Bitcoin Sleeping on U.S. Dollar Cool Down
Bitcoin continues to cling to the $39,000 range and since it hasn’t been able to climb back over $40,000 analysts are saying that the latest support of $39,300 has been crucial.
There is some upside for BTC though, the US dollar index has been showing signs of cooling down after a huge run to level seen last in 2002. The upside is slight and bitcoin has yet to show signals of reaping the rewards of the US dollar changing gears but that doesn’t mean that bitcoin’s out of time.
Some analysts are predicting that the slowing US dollar index may be triggering a short-term bullish movement for bitcoin towards $42,000.
Ethereum Beacon Chain Growing Pains
As we near the Ethereum beacon chain merge, the altcoin has been going through some interesting changes. For starters revenue from gas fees have nearly been cut in half from 2021’s fourth quarter to Q1 of this year.
Q4 saw $4.34 billion in gas fee profits and those got slashed by 44% in the quarter after that to nearly two and a half billion. On top of that 87% of the first quarter revenue was burned amounting to over two billion dollars worth of ether.
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Those numbers don’t sound too appetizing but with sites set on the beacon chain Ethereum has been racking up lots of capital. The ETH 2.0 staking deposit contract has grown to 12 million ether which is essentially $34.5 billion in total value locked.
And since the smart contract launched in November 2020, it has swelled up to holding about 10% of the total ether supply in circulation.
Terra $LUNA Bringing $UST Down
If you haven’t noticed terra’s Luna tokens have taken a slide in the charts. The native token has lost about 5% in the last 24 hours falling to a nine-day low of $85.50.
And yes when we zoom out Luna is still way up with 400% in growth in the last year but this current tumble can be an issue for terra’s UST stable coin reserve.
As Luna makes up about 7% of the bitcoin dominant UST reserve and since bitcoin has been stagnant for over a month these sudden Luna losses are the cherry on top and has likely suffocated UST reserve values to a near two-month low. If Luna can pick up the slack it would probably be from extra token burning.