Crypto prices gradually receded on initial gains after the minutes from a Fed November meeting revealed a projected slowdown in rate hikes. According to Federal Reserve officials, the apex bank would likely resort to smaller interest rate increases after evaluating the US fiscal landscape. Part of the minutes read:
“A number of participants observed that, as monetary policy approached a stance that was sufficiently restrictive to achieve the Committee’s goals, it would become appropriate to slow the pace of increase in the target range for the federal funds rate.”
Additionally, the document also stated that an overwhelming majority of participants rule that a “slowing in the pace of increase would likely soon be appropriate.”
Crypto Prices Rally Temporarily on Reduced Fed Hikes
The crypto market price level rose before the release of the Federal Open Market Committee (FOMC) minutes. This spike was in anticipation of reduced rate hikes by the US central bank due to tapering inflation. Although the prices of crypto assets inched higher, they pared down to previous levels following the Fed update on rate hikes. At the time the news broke yesterday, Bitcoin (BTC) was trading around 5.5% higher at $16,500. The total crypto market cap stood at $781 billion.
Observers in the crypto marketplace widely expected the FOMC to dial down to a 0.5 percentage point increase in December. Such anticipation comes after the fiscal group previously embarked on four straight 0.75 percentage point hikes throughout the year. At the meeting from November 1st to 2nd, the committee agreed that the Fed should cut back on rate hikes. Some officials also expressed concern over how incessant steep rate increases could impact the economy and financial stability.
Markets Ascertain How Far Fed will Go to Contain Inflation Successfully
Market observers were also searching for clues on the extent policymakers may have to go in 2023 to contain inflation continually. The observers expect a few more rate hikes next year, followed by likely reductions as 2023 winds down.
FOMC officials also stated that the public needs to focus on its likely rates trajectory rather than the pace of further increases within the “target range”. However, as it stands, policymakers also believe that the projected smaller hikes would afford a chance for evaluations before subsequent deliberations in December. Such evaluations include examining the impact of the rate hikes succession and the economy’s overall health so far.
Although Fed officials share the consensus sentiment that inflation may be decreasing, they still preach caution. For instance, last week, St. Louis Federal Reserve President James Bullard stated that the central bank still has work to rein in inflation. Explaining that rate hikes have had only a limited effect on inflation, the FOMC voting member explained:
“Thus far, the change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023.”
Shiba Inu Observes Highest Rise In Burn Rate – Is This Normal?
SHIB token burn rates are seemingly rising on the Shiba Inu network. The current number of Shiba Inu burn trackers is quite surprising. However, data shows it is due to the degenerative performance of the SHIB burning machine.
On-chain data shows that the SHIB burn rate observed a massive 1682.07% increase over the past 24 hours. That is the highest percentage rise in the burn rate on the SHIB network in the past few months.
Why Is SHIB Burn Rate Increasing?
In detail, the number of burnt tokens on the Shiba Inu network did not exceed 1 million SHIB on January 26. Yesterday’s amount was one of the lowest numbers of assets developers has burned on the network. So, the seeming spike in burn rate could be due to a default in the SHIB burning machine yesterday.
According to analysts, this percentage spike wasn’t triggered by increased network activity. Also, it didn’t represent a large number of actually burnt tokens.
Token burns help to reduce the number of coins in circulation. It helps increase an asset’s scarcity and possibly boost the token’s price when increased supply pushes it down.
For instance, on January 17, the SHIB token burn surged by 613% within 24 hours, and the coin broke the bearish traders’ expectations, rising above 20% on the day. However, a surge in price did not accompany the recent rise in the token burn rate.
Also, some SHIB whale activities indicate that top investors have lost faith in the meme coin as many whales keep moving chunks of Shiba Inu positions on exchanges.
— Whale Alert (@whale_alert) January 26, 2023
This could mean that short-term traders don’t believe the asset couldn’t rise above the resistance level, helping them earn profit.
New SHIB Whales Emerge – What’s Next?
While some whales sell off their tokens, a new address is buying the dip, accumulating large amounts of SHIB tokens, and maybe awaiting the next bull market. Data shows that a new crypto wallet became a Shiba Inu whale address on Thursday, January 26, 2022.
The new wallet became a whale address after receiving 3.3 billion SHIB worth about $38.9 million. Etherscan revealed that the sending address moved funds from different wallets before transferring the tokens to the receiver, now the newest SHIB whale. This move further confirms our suspicion that smaller investors are giving up their positions.
According to the blockchain whale tracker, Whale Alert, the wallet also received 1 billion PAW tokens a few minutes after sweeping the SHIB token. With the current balance, the new whale is now the world’s 30th-largest SHIB holder.
This recent accumulation came after the world’s 26th-largest SHIB holder swept 150 billion tokens into its wallet. The token sweep occurred through four transaction clusters within three hours on January 23.
So while short-term investors might be selling their positions due to falling SHIB prices, some could be accumulating in anticipation of future gains from the upcoming Shibarium launch.
