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Bitcoin Falls 15% on Inflation Bombshell – eToro Crypto Roundup

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Crypto sinks with stocks as the Fed acknowledges inflation.

Bitcoin has fallen 15% over the last week as the market weighs the impact of big shifts in the crypto ecosystem and broader macro environment.

On Wednesday, Fed chairman Jerome Powell acknowledged rising inflation, and responded by bringing forward the timing of the next interest rate hike to 2023. This spooked stocks and crypto, with the S&P 500 and Bitcoin tumbling together for the remainder of the week.

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Adding to the uncertainty, crypto mining firms are exiting China, and billionaire investor Mark Cuban has fallen victim to a collapsing DeFi protocol. Prices across the market reflect this poor sentiment, and major altcoins, including XRP and Ethereum, are showing double-digit weekly losses.

This week’s highlights
  • Panama and Paraguay look to follow El Salvador
  • China steps up mining crackdown
Panama and Paraguay look to follow El Salvador

As Latin American leaders reflect on Bitcoin adoption in El Salvador, politicians in Panama and Paraguay are already proposing to make cryptocurrency legal tender in their own countries.

In Panama, opposition politician Gabriel Silva wants to make the country “a true hub of technology and entrepreneurship” by adopting Bitcoin with a bill set to be unveiled in July.

Paraguayan congressman Carlitos Rejala plans to present a similar Bitcoin bill, and local companies are already supporting the initiative. The country’s largest entertainment firm Grupo Cinco said last week it will start accepting cryptocurrencies in July.

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China steps up mining crackdown

In what is being dubbed “the great mining migration”, more than half of China’s Bitcoin miners are fleeing the country as officials order mining operations to shut down.

The rise in miners leaving the country comes as recent enforcement efforts extend to Sichuan province, which is thought to be the largest mining hub in China, thanks to an abundant supply of hydroelectricity.

Though the crackdown is creating uncertainty as hashrate falls, many miners are now looking to settle in Western jurisdictions. This is likely to be positive for the network in the long term as it makes mining more decentralized – disarming critics who have pointed towards the centralization of mining in China.

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The week ahead

After four weeks of sideways price action since the crash of mid-May, traders are now eagerly awaiting a breakout to indicate the direction of future momentum.

While mining uncertainty and macroeconomic woes could continue to hold prices down this week, MicroStrategy CEO Michael Saylor might be adding buying pressure. He filed to issue $1 billion worth of shares last Monday to raise funds for more Bitcoin.

On Friday, volatility could come to a head as a record number of Ethereum options contracts are set to expire.

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To the roots of mining: Bitcoin going green faster than ever

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There’s no denying that over the past couple of years, the narrative that Bitcoin (BTC) consumes too much power has continued to garner an increasing amount of mainstream traction. However, what sometimes gets ignored is that in recent months, an increasing number of Bitcoin miners have moved toward the use of power sources driven primarily by renewable energy.

To expound further on the subject, it should be noted that a number of studies, including one that was released recently by Cambridge University, revealed that more than 75% of all miners operating today make use of renewable sources to power their day-to-day operations.

In this regard, MintGreen, a Canada-based cleantech cryptocurrency miner, recently announced that it had entered into an agreement with Lonsdale Energy Corporation to supply heat generated from BTC mining to the residents of North Vancouver in British Columbia by the start of 2022.

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To elaborate on the deal, a spokesperson for MintGreen recently said that the company’s digital boilers are capable of recovering more than 96% of the electricity that it uses for Bitcoin mining purposes. As a result of such a setup, the firm will reportedly be able to prevent 20,000 metric tons of greenhouse gases per megawatt from entering the atmosphere per annum.

Not only that, but MintGreen also claims that the harvested energy can and will be used to provide heat to a total of 100 residential and commercial buildings in a Canadian city, which per recent census data currently houses a population of around 155,000 individuals.

But could this be just the tip of the iceberg when it comes to how the crypto industry can impact the environment in a positive way?

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Renewables as a game-changer

Providing his thoughts on the matter, Colin Sullivan, CEO of MintGreen, said that his company’s partnership with Lonsdale seeks to help mitigate and tackle a number of issues related to climate change that people have tended to associate with various crypto mining activities.

Zach Bradford, CEO of CleanSpark — a sustainable Bitcoin mining and energy technology company — told Cointelegraph that the relationship between energy generation and Bitcoin mining will continue to deepen and expand over the coming decade, adding that there are a lot of stranded energy assets in North America that Bitcoin mining is particularly suited to make use of. He then went on to add:

“There are power plants that are currently too far from large metro areas to be efficient during regular demand. A Bitcoin miner can partner with the community to conserve that energy by using it to mine Bitcoin and send excess energy to other parts of the grid.”

When questioned about the long-term viability of a setup such as the one proposed by MintGreen, he opined that it depends entirely from company to company, stating that there are two scenarios that can be used to expand upon the subject: “In one scenario, Bitcoin miners set up shop where there is excess energy — i.e., where energy is already being lost. Mining takes those stranded electrons and converts them into something useful — ala Bitcoin.” In the second scenario for Bradford, “Bitcoin miners increase the total energy generation in a particular area,” he added.

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And while the latter may result in a “loss” of energy for mining, according to Bradford, there is usually much more total energy available when such a setup is involved. Therefore, in case one’s local power infrastructure needs that extra energy — for heating or cooling homes during peak periods — it is possible for grids to harness this excess electricity in order to satisfy the demand of their users.

