in its importance just as price starts to decide a direction and commit.

BTC - Macro View
Following on from last week's HTF breakdown, we have seen BTC's price find sustained short-term support at our HTF support levels: the monthly fair-value gap and bullish order block.

”Bitcoin_Macro_TA"Looking for continued support at $14k

These levels are our last bastion of support based on the Monthly/Weekly charts until the $14,000 region. If we break below the support found on the 9th Nov, we would expect the price to tumble with small retracements off of daily support levels until we reach $14,000.

If price continues to find support here, we are likely to see a move at minimum to the $19,500 price point which we will explain further using the lower time frames for a higher resolution perspective.

Altcoins on the Move
TWT tokens took the spotlight this week as Binance (and new) users moved en masse to its self-custodial Trust Wallet. Crypto investors worldwide were busy looking at alternative means of storing and maximizing their digital assets holdings.

  • Trust wallet’s token TWT, skyrocketed as Binance users moved to its self-custody product. Over the week, TWT rose over 88%.
  • Circle announced its stablecoin USDC would support Apple Pay, the second most used digital (non-crypto) wallet in the US.
  • Lido DAO (LDO) launched its Ethereum-based token on Coinbase and is currently in a relief rally from last week's plunge.

Ethereum (ETH) Micro
As usual, ETH is aligned very closely with BTC's price action.

”Ethereum_Micro_TA="75%"A move into the $1300 level is still possible

We can see the price continuing to accumulate sideways, pulling in orders to fuel the directional move that is inbound. However, ETH's structure signals additional information that BTC's does not.

ETH's structure shows that we have not yet mitigated the extreme bullish order block where buyers will have entered their original positions on the 10th. Although price has mitigated a bullish order block in discount, we could absolutely see a fake-out bearish move to this extreme bullish order block before aggressively turning back to the upside.

However, given that the minimum requirements for a bullish move have technically been met, a move into the $1300 level is still possible, for longs at the current price our target would be around the $1280 level, and for shorts the $1125 level. At these points, we would expect short-term retracements to fuel the longer term range breaking directional moves.


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Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.