DeFi is growing as Bitcoin lags behind

According to DeFillama, the TVL in DeFi surpassed $260 billion following the tremendous Bitcoin rally in October. Protocols that support the DeFi ecosystem, such as Ethereum, Solana, and Avalanche, have also seen significant price increases. Solana recently hit a new high of $260.

Daily transactions on DeFi protocols, such as PancakeSwap, which runs on the Binance Smart Chain, have also increased. The network's active users increased to over 600,000, with the number of active addresses on the protocol reaching 2 million.

According to Genesis' Q3 report, the number of institutions entering the DeFi industry is increasing. Large corporations are increasingly interested in using Ether to borrow and lend in a variety of decentralized applications (Dapps).

This could also be attributed to a "significant structural change" in the cryptocurrency market as retail exchanges began to deleverage. Several digital asset exchanges limited their leverage offerings in the second quarter of 2021, including Binance, which reduced its levels to a maximum of 20x for accounts opened for less than a month.

Genesis also stated that the weighting of Bitcoin in its overall portfolio has decreased due to a lack of BTC-denominated trading opportunities. While interest in the leading cryptocurrency has waned, emerging Layer-1 protocols such as Solana have seen an increase in demand, serving as natural liquidity pairs for DeFi yield opportunities.

All of Solana's accomplishments, however, fall short of the one it achieved yesterday.

The new top 4

Solana finally accomplished yesterday what veteran players like Litecoin and Dogecoin failed to do at their peak of popularity. It flipped Cardano and Tether to become one of the top four cryptos on the market.

Surprisingly, at the time of publication, the difference between the two was not by a few million dollars. Instead, Solana was worth $73.1 billion, Tether was worth $71.4 billion, and Cardano was worth $68 billion.

Furthermore, the last three months have seen a significant shift in the cryptocurrency market. Notably, NFTs-led Solana increased by 945.66 percent in just three months.

Solana, on the other hand, flipped Cardano not only because Solana is performing well, but also because Cardano is not performing competently. In fact, because of its poor performance, it has a lot to catch up on.

Over 550,000 addresses have left Cardano in just a week. Even transaction counts dropped to four digits at one point.

To begin with, ADA is not responding to broader market cues. It flipped the $2.07 support into resistance after failing to break through the $2.28 resistance.

This is also why its correlation with Bitcoin has dropped to – 0.61, the lowest level seen since ADA's inception.

But, can Solana keep up this pace?

SOL appeared to be at its lowest year-to-date volatility at the time of publication (YTD). Furthermore, high volumes indicated that the rally was driven by investors. As a result, if investors slow down, the rally may end without causing a corresponding drop in the altcoin's price.

In other words, if market sentiment is correct, Solana may be the new Cardano. In terms of market position, if not characteristics.

This "grey" patch needs to be colored...

Crypto-holding Crypto has become a big component of the identity, financial worth, and/or business of Indian innovators, entrepreneurs, and venture capitalists. These are resourceful, connected, and globally mobile individuals who have been planning for prospective cryptocurrency regulations for years.

Many of them are ideologically committed to the cryptocurrency's success. Paytm, based in India, is likely to be the next company to join this club.

#Paytm would consider #Bitcoin offerings if the nation’s authorities removed regulatory uncertainty surrounding the adoption of #cryptocurrencies.#cryptocurrency
https://t.co/OfuXZIAncC

— Deccan Herald (@DeccanHerald) November 4, 2021

Consider the most recent comment made by a representative of Paytm, India's digital payments pioneer. During a recent interview, Madhur Deora, the company's Chief Financial Officer, elaborated on the aforementioned problem.

“Bitcoin is still in a regulatory grey area if not a regulatory ban in India. At the moment. Paytm does not do Bitcoin. If it was ever to become fully legal in the country, then clearly there could be offerings we could launch.”

This is clearly the case in this instance. Even though Indian regulators rejected the idea of a complete ban, there is still some doubt.

So, why is this significant?

Users and merchants were previously barred from using the UPI deposit option on crypto-exchanges by one of India's oldest banks, the State Bank of India. Users were left with no choice but to use alternative money deposit methods that take longer to complete and charge additional expenses such as convenience fees.

Banks, on the other hand, will no longer be able to stifle crypto-investors and exchanges as a result of this development.

(*The Unified Payment Interface, or UPI, allows all bank account holders to send and receive money from their cellphones without having to input their bank account details or their net banking user ID and password.)

In general, the legislation governing these digital tokens will undoubtedly make India one of the leading nations in the handling of these assets. Consider this: despite the fear mongering, India's crypto usage has topped $10 billion. Now all that is needed is for the country to see some regulatory clarity.

“The Rockdale economy was devastated for several years until the bitcoin miners showed up.”

Rockdale's mining ray of hope

Bitmain's $500 million investment promise has given Texas another ray of hope, as it has promised to build the world's largest bitcoin mine in Rockdale. That, as we all know, did not happen.

Bitdeer and Riot Blockchain's Whinstone, which is "believed to be the largest single facility, as measured by developed capacity, in North America for Bitcoin mining," are currently competing for a large share of the Texas market. We know that Texas is appealing due to its low energy costs and crypto-friendly policies.

Distinctive features

According to the CNBC report, the only similarity between the two is the location of the companies' facilities. It described Bitdeer as "aloof and closed to media." Whinstone, on the other hand, "thrives on transparency and throws open its doors to the media on a daily basis," according to the report.

In terms of location, Bitdeer’s mine was built over a closed Alcoa smelter with electrical lines, the report noted. Meanwhile, Whinstone’s facility is situated in what was once a “thickly wooded forest.”

