While the Bitcoin market is taking another challenge at the $20,000 support level, it inevitably affects all the altcoins too. However, these 3 coins are having new developments and updates that could make them outperform Bitcoin this week.
Here are the 3 alts that I am keeping a close eye on:
- 1. ETH [ETHEREUM]
The Ethereum token’s gas fees are at a 2-year low as developers successfully merge another Ethereum testnet.
After almost two years of insanely high Ethereum fees (average fee was above $40 most of the time) the Ethereum fees have recently finally started to normalize. Last week, the average Ethereum blockchain transaction fee fell down to 0.0015 ETH or $1.57 — a number previously seen in December 2020. The record low ETH fees are most likely caused by the dropping NFT sales, which have also hit a yearly low in this bear market, indicating that the NFT fever is starting to cool off fast. Whatever the reason for them, lower fees will allow investors to pursue DeFi investment opportunities more easily on Ethereum. In addition, we are all looking forward to Ethereum 2.0 which would further reduce the blockchain fees and last week developers brought Ethereum another step closer to ETH 2.0 by successfully performed the merge on the Sepolia testnet.
Sepolia is now already the second Proof-of-Stake Ethereum testnet, the first one being Ropstein that moved to PoS in the beginning of June. Ethereum developers now only have to complete The Merge on Goerli testnet, before moving on to the Ethereum mainnet. The transition of the Ethereum mainnet to a proof-of-stake blockchain will reportedly be completed before the end of this year, with The Merge taking place in August.
- 2. MKR [MAKER]
On July 7, the Maker community passed a vote to partner with Huntingdon Valley Bank (HVB). The proposal, which passed the governance vote with over 87% of the voting power supporting the proposal, involved creating a vault with 100 million Dai (DAI) for HVB as part of a new collateral type in the Maker Protocol. The partnership with this Pennsylvania-based traditional bank will allow the DeFi protocol to issue cryptocurrency-backed fiat loans in the future. At the launch, the bank will be able to borrow up to $100 million DAI, but the debt ceiling is predicted to grow to $1 billion DAI over the next 12 months.
In addition, the collaboration with a traditional banking institution lends additional credibility to the Maker protocol and the broader DeFi sector. Nevertheless, even without the traditional bank partnership, Maker is among the most reputable and oldest algorithmic stablecoin issuers. In addition, while many including USDD, and even USDT, struggled to retain the $1 peg in the past couple of bearish months, DAI seems oblivious of the market volatility, retaining its $1 peg throughout the whole time.
- 3. AXS [Axie Infinity]
Axie Infinity is a Pokémon-inspired blockchain-powered trading and battling video game. The game is developed by a Vietnamese gaming studio Sky Mavis and has netted more than $2 billion in NFT sales to date. Axie infinity players utilize Ethereum-issued tokens AXS and Small Love Potion (SLP) to breed, trade and battle with their virtual creatures called Axies, each represented by a one of a kind NFT. The growing userbase and protocol revenue has made Axie Infinity one of the most expensive NFTs collections.
The Axies team has successfully deployed the Origin update and also the first Origin update patch. In addition, the Ronin bridge is now up and running again (recovered from a recent hack) and the game developers launched a new feature called land staking, where players are rewarded with AXS for staking their in-game land plots. This recently rolled-out feature instantly became very popular as it increases the game’s earning potential. Data from the Ronin Chain explorer suggest that more than 87% of plots of land have already been staked. The introduction of plot staking has driven up the price of in-game land plots causing several virtual plots to sell for over 130 Ether (ETH) each, which suggests that the level of interest in the game is still very high. Last but not least, Axie Infinity started selling tickets for AxieCon event that will take place in Barcelona in September. AxieCon will feature three big tournaments with a combined prize pool of $1 million in AXS. The biggest of the three tournaments will be the Axie World Championship where top 16 Axies players will fight for the $500,000 of AXS prizes. As you can imagine, hosting a real-life event of this proportion is an important milestone for the Axie team and even more for the game’s community.
With all this in mind, as the whole market is taking a dive to current support levels, this presents us a great opportunity for accumulation. This, coupled with a weakened dominance of BTC (we are back to being around 40% after the recent jump to almost 50%), could help these tokens outperform Bitcoin in the short term.
However, the danger of Bitcoin failing the 20k support retest is still hanging as the DXY (the dollar index) is looking strong and is on a steady bull run. Bitcoin is typically weaker at times when the DXY is showing strength, so a further slide beneath our current support is also a possibility, so yet again, all eyes are on Bitcoin and how it will react to the retest of this crucial $20,000 support level. A break below this, could yet again send us to the $18k region and even below.
I will keep an eye on the charts and will make an update on this as we go along.