In this technically heavy issue we dive into the Bitcoin breakout against the dollar and the potential implications after a lengthy consolidation period. Meanwhile, Ethereum price-action suggests a potential rotation of capital inflows into decentralised financial applications and tokens.
Let’s dig in.
ConsenSys Closes $65 million Funding Round led by JPM, Mastercard
The Ethereum-focused software firm, ConsenSys, has raised $65 million from a group that includes two major banks, a top financial services firm and several digital asset industry startups and investors.
- ConsenSys has raised $65 million in a new funding round.
- Among those backing the Ethereum-focused company are JPMorgan, Mastercard, UBS, and several investment firms in the crypto space
The news comes just before the much-anticipated Coinbase IPO goes live on April 14, which investors are eyeing for a potential fresh flood of inflows into the cryptocurrency space.
The funding round shows that traditional financial conglomerates have systemically recognised the ecosystem’s intrinsic value, despite various headlines suggesting otherwise.
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Bitcoin continuation after consolidation
BTC/USD has made a higher high, demolishing the old-standing range cleanly and unambiguously. On lower time-frames, price-action also provided two additional entries by way of a back-test before taking off.
Bitcoin is in price discovery mode so attempting to contextualise something that never happened before could be described as an exercise in futility.
However, we’ll do that just the same.
The setup is pretty straight forward. Firstly, to maintain confidence in the BTC/USD pair, then any lingering around breakout levels is not something we want to see. Per comments in the telegram channel, a move to the breakout level ($61,200) would indicate weak buying pressure and a more ominous situation, potentially.
Secondly, the market consolidated for months, so price expansion is likely to be somewhat prolonged. Typically, long consolidations precede periods of price expansions in the direction of the breakout, assuming the setup isn’t invalidated.
As such, ‘number go up’ is still in play.
Ethereum’s major breakout melts faces
ETH/USD printed a fresh all time high breaking out of the range above $2,040 after a prolonged period of consolidation similar to bitcoin.
As it happened, the ETH/BTC pair also reacted bullishly, setting a precedent for capital flows to continue shifting towards Ethereum and decentralised finance, potentially.
Why is this important?
The ETH/BTC pair remains relevant because it provides insight into market behaviour and capital rotation. As bitcoin reached fresh all time highs against the dollar in typical explosive fashion, Ether also broke out but more strongly, and this dynamic became apparent in the ETH/BTC chart. The fact that ETH/BTC did not consolidate on a BTC/USD breakout is a show of relative strength. That’s not just noteworthy but downright impressive.
As covered previously, the technical situation remains simple: close above ₿0.04 and it’s all systems go for Ethereum to significantly outperform bitcoin in dollar terms.
DeFi rotation incoming?
As you might have noticed, a lot of money is entering the space and it tends to roll from sub-sector to sub-sector within the industry.
A few weeks ago the NFT craze saw so-called ‘digital art’ selling for millions of dollars. This turn of events surprised analysts who were expecting decentralised finance to get the bulk of inflows, not random ‘art’ on the internet.
This time, the DeFi sector might be the next beneficiary of these major inflows, particularly for exchange tokens, DEX protocols and centralised and decentralised tokens.
The Coinbase direct listing narrative is one to look out for in this next leg up as attention will turn to various tokens using the exchange listing as a benchmark. Such price-comparisons for Uniswap based on trading volumes have already been made and are quite compelling (as far as arguments in crypto are concerned).
How do we measure this?
The DeFi perpetuals index is essentially the proxy signal to keep an eye on as it moves into price-discovery territory.
Coinbase goes public on Wednesday 14 April (today). It will be listed on Nasdaq at about a $100bn valuation.
All that being said, it’s vital to keep in mind that crypto is very cyclical. If the market becomes less interesting at high valuations there’s no guarantee that Coinbase will be able to sustain its incredible revenues forever (which would in turn impact prices).
Bulls lead the way.
Catch you next time.
Read More: ConsenSys Closes $65 mn Funding Round by JPMorgan, Mastercard
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Originally published at https://mailchi.mp.