- Bitcoin, Ethereum, and Ripple are bouncing after digging the bottom.
- The three cryptocurrencies all found significant support and eye upside targets.
- The Confluence Detector shows clusters of technical levels according to their importance.
BTC/USD has a strong base and could run above $7,000
After the big bounce, the price of Bitcoin has established itself above the significant support line of $6,457 which is a dense cluster of lines: the Fibonacci 61.8% one-day, the 4h- high, the 1h-low, the Bolinger Band 15m-Lower, and the Simple Moving Average 10-4h.
This base may allow BTC/USD to attack $6,588 which is the convergence of the Simple Moving Average 50-1h, the 15m-high, the Bolinger Band one-day Lower, the Bolinger Band 1h-Upper, and the Pivot Point one-day Resistance 1.
A run higher may see fewer levels of resistance until the target of $7,056 which is the confluence of the one-month low and the Pivot Point one-day.
Looking down, if $6,457 does not hold, the next cushion is close by. The pair has robust support at $6,379 which is the Pivot Point one-month Support 1, the Bollinger Band 1h-Middle, the Simple Moving Average 5-4h, the SMA 50-15m, and the SMA 100-15m.
This is how it looks:
ETH/USD has limited room to further run
The Ethereum Price does not look as steady as its bigger brother but has also bounced. Initial resistance awaits at $504 which is the confluence of the 1d-high, the Pivot Point one-day Resistance 1, the one-month low, and the Bolinger Band 1h-Middle.
Further above, $524 is a steady level which is the convergence of the Pivot Point one-week Support 3 and the Simple Moving Average 5-one-day.
Support awaits at $483 which is the congestion of the Bollinger Band 15m-Lower, the Fibonacci 61.8%, the Simple Moving Average 10-4h, the SMA 10-1h, and the SMA 50-15m.
The round $450 level awaits ETH/USD way below. This is the meeting point of the one-day high and the Pivot Point one-day Support 1.
Here is how it looks:
XRP/USD finally found its feet
After suffering from no significant support, the price of Ripple.finally found a considerable base at $0.5450. This is the convergence of the one-hour low, the 4h-high, the Bollinger Band 15m-Lower, one-month, and just below, the Simple Moving average 10-4h.
The firm base may allow the pair to move up and challenge $0.5630 which is the confluence of the Bolinger Band 1h-Middle, the one-day high, and the Pivot Point one-day Resistance 1.
The more significant target above is $0.6005 which is the convergence of the Fibonacci 161.8% one-day and the Pivot Point one-week Support 2.
Looking down below the substantial support of $0.5450, the next level awaits at $0.5320 which is the convergence of the Bolinger Band one-day Lower, the BB 1h-Middle, the SMA 5-4h, and the SMA 100-15m.
This is how it looks:
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.
How the Ethereum Foundation Got UNICEF to Embrace Blockchain
Donating to the United Nations Children’s Fund (UNICEF) may turn out to be the Ethereum Foundation’s shrewdest move yet.
“We are still discussing the details on what we can do together, but we have decided to continue support for the next couple of years,” said Ethereum Foundation Director Aya Miyaguchi. “I believe a partnership with a group like UNICEF can maximize our impact without shifting our focus from what we still need to do to improve Ethereum as a technology.”
The foundation donated roughly $150,000 worth of bitcoin and ether the UNICEF’s experimental crypto fund in October 2019. Since then, the UNICEF Kazakhstan office has developed an ethereum-based system for processing internal payments, such as sending funds from the UNICEF headquarters to people running a local education program.
“We can see now clearly it’s operational and it’s great for the organization. So we will continue to work on that,” said UNICEF partnership specialist Oleksandra Gaskevych. “We only have used ethereum so far, for smart contracts. We’re thinking maybe we could test bitcoin as well for digital currency transfers, so we’ll see.”
The Kazakhstan-based team is still putting a few finishing touches on the smart contract platform, because UNICEF budgets require multiple signatures from people with varying degrees of clearance. Today, a significant amount of office paperwork still involves people double-checking expenditures by hand. So this new digital process is much more efficient.
Gaskevych said they expect to be fully transitioned over to the ethereum-based system in 2021.
“We can easily adapt it to other Russian-speaking countries in the region,” she added.
