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The Impact of Structured Finance on the Ghanaian Financial Services Industry in the Next 10 Years

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A Company can issue bonds to investors secured on the future profits expected to arise from part of its existing life business.

When a pool of financial assets (such as car finance, home or commercial mortgages, corporate loans,royalties, leases, non-performing receivables, and contractually pledged operating revenues) are structured and transferred to a ‘special purpose vehicle or entity'(SPV or SPE) it is known as a Securitisation transaction.

Generally, most securitisation transactions involve a two tier transaction in which the originator of the assets to be securitised transfers such assets to a wholly-owned SPV.In turn the SPV transfers or pledges such assets to another entity, which issues rated securities in the capital markets that are collaterised by such assets. This second tier entity can be another SPV or a multi-seller commercial paper conduit and can provide funding by issuing medium term notes or commercial paper.

Types of Securitisation transaction

Usually with securitisation transactions, the transfer of rights to assets can take one of two main forms, true sale or synthetic securitisation.

1. True Sale securitisation

In a true Sale securitisation, the originator (for instance a bank selling mortgages) sells the assets to the Issuer. the assets are serviced by the servicer who happens to be the Originator, with respect to say the mortgages sold to the Issuer(i.e.) and the originator continues to collect the principal and interest from the borrowers on behalf of the issuer on such mortgages and see to all default mortgages as well.

The significance of true sale is that the first-tier sale of the assets from the originator to the SPV is structured as a “true sale” such that the assets are removed from the originator’s bankruptcy or insolvency estate and cannot be recaptured by any trustee. Thus, the issuers are usually incorporated as insolvency remote entities; and may not engage into any transactions other than those necessary to effect the securitisation what is known as “limited purpose-concept” by which virtue the SPV will not be allowed to issue any additional debt or enter into mergers or similar transaction.

The transactions can be conducted as conduit, whereby the purchaser purchases and securitises assets from a number of different originators. This is done by through refinancing by issuing commercial paper into the capital market. Banks usually engage in conduits by arranging securitisation for their clients, or standalone where the purchaser only purchases assets and issues as asset-backed securities in the context of a single securitisation transaction. No commercial paper is issued.

It must be said here that, the legal characteristics and economic substance of the transfer will be the primary determining factors as whether the transaction is a true sale not a loan.

2. Synthetic Securitisation

In a synthetic securitisation transaction the originator does not sell any assets to the Issuer and therefore does not obtain any funding or liquidity under the transaction. The originator enters into a credit swap with the issuer in respect of an asset or pool of assets, transferring the originator’s risk to the issuers. Under this contract, the issuer pays the originator an amount equal to any credit losses suffered in respect of such assets or pool of assets. The Issuer’s (SPV) income streams in a synthetic transactions are the fixed amounts paid by the Originator under the credit default swap and interest amounts received on the collateral. These transactions are typically undertaken to transfer credit risk and to reduce regulatory capital requirements.

3. “Whole-Business” Securitisation

Apart from the main two forms above,” whole business” securitisation is sometimes used to finance a stake in private or management buy out of the Originator.

This type of securitisation originated in the United Kingdom. It involves the provision of a secured loan from an SPV to the relevant Originator. The SPV issues bonds into the capital markets and lends the proceeds to the Originator. The Originator services its obligations under the loan through the profits generated by its business. The Originator grants security over most of its assets in favour of the investors. In terms of cash flow, there are three most common types of securitisation transactions:

Collaterised Debt- this is similar to traditional asset-based borrowing. The debt instrument need not match the cash flow configure ration of any of the assets pledged.

Pass-Through-this is the simplest way to securitise assets with a regular cash flow, by selling participation in the pool of assets i.e. an ownership interest in the underlying assets so that principal and interest in the underlying assets collected are given to the security holders;

Pay-Through debt instrument-this is borrowing instrument and not participation. Investors in a pay-through bond are not direct owners of the underlying assets but simply investors.

One significant thing with SPV is that unlike with ordinary operating companies, whose charters typically provide for maximum flexibility, the charters of SPVs provide for the entity to have only those powers that are necessary to accomplish the purpose of the securitisation transaction. Thus the SPV in a securitisation will have the power only to purchase the particular receivables contemplated by the transaction, issue the related capital market securities, and make the payments on them and so on.

The reason for these restrictions is thought to keep the risks of the SPV’s own bankruptcy as narrow as possible: the smaller the range of the entity’s activities, the smaller the risk of a bankruptcy.

Securitisation is based on the underlying assets being securitised. Rating agencies spend a lot of time to estimate the credit risk for all underlying assets in Securitisation transaction. Other risks considered is the prepayment risk.-the risk that a portion of the assets in the underlying pool may be repaid early. Payments and settlements in Ghana are considered to be good. Prepayments can reduce the weighted average life of the pool and as a result expose investors to considerable uncertainty over future cash flows.This can be mitigated by separating the payment of the principal and interest or the conversion of fixed rate returns to floating rate.

Third Party Risk

Collateral is not the only important factor in structured finance transaction. A servicer risk would be particularly strong in Ghana. This is the case that the collection of payments, distribution to investors and performance tracking will fail. Because in Ghana credit rating is not popular.

In a Securitisation or structured finance transaction, a lot of third parties are involved who must fulfill their various responsibilities to make the transaction go on successfully .”Time is money”, it is said. Other third party risks include trustee managing succession of servicing in case of servicer default, notifying investors and rating agencies of breaches and defaults, and holding cash payments to prevent servicer misuse of cash flows; manager responsible to balance the competing interest within a transaction.

Financial Risks (Interest Rate Risks, Foreign Exchange Rate Risks, Devaluation Risk)

Financial risks usually cover interest rates, foreign exchange rate & availability, currency and inflation risks. Inflation really affects the originator in a Securitisation transaction for reasons like raising the cost of the transaction which can delay its completion. Some governments are also sceptical about foreign investment in their country and sometimes prevent the repatriation of funds by foreigners outside. Devaluation and interest rate just like inflation can also affect Securitisation negatively especially when provision has not been made in the transaction deal for that. Russia is a good example. International funds are often cheaper than local ones, but given the fact that the payment to receivables is sold locally, and paid in local currency, using foreign loans creates exposure to the risk of currency depreciation.

Political Risk

Because cross-border transactions are conducted such that assets generate cash flows in the domestic currency while the securities backed by those assets are denominated in foreign currency, there is the risk that regardless of the credit strength of the underlying assets, the issuer might default on the payment. The following relevant known political risks are identified:

Expropriation risk:

The act of taking something from its owner for public use. This involves the act where a government takes over assets or accounts of local parties in the event of financial crisis.

