Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.
- Price Point: BTC holds the $20,500 level and DeFi tokens continue to surge. A new court filing showed that Celsius acknowledged a $1.2 billion hole in its balance sheet.
- Market Moves: Omkar Godbole looks into why DeFi tokens are rallying and whether traders think it will be a short-lived rally or not.
This web version of today's First Mover newsletter was produced by Sage D. Young.
The crypto market got off to a good start on Friday morning, with bitcoin (BTC) trading up 5% on the day, at $20,800 and all other assets higher.
Liquidation levels for BTC are currently at 5:2 in favor of short rekts, meaning an upside rally has been favored over the last 12 hours, according to Hashdex’s head of Europe, Laurent Kssis.
“An upside above $21,000 can be tested should the short liquidations continue to be triggered and we could then test the $22,000 mark,” said Kssis. He added that a cautionary stance remains as any further negative news will keep BTC under pressure and below $20,000.
AAVE was up 16.5% over the last 24 hours and Solana’s SOL was up by 12%. The QNT token of the Quant Network, which automates trust functions between multiple blockchains, was trading up 20% on the day.
The recent rallies in altcoins and BTC’s rise have brought the entire crypto market capitalization up to $928 billion, trying to approach the $1 trillion mark again.
Some analysts are seeing a bright future for Celsius’ CEL token, despite the lender's recent downfall. The token could recover in the future despite the current actions of its management team, some traders are saying. CEL was up 20% on the day.
By Omkar Godbole
Cryptocurrency lending platform Aave's native coin AAVE was up 15% at $91. Last week, AAVE proposed a decentralized yield-generating dollar-pegged stablecoin GHO to expand services offered on the platform. GHO is likely to generate additional revenue for the Aave DAO by sending 100% of interest payments on GHO borrowing to the DAO, the proposal said.
Decentralized exchange Uniswap's UNI traded at $7, representing a 13% gain. Bitcoin, the biggest cryptocurrency by market value, changed hands at $20,660, up 3.5%, while Ethereum's ether token was priced at $1,200, up 8%. Other notable gainers were programmable blockchain Solana's SOL cryptocurrency, privacy-focused coin XMR, Polygon's MATIC, ATOM and ALGO.
DeFi outperformance a flash in the pan
Observers were unsure if the rally in the decentralized finance (DeFi) majors would be long-lasting, given the fundamentals remained weak.
"Sure, we see some rally in the DeFi coins for now, but fundamentally nothing has changed. The total value locked has been destroyed," crypto financial services firm Amber Group said, while noting the absence of large buying.
"We have seen some institutional mandates scooping up majors and DeFi blue chips, but it's not like massive amounts," Amber's trading desk told CoinDesk.
The total value locked in the DeFi protocols has crashed to $38 billion from $95 billion this year. And there was hardly an uptick as of writing, according to data source DeFi Pulse. The total value locked is the amount of user funds deposited in the DeFi protocols and is one of the most commonly used metrics to assess the sector's growth.
Other indicators, such as the volume of bitcoin locked in DeFi and the number of addresses lending and borrowing in DeFi protocols, pointed to a continued slowdown in the activity.
"The volume of wrapped bitcoin participating in DeFi protocols is a clear indicator of the DeFi momentum among more traditional crypto investors," Jesus Rodriguez, CEO of the analytics firm IntoTheBlock, wrote in an DeFi analysis piece published Tuesday. "Recently, that indicator has dropped to a near all-time low, signaling a slowdown in the DeFi activity among bitcoin holders."
Read the full story here: DeFi Coins Outperform Bitcoin, Ether as Traders Pare Bets on Jumbo Fed Rate Hike
- DeFiance Capital Has Been 'Materially Affected' by Three Arrows Liquidation: The firm's CEO has said that he is committed to recovering all assets that may have been affected.
- Bitcoin Mining Rig Prices Slump to Near 2-Year Lows Amid Celsius Bankruptcy: Celsius’ mining unit is said to have auctioned off some of its newly purchased mining rigs at fire-sale prices back in June, before filing for bankruptcy.
- DeFi Coins Outperform Bitcoin, Ether as Traders Pare Bets on Jumbo Fed Rate Hike: The outperformance of the DeFi coins could be fleeting, given the weak fundamentals.
- Three Arrows Liquidators Ask Singapore Court to Recognize Company's BVI Bankruptcy, the Straits Times Reported: Three Arrows’ liquidators are working to get Singapore courts to recognize the British Virgin Islands liquidation order against it, in order to preserve the company's Singapore assets.
- Celsius Network 'Could Stick Around' After Bankruptcy, Restructuring Expert Says: Ryan Preston Dahl joined CoinDesk TV’s “First Mover” to discuss the crypto lender's filing.
- 5ire Raises $100M to Fund Expansion of Sustainable Blockchain: The company will use what it calls a Proof-of-Benefit mechanism, saying it is the only sustainability-focused blockchain unicorn in the world.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.