Bitcoin breakout in sight
After the high on March 14, we reached the upper boundary of this corrective pattern for the fourth time. While many aspects remain similar to previous instances, there are several indicators suggesting that this time could indeed be different from the last three.
Market update
The crypto market has had an excellent week. The price of bitcoin has surged over 10%, rising from ā¬57,500 to above ā¬63,000. The rest of the crypto market has also performed well, with ETH reaching ā¬2,500 and SOL hitting ā¬150. The chart below highlights the strength of this increase, which is evident in the significant gap above the 40-day average.
The question on everyone's mind is whether Bitcoin has broken out of the eight-month corrective pattern. After the high on March 14th, we have seen a series of lower highs (LH) and lower lows (LL). Has this trend finally been broken by the rise to ā¬63,700 on Sunday and Monday?
Analysts are divided on the matter. Some believe a breakout is already occurring, while others see the July 29 high of ā¬64,800 as the dividing line. Still others prefer to wait for a move above the March 14 high of ā¬67,500. Together, these price levels could be considered a transition zone (1).
Since the high on March 14, this is the fourth time we've reached the upper limit of this correction. Much is the same as on previous occasions. For example, sentiment on social media has once again turned overly bullish, and there has been a sudden surge of funds flowing back into U.S. Bitcoin ETFs.
But there are also several signs that suggest that this time might be different from the previous three. Technical indicators such as RSI and OBV are already showing a clear trend reversal, as are on-chain metrics like MVRV. These suggest that selling pressure is waning, and that there is room for a new upward trend.
Sometimes it is also useful to focus solely on the weekly or monthly close price to filter out noise. The line in the chart below tracks the weekly close, and with last week's close being the highest since early June, it's clear that weāre seeing a break in the trend.
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Three-way battle: Ethereum vs. Sui vs. Fantom
Ethereum, Sui, and Fantom: three networks, three ecosystems. All three are competing for the biggest network effect, using different strategies and pursuing unique objectives. Letās take a closer look at these competing landscapes.
Ethereum: the original powerhouse
Ethereum, founded by Vitalik Buterin, has been the cornerstone of the smart contract ecosystem for years. Despite the involvement of hundreds, if not thousands of developers constantly working on the platform, Vitalikās influence continues to be a guiding force.
HisĀ most recent proposal is to make Ethereum faster and cheaper, with the goal of lowering staking deposits and reducing the time needed to finalize transactions from 15 minutes to just 12 seconds. While this may sound technical, the key takeaway is that using Ethereum will become more affordable,Ā faster, and more predictable.
Yet Ethereum faces growing competition. Although the network is robust and (relatively) decentralized, becoming a validator remains expensive, requiring a hefty investment of 32 ETH (about $83,000). Vitalik has proposed lowering this to 1 ETH so that more people can contribute to the network's security. With the upcoming Pectra upgrade, Ethereum is expected to take another leap forward, but there's still work to be done to stay competitive.
Sui: the new challenger
Sui, developed by Mysten Labs, is the young, ambitious challenger gaining considerable traction. And with a price increase of 108% in the past month, the market seems to have confidence in this network. Sui is now focusing primarily on the gaming world, where other networks - by their own admission - are struggling to handle the necessary scale. Where Ethereum and other networks experience skyrocketing costs when a game becomes popular, Sui offers a solution: the network can handle millions of transactions without buckling under the pressure.
Sui has returned to the spotlight among speculators with its recent projectĀ Walrus Protocol. This decentralized storage network aims to make Sui more appealing to major data-heavy applications, such as video platforms and games.
Sui's recent success has overshadowed rumors of insiders selling tokens, allegedly valued at $400 million. The foundation behind SuiĀ has strongly denied these allegations.
Fantom (now Sonic): the comeback kid
Fantom, now rebranded as Sonic, is making a strong comeback. Network activity is on the rise once more and there's growing excitement around $S, Sonic's governance token. Fantom is trying to attract developers by allowing them to keep 90% of the transaction fees, potentially turning it into a lucrative revenue stream for those building on the platform.
The team behind Fantom is making bold claims with the launch of Sonic, stating that the new network could process as many as 900 million transactions per dayāfar more than Solana's best performance. And while the total value locked (TVL) on the network is still well below its all-time high of 2022, there is a clear upward trend.
The competition
Three networks, three different visions. Which of these networks will ultimately prevail? Time will tell, but one thing is certain: the race is tight, and the newcomers have an edge as sentiment around Ethereum remains notably low.
In other news
Pump.Fun breaks records again due to memecoin surge. On October 17, as many as 78,000 addresses interacted with the platform, up 20% from the previous high in July. Another milestone was reached withĀ the number of new memecoins launched; 25,000 on 14 October alone. Pump.Fun generated $7.3 million in revenue in seven days, surpassing Solanaās earnings. This spike is due to the hype surrounding $GOAT, a memecoin that quickly reached a market cap of $400 million.
Crypto breaks records despite regulatory uncertainty. This is according to State of Crypto,Ā an annual report released by venture capital firm Andreessen Horowitz (a16z). According to a16z, there were 220 million active addresses in September, three times as many as at the end of 2023. A key factor behind this growth is the wider adoption of stablecoins, whose use and issuance are "off the charts." Despite growing interest, regulation remains a gray area, and the company believes the memecoin explosion is partly due to this.
Thailand's Siam Commercial Bank launches stablecoin service for international payments. After successful testing in the central bank's sandbox, theĀ service is now fully operational. By using stablecoins for settlements, international transactions via SCB have become cheaper and faster. The service, developed in collaboration with Lightnet and Fireblocks, provides customers 24/7 access to efficient international payments. Stablecoins are playing an increasingly significant role in the traditional financial system.