Data Negates BTC Recent 10% Plunge, Analysts Weigh in as $5,900 Remains Crucial

In the last few days, top crypto-asset by market capitalization had been stuck in a consolidation stint as the bulls failed to reclaim the $6,900 territory. The bears later swung into action after the top asset held steady its position at $6,700 for 3 days, pushing down its price below its key support to its recent levels.

The activity of the bears extended as the king coin failed to reclaim the $6,700 level, trading down by 10% at $6,050 at the time of this report.

However, the bulls stepped up and guarded the $6,100 territory against further decline.

BTC’s sharp decline by 10% from its daily high may seem bearish as a concurrent drop was recorded likewise in BTC dominance as stats from CoinMarketCap indicate a plunge from 66% to 64.9% in the last 3 days.

BTC Chart Stays Bullish Amid Sell-Off, $5,900 Key Level Suggests Bullishness

BTC near term structure may seem to have been tampered with by the sell-off, as traders, however, remain positive about the key asset movement. Analysts have noted that the stats indicating the magnitude of buy orders at the $5,900 level which is beneath BTC’s recent price of $6,050 level seemed to be a bullish signal.

Bitcoin’s recent plunge seems to be relatively tempered, and analysts now hold the opinion that the $5,900 support level could necessitate a rally.

A renowned trader who goes incognito as Flood tweeted that traders should go long at $5,900 level for “infinite money,” a signal indicating that he expects the top crypto asset to see a strong reaction to this key support level.

He further substantiated this by reiterating the immense magnitude of buy orders placed at this level.

Another popular trader on twitter also noted the buy orders around BTC’s recent price levels glaringly outweigh sell orders, indicating that the buys outweigh the selling by 30-50% at +/-4%, indicating a comeback may be impending.

As it stands, the gap between the number of buyers and sellers remain visible, suggesting that the recent sell-off was uncalled-for and that it may be followed by a rebound in the near term.

Dan Morehead and Joey Krug of Pantera Capital in a recent Pantera Blockchain Letter titled “Crypto In This Crisis” noted that BTC will “probably out-perform other tokens for a while,” holding the opinion that the crypto market will start to re-centralize around BTC.

Morehead had previously stated that the unorthodox monetary and fiscal response to the crisis will be significantly bullish for BTC.

Nevertheless, amid the ongoing global turmoil, an interesting fact that came to light was that Bitcoin was less volatile in March than the S&P 500 stock during the major sell-off it had on the March 13th market carnage and its subsequent rebound.

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ETH 2.0 Finalized Audit Marks a Fresh Move Amid Market Turmoil, More to Expect?

Ethereum’s major network upgrade, referred to as Ethereum 2.0, ETH2 or Serenity, will be marked by Sharding, Proof of Stake, a new virtual machine (e WASM) and other features. While it’s paramount to note that this upgrade will not occur once at a particular time frame- instead, it will be rolled out in phases. ETH 2.0 was initially set to launch in January 2020 but due to implementation delays, July 2020 now seems to be its probable release date. The Testnet has been live since December 2019 and node clients have made progress since then.

Phase 0 refers to the launch of the Beacon Chain which will coordinate all 64 sidechains called shards. The Beacon Chain will also manage the Casper Proof of Stake protocol for itself.

Vitalik Buterin ETH co-founder while expatiating more on phase 0 referred to it as the initial phase of the Ethereum 2.0 launch. This will release the proof-of-stake network, which he sees reaching the online community this year.

While the official launch date of Phase 0 is yet to be disclosed, Buterin explained that Phase 0 is close to having a multi-client Testnet and audits of the existing code.

Phase 0 Leaps Forward, What Next After?

Phase 0 made progress recently as Ethereum 2.0 had its preliminary audit of the protocol’s specifications, undertaken by Least Authority. The purpose of the audit was to fully understand the protocol and point to any loophole found in its design.

On a note of finality, the audit firm passed a stamp of approval on the specs referring it as very well thought out and comprehensive but found some limitations.

After this initial phase, Phase 1 of ETH 2.0 would be launched next, which will enable sharding. Every shard will act as a full PoS system, containing an independent piece of state and transaction history. Instead of processing all network transactions, each node will only process transactions for a certain shard.

If the phase is successful, sharding would render a solution to Ethereum’s scalability problem without compromising the network’s security and decentralized nature. The ETH co-founder stated that the transition will be completed once the ETH 2.0 network becomes fully robust, then Ethereum 1.0 will merge into the 2.0 system.

Ethereum, the second-largest digital asset with a current market value of about $15 billion, tested above $142.00 level in the prior session before receding to its current levels today. At the moment, ETH is exchanging hands at $131.67 level.

ETH 2.0: Limitations Pointed Out

In the latest audit, two potential security risks were detected which are the block proposer system and the P2P messaging system. These features were noted to have attack vectors.

Also, they noted that there haven’t been any real precedents of a large-scale protocol using Proof of Stake and Sharding. Therefore, ETH 2.0’s long-term stability comes under question.

However, Carl Beekhuizen, a researcher on ETH 2.0 at the Ethereum Foundation explaining ETH sharding sees no chance for attack. He sees a process where validators attest to the block proposal (voting for a new block in the chain) every 12 seconds. In Ethereum 2.0, there is a minimum period of network existence, which is called a ‘slot’.

Validators are organized into committees while performing their duties. Thus, if one validator decides to attack the network from within, the proper performance of the committee is in a precarious state. To prevent such, a random shuffling of validators between committees seemed to be a more viable option.

ETH 2.0 May Take the Edge off ETH Defi Vulnerability

When ETH had a flash crash on Black Thursday, the outcome was devastating, users of MakerDAO lost millions of dollars, oracle prices lagged and applications like dYdX and Nuo had to change their fees to force through delayed trades.

As against investment advice of not putting one’s eggs into a single basket, in the DeFi sector, all eggs are in Ethereum, which controls the fortunes of DeFi apps and investors also. For instance, users of MakerDAO mostly use Ethereum as collateral. When ETH prices tank, users scramble to re-collateralize and the network suffers congestion. This makes the DeFi sector uniquely susceptible to market volatility resulting from fluctuations in Ether’s price and network congestion.

Buterin noted that while ETH 2.0 is undergoing testing and development, new scaling solutions are being innovated that are compatible with Ethereum and can solve some of its major challenges. For example, “Optimistic Rollups” are second layer constructions that allow smart contracts to scale. This innovation may help reduce ETH Defi susceptibility to market downturns.

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South Korean Banking Giant KB Kookmin Set to Launch Crypto Custody Service

South Korea’s largest bank KB Kookmin is going the crypto way and is looking to float its own crypto custody firm for assets like Bitcoin (BTC) and Ether (ETH).

According to a report from a Korean media firm, the bank filed a trademark application for its new firm on January 31, 2020. The firm, KB Digital Asset Custody (KBDAC), is expected to be launched soon, as KB Kookmin has already begun not just the trademark application but also several other plans related to branding the products and services the new firm would offer.

The report says that KB Kookmin had begun planning KBDAC since June 2019, with Atomrigs Labs, its blockchain startup. The two entities had initially partnered to create several mainstream products that revolve around crypto services, via multi-party computation technology (MPC).

KB Kookmin’s interest in crypto is a big pointer to the future of crypto adoption in the country as it could easily change perceptions, encouraging more people to get involved in the sector. It is already being suggested that other banking giants in the country including Woori, Hana and Shinhan could also be convinced to get into crypto to compete with KB Kookmin.

South Korea’s crypto clime is welcoming, as last year, the country’s largest Telecom company KT announced plans for a digital asset.

Image Credits: Pixabay

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