Nationalisation:

Transfer of business from private to state ownership. This is not usually experienced in the West as in South America and Africa. In relation to Ghana’s political situation, this is not envisaged.

Convertibility risk:

This is the risk that in a national crisis, the government might impose a moratorium on all foreign currency debts because of a financial crisis in the country.

Change of law:

The ruling government can change the laws overnight and this can affect a structured finance. Sometimes for economic and political reasons, tax laws are enacted which might not be to the advantage of the originator in terms of the cost increase to certain elements which could increase the purchase price of the product on completion and can jeopardise the securitisation transaction which must be made cheaper if it is to succeed. For example an increase in the fuel tax can affect the entire transaction because tax neutrality is paramount to securitisation transaction.

Legal & Documentation Risks

Following change of law in political risk discussed above, possible legal risks to a Securitisation transaction include inadequate legal, legislative, and regulatory framework on tax, financial and money market & securities. Sometimes the case and administrative laws in the country concerned are not developed. These issues are of great concern to investors and for that matter the originator will have to deal with this risk.

In asset-backed securities(ABS),however, the legal and documentation risks include uncertainty surrounding the transfer of assets from the seller/originator to the SPV (i.e. ‘true sale’) the need to ensure that holders of ABS receive full control over the underlying assets; the bankruptcy remoteness of the issuing SPV.

This means reviewing all the covenants in relation to the separation of the SPV from the seller; the legal roles of the trustee and servicer across all relevant jurisdiction including Ghana to curtail operational and execution risks associated with the payment and receipts of transactions.

Because of the changes in deal structures and considering the legal and financial framework of Ghana, legal and documentation risk will be very high.

Regulatory Risk

The risk that originators and other lenders will not be treated fairly. There should be a laid down regulation on profit-sharing, regulations on the rated instruments and most importantly what structure should the SPV that issues the securities be.

Liability Structure Risk

This risk is the issues associated in which with the tranching or slicing of securities brings conflicting interests which if not checked may disrupt the appropriate distribution of receivables to end-investors. The key to structured finance transaction is the payment waterfall which set the covenants for paying the interests and principal and allocation of losses among investors. This can be sorted with over-collateralisaton tests which ensure the existence of sufficient collateral in the underlying pool of assets to cover principal payments; and interest coverage test to ensure that there are sufficient interest proceeds to cover interest payments to note holders.

Levels of Risks

Rating agencies usually would have to assess the totality of the risks envisaged in each transaction before assigning a rating to the security. Thus the potential for any shortfalls in receivables and the adequacy of any credit enhancement to ensure that the end-investors are assigned the right level of default risk. Cross-border transactions for example require specific analysis regarding the potential limit that could apply to the rating of the notes because of the potential default of a government and the possible application of a moratorium by a government in times of crisis.

Benefits of Securitisation

The use of Securitisation is not limited to one specific asset or income flow. The application stretches beyond the existing bank-funding products and equity funding arrangements. The challenge is the approach with which a Securitisation is considered and the ability to measure the impact thereof on the future of the business. This stems from the fact that Securitisation is cash flow driven and not earnings-improvement driven.

Generally, securitisation can offer the following benefits and we would later analyse to see whether or not it would benefit Ghana.

Efficient access to capital markets: when transactions are for example structured with credit ratings by a recognised credit rating agency on most debts, pricing is not tied to the credit rating of the originator. This is very significant if the originator is not credit worthy.

Limitation on issuer-specific’s ability to raise capital is reduced: securitisations can minimise an entity’s inability to raise capital because capital raised under securitisation becomes a function of the terms, credit quality or rating, prepayment assumptions and prevailing market conditions.

Illiquid assets are converted to cash: Securitisation makes it easier to combine assets which otherwise could not be sold on their own, to create a diversified collateral pool against which debt can be issued.

Raise capital to generate additional assets: capital can quickly be raised such as releasing long-term capital for any allowable purposes like completing capital project and purchasing additional assets.

Match assets and liabilities to minimise risks: a well-structured securitisation transaction could create near perfect matching of term and cash flow locking in an interest rate spread between that earned on the assets and that paid on the debt. This means that Ghanaian business entities can raise enough funds without necessarily providing collateral for security because of the transfer of risk.

Raise capital without prospectus-type disclosure: A conduit securitisation transaction allows one to raise capital without disclosure of sensitive information of any sort; in fact information is kept confidential.

Complete mergers and acquisitions, & divestitures more efficiently: Assets can be combined or divested efficiently under Securitisation transaction. By dividing assets into smaller parts against which debt is issued it can become possible to do away with other business entities which are no longer profitable.

Transfer risk to third parties: Financial risk on loans and other contractual obligations by customers can be partially transferred to investors under securitisations.

More funding beyond bank lending: A structured Securitisation transaction enables the originator to raise funding while maintaining the right to the profit on the receivables. However, these funds will not be linked to its credit rating but rather the credit rating is on the special purpose entity created for the Securitisation transaction. By incorporating an offshore SPE, many businesses in Ghana with poor credit rating might potentially raise funds for any purpose.

The overall effect of securitisation of bank loans and credit aggregates is likely to be a reduction in the level of credit extension by the monetary sector and a reduction of similar magnitude in the M3 money supply. This is to say that the banking sector closes its balance sheet by setting off some loans against some M3 deposits.However,the original borrowers still have obligations but to the SPV not a bank and institutional investors still own assets which are now tradable securities not M3 deposits.

Structure of Ghana’s Financial System

The financial system comprises of

1. Bank of Ghana

I. Savings and loans bank

II. Discount houses

III. Finance houses

IV. Leasing companies

V. Forex Bureaux

2. Securities and Exchange Commission

I. Stock Exchange

II. Brokerage firms

III. Investment Management companies

IV. Trustees and Custodians

3. National Insurance Commission

I. insurance Companies

II. insurance Brokers

III. reinsurance Companies

The banking system in Ghana is structured to serve the needs of all citizens as much as possible. At the end of 2005,the banking industry was made up of Merchant banks, Universal banks, Commercial banks, development Banks,ARB Apex banks, and Rural Banks; with a total growth of its assets by 17.62%.

The Non-Banking Financial institutions (NBFI) sector is made up of Savings and Loans Companies, Discount Houses, Finance Companies and Leasing Companies. Total assets for the Non-Banking Financial Institutions also grew by 47.98% which were mainly triggered by loans and advances, investments, other assets and fixed assets. The Discount houses hold 82.61% of the overall total investments of the NBFI sector.

