Cryptocurrency
Rise of Ethereum staking came at cost of higher centralization: JPMorgan
The rise of Ethereum staking since major network upgrades, Merge and Shanghai, has come at the cost of higher centralization and lower staking yields, a new report by JPMorgan said.
JPMorgan’s analysts led by senior managing director Nikolaos Panigirtzoglou issued a new investor note on Oct. 5, warning about the risks stemming from Ethereum’s growing centralization.
Top five liquid staking providers — including Lido, Coinbase, Figment, Binance and Kraken — control more than 50% of staking on the Ethereum network, JPMorgan analysts noted in the report, adding that Lido alone accounts for almost one-third.
The analysts mentioned that the crypto community has seen the decentralized liquid staking platform Lido as a better alternative to centralized staking platforms, associated with centralized exchanges like Coinbase or Binance. However, in practice “even decentralized liquid staking platforms involve a high degree of centralization,” JPMorgan’s report said, adding that a single Lido node operator accounts for more than 7,000 validator sets, or 230,000 ETH.
These node operators get selected by Lido’s decentralized autonomous organization (DAO), which is controlled by few wallets addresses, “making Lido’s platform rather centralized in its decision making,” the analysts wrote. The report mentioned a case when Lido’s DAO rejected a proposal to cap the staking share at 22% of Ethereum’s overall staking to avoid centralization.
“Lido didn’t participate in the initiatives as its DAO rejected the proposal by an overwhelming majority of 99%,” JPMorgan analysts wrote, adding:
“Needless to say that centralization by any entity or protocol creates risks to the Ethereum network as a concentrated number of liquidity providers or node operators could act as a single point of failure or become targets for attacks or collude to create an oligopoly […]”
Apart from higher centralization, post-Merge Ethereum is also associated with an overall staking yield decline, JPMorgan noted. The standard block rewards declined from 4.3% before the Shanghai upgrade to 3.5% currently, the analysts wrote. The total staking yield has declined from 7.3% before the Shanghai upgrade to around 5.5% currently, the report added.
Related: Time to ‘pull the brakes’ on Ethereum and rotate back to Bitcoin: K33 report
JPMorgan analysts aren’t the only Ethereum observers that have noticed a significant increase in centralization of the network following the Merge upgrade. Executed on Sept. 15, 2022, the Merge has been seen as a major impediment to Ethereum’s decentralization and a major reason for dropping yields.
you are the yield pic.twitter.com/ONJT6QmDch
— Pledditor (@Pledditor) October 5, 2023
Ethereum co-founder Vitalik Buterin has admitted that node centralization is one of Ethereum’s main challenges. In September 2023, he said that finding a perfect solution to handle this problem may take another 20 years.
Magazine: Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis
Cryptocurrency
Bitcoin Price Analysis: Can BTC Bounce Back to $100K Following 8% Weekly Drop?
Bitcoin has been navigating an ascending consolidation phase near its critical $108K resistance level, recently encountering a sharp decline.
However, strong support zones suggest a potential for a short-term bullish rebound.
Technical Analysis
By Shayan
The Daily Chart
Bitcoin has undergone an ascending consolidation phase near the $108K resistance region, only to face increased selling pressure and distribution activity from large market participants.
This wave of selling led to a significant 15% decline, with the price finding support around the $90K mark and the middle boundary of a long-standing bullish price channel. These levels represent a critical defense line against further declines.
A rebound from this support could set the stage for a renewed attempt to reclaim the $108K mark. Conversely, a failure to hold it may lead to a deeper correction, with the channel’s lower boundary near $75K serving as the next key level of support.
The 4-Hour Chart
On the 4-hour chart, Bitcoin has been consistently trending upward within a multi-month bullish channel. The recent rejection at $108K triggered a sharp decline, bringing the price down to the channel’s middle boundary near $95K, a crucial dynamic support level.
A bounce from this region is anticipated, allowing the price to stabilize and potentially resume its uptrend. However, concerns over a hawkish monetary policy for 2025 may amplify selling pressure, increasing the likelihood of a bearish breakout.
In such a scenario, Bitcoin could face further downside, with $90K as an immediate target and $75K as long-term support.
On-chain Analysis
By Shayan
The Bitcoin Long-Term Holder SOPR metric provides valuable insights into market behavior and investor sentiment. Between 2022 and mid-2023, the SOPR remained below 1 for an extended period, indicating that long-term holders were selling at a loss associated with market capitulation.
By mid-2023, the SOPR began trending closer to or above 1, marking the beginning of a recovery. This shift was aligned with a broader market rebound as Bitcoin prices rose, reflecting renewed confidence among investors. The upward trend in SOPR suggested that long-term holders were no longer selling at a loss, a key sign of improving sentiment.