Elsewhere, UNICEF is also partnering with SoftBank Investment Advisers (SBIA) to develop a structure for distributing cryptocurrency. Chris Fabian, co-lead of UNICEF Ventures, said so far the crypto fund is starting slow by funding several startups like Coinsence, a Tunisian token project experimenting with ERC-20 tokens for community currencies.
Coinsence founder Karim Chabrak said more than 200 people in the beach town of Hammamet, with roughly 100,000 residents, participated in a pilot program that is graduating to a fully operational phase this quarter.
“There are communities that have no money and a lot of unemployed youth,” Chabrak said. “Communities need to be able to address that without waiting for governments to act.”
Residents mainly use the token to pay youth for jobs at local restaurants and resorts, then offer them a discount at particular businesses. Chabrak said the goal is to reduce the unemployment rate and encourage productive spending habits. This year, Chabrak said he is establishing a national association with a legal framework to support any other community that wants to issue its own local token.
“We heard about bitcoin in 2010,” Chabrak said. “But we are trying to build currencies that aren’t speculative, that are part of the commons.”
All of these experiments were funded by the Ethereum Foundation, which also acts as a consulting resource but not an official partner like SBIA. For example, Coinsence received 50 ether, most of which was used for pilots and research in late 2019. Likewise, the Argentinian startup Atix Labs received a bitcoin from the Ethereum Foundation’s donation, and developed software tools that Fabian said may be useful for the program in Kazakhstan.
Fabian said last year’s donation from the Ethereum Foundation was “part of a larger agreement with them, that we had to test some of the piping with them first.”
The ethereum community is investing in global outreach through this agreement with UNICEF, even without directly implementing blockchain solutions.
“They’ve made the community available to us for a variety of things,” Fabian said.
This created a ripple effect beyond the donations themselves. For example, Gaskevych said basic materials related to blockchain technology and smart contracts were incorporated into the Kazakhstan office’s digital literacy program for youth, teaching 200 people about ethereum so far. As UNICEF looks to transition its internal system, and find external partners willing to accept ether, the team is focused on training local talent to develop customized solutions for specific needs.
Fabian clarified only a few of UNICEF’s external partners in Kazakhstan are willing to accept cryptocurrency for the services they already provide, like an internet service provider or a construction company.
“That’s fine, we’re not trying to push it,” he said. “It’s not that we are only paying them in crypto, we’re also paying them in fiat so there’s a little bit of hedge.”
Over the next two years, Fabian said UNICEF’s goal is to help schools without internet connections get online by supporting local tech ventures, some of which may choose to run their own cryptocurrency nodes and earn revenue from providing connectivity to people and businesses in the surrounding neighborhoods. That’s how UNICEF aims to make this project sustainable beyond one-off donations.
In addition to the global school initiative, called GIGA, Chabrak said he hopes community currencies in Tunisia will be designed to help nonprofits and universities promote the United Nations’ sustainability goals by incentivizing eco-friendly habits.
To be clear, there’s one main reason ethereum became the most widely used blockchain technology across UNICEF’s global development strategy, which seeks to deploy nearly $45 billion in diverse programs around the world. The reason is the Ethereum Foundation reached out and ponied up.
Even though the donation was a tiny fraction of UNICEF’s related budget, the “agreement” Fabian referenced motivated his fund to set up a compliant system for receiving and distributing cryptocurrency. The fund also accepts bitcoin, but there have been hardly any bitcoin donations so far, Fabian said.
Based on his research in Tunisia, Chabrak said the most challenging part of getting people to use cryptocurrency was inspiring a sense of personal ownership over an asset that isn’t associated with a familiar entity, like the government. That’s why foreign startup tokens, and to some extent bitcoin, have been a harder sell.
“Communities are not so motivated to build an ecosystem around the currency because they don’t identify with the currency and have full control,” he said. “People accept the coins when they know the people that are issuing the coins and they can implement their own governance.”
(The fact such communities don’t see bitcoin as something they can control and influence the governance of may be, in part, a misunderstanding.)
With that in mind, the Ethereum Foundation’s strategy of finding an indirect way to fund blockchain education and entrepreneurship in emerging markets, where other computer science resources are scarce, may eventually set it apart among blockchain projects competing for both market- and mind-share.