The new Banking Law, Act 673, which became operational in 2005 with its higher Capital Adequacy Ratio requirements, new sanctions regime, as well as higher governance standards ensured that banks remained generally compliant with regulatory and prudential requirements.

The Securities Market in Ghana

African stock exchanges face a number of challenges before they could enter a new phase of rapid growth. The most critical issue is to eliminate existing impediments to institutional developments. These include a wider dissemination of information in these markets, the implementation of robust electronic trading systems and the adoption of central depository systems. Ghana has since established a central depository system in November, 2004.

The Ghana securities market is regulated by the SEC. The Ghana Stock Exchange is underdeveloped with reference to exchanges in US, Europe and even South Africa. South Africa for example has market capitalisation of $180 billion, one of the largest in the world with Ghana’s market capitalisation of $11 billion.

Considering that Ghana has had just one Securitisation transaction -structured finance-with no records for research, and the position of Ghana’s macro-economic situation, it was found expedient to look at the Securitisation transaction in South Africa. Even though Securitisation transaction is still at an early stage of development in South Africa, it has grown rapidly in recent years and it would be a suitable “benchmark” after which to carve Ghana’s Securitisation transaction.

According to the available information, the first Securitisation in South Africa was aimed at mortgage Securitisation; developments were very slow over the 11 years. Then in 1992 Securitisation was applied to corporate equipment rentals and leases up until 1997 through 2000s with Securitisation on trade receivables, properties, future rebate flows, future cross-border flows and CLOs.

South Africa’s motive for Securitisation transaction was to benefit from more efficient financing and profit maximisation; improved balance sheet structure and finance ratios; improved risk management; and lower economic and regulatory capital requirements among others.

Although the Securitisation transaction is still in its infancy in south Africa, available records show that issuance involving domestic banks in South Africa (i.e. private banks) has increased from R250 million in 1989 to a whopping R26 billion by the end of October 2005. Based on a recent study conducted on the UK market which suggests that Securitisation provides investors the opportunity to attain a higher after tax return in comparison with after tax returns being generated by equity related property investment , Securitisation in South Africa is being applied as an acquisition tool in acquiring properties and as a portfolio optimisation and value unleashing tool.

Securitisation regulations in South Africa compares to international Regulatory Practices similar to those in the United States of America and regulate the manner with which Securitisation assets and income flows are transferred from the originator to the SPV and operational aspects and efficiencies of the SPV.

Different opinions exist in the South African market regarding conformity to Securitisation regulation. One centres on the use of specific words “Bank or deposit-taking Institution” that only South African banks can originate a securitisation.The other opinion is on non-conformity as appropriate if a company or business other than a bank originates a Securitisation.

The onus of the matter is that Securitisation transaction is also designated within the regulation as an activity which is not limited to the business of a bank under certain conditions; thus allowing companies other than a bank to embark on Securitisation transaction.

The Ghana Securities Exchange Commission’s annual report for 2004 does not mince words about the position of the Ghana Securities market. It reported that “despite the modest decline in index performance in percentage terms, the GSE still maintained its position as one of the best performing stock exchanges in the world in 2004 for the second time running.” Market capitalisation of listed Companies on the Ghana Stock Exchange increased by 84.90 trillion cedis to 97.61 trillion cedis from just 12.6 trillion cedis.In dollar terms, market capitalisation went up by 654.0% from US$1.43 billion at the beginning of 2004 to US$10.8 billion at the end of 2004.

Unlike the stock market, the bond market in 2004 was relatively low posing “a serious market development challenge to the commission”. The turnover value of listed corporate bonds in 2004 declined from US$606,600 in 2003 to US$73,414 a decline of 87% whilst government bonds also declined by 71%.The value of listed corporate bonds in 2004 was US$6.79 million compared to US8.98 million in 2003.

The corporate bond market remained relatively quiet. However, the US dollar denominated corporate bonds traded on the market increased by $41,783 to $115,200.

The government of Ghana is determined to use municipal, corporate, government and agency bonds to improve activity in the primary market. As a result of that, the Bank increased accountability and transparency in line with International Financial reporting Standards (IFRS) best practices in its financial reporting and disclosures in 2005.

Coupled with this, other relevant Government policies were strengthened to reinvigorate revenue collections and consolidate public expenditure aimed at reducing the domestic debt in relation to GDP .As a result of that the government started a programme of reducing domestic debt in relation to GDP to enable the private sector access credit and lead the growth process.

The significance of Bank of Ghana in the financial system is that the bank is the provider of technical support for the legal and regulatory reform of the financial system to minimise risks and ensure legal certainty especially for electronic transactions; and also monitor various financial laws at different stages of development.

There is no doubt that people learn from experiences of others so do nations about the successes and failures of other nations especially with regard to something new and complex like the concept of Securitisation transaction. It is recommended that Securitisation in Ghana is modeled on the experience of South Africa’s Securitisation transactions with some changes in the legislations to fit the situation in Ghana.

Ghana’s private sector is beset with many constraints for no doubt, however, the other side is that, there are so many opportunities either untapped or unidentified comparative as well as other natural and mineral resources already in large quantities. There is potential for more effective exploitation of these endowments. But continued reliance on a few commodities with low prices and wages subject to fierce international competition in slow global markets have left the country vulnerable to hardship. These products could be structured and securitised.

Training of players of Securitisation transactions like, the originator, servicer, legal advisers, accounting adviser, tax advisers and others must be continuous about the technicalities of Securitisation transaction from now till the take-off. There should not be any mediocrity as is the characteristics of government and government agencies.

Investors and potential originators must also be educated on the benefits of Securitisation as an alternative for traditional capital formation besides equity and debt which is common to the Ghanaian business community. Providing better understanding of, cash flow drivers behind Securitisation transactions, credit rating agencies and also credit enhancement issues. This would trigger a strong desire for this form of capital formation to put Ghanaian businesses in the race to compete favourably on the international scene.

The technicalities of grasping the intrinsic techniques of properly analysing the segregation of assets and income flows from the company that owns them to the SPV which is meant to control the assets for the benefit of investors, must be well understood by the investment community.

A lack of genuine understanding of the drivers behind a Securitisation transaction, the ability to measure the impact on future operations as well as the initial costs involved in Securitisation creates difficulty in clearly defining the true incentives for conducting Securitisation amongst South African companies. Thus a comprehensive understanding of such amongst Ghanaian companies will boost Securitisation transaction.