Shiba Inu is currently trading at $0.00001188 with a 24-hour increase of 1.28% and a 7-day price surge of 0.2%. In addition, the meme coin has seen a 14-day price surge of 22.1% and a 30-day rally of 41.4%.
Featured Image From Pixabay Kevin_Y, Chart From Tradingview
AAVE Seeks Proposal To Clear Itself Of Bad Debt – Can It Overcome These Obstacles?
The lending platform AAVE has been enjoying positive news lately. According to reports, AAVE has passed a governance proposal that would eradicate all bad debt it accumulated when Avraham Eisenberg, orchestrator of the Mango Markets exploit, targeted the platform’s Ethereum V2 liquidity pool back in November 2022.
However, the governance token of the platform, AAVE, has not responded either positively or negatively. According to data from CoinGecko, the token registered losses in the daily and weekly time frames. But these losses are too miniscule to revert the token’s gains from the start of the year.
With the launch of AAVE’s V3 on its mainnet, the crypto might be in a position to tally new highs if the situation permits it.
The Gist Of The Proposal & On-Chain Developments
Based on the proposal, the token has over 2,677,749 units of CRV in debt on its Ethereum V2 CRV reserve. This is worth, at the date of the proposal, over $2.5 million. The proposal would use V2’s stablecoin reserve to buy the necessary number of units of CRV to pay the debt.
This obviously was accepted by the community positively, being implemented immediately by January 25th. This would reverse the damage of the exploit attempt, proving the liquidity of the protocol.
The deployment of AAVE’s V3 on Ethereum was also implemented. According to DefiLlama, the crypto is in the top 4 among all platforms. AAVE V3, the Ethereum pool deployment, has over $526.52 million total value locked.
At $86.02, What’s In Store For AAVE?
The token is currently consolidating around the $85.8 support range. This could be a sign that the token still has room to regain lost ground from 2022’s bear market. However, this can only be achieved if the token closes with a green candle to continue AAVE’s rally when the year started.
Investors and traders should target the token’s current resistance at $90.15. If the bulls can consolidate at the token’s present support, we can see an upward push towards $94.70.
Investors should also monitor the token’s correlation with Bitcoin and Ethereum as these would have a big influence on its price movement in the short to medium term.
As these major cryptocurrencies retest their crucial resistances, a breakthrough by either one or both of these coins would boost AAVE’s momentum to regain lost ground.
With this in mind, investors and traders should exercise caution in the short to medium term as the token can still be clawed by the bears to revert back to $78.65.
Featured image by Kanalcoin.com
Litecoin (LTC) Displays Consolidation – Can We Expect A Reversal Soon?
The Litecoin price has shown considerable recovery ever since it reached its bottom in December 2022. LTC secured almost 50% appreciation in January this year. Currently, however, the altcoin has witnessed a price pullback and is consolidating on its daily chart.
Over the last 24 hours, the Litecoin price moved down by 0.3%, which signified a range-bound movement. The altcoin also lost close to 3% of its market value. The technical outlook of Litecoin pointed towards bullish momentum as demand for the altcoin remained high on the daily chart.
Accumulation also reflected the same. Price noted a decline as LTC receded from the overbought zone. Buyers still have the upper hand on the chart.
A continued fall in accumulation will cause bears to secure Litecoin’s price action. That momentum would continue for the upcoming week, causing LTC to fall below its nearest support level. At the time of writing, LTC was trading 78% below its all-time high set in 2021.
Litecoin Price Analysis: One-Day Chart
LTC was trading at $88.11 at the time of writing. The coin has pierced through several resistance lines over the past several weeks but has failed to hold on to the momentum. LTC met with two rigid resistance levels before it started to move south again.
The two important resistance lines for the coin stood at $90 and $92. Immediate resistance stood at $90. If demand for the altcoin remains steady, then LTC might attempt to breach the $90 price mark.
On the flipside, the nearest support line for the Litecoin price stood at $86, and a continued price correction will force LTC to fall below the $86 price mark and settle at $82. The amount of LTC traded in the last session was red, indicating a fall in buyers.
The altcoin has been hovering in the overbought region for several weeks now, and at the moment there is a slight fall in demand for Litecoin. The Relative Strength Index stood a little below the 60-mark after it noted a recent downtick indicating that demand was shrinking.
A reading close to the 60-mark, however, signifies that buyers outnumbered sellers. In accordance with that, LTC price shot past the 20-Simple Moving Average (SMA) line as buyers were driving the price momentum in the market.
The coin was also above the 50-SMA (yellow) and 200-SMA (green) lines, indicating increased bullishness.
Concerning the fall in buying pressure, the LTC chart displayed a sell signal on the one-day chart. The Moving Average Convergence Divergence (MACD), which depicts market momentum, underwent a bearish crossover and formed red signal bars tied to sell signals.
This could also imply that the price will fall in the coming trading sessions. The Parabolic SAR, the indicator that reads the trend and change in price momentum, was still positive. The dotted lines were below the candlesticks, suggesting that the LTC price was still positive.
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