“Cryptocurrency is too often seen as a means for investment, but as you know, ethereum is capable of so much more than that,” Miyaguchi said. “Whether with UNICEF or other parties, we are always looking for ways to maximize our impact using the technology that we’re helping to build.”
Exploring the Decentralized Insurance Arena That’s Rising on Ethereum
The Ethereum “world computer” can do, and be extended into, many things, which is why the young but advancing smart contract platform has given rise to various sectors of projects across fields like finance, identity, logistics, collectibles, and games.
When it comes to Ethereum’s decentralized finance arena, or DeFi, insurance in particular is a growing area of note. This isn’t surprising, either: insurance was one of the earliest envisioned use cases for Ethereum, as demonstrated by Vitalik Buterin’s brief description of a crop insurance prototype in the platform’s whitepaper.
But moreso than that, the specter of decentralized insurance has spiked anew in the space as a bad actor has launched two DeFi attacks so far in February, and they apparently remain on the prowl for now.
With the stakes as they are then, let’s touch a little further on those attacks as a jump-off point to explore some of the top insurance projects in the Ethereum ecosystem, namely what they can offer users today and what we might expect going forward.
Flash Loan Predator on the Loose: Are You Covered?
This month, the DeFi lending protocol bZx faced sophisticated, back-to-back assaults against its system.
The first attack involved a dastardly market manipulation exploit that netted the blackhat responsible 1,193 ether (ETH), or some $300,000 USD. The second attack, seemingly by the same blackhat, seemed to be an oracle manipulation incident that saw around 2,388 ETH, or nearly $650,000, stolen.
Both transactions involved flash loans, a powerful new crypto primitive that allows users to take out a DeFi loan and pay it back within a single transaction. This new tool gives nefarious agents the ability to blitz unprepared DeFi platforms by borrowing, manipulating, and then profiting within the span of one Ethereum block.
And while there are defenses that can be taken going forward, the bZx system was unprepared for these novel assaults. The platform’s leadership has charted a course to absorb the blows, but the episode has served as a stark reminder that young DeFi platforms are still vulnerable and thus so are the users’ funds therein.
Notably, a few users actually had purchased bZx insurance policies in place before the attacks, but since the exploits didn’t occur from a hack per se but rather through market manipulation techniques, the question arose as to whether they would pay out. What came next will serve as an interesting early case study for DeFi.
Enter Nexus Mutual
Nexus Mutual is a “people-powered” insurance platform on Ethereum. Holders of the Nexus (NXM) token can decide whether claims should be approved for payout from their collectively-pooled fund.
The Nexus Mutual community ultimately responded to the first bZx attack with nuance. While a general consensus emerged early on that a hack hadn’t occurred and thus there wasn’t a direct obligation to honor claims, some key stakeholders highlighted that Nexus’s assessors had full discretion to consider the incident’s unique circumstances and vote accordingly. These folks made the case that even without direct obligations, the project could earn trust and more users from demonstrating that it’s flexible and can payout in borderline cases.
With that said, Nexus’s assesors approved two of the six claims that were received over the first bZx attack for a collective payout of around $31,000. It was the first time the project paid out to claimants.
“It’s never good that people are losing money because there’s a hack, but we are able to prove that the system works,” Hugh Karp, the founder of Nexus Mutual, commented in the aftermath.
Not Perfect, But It’s Something and Can Grow
An interesting wrinkle to consider with Nexus Mutual is that you can take out an insurance policy through it even if you don’t have any funds at stake in the smart contract you want a policy on.
Right now then, a user simply has to request insurance on a particular contract for a particular duration of time, to which Nexus then offers a quote.
This model has raised some concern, with skeptics saying its vulnerable to exploitation, too. For example, consider if a blackhat was about to launch an attack on a DeFi project. As Nexus currently works, the attacker could take out a policy with the project, launch the exploit, and then reap an insurance payout on top of their illicit profits.
That’s obviously not the most optimal opening to have, though Nexus does employ a basic Know Your Customer (KYC) process that means any abusers would leave some sort of trace. The advantage of this structure is it allows regular users to bet on the health of popular smart contracts, which is useful.
Opyn Insurance Hits the Scene
Another project to watch in Ethereum’s insurance sector is Opyn Insurance.