One issue that needs to be tackled very well is the Tax Laws to make the Securitisation transaction work. Ghana operates a free-zone scheme and this can be extended to encourage Securitisation transaction. Certain areas within the country could be assigned as ‘free zone for Securitisation’and ‘use as tax haven’ to nurture and groom Securitisation in Ghana.

The regulatory environment through which Securitisation is conducted, coupled with capital market infrastructure to support adequate pricing of all risks associated with all forms of Securitisation transaction-conduit, synthetic or “whole-business”.

Finally, it is recommended that, research into the legal framework on bankruptcy, tax, and commercial laws relating to structured finance and Securitisation in particular should be encouraged among the Ghanaian academia.

Ghana indeed has an enabling environment suitable for Securitisation transaction. Key issues to drive this on might include as mentioned above extension of existing laws like Tax, Bankruptcy and commercial Laws to include treatment of Securitisation transaction.

Ghanaians are strong-willed, forceful and patient. When the expertise is acquired for Securitisation with the training of the players above, good governance of the other key government policies like MIDR and Strategy for 2004-2008‎, improvement on the Ghana School Financing activity‎ they will serve as catalyst for Securitisation.

Considering the experience of South Africa over the past decade, the experience of the developed economies in Securitisation transaction and the macroeconomic and the investment climate continue to improve as it is now ,in the next 10 years, Ghana will not be too farther away from engaging in Securitisation transaction if not already there.

Reference:

1. ‘Securitisation in South Africa-a revolution for local funding’, by Bagley et al(2003) Fitch Ratings available online accessed 20/07/2007

2. ‘Securitisation: A public tool?’ Treasury working paper, by Davis,N ,available online treasury.govt.nz/workingpapers/ accessed on 20/07/2007

3. ‘Securitization.’Wikipedia, the free encyclopaedia. Reference.com accessed 25 Feb. 2007.

4. “Consider Securitisation to improve liquidity in the South African property market” by Eugene G van den Berg, accessed on vinodkothari.com accessed on 04/08/07

5. “Note on the impact of securitisation transaction on credit extension by banks” in Quarterly Bulletin December 2005 by N. Gumata and J .Mokoena

6. “The awakening of securitisation in south Africa”, by Van Vuuren online available vinodkothari.com/secafric.htm

7. Africa -Ghana organising in the informal sector(on line) Available from oecd.org/dataoecd/html (accessed 29th April 2006)

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How is Solana (SOL) Price Grappling with Bearish Crypto Market? Right Time to Buy the Dip?

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Solana Price Analysis : SOL Price is Above Crucial Support level ! Where it Heads Next ?

The crypto market cap is down by $150 billion, total liquidations are more than $800 million in 24 hours, as bitcoin dropped below $45,000. Major altcoins like Ethereum, Cardano, Ripple, Solana and more are plunging double-digits.

The most trending altcoin Solana is the most affected crypto-asset among the top 10’s with an 11 % loss.

Solana Price Plunge Heavily! 

Since the beginning of September, Solana has been attracting more investors and entering the top 10 cryptocurrencies by market capitalization. So far this year, crypto has accumulated a rise of 8,600%. Solana has been highly volatile in the last couple of weeks.

Initially, this Ethereum rival exploded to a new all-time high of around $215. With the sudden market crash, Solana price resulted in massive losses testing $140. 

At press time SOL price is trading at $141.13. The immediate support lies at the $140 Level. If the altcoin fails to maintain above this level the price may drop to $128.

Right now, the technicals, Moving Average Convergence Divergence are hinting towards the downtrend. Therefore, another four-hour close below the 38.2% Fibo would trigger more sell orders and perhaps push Solana to the 200 SMA near $120.

on the flip side, When market sentiment would roll over, if Bulls kicks the price action, SOL price might break the 23.6% Fibonacci level at $174. If the buying spree continues at that level SOL bulls gear for a rerun towards $221 within a few weeks.

Also, Read Bloodbath in Crypto Market: Here’s the Next Target Level for Bitcoin (BTC), Ethereum (ETH), And Cardano (ADA)

$26 million liquidation

As per Bybt, nearly $31.22million worth of SOL trades were liquidated in the last 24 hours, out of which nearly$10 million is via ‘shorts’. Binance exchange saw the biggest number of Solana short liquidations, followed by FTX. 

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Time to Enter Cardano? Programmable Identifiers to Bring Revolution to ADA?

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Cardano, which has been making headlines after much awaited Alonzo hard fork upgrade on September 12th, 2021 is patiently waiting for a breakout! The increasing selling pressures letting Cardano (ADA) price find a strong support zone between $1.9 and $2.20

RSI factor of Cardano is at 26.08 indicating an overbought scenario. With the increase in buy pressures, ADA price has seen a dip by 8.57% in the last 24 hours. The Cardano price is trading at $2.16 at the press time. 

Analyst Bullish On Cardano Price.

Popular crypto analyst, Micheal Van de Poppe in his video analysed the ADA’s ongoing consolidation phase. Analyst says bullish sentiments for Cardano are increasing like never before. These huge buy signals are rising after the Alonzo hard fork upgrade and prior to the most anticipated Cardano summit. He made a tweet addressing his 412.7k followers, “Time to enter Cardano”?

Cardano price has been hovering around $1.9 to $2.40 level, which is a key resistance level that the price can sustain, according to Van de Poppe.

“Cardano running onto these ($1.9 to $2.40) support level here, still consolidating. That might be taking some time before we are going to have an actual run on Cardano” He added.

He then refers to ADA/BTC price chart says, he is looking at Cardano price against bitcoin in the region between 4000 and 4740 sats. Indicating the region zone he added, 

“if you want to get into Cardano these two regions are ones that you should be taking any action”.

He went on to say, the Cardano price may experience a heavy dip if the price fails to sustain in the present range.

Also Read: Cardano Price to pick up pace soon ! Exciting month ahead for ADA!

Cardano’s Programmable Identifiers to Push ADA Price Rise!

The present pullback seems to be Cardano’s “Calm before the storm” behaviour. Huge ADA buy signals are recorded prior to Cardano’s biggest blockchain event that is happening on September 25th-26th. The IOHK team built 7 virtual Cardano worlds on the back of a turtle to give unique experiences and discussions about the latest blockchain innovations. 

The team has also created essential Cardano GitHub repo to curate a definitive list of all Cardano ecosystem projects. The related projects are said to bring revolution in the smart contracts mechanism. Cardano founder Charles Hoskinson said that the term “Smart contract” is a misnomer when it comes to Cardano. The founder further advised that the new feature be referred to as “programmable validators“.

