October 14, 2021
Cryptocurrencies: Daily Update
By Holden Milstein
Bitcoin (BTC) led the pack on a strong recovery back to $57,000, but now it's Ethereum’s (ETH) turn. Ethereum is the second largest cryptocurrency with an 18.6% market cap dominance that makes it a solid benchmark for the Decentralized Finance (DeFi) sector of the cryptocurrency market.
Typically when Ethereum runs hot, other large cap cryptocurrencies follow suit… but why?
Well, Ethereum is an extremely popular and objectively oversaturated blockchain network, as countless projects and decentralized applications have been built on Ethereum’s platform. Like in any industry that is adopted at a global scale, competition becomes a healthy necessity that pushes innovators in the industry to constantly create more advanced versions of their technology. The DeFi cryptocurrency space is no different.
A coin that has been created on the Ethereum blockchain is also known as an ERC-20, a symbol recognizing coins that are compatible with decentralized applications across the Ethereum network.
Chainlink (LINK) is one of the largest ERC-20 coins by market cap, and a personal favorite. The project is able to create databases using off-chain inputs… A hypothetical real-world example would be to use Chainlink to create a system that makes trades every time the moon is in a certain phase.
All of the crypto jargon aside, when Ethereum trades intraday with high volatility and large swings, so does Chainlink.
The thing is, we already know that if Ethereum clears the $3,800 level, it will likely run until the stiff $4,000 resistance level. However, Chainlink has already been suppressed under both its 50 and 200-day Moving Averages for 3 weeks while Ethereum’s been clear of its moving averages for 2 weeks.
One more good pop in Ethereum, maybe even just to $4,000 could see Chainlink go flying.
Coins to Watch: Solana (SOL) to bounce off of its 50-day Moving Average (DMA), Ethereum to garner increased attention with positive comments from Vladamir Putin regarding the potential for Russian adoption in the future
Today’s Winners: Ethereum +5.4% today and looking to overcome the $3,800 level, Axie Infinity (AXS) +11.4% after a brief selloff at all-time highs, Large cap DeFi projects all recover well from a slow start to the week including Chainlink (LINK) & Avalanche (AVAX)Today’s Losers: Polkadot (DOT) -1.95% as the coin cools off from a +18.6% boost on Tuesday, Algorand (ALGO) -1.75% but consolidating at current levels near the all-time high and could springboard off of its 50-DMA