Aside from that, the CNBC report stated that the specifics of Bitdeer's bitcoin mining operation are unknown. However, Whinstone CEO Chad Harris stated that Bitmain had shown "keen interest in Whinstone's shelving and racking system."

The report noted that Whinstone's leadership style is "about improvisation," and that it does not see Bitdeer as a competitor. Furthermore, according to CEO Harris, the company does not perceive Bitdeer as a threat. He stated,

“There is no IP in this business. That’s nonsense.”

Interestingly, Whinstone publicly documented the process of building Whinstone mine on social media platforms. The report noted,

“Whinstone has multiple buildings on-site, each stacked 20 feet high with rows of computer hardware…”

Furthermore, Harris estimates that the company "produces more than 500 bitcoin per month at its current capacity." This equates to approximately $368 million per year. According to the report, the company also claimed to have close to 100,000 machines on-site.

It is worth noting that Riot purchased the Whinstone mine earlier this year for $80 million and has since risen to prominence in the North American region. It is estimated that the United States contributes more than 35% of the global hash rate.

Daily Dogecoin Chart

Based on the highs and lows of its rising wedge, Dogecoin is expecting a 27 percent increase from its breakout point of $0.283. Should bulls capitalize on the ongoing breakout, DOGE would return to its swing high of $0.352 set on August 16, assuming bulls can convincingly break through the $0.321 price ceiling. The final barrier was a resistance level of $0.445, after which DOGE could challenge its May ATH.

According to the Visible Range Profile, there was a lot of sell pressure between $0.30 and $0.380, which meant that DOGE's ascent wouldn't be as easy as some of its peers who were approaching record levels.

However, the groundwork for a sustained push would be laid as soon as DOGE is able to close above $0.30. Furthermore, a return to $0.30 would trigger new longs in the market, paving the way for a bullish outcome.

Reasoning

Since September 21, DOGE's RSI has formed consistent higher lows, which has been a huge positive. As the bulls continued to advance, the RSI needed to surpass its previous high of around 70 in order to break through into overbought territory. In the meantime, the Directional Movement Index favored the bulls as well. The MACD, on the other hand, was bullish-neutral because buyers had yet to establish their presence.

Conclusion

DOGE sought a close above key areas in order to maximize its breakout potential. In the short term, a pullback to $0.30 is to be expected, after which DOGE will continue its ascent toward $0.352. Following that, a decisive close above $0.380 would propel DOGE towards the ultimate challenge at $0.445.

The success of ProShares has revealed the enormous demand for institutional cryptocurrency products, but where is it coming from? According to Bitwise CIO Matt Hougan, financial advisors are the key demographic investing in these ETFs because they manage money for the nation's wealthiest individuals and control the majority of the country's private capital. In a recent interview, Hougan stated that investing in funds is "easy" for managers because they follow the same process as traditional stocks and ETFs.

Drawing an analogy with his company’s own Bitcoin fund, he stated,

“Bitwise has a private fund. It’s available to accredited investors. It’s a great product. It costs 95 basis points. The assets are stored at fidelity. You can buy and sell it at NAB. It basically does exactly what you would expect. By almost any academic perspective, it’s better than a futures-based ETF.”

However, allocating or relocating funds for a hundred different clients would bury the asset manager in paperwork, making an ETF a much better option for them, according to Hougan, he added,

“Even though you, as an individual may be better served buying it directly, these people are busy. Bitcoin’s maybe 2% of their portfolio. They’re just never gonna do it, but they will do it if there’s an ETF. So ease of use is like the most boring thing you can say about a product, but it’s actually really important, particularly for these financial advisors.”

Following the application for a Bitcoin futures-backed ETF last month, Bitwise, the world's largest crypto index fund manager, filed for a physically-backed Bitcoin ETF last month. While both are awaiting SEC approval, Hougan believes the ProShares ETF will be “will probably be the biggest for a long time.”

He explained,

“The first to market is the kingmaker. First to market ETFs get most of the assets. And while I’d love to say Bitwise will sweep in and win all the assets on futures-based ETFs, I don’t think that’s true.”

Several ETF experts have recently made this argument, especially since later-released ETFs have performed poorly in comparison. Hougan also stated that this will lead to price competition, which is already occurring as recent ETF filings reveal a significant management fee reduction from what Proshares' BITO charges.

According to Hougan, Bitwise's goal in this scenario is to focus on relationship management rather than pricing. He added,

“We compete on relationships. So when you buy a product from Bitwise, you have a relationship with our research team. We’re selling a research-based relationship behind what is gonna be a fairly commoditized product.”

The closest defensive option for Eth was $4K and $3,700, but the Visible Range Profile indicated that these regions had yet to establish themselves as a reliable support zone. If bears take advantage of these cracks, the lack of demand above $3,500 would cause ETH to fall another 10% before moving to a stronger support area.

Meanwhile, there were plenty of defensive resources available for less than $3,650. A $3,350 support line has already aided ETH during a mini-correction in mid-October.

To avoid a bullish thesis, bears would need to close below the horizontal channel's mid-line and the 200-SMA (green). A potential drop all the way up to $2,700 would then pose a serious threat. A possible decline all the way up to $2,700 would then become a serious threat.

Reasoning 

The current correction in ETH was long overdue, according to the daily RSI. Lower peaks along the RSI revealed a bearish divergence in relation to ETH's price action, indicating a possible decline. Indeed, ETH was headed for further losses as the MACD and Directional Movement Index approached bearish crossovers. Expect these indicators to remain above their respective half-lines, as ETH was very much in a bullish trend.

Conclusion

If ETH falls below $4,000 and $3,700, expect bulls to keep the price within a strong support zone of $3,500-$3,100. With the addition of new longs, ETH would launch another attack at $4,400, aiming for a new ATH.