The team further informed unlike other platforms ETH, SOL etc. The Cardano ecosystem will take unique measures such as validators are implicitly referred to by hashes prior to their use, and they are disclosed upon activation other than deploying a smart contract.

Cardano investors strongly believe that this step is going to bring revolution in the crypto industry. However, the community is awaiting how these events are going to impact ADA prices. The present price pattern is awaiting either a breakout or breakdown to happen anytime soon! 

Also Read: Altcoins That Could Challenge The Bearish Divergence This Week

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Shiba Inu Bullish Flag Breakout – Will SHIB Price Kill A Zero to Hit $0.00001115?

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Shiba Inu Bullish Flag Breakout - Will SHIB Price Kill A Zero to Hit $0.00001115?

Popular cryptocurrencies weakened sharply over the past 24 hours due to a sudden spike in volatility. The majority of the altcoins crashed due to the overall weakness in the cryptocurrency market. As a result of the ongoing marketwide dump, BTC’s 24-hour losses lay in excess of the 5% mark.

Among the top Altcoin, Ethereum has lost 6.1%. Meanwhile, Cardano Price is one of the worst performers with an 8% loss. Meme Coins After being trapped inside a tight trading range for several days gradually declined in price. DOGE Price has plunged 9% trading at $0.2174, SHIB Price dropped by 2% trading at $0.000007503. 

Recently, Shiba Inu got listed on coinbase pro, and as a result, SHIB price surged more than 30 % in one day. Since the May crash, this was the highest single-day growth. With an extended rally, the token rose more than 55% from September 13th to 17th. However, the meme token failed to sustain the rally and retraced 17% since then the price is consolidating within the $0.00000963 level. 

Also Read : Shiba Inu Price Prediction, Will The DOGE Killer Hype at $1?

Shiba Inu Price Analysis 

At Press time the Dogekiller dropped by 2% trading at $0.000007503. SHIB made a false breakout of the resistance at $0.00000793 it seems that sideways trading is relevant. The immediate support lies at  $0.0000062, in case the SHIB Price drops below this level we can expect an extended bearish trend. 

Now, SHIB is currently consolidating between two crucial barriers, anticipating a volatile move.

Also Read : Shiba Inu Price Racing Ahead Of The Market, Primed To Clinch Massive Gains

Will SHIB Price Reach $0.00001115 ? 

The meme token is currently consolidating between the $0.00000768 and $0.00000835 levels as the buying pressure is in the same league as selling pressure. Thus, we may expect the SHIB price to rally and test the major resistance level at $0.00000963. On a successful breakout, an extended uptrend can take the token price to $0.0000101 which is quite unlikely looking at the current market sentiments. 

On the flip side, if the SHIB price fails to hold $0.00000768 support, the price may drop near the $0.00000654 support level with a more than 15% plunge. However, the extended bearish trend can take the price down to the $0.00000549 level. 

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What’s coming in the next phase of DeFi?

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What’s coming in the next phase of DeFi?

Decentralized finance (DeFi) is no longer just a buzzword. DeFi protocols are bringing a wide range of financial products and services at a breakneck pace, providing real-world utility to end-users.

DeFi bypasses the centralized intermediaries that slow down the process and add to costs in the traditional financial system.

Smart contracts replace intermediaries to facilitate low-cost, secure, and high-speed transactions without any restriction.

It’s one of the reasons Defi will eventually find its way into the existing financial infrastructure to facilitate services like lending, borrowing, remittances, etc.

The total value locked in Defi protocols has shot up from $17.3 billion in September 2020 to $94.2 billion on September 07, 2021. Defi experienced its first major boom with the rise of smart contracts-based lending, borrowing, and flash loans.

Flash loans are not secur loans that require no collateral or credit checks. But the loan must be paid within a single Ethereum transaction, else the transaction won’t go through.

Delivering on its promise

Despite such phenomenal growth, there is still plenty of room for growth and innovation. Decentralized finance’s promise is to make itself accessible and usable for everyone. That includes institutions as well as everyday people. 

Institutions have begun to acknowledge its potential and benefits. They are embracing the decentralized financial railroads rather than watching it from the sidelines.

The current protocol models still have inefficiencies (why aren’t there single token liquidity pools instead of liquidity pairs?) that new DeFi initiatives will solve to ensure that the space becomes more attractive for institutions. 

However, bringing everyday users into the DeFi ecosystem could prove challenging for a couple of reasons.

First, they are deeply entrenched into the traditional financial ecosystem. Second, they get overwhelmed figuring out the wallets, protocols, token swapping, yield farming, and other things they find complicated. 

The DeFi ecosystem has to nurture greater trust and security while making it easier for people to transact across different blockchains seamlessly.

In recent times, we’ve seen blockchain protocols like Reef Chain giving decentralized app developers all the tools along with assistance in business development and marketing to build and scale dApps that even noobs will find easy-to-use.

Reef Chain is a one-stop cross-chain DeFi operating system built with Polkadot Substrate to make Defi easy to use for newcomers.

Its Global Liquidity Aggregator, Smart Yield Farming Aggregator, and Smart Asset Management make it easy for noobs to get started with yield farming.

Reef Chain has built-in AI tools that allow for asset management based on each individual investor’s plans, goals, and risk appetite.

If DeFi delivers on its promise, we’ll see institutions and everyday users flocking to the DeFi ecosystem, and eventually there will be a full-fledged integration of DeFi into the existing financial infrastructure.

Besides the obvious ones like liquidity mining, stablecoins, and the monetization of the gaming industry, DeFi is witnessing some more exciting trends.

For instance, social tokens are here to stay. RealVision CEO Raoul Pal predicts that social tokens would be the next big thing, disrupting all kinds of traditional industries in the next 5-10 years.

Social tokens have the reputation of a brand, individual, or community whose work you might want to support.

The token holders get exclusive perks from the token issuer, which could include exclusive content, digital merchandise, group chats, and more. The social tokens are decentralized and run on the blockchain, much like NFTs.  

In another development, Bitcoin could enter the Defi club in a big way, all thanks to the Lightning Network. Unlike Ethereum, Bitcoin doesn’t support the smart contract functionality.

It;s meant to be “peer-to-peer digital cash” that would make payments faster and cheaper. But Bitcoin holders often struggle to make fast transactions with the OG cryptocurrency. 

Lightning Network, a Layer-2 scaling solution for Bitcoin, brings the smart contract functionality to Bitcoin. It means Bitcoin would behave the same way Ethereum does.

