Welcome to CoinJar’s Three Ts. Every two weeks we explore big themes, interesting trades and good old technical analysis (Courtesy: Carl Capolingua Thinkmarkets Australia).
bridge to ruin
Luckily for crypto bridges, the massive implosion of the DeFi lending space has distracted them from their own very bad year.
The Nomad bridge, which was touted last week as enabling “fundamentally cheap cross-chain communication,” will allow regular upgrades to allow attackers to replay and complete transactions on their own ETH addresses. It caused the first large-scale looting incident in the cryptocurrency world when it opened a vulnerability to Cue all the frenzy as regular users with no hacking experience started cashing out other people’s money.
$190 million has since been paid out, yet another superlative example of how badly the current bridges between cryptocurrencies are. According to Chainalysis, 13 different bridges have been hacked so far this year, with more than US$2 billion stolen. Chainalysis ranks depositing money on a crypto bridge as slightly less risky than throwing money off a literal bridge.
All of these bridge hacks are due to implementation errors, smart contract/software bugs, or multisig compromise. While rollups are also susceptible to all of this, they add a lot of complexity and potentially more payouts due to more TVL.
— Seq ? (@CryptoSeq) August 2, 2022
Everyone is convinced that cross-chain bridges are the way of the future and the only way for cryptocurrencies to reach mainstream use. But now it feels like he’s trying to do a BMX triple backflip before walking. Perhaps we should focus on how to prepare the blockchain we actually have for prime time before adding layers of super-hackable complexity and financial abstraction to the system.
And if you don’t take my word for it, there’s Vitalik’s warning about the $2 billion bridge seven months ago.
My argument for why the future will be *multi-chain* is not *cross-chain*. The security of bridges that span multiple “sovereignty zones” has fundamental limitations. From https://t.co/3g1GUvuA3A: pic.twitter.com/tEYz8vb59b
—vitalik.eth (@VitalikButerin) January 7, 2022
DeFi yield problem
As the ridiculous extent of the CeFi collapse comes into focus, this interview with the disgraced founder of 3 Arrows Capital really shows just how stupid everyone has been. similar. DeFi protocols won’t break billions of dollars. People destroy billions of dollars.
Yes, established DeFi protocols (Compound, Aave, Curve, etc.) continue what they have been doing for the past few years without interruption. A lot of pain and discomfort could have been avoided if I had stuck to the “simple” option.
But now these DeFi protocols face their own problems. While the worst of winter passes, people look for safe havens to park their stables and tokens, but the returns have been, well, disastrous. Stablecoin APY is 1.48%.
The reason for these low returns is in many ways directly due to the CeFi meltdown, but more coins are pouring into these protocols and no one is borrowing because the market is terrible. It is certainly not ideal that these rates are significantly lower than the reserve. Bank’s current cash rate.
Low returns and high risk profile? Sign up!
So you want trading ideas? Open a fixed deposit with Commonwealth Bank. They are paying 3%!
What does hope look like?
Well, it’s been a while, but we finally have some encrypted TA that doesn’t look like a pile of garbage that’s been set on fire and covered with even bigger piles of garbage.
Bitcoin, in the words of a technical analyst Carl Capolingua “Do your best to look half decent”: a series of higher peaks and valleys, a short-term ribbon turn, and a majority of green candles. It remains trapped in the lower band range around $17.3k until it breaks above $25.3k.
Ethereum, on the other hand, shows some real quirkiness. Similar to Bitcoin, it has been making higher highs and lowers, and the short-term ribbon is headed in the right direction.However, unlike BTC, ETH has breached his $1,700 primary his supply zone. , and keep it there. We appreciate the consolidation, but expect to see more resistance as we approach the long-term trend ribbon at $2,000. Things start to get worse when the price starts to drop below he US$1,559.
When BTC and ETH move, it’s usually time for the alts to shine and Capolingua sees many green shoots pouring in. Specifically ATOM, BAT, DOT, FLOW, FTT, GRT, NEAR, RVN, UNI, WOO, and XDC. .
Near Protocol is his selection of bundles with consistent green candlesticks and steep short-term ribbons indicating solid demand building from lows. If the momentum continues, the first stop will be the $7 zone. If you show your strength there, US$13 could be on the agenda.
Still, let’s not get ahead of ourselves. Level by level is the name of the game. Things calm down once he closes below $4.02.
coin jar It is Australia’s longest-running crypto exchange. Since 2013, CoinJar has helped over half a million Australians buy and sell billions of dollars in cryptocurrencies.
FX evolution Australia’s premier forex, stocks and crypto trading community.