Digest: The Main News On The Cryptocurrency Market (December 14-20)
The protagonist last week was Bitcoin and its triumphant update to 2017 high. But the records did not end there. What else the crypto market lived, and what events deserve attention, read in our weekly review.
Bitcoin soars to $23,800 and prepares for “To The Moon”
Bitcoin can be congratulated on a new all-time record. On December 17, the price of Bitcoin broke through the critical resistance range of $21 000–$22,000 and reached a new high at $23,800. On December 19, the victorious procession continued: Bitcoin peaked at $24,200 but then rolled back into the range of $23,500 – $23,800.
The update of the all-time high of 2017 excited the crypto community in earnest and became the reason for new predictions. Willie Woo was one of the first to share his expectations. The trader is convinced that Bitcoin will continue to rally and at least reach the $100,000 level by the end of 2021. On this path, the defining point for Bitcoin will be $55,000 because this price will allow the crypto asset to reach 10% of the market capitalization of Gold.
The technical indicators on the weekly chart confirm the optimism that now prevails in the crypto community: the bulls remain on the side of Bitcoin, and ready to continue the vertical rally. Is Bitcoin expecting a repeat of the 2017 scenario? So far, analysts comment on this with caution.
Unlike 2017, now Bitcoin has significant support from institutions, the macroeconomic situation forces it to play by new rules and in general, the crypto market has made a huge step forward in the context of 2020. Against the backdrop of optimistic forecasts, analysts also do not exclude a correction in the price of Bitcoin. When and at what level the Bitcoin correction will take place is still a matter of time.
DeFi community criticized the new Compound Chain protocol
On December 17, Compound Finance, a popular DeFi project, announced the development of its blockchain, with a test version scheduled to launch in 2021. The new Compound Chain protocol is designed to provide access to lending across different blockchains. For example, a user of an application based on the Tezos blockchain will be able to receive a loan in tokens that are stored on the Polkadot network.
According to the developers, the new blockchain will be able to solve the problem of high transaction fees in Ethereum. This cost reduction will be achieved through the use of the Proof of Authority (PoA) consensus mechanism, which provides for the support of the transaction process by the validators. The Compound Chain ecosystem will use its CASH token to pay the commission.
The idea of creating a new blockchain-based on PoA did not receive the desired support from the DeFi community. The analyst Anthony Sassano has been a fierce critic of this system. He believes that there is no need for a new Compound Chain as such since the deployment of Ethereum 2.0. will be able to solve all the stated problems. In his opinion, the use of the PoA mechanism is a direct route to centralization, and the launch of side networks can further confuse.
To date, the total value of assets locked in the Compound Chain exceeds $1.80 billion.
Cardano blockchain will support smart contracts written in Solidity
Cardano is preparing to take another step towards scaling by integrating Solidity, the main programming language for writing smart contracts. Shortly, a system will be implemented thanks to which developers will be able to work seamlessly in the Cardano and Ethereum ecosystem.
This initiative is part of the Cardano team’s commitment to bringing leading developer communities to their ecosystem. According to Tim Harrison, director of marketing at IOHK, Cardano is now building bridges between developers, which will enable long-term partnerships in the future and will be the impetus for continued modernization of smart contracts.
Going forward, Cardano plans to bring developer networks such as Glow and IELE into its ecosystem.
XRPL testing showed “promising results”
David Schwartz, CTO at Ripple, tested an updated version of the XRP Ledger platform software last week. Three key indicators were taken as a basis – memory consumption, data processing, and the time during which the task was completed.
Schwartz announced all stages of testing on his Twitter account. The XRPL performance benchmark results were more than encouraging. The number of nodes processed per second increased from 73,000 to 327,000. Also, the optimized version of XRPL showed an increase in average sync speed with less memory consumption. If the current version of XRPL syncs in 82 seconds when consuming 5.2GB of memory, the updated version syncs in 37 seconds when consuming 2.2GB of memory.
On key performance metrics, XRPL optimization has been improved by over 50%. But for now, the updated version of XRPL is only available in test mode, and according to Schwartz, the community is open to new proposals from developers.
Large investors have acquired 500,000 BTC since September
Institutional investors have shown tremendous interest in Bitcoin and continue to be in the spotlight. Since September, investors with $20 million or more in BTC have acquired a total of 500,000 BTC (worth about $11.5 billion).
Aggressive Bitcoin hoarding by big players is fueling the current crypto asset rally. Economist Philip Gradwell is convinced of this. He noted that “the entry of new investors into the market has become one of the drivers for the growth of the BTC price from $1110K+ in September to $1120K + in December.”
The influx of institutional investments is under the banner of portfolio diversification, inflation protection and, according to analysts, will receive a new impetus in 2021. A good example is MicroStrategy and Grayscale, which continue to actively buy Bitcoin even at current levels and are determined to play for a long time.
Another important event awaits Bitcoin next week: 92,900 BTC options expire on December 25. Analysts do not exclude that this event may provoke an increase in Bitcoin volatility.
XRP may rise above $1 amid BTC rally
XRP found itself in bullish territory this week as a result of the breakdown of the downward resistance line and hit the $0.65 level. As of this writing, XRP is down $0.54, with daily charts continuing to signal a possible rise in the token in the short term.
Crypto analyst MagicPoopCannon has traditionally reacted to the XRP movement with his usual enthusiasm. He is convinced that the Ripple token could rise to $1.20 as a huge bullish flag formed on the chart. Another potential driver for XRP growth is the current rally in Bitcoin, against the background of which altcoins usually gain strength and move forward.
Early in November, MagicPoopCannon received a flurry of criticism for its prediction that XRP would reach $440. The current forecast looks more realistic.
Before the coveted level of $1.20, XRP has to overcome the following resistance levels – $0.80, $0.92, $1. Unlike MagicPoopCannon, some analysts are suggesting XRP pullback and consolidation in the range between $0.43 and $0.53. If this support turns out to be weak, then XRP could fall to $0.35.