Until now, Bitcoin owners were creating wrapped tokens (WBTC and others) to interact with Defi apps.

As an L2 scaling solution, Lightning Network moves some of the transactions off-chain to reduce the load on the main blockchain. Bitcoin is no longer just digital gold. Lightning Network has opened up new possibilities. 

Institutions have become quite serious about gaining exposure to digital currencies and Defi assets. Everyday users will also embrace DeFi in a big way once it becomes easier to use.

In its next phase of growth, Defi would bring a flood of new users into the ecosystem by delivering on its promise to make itself accessible to everyone. 

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Altcoins That Could Challenge The Bearish Divergence This Week

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The entire crypto space appears to have fallen into a bearish trap as almost all cryptocurrencies are falling with a wide margin. Bitcoin price is nearing the $45K mark, whereas Ethereum price is hovering around $3200. On the other hand, XRP price has tanked below $1 and Cardano price is just above $2.1. Amid the steep downfall, some altcoins show some signs of a retracement and a quick rebound. 

Curve DAO Token (CRV)

Curve DAO Token price initiated this trade with a double-digit figure but only within 2 months, the price slumped drastically close to $0.3 levels. And since then the altcoin is attempting hard to undergo a massive bull run. But woefully it could just hit $4 amid the 2021 bull run. The price in the past couple of days was consolidating but a notable drop began since the early trading hours. However, the price could drop to the strong support zone around $2.47 and by holding strongly, the CRV price could surpass $4. 

Fetch.ai (FET)

Fetch.ai price had smashed its highest levels just a couple of days before by ranging above $1.1. However, the price again tanked down below $1 with a double-digit loss compared to the previous trading day. The asset is trading within the buy zone currently which is around $0.5711 to $0.6168. And a rebound at these levels can be expected which could get aggressive hitting $0.6853.

Serum (SRM)

Serum price amid the Solana price rally gained immense bullish momentum to hit new highs each day. However, after trending within the discovery phase, the price just got exhausted and dipped down. The current zone just below $10 could be a perfect resistance to support flip zone and a decent reversal could be possible. If the price flips at this point it could regain bullish momentum yet again. 

Holo (HOT) 

The Holo price is testing the crucial support levels and appears well placed ahead of a flip. The crucial support levels are just placed below the current levels at $0.008587. If the HOT price sustains strongly above these levels, a notable flip could be imminent. However, once the asset flips it could undergo a 2x potential run from the current levels.

Coti (COTI) 

Coti price has gone parabolic to reach the levels close to its ATH. Despite a rejection, yet the price continued to range high close to these levels. As the bears have taken back control, the price has tanked considerably. Yet notable flip may be underway that could rebound with a huge margin to smash above $0.5 levels soon. 

Cosmos (ATOM)

The ATOM price chart is among the most prominent charts in the crypto space. As the price smashed new highs in the past trading day above $44 and experience a slight pullback. Yet, the possibilities of a notable bounce are high as the price is very close to its ATH and refusing to drop drastically. However, many believe ATOM price is capable of smashing a 3-digit figure soon. 

Currently, there is bloodshed in the entire crypto space as almost all cryptos are facing immense drain. No doubt the plunge is expected to remain only for a period of time, yet the upcoming rebound would be important. Amongst all the altcoins, the above mentioned could regain the bullish momentum quickly as the bears fade away.

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Bitgame Launches LUT Lightpaper with a $200,000 Bounty Campaign

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Bitgame Launches LUT Lightpaper with a $200,000 Bounty Campaign

With more than 10 years of industry experience, the team behind innovative sports betting platform Bitgame has recently released the Lightpaper of native currency Lucky Tokens (LUT).

Alongside this publication, the team has organized a $200,000 bounty campaign to spread awareness of the blockchain-powered entertainment platform.

Compared to traditional sports betting platforms, Bitgame utilizes the power of blockchain to provide real, transparent, and untamperable results, as well as supporting a large number of cryptocurrencies.

Within the newly-released details of LUT on the Bitgame platform, token holders are rewarded for their participation in the platform and able to share handsomely in the profits of the entire ecosystem. 

Bitgame Leading the Industry

Long overdue for new innovations, Bitgame is following emerging technology trends to lead the online sports betting industry into the future.

Combining extensive industry experience and cutting-edge decentralized infrastructure, Bitgame is able to provide a platform that is safe, reliable, and fair.

These features are the result of applying keen insights into the future of entertainment, especially those looking at the global phenomenon of play-to-earn, which is quickly becoming an important part of the broader entertainment industry.

Additionally, Bitgame recognizes the growing adoption rates of cryptocurrencies worldwide as an important trend to be a part of and therefore supports betting in over 20 of the industry’s largest cryptocurrencies (Bitcoin, Ethereum, Tron, etc.)

Bitgame’s mission is to provide an inclusive, transparent, and fair sports betting entertainment platform. In realizing a primary issue with traditional sports betting platforms is their centralized and secretive nature.

Bitgame has built an entire ecosystem around profit sharing and rewarding user activity and contributions.

As well as hosting the Bitgame team-created platform, this open ecosystem will support user-created Dapps and be geared towards organic expansion. In the future, users will be able to play and bet on an increasing number of games and sports matches on Bitgame.

LUT-Powered Innovation


Although having been trialed and tested on the Bitgame platform for a while, the release of the new LUT Lightpaper marks the beginning of wider circulation for the token.

Lucky Tokens are the native digital currency underpinning the entire Bitgame ecosystem and can be used in a number of different ways, including betting on sports matches, participating in the platform auction house, and being given as prizes.

Of the 1 billion LUT issuance, 70% will be reserved for mining rewards, 10% will be used for community building through incentive rewards, 10% will be used for marketing promotions and as fund reserves for development, research, and legal compliance, and the project team will hold 10% with a lockup time of at least two years to be used for technical development and partnerships.

As part of the ecosystem’s focus on profit sharing, LUT holders will gain a percentage of the entire ecosystem’s profits just by holding the token. A portion of each profits will be distributed into the dividend pool. From there, LUT holders will periodically receive a percentage of the pool relative to the size of their holdings and the rest of the ecosystem. The more tokens a user holds, the larger the percentage of rewards they will receive. This gives a new spin to the emerging play-to-win business model by giving out dividends for ecosystem participation.

Bounty Campaign

To accelerate the adoption of the Bitgame platform, the team has sponsored a $200,000 bounty cross-platform social media campaign.

Users on the Bitcointalk forums are able to take part in the campaign, which requires them to circulate information about Bitgame to their own communities and networks.

