The Protocol: Death Cross, Dip Buying and Developer Nerves

Bitcoin swooned, and crypto markets followed. Should blockchain-project founders and developers be worried? PLUS: We break down Ronin Network's $12 million run-in with white-hat hackers.

Bitcoin's price plummeted, and the cryptocurrency market also plummeted. Should blockchain project founders and developers be worried? Plus, we'll dive into the Ronin Network's $12 million tangle with white hat hackers.

In The Protocol newsletter, we focus primarily on blockchain technology and don’t usually delve into the cryptocurrency market. But after this week’s events, how can we ignore it? Founders and developers have deeply felt the impact of falling prices on industry development. Read on to learn more.

See also:

This article is included in the latest issue of The Protocol, a weekly newsletter that provides an in-depth and easy-to-understand look at the technology behind cryptocurrencies. Sign up here to get the newsletter delivered to your inbox every Wednesday.

Online News

Bitcoin price (shown here as a chain of red and green candles) compared to the 50-day and 200-day simple moving average prices – currently approaching the “death cross”. (Omkar Godbole/CoinDesk/TradingView)

Death Cross! Cryptocurrency markets have suffered one of their worst sell-offs in years, with a week-long plunge that sent the price of Bitcoin (BTC) plummeting to $50,000 from $70,000 last week - and the blockchain industry was euphoric last week In the mood, this week has been shrouded in gloom. Although prices recovered slightly on Tuesday and Wednesday, all members of the benchmark CoinDesk 20 index still posted significant losses over the past week, with ether (ETH) suffering its largest single-day price drop since May 2021. Alternative.me's oft-cited "Fear Greed Index" of cryptocurrency market sentiment swings wildly from "greed" to "extreme fear," and CoinDesk's Omkar Godbole has spotted a terrifying "death cross" pattern emerging on the Bitcoin price chart.

Currently, the mainstream view is that this is just a small fluctuation in the market and will pass soon. (Meme coins appear to have made a comeback.) The question is whether some of the doubts will resurface in the blockchain industry—whether developers, project staff, and fundraising founders will soon be experiencing another round of crippling existential anxiety. It spread throughout the industry late last year.

Macroeconomic and cryptocurrency-native factors are believed to be the catalyst for last week’s selling wave: Japan may raise interest rates (later withdrawn), the U.S. employment report is weaker than expected, tensions in the Middle East, poor earnings of technology companies, and the fading artificial intelligence boom, Bitcoin miners are selling off and there are rumors that market maker Jump Trading may be forced to sell ETH due to regulatory investigations. The end result was a liquidation of approximately $1 billion in cryptocurrency futures and $350 million in decentralized finance (DeFi).

As is often the case, there were some winners, as well as some opportunists trying to buy the dip or spread encouraging words. As a whole, CoinDesk’s Krisztian Sandor reports that Bitcoin whales (i.e., large holders) accumulated more of the cryptocurrency during the market storm, but panic among smaller investors was evident, leading them to reduce their holdings, Block Data from chain analysis company IntoTheBlock shows. Bitcoin exchange-traded funds (ETFs) performed surprisingly well, with net outflows of just $168 million on Monday — what Bloomberg Intelligence senior ETF analyst Eric Balchunas expected to be "in the billions." In fact, the Ethereum ETF saw net inflows.

An address involved in the infamous Nomad cross-chain bridge breach in 2022 was apparently tempted back into the market, spending around $40 million in stablecoins to buy ETH at a deep discount, The Defant reports. Tron founder Justin Sun said on Notably, DeFi platforms maintained operations throughout the incident, successfully handling the liquidation of cryptocurrency collateral, and lending protocol Aave even reported a substantial $6 million in fee revenue.

Cryptocurrency analyst Sean Farrell of FundStrat wrote on Tuesday that he was "encouraged" by the "impressive" and "strong" market rally, but "we think it's best to preserve some liquidity over the coming weeks." Funding.”

This is a t-shirt I purchased from Goodwill a few years ago for $3.99. I have no idea what it originally stood for, but from my understanding it represented a "bargain" for a lower G-rated version. (Bradley Keoun)

RONIN Correction

The above is the detailed content of The Protocol: Death Cross, Dip Buying and Developer Nerves. For more information, please follow other related articles on the PHP Chinese website!