This month, the effort launched its first offering, which allows users to take out put options on stablecoin deposits on DeFi’s popular Compound Finance dApp. These options can be used to cover losses, or even just simply profit, if Compound was struck by catastrophe.
Similar to how Nexus Mutual works, Opyn users won’t have to demonstrate that they own any of the underlying stablecoin in order to take out an option. Where Opyn differs from Nexus, though, is that it doesn’t similarly require a KYC process.
“You don’t have to prove anything to anyone,” the project’s co-founder Zubin Koticha has commented previously.
Interestingly, Opyn’s oTokens — which are what are used to take out options on Compound’s cTokens — can work like oracles with regard to risk. If the price of an oToken starts to rise quickly, it could mean anticipation of a crisis is growing, which is an alarm in and of itself. They’ll certainly be a wrinkle to watch in the years ahead.
Bigger Picture: Etherisc
Etherisc is also a major insurance project of note, being one of Ethereum’s oldest. Simply put, it’s a decentralized insurance protocol that can be used to build different kinds of insurance products.
For example, the protocol’s builders have designed insured crypto wallet and hurricane protection products. Just this month, the Etherisc team and decentralized oracle play Chainlink unveiled a decentralized flight insurance prototype that can pay out in the event of delayed or missed flights.
“Insurance companies stand to save money on the backend by cutting their overheard for processing claims, as well as improved brand recognition thanks to moving policy arbitration to a neutral third party protocol,” Etherisc explained of the proof of concept.
We’ve only just begun to scratch the service with regard to the types of parametric insurance products — “if this parameter is crossed, pay out” — that can be actualized on Ethereum. Like Vitalik Buterin suggested in the Ethereum whitepaper, crop insurance is but one fertile avenue to explore here.
Another aspect to consider going forward is how decentralized solutions can bring superior transparency to the insurance industry. The on-chain auditing and KYC possibilites of such solutions can help clamp down on claims fraud, not to mention that these tools can be used to automate many related processes.
Accordingly, there’s plenty of room for more insurance projects on Ethereum, though from the examples above it’s clear that there’s already an early groundswell of interesting efforts that are pointing the way to an even more robust DeFi insurance sector in the future.
Ethereum Trades In Short Term Consolidation Phase – Which Direction Will We Break?
- Ethereum saw a decent 7% price increase over the past 7-days, however, it still failed to break the 2020 resistance at $186.
- The cryptocurrency is now moving sideways as it starts to form a short term consolidation pattern.
Ethereum was unable to overcome resistance at $279 during the past 24 hours of trading. The cryptocurrency reversed from here as it drops back beneath $270 to reach $268.50.
Despite the 7% weekly price increase, Ethereuum is starting to trade sideways within a short term symmetrical triangle pattern and will need to break this pattern to dictate the next direction it would be heading.
Ethereum Price Analysis
ETH/USD – Daily CHART – SHORT TERM
Since our last analysis, we can see that ETH bounced higher from the support at $256.20, provided by the short term .236 Fib Retracement, as it started to climb higher. It climbed as high as $278.95, however, it was unable to overcome this resistance and started to fall.Advertisement
We can see that ETH is now forming the making of a short term symmetrical triangle pattern. A break of this pattern will dictate the next direction that ETH will be heading within.
Short term prediction: BULLISH
Ethereum still remains bullish at this time, however, it is in danger of turning neutral if it does break beneath this short term consolidation pattern. It would need to drop beneath $200 for the market to be considered as bearish.
If the sellers push lower, the first level of support is expected at the lower boundary of the symmetrical triangle. Beneath this, additional support lies at $256.20 (.236 Fib Retracement), $250, and $240.
On the other hand, if the bulls push higher, the first level of resistance lies at $279 and the upper boundary of the triangle. Above this, resistance lies at the 2020 high at around $286, $290 (1.272 Fib Extension), and $298 (long term bearish .5 Fibonacci Retracement).
The RSI is falling which is a sign that the bullish momentum is fading. It still remains above the 50 level, however, if it breaks beneath, the bearish momentum will start to gain control over the market.
Support: $256, $250, $247, $240, $235, $230.
Resistance: $278, $285, $290, $298, $300, $310, $314, $334.