Running over 12 weeks, participants will be required to perform specific actions and make certain posts on Twitter, Facebook, Reddit, Instagram, Telegram, YouTube, and TikTok to redeem their LUT.

Additionally, some lucky earners will be further rewarded for their participation by receiving randomly drawn cash prizes.

For more details about the campaign, head over to: https://bitcointalk.org/index.php?topic=5360440.0

Website: https://www.bitgame.com/?trackCode=News

LUT Lightpaper:  https://bitgame-lut.gitbook.io/lightpaper/

Twitter: https://twitter.com/BitgameGlobal

Facebook: https://www.facebook.com/BitgameGlobal

Telegram: https://t.me/Bitgame_EN

Email: [email protected]

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Ripple Vs SEC: The Settlement is Still a No Go for Ripple! High Hopes on Gensler

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Bullish Bitcoin Price Predictions - BTC bulls Aim Towards the $50k Mark!

As reported by Fox Business, Ripple’s legal team has no plans to settle the dispute with the Securities and Exchange Commission of the United States (SEC). 

Reporter Charles Gasparino tweeted that Ripple believes that pursuing the lawsuit would persuade SEC Chairman Gary Gensler that it is picking winners and losers in the crypto industry at the expense of innovation.

Supporters of Ripple and XRP are hoping that the new SEC chairman, Gary Gensler, who previously taught cryptography at MIT, will dismiss the XRP litigation. 

They claim that former SEC Chairman Jay Clayton had a conflict of interest. In August, a government investigator began looking into the circumstances surrounding Clayton and senior SEC official William Hinman’s XRP lawsuit.

Gensler has demonstrated that he is open to new ideas. “Do you support responsible innovation?” Senator Cynthia Lummis, a pro-bitcoin member of the Senate Banking Committee, asked him during a hearing last week. “Oh my gosh, yes,” Gensler said right away.

The Chairman has said, Satoshi Nakamoto’s innovation is real, “His innovation sparked the creation of crypto assets and the underlying blockchain technology,” 

He also stated that “it has been and could continue to be a catalyst for change in the disciplines of finance and money.”

Critic Brandt says XRP is a security 

Peter Brandt, a commodity trader with more than four decades of experience, continues to believe that XRP is unregistered security.

Brandt, a long-time Ripple opponent, publicly petitioned the Securities and Exchange Commission to designate XRP as security just two months before the case was filed. He also charged the firm with rigging the price of the contentious cryptocurrency.

However, the veteran trader would own the Ripple-affiliated cryptocurrency “under the appropriate circumstances,” despite the regulatory ambiguity around it.

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Bitcoin in El Salvador – 5 talking points from its official adoption

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Bitcoin in El Salvador – 5 talking points from its official adoption

Street protests, technological glitches, and a crypto crash…and that was just the first day.

When El Salvador became the first country in the world to recognize Bitcoin, or BTC, as legal tender, few analysts predicted a smooth transition.

However, the official adoption couldn’t have gone much worse for the Central American country in a chaotic opening 24 hours. Here are five of the key talking points to a historic episode in the history of currency. 

The people take to the streets

Cryptocurrency is hailed as the future of money by some financial experts, but in a country where half the population has no internet access, many people are unsure about what Bitcoin even is. 

The uncertainty is part of the reason why protests broke out across the country at the same time as the BTC launch.

More than 1,000 people protested outside the supreme court in San Salvador, the nation’s capital, setting off fireworks and burning tyres.

Other reasons for opposing the virtual coin include a hostility towards big businesses. Many citizens believe their economy will be exploited by the so-called ‘whales’ – people with large amounts of BTC – to make profit. Other people simply don’t like the volatility of the currencies, with prices sometimes soaring or dropping by over 10% in a single day

However, not everyone is put off by Bitcoin. It’s high accessibility means it’s a way for ordinary people to invest in financial markets – something that’s normally out of reach.

The biggest crypto crash in months

The protestors may have a point about volatility. The last 12 months have seen the price of Bitcoin treble in value to a high of around $61,000 in early 2021, dip by 50% over the summer, and almost double again in August and September. Swings and drops like this might make some people think they’re better off putting their BTC into a Bitcoin-friendly casino, rather than a crypto exchange

Bitcoin stayed true to form on launch day. After starting the day at the $52,000 mark, it plummeted 17% to $43,000 at one point, before steadying itself at around $47,000. 

It was part of a wider crash that saw over $400 billion wiped off the value of the full crypto market. Altcoins such as Ether, Cardano and Ripple suffered their biggest fall in months, as investors were spooked by the shock to the system.

Forecasts for the short to mid-term, though, are mixed. Some experts believe the crash was just a blip before the next step higher for crypto prices.

Others believe that Bitcoin simply isn’t ready to be an official currency, and the ensuing problems in El Salvador will contribute to a long-term slump. 

The government snap up more Bitcoin

The crash did have one small consolation for the country – it allowed them to ‘buy the dip’. Buying the dip is a common investing term for purchasing when prices are cheaper, and this is exactly what the El Salvador government did.

They swooped in to buy an additional 150 bitcoins as prices fell, worth around $7 million. 

The problem is, they had already lost almost a fifth of the value from their initial purchase of 400 BTC (around $20 million) a few days prior. If the price were to drop more, then many will question the wisdom of the government’s investment.

However, for ‘bullish’ believers in the long-term value of BTC, buying at any point below $50,000 is good value. They expect the coin to hit $100,000 soon, on its way to even higher values over the next few years.

Tech glitches force the President to take to Twitter

Ahead of the launch, El Salvador’s President Bukele announced a new national digital wallet, called Chivo, designed to make the transition to virtual money as smooth as possible. 

Come the big day, though, and the wallet’s app was nowhere to be seen on Apple or Android. After a period of uncertainty, the president complained to the online stores via Twitter in a bid to make it available.

The reason was a technical glitch that meant the app couldn’t cope with the influx of new registrations. The government then connected it to more servers to increase capacity and it appeared that the problem was solved.

People start to make BTC payments at major outlets

With the glitches corrected, the day was about to end on a happy note as pictures appeared online of shoppers using Chivo in retailers such as Starbucks to pay for goods in BTC. 

President Bukele posted the images to show the world that the crisis was over, and El Salvador was on the way to the successful adoption that he predicted.

The good news, however, didn’t make the fears about money laundering and security go away. This will be the big test for El Salvador over the next few months – to make the currency work in a climate of fear and distrust. 

