Ethereum: USD/ETH (ETH=) Actively Powering the DeFi Ecosystem

Ethereum: USD/ETH (ETH=) Actively Powering the DeFi Ecosystem

Ethereum: USD/ETH (ETH=) Actively Powering the DeFi Ecosystem

DeFi Powering Ethereum to Greater Heights?

Since Satoshi Nakamoto brought distributed ledger technology (DLT) into the consciousness of the masses through the creation of Bitcoin (BTC) 11 years ago, the revolutionary blockchain technology has continued to gain traction across a vast array of industries around the world, from supply chain and logistics down to payments and decentralized finance (DeFi).

For the uninitiated, DeFi simply refers to the use of smart contracts and blockchain technology to transform existing financial products into trustless, transparent and decentralized protocols that function on their own without third-party interference.

As stated in the latest report released by Binance Research, in 2019, DeFi contributed significantly to the growth of the Ethereum ecosystem, as the number of active projects (projects having over 50 daily users) that built their decentralized applications (dApps) on the network nearly doubled last year, even though the price of ether (ETH) hasn’t really been impressive, from a “hodler’s” perspective.

In 2020, the Binance Research team expects the Ethereum ecosystem to build upon the foundation laid last year and facilitate new developments such as Ethereum-powered derivatives, undercollateralized initiatives, staking and more.

Last year, the Ethereum DeFi ecosystem reportedly attracted between 40,000 and 60,000 unique users monthly, with decentralized exchanges attracting 34,244 of those users, while 4,649 users went to financial applications such as lending platforms.

The team said:

“DeFi has become one of the most significant areas of Ethereum, with more than 100 projects and teams building applications and protocols in 2019.”

DAI, DEXs and USDC

Also, the team notes that while SAI/DAI, the decentralized stablecoin powered by the MakerDAO ecosystem has historically occupied the frontline of the DeFi world, in 2019, Circle’s USD Coin (USDC) stablecoin gave DAI a run for its money.

“The gap in the total supply chain between USDC and DAI widened in 2019, partly due to single-collateral DAI being restrained by 100 million supply cap.USDC supply grew from 261.3 million to 518.5 million in 2019, an increase of +98.4 percent,” while the aggregated SAI+DAI supply increased by only +600.4 percent YoY, from 69.6 million to 111.6 million.

Notably, Kyber Network, an Ethereum-based platform that enables the instant exchange of cryptoassets, was reportedly the most used DeFi project in 2019, attracting a total of 35,570 unique users, followed by Compound, which managed just 21, 424 unique users.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 146.76.

The projected lower bound is: 124.16.

The projected closing price is: 135.46.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.2496. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 49.74. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 23 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 40. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 17 period(s) ago.

Rex Takasugi – TD Profile

FOREX ETH= closed down -1.120 at 135.930. Volume was 55% below average (consolidating) and Bollinger Bands were 35% narrower than normal.

Open     High      Low     Close     Volume___
137.040 138.450 135.820 135.930 26,082
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 135.77 139.30 187.93
Volatility: 46 53 76
Volume: 71,546 66,571 65,727

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX ETH= is currently 27.7% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of ETH= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on ETH= and have had this outlook for the last 4 periods.

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