Bitcoin’s future is becoming increasingly green

In Bradford’s view, Bitcoin mining is the first meaningful investment in decades that is designed to help bolster North America’s existing energy infrastructure because he believes that Bitcoin not only increases energy consumption across areas where it is being mined but also improves upon that region’s energy generation capabilities, adding:

“This is a key aspect that is sometimes lost in the ideological struggle. North America’s energy consumption is going to grow a lot over the next decade as electric vehicles become more mainstream. In California, EVs are already straining the state’s power grid. California’s present is North America’s future.”

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In this regard, one can see that Bitcoin mining incentivizes energy development and generation, with almost everyone involved — not just miners — standing to gain from this evolution. “We’re in for a wild ride as global climate goals, greater energy demand from electric vehicles and monetary policy all collide with Bitcoin at the center of it,” Bradford closed out by saying.

Similarly, providing his thoughts on the subject, Samir Tabar, chief strategy officer of Bit Digital — a Bitcoin miner listed on the Nasdaq — told Cointelegraph that Bitcoin miners are and were criticized over the environmental toll from mining. However, the reality today is that Bitcoin miners have become the vanguard in showing innovation and creativity in leveraging sustainable practices. “This experiment with North Vancouver is an illustrative example of that ingenuity,” he noted.

Crypto’s walk toward a more sustainable future

Per a report released in December 2020, it is estimated that real estate building operations and their associated construction-related activities currently account for a whopping 38% of all carbon dioxide emissions taking place in urban areas. Therefore, the narrative that crypto mining alone is quickly becoming one of the largest contributors to today’s global warming could be skewed.

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To elaborate further, one study suggests that hydroelectric power is the most common source of energy for miners presently, with a staggering 62% of all mining farm operators reportedly making use of hydroelectricity to facilitate their day-to-day operations — with exhaustible sources such as coal and natural gas taking the second and third spots at 38% and 36%, respectively, followed by wind and solar energy.

Also, with companies like MintGreen now modernizing their mining rigs at an increasingly rapid pace, it stands to reason that more firms and people will look to turn toward various crypto mining operations to meet their power and heating needs in the near future. In fact, MintGreen has already teamed up with the Vancouver Island Sea Salt facility and the Canadian whiskey company Shelter Point Distillery to start selling its excess heat energy by 2022.

As the industry attempts to move closer to a greener future, it appears as though many standards surrounding carbon neutrality are becoming a norm for the crypto mining industry. To put things into perspective, data suggests that gold mining is more resource-exhaustive than BTC. Similarly, it is estimated that flare gas waste can power the entire BTC network 6.2 times over, which just goes to show that crypto miners could turn out to be part of a solution when it comes to wasted energy.

Lastly, as pointed out previously, a growing list of mining firms have adopted strategies that have enabled them to become “climate positive” for Scope 1, 2 and 3 greenhouse gas emissions.

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Ethereum Outperforms Bitcoin, Why ETH Could Rally To New ATH

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Ethereum started a fresh increase above $4,175 against the US Dollar. ETH could gain pace if there is a clear break above $4,300 in the near term.

  • Ethereum was able to climb above the $4,175 and $4,200 resistance levels.
  • The price is now trading above $4,200 and the 100 hourly simple moving average.
  • There is a major rising channel forming with support near $4,175 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could extend its increase if it clears the $4,300 and $4,320 resistance levels.

Ethereum Price Could Rise Further

Ethereum started a fresh increase after it settled above the $4,050 level. ETH was able to clear the $4,750 resistance zone and the 100 hourly simple moving average.

Ether price even traded above the $4,250 resistance zone. A high was formed near $4,313 and the price is now consolidating gains. It traded below the $4,300 level. An immediate support is near the $4,260 level. The stated level is near the 23.6% Fib retracement level of the upward wave from the $4,091 swing low to $4,313 high.

There is also a major rising channel forming with support near $4,175 on the hourly chart of ETH/USD. An immediate resistance on the upside is near the $4,300 level.

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Ethereum Price
Source: ETHUSD on TradingView.com

The next major resistance is near the $4,320 level, above which the price might start a fresh rally. In the stated case, the price might rise towards the $4,400 level. Any more gains could lead the price towards the $4,550 level.

Dips Supported in ETH?

If ethereum fails to continue higher above the $4,300 and $4,320 resistance levels, it could start a fresh downside correction. An initial support on the downside is near the $4,260 level.

The first major support is near the $4,200 level. It is close to the 50% Fib retracement level of the upward wave from the $4,091 swing low to $4,313 high. The main support is near $4,175 and the channel trend line. Any more downsides could lead the price towards the $4,050 support. The next major support for the bulls is near the $4,000 level.

Technical Indicators

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Hourly MACD – The MACD for ETH/USD is gaining pace in the bullish zone.

Hourly RSI – The RSI for ETH/USD is now well above the 50 level.

Major Support Level – $4,175

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Major Resistance Level – $4,320

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Terra prepares to burn more than 9% of LUNA’s total supply

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Burning nearly 90 million LUNA tokens into the community pool can put an upward pressure on the native token’s price.

Do Kwon, co-founder and CEO of Terraform Labs, the South Korean company behind the blockchain project Terra (LUNA), recently announced on Twitter that on-chain voting for project 44’s proposal will begin on Wednesday. ).

The proposal to start burning 88,675,000 LUNA from the community pool to mint 3 – 4 billion UST will reduce the total supply of native token by more than 9%.

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TVL on Earth reached ATH

After the integration of the IBC protocol last week and the launch of Wormhole V2 support for Terra, the total blocked value (TVL) in protocols on the network has reached a new high.

Last week, TVL on Earth reached $10.22 billion, with the Anchor, Lido, Mirror and Terraswap protocols accounting for more than 90% of the amount, according to data from DeFi Llama.

Currently, at US$9.97 billion, Terra is ranked as the fourth blockchain with the largest TVL, following Ethereum, Binance Smart Chain and Solana.

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