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This is what cryptocurrencies were worth this time last year

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This is what cryptocurrencies were worth this time last year

When it comes to investing in crypto, it’s easy to get caught up in the short-term. Wild fluctuations, sometimes over 10% of a coin’s value, like the fall in prices among altcoins at the start of September, often influence our thinking and decision-making.

Several experts give advice that follows two key rules: buy low and buy long-term. To back this wisdom up, several major coins are now trading at much higher levels than last year – although it’s important to remember that it may not stay that way. 

Here are the price changes in some of the big coins that you might have your eye on.

Bitcoin 

September 2020: 10-11,000 USD, now: 47-48,000 USD

The original cryptocurrency has had a strange year. Despite record levels of growth – the coin has more than quadrupled in 12 months – it has also faced a range of issues.

China’s embargo on Bitcoin is probably the biggest, and when its government announced the ban in mid-2021, prices plummeted to 50% of their yearly high. El Salvador’s adoption of BTC, becoming the first nation ever to do so, also gave the coin an unexpected knock as the country’s systems struggled to cope.

Still, there’s no denying Bitcoin’s ability to bounce back from setbacks – and some analysts predict the coin to hit $100,000 in early 2022.

Ethereum   

September 2020: 300-400 USD, now: around 3,300 USD

The last year has been a rollercoaster ride for ETH investors, with highs that didn’t previously seem possible. A six-week jump in summer 2020 that almost doubled the coin’s price kicked it off, followed by a 50% dip, and then another doubling as the year ended with crypto prices rocketing.

Consistent rises this year, marked by a couple of sudden drops, have led to the price bobbing between the 3,000 and 4000 USD marks, which represents a stunning x10 value jump in the year.

ETH whales with six-figure investments might feel like they’ve hit the jackpot, with portfolios that probably resemble lottery jackpot wins.

A big reason behind ETH’s success is the rise of NFTs, with sites such as Rarible using it as their main currency to facilitate the trading of the tokens. While the next 12 months by no means offer a repeat of the same, it’s likely that ETH’s price will continue to rise. 

Cardano

September 2020: 0.10-0.12 USD, now: 2.30-2.40 USD

While BTC and ETH’s rises have been impressive, they pale in comparison to Cardano, otherwise known as ADA, after 19th century mathematician Ada Lovelace. 

The past year has seen it launched in Africa as part of a project aiming to develop the continent’s infrastructure and bring crypto technology to millions of Africans. Ada refers to it as its mission to ‘bring banks to the world’s unbanked’ and could see it become widespread in developing countries.

Billed as a leaner alternative to Ethereum – founder Charles Hoskinson is also co-founder of ETH – Cardano has seen an incredible leap in value – at one point this year, it weighed in at 2.90 USD, a x29 increase.

Over the last few weeks, it’s settled down to around 2.40 USD, but looks set to stay as one of BTC’s main challengers.

Litecoin

September 2020: 42-62 USD, now: 180-190 USD

Referred to as the silver to Bitcoin’s gold, Litecoin’s staying power should never be in doubt. Formed in 2011 by Charlie Lee, many predicted it to fall by the wayside, but it’s kept pace with headline-grabbers Bitcoin and Ethereum.

The last 12 months has seen a quadrupling in value for LTC after it rode the wave of the famous crypto rise of late 2020. It’s also had a good few months, threatening to break the 200USD limit on occasions. 

Like a Rocky Balboa, LTC keeps taking the punches and coming back for more. Could 2022 see it become the number one contender for the crypto belt?

Doge

September 2020: 0.0026-0.0032 USD, now: around 0.24 USD

Perhaps the biggest crypto shock story so far. Since its creation at the end of 2013, Dogecoin had often been dismissed as a joke coin – a silly internet meme thought up by Reddit members with nothing better to do.

However, a x100 increase a year later means not many people are dismissing it now. Helped by a somewhat cynical campaign of publicity stunts by Elon Musk, the coin rocketed in value in spring 2021, including a ridiculous rise of 300% in a single day. 

DOGE has since dropped to less than half of its 0.55 USD high, and many predict it to fizzle out – but after last year, who knows what will happen?

Solana (SOL)

September 2020: 2.40-3.50 USD, now: around 158 USD

Solana is one of the youngest blockchains around, with its whitepaper released in 2017, but that hasn’t stopped it turning 2021 into a golden year.

The coin has shown remarkable resilience to several challenges, particularly during the recent altcoin dip where it was the only one not to feel the effects of the China/El Salvador fallout. 

Whether it’s ready to step up to the level of the big boys remains to be seen, but a yearly rise that has seen its value multiply over 60 times is something to take note of.

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TA: Ethereum Plunges to $3,150: Can Bulls Save the Day?

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Ethereum

Ethereum started another decline below the $3,400 support zone against the US Dollar. ETH price must stay above $3,150 to avoid more losses in the near term.

  • Ethereum started a fresh decline from the $3,500 and $3,550 resistance levels.
  • The price is now trading below $3,300 and the 100 hourly simple moving average.
  • There is a major bearish trend line forming with resistance near $3,360 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could a steady increase as long as it is above the $3,150 support zone.

Ethereum Price is Eyeing Decent Recovery

Ethereum failed to clear the main $3,500 resistance zone. ETH started a major decline below the $3,400 support zone and the 100 hourly simple moving average, similar to bitcoin.

The price traded below the $3,320 and $3,250 support levels. Finally, ether spiked below $3,200, but the bulls were active near the key $3,150 support zone. A low is formed near $3,156 and the price is now consolidating losses.

An immediate resistance on the upside is near the $3,230 level. It is close to the 23.6% Fib retracement level of the recent drop from the $3,456 high to $3,156 low. The first major resistance is now forming near the $3,320 level (the last key support).

Source: ETHUSD on TradingView.com

The 50% Fib retracement level of the recent drop from the $3,456 high to $3,156 low is also near $3,320. Besides, there is a major bearish trend line forming with resistance near $3,360 on the hourly chart of ETH/USD. A clear break and close above the $3,400 level could start another increase. The next major resistance sits near $3,500.

More Losses in ETH?

If ethereum fails to correct higher above the $3,250 and $3,320 resistance levels, it could start another decline. An initial support on the downside is near the $3,180 level.

The next major support seems to be forming near the $3,150 level. A downside break below the $3,150 support zone could spark a sharp decline. The next major support is near the $3,000 level, below which ether price might decline towards the $2,880 support zone in the near term.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is slowly losing pace in the bearish zone.

Hourly RSIThe RSI for ETH/USD is now well below the 50 level.

Major Support Level – $3,150

Major Resistance Level – $3,320

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