As the market moved into 2024, Bitcoin prices continued to climb, and the SOPR consistently stayed above 1. This shift signified that long-term holders realized profits, but the selling pressure remained controlled.
The stability of the SOPR above 1 highlights sustained confidence among investors, reinforcing that market conditions support continued growth, with a potential for further market expansion.
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).
LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
Cryptocurrency
Dogecoin (DOGE) Price Can Skyrocket by 12,000% If History Repeats
TL:DR;
- Dogecoin was once the top-performing cryptocurrency after Donald Trump’s victory, going from under $0.15 to almost $0.5.
- Although it has lost its momentum, especially in the past week or so, history shows that its most spectacular price surge during this cycle could still be around the corner.
Can DOGE Pull a 2021-Like Rally?
Perhaps due to its affiliation with Elon Musk and his upcoming role in Donald Trump’s administration, Dogecoin skyrocketed after the US presidential elections. Its price exploded by more than 200% from its aforementioned bottom to $0.485 on December 8.
After these quite impressive gains, though, DOGE started to retrace but still maintained the $0.4 level. However, that all changed last week when the market-wide crash pushed it south hard. In just a few days, DOGE’s price tumbled by nearly 40% to $0.26.
Although such a massive correction sounds painful, it is not something unheard of for the crypto market, especially in the ever-volatile meme coin sector. Similar enhanced fluctuations have transpired in the past as well, which could actually suggest a more favorable future for DOGE.
Popular crypto analyst Ali Martinez compared the recent crash to similar developments that took place during the bull cycles in 2017 and 2021. In both instances, the largest meme coin surged by triple-digits, retraced by 40-60%, and then shot up by four or even five digits by the end of the respective runs.
In 2017, when #Dogecoin began a parabolic run, it surged 212%, retraced 40%, then rallied 5,000%. In 2021, it went up 476%, retraced 56%, then skyrocketed 12,000%.
Now, in 2024, $DOGE is up 440% and has retraced by 46%. If history repeats, another parabolic rally is on the way! pic.twitter.com/uhf2kMc0Id
— Ali (@ali_charts) December 23, 2024
Can DOGE Soar Above $10?
Skyrocketing by 5,000% or 12,000% sounds quite bullish, but let’s look at these predictions more realistically. In 2017 and 2021, DOGE’s price was a lot more modest, and posting such massive gains seemed easier, at least on paper.
If the OG meme coin is to surge by similar percentages from now on, its price and market cap would have to go to the stratosphere. For example, a 5,000% increase would put its price at over $13, and the market cap would be at over $1.9 trillion – or bigger than bitcoin’s current one.
If DOGE repeats the 2021 gains, then its price would go all the way up to $31-32, and its market capitalization would be north of $4.5 trillion – bigger than Apple’s.
Although these numbers sound quite far-fetched and history is no indicator of future price performances, this doesn’t necessarily mean that DOGE has peaked during this cycle. Dogecoin is still far away from its all-time high registered in 2021, and many other assets have managed to break their peaks, so DOGE might still have a lot of room for growth.
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).
LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!
Cryptocurrency
Why is the XRP Price Down Today? (Ripple Price Analysis)
Ripple is navigating a pivotal range between $1.8 and $3, with recent price action highlighting the likelihood of a consolidation phase.
A breakout from this range will likely determine its next significant trend.
By Shayan
The Daily Chart
XRP recently faced rejection at the critical $3 resistance, triggering increased volatility and initiating a sideways consolidation phase. After that, the price found support at the $1.8 level, a key zone filled with demand and buying pressure.
This support region can limit further downward movement and maintain the cryptocurrency within the $1.8-$3 range.
As the price consolidates, a bullish or bearish breakout will determine Ripple’s upcoming trajectory. While this could lead to a sustained uptrend, an unexpected bearish breakdown might trigger a significant liquidation event, causing the price to plummet toward lower levels.
The 4-Hour Chart
During the 4-hour timeframe, XRP consolidates within a descending wedge pattern, which often signals a potential bullish breakout if breached upward.
Currently, the price is testing the wedge’s lower boundary near the $1.8 support level, where increased buying activity is expected.
In the mid-term, Ripple seems likely to continue fluctuating within this pattern, with a bullish breakout aiming to reclaim higher levels near $3. Conversely, a bearish breakdown below the wedge’s lower boundary could initiate a decline, potentially driving the price toward the $1.5 threshold, a crucial support level.
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).
LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
- Forex2 years ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Unbiased review of Pocket Option broker
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
- Forex2 years ago
The dollar is down again against major world currencies