Week 20, 2023 - Weekly Market Outlook

TLDR

• Ripple launches a Central Bank Digital Currency (CBDC) platform, allowing creation of digital currencies.
• Republic of Palau partners with Ripple for their national digital currency.
• Australia's Westpac Bank bans its customers from trading with Binance, reflecting regulatory pressures.
• Bankrupt crypto lending company Voyager Digital gets approval to return 35% of users' deposits.
• Bitcoin trading trends are dependent on the bullish trend of the US equity market and its own support levels.
• Ethereum's downward trend continues; buying interest remains low until bearish market structure is broken.
• The emerging Bitcoin Economy is a potential sector of interest despite lack of mainstream attention.
• Lido and Rollbit are notable performers in the crypto market, while Evmos might be a solid project for long-term portfolios.

Introduction

In an ever-evolving digital landscape, cryptocurrency has become a defining feature of the global economy, sparking numerous technological advancements and regulatory changes. This article will explore Ripple's new Central Bank Digital Currency (CBDC) platform, Binance's ban in Australia, the return of funds from the bankrupt Voyager Digital, and recent cryptocurrency market data. We will delve into these recent events, examine their implications for the DeFi sector, and provide insights into the market dynamics and potential narratives that may shape the future of cryptocurrencies.

A new CBDC Platform

Ripple, a major company in the blockchain field, has announced a new platform aimed at Central Bank Digital Currencies (CBDCs). This comes as over 90% of countries are considering the benefits of CBDCs for making payments easier and more accessible.

The Ripple CBDC Platform provides an all-in-one solution for central banks, governments, and financial institutions worldwide. It allows them to create digital currencies powered by the same technology that supports the XRP Ledger, a well-established digital ledger system.

The President of the Republic of Palau, Surangel Whipps Jr, said this platform could help central banks and governments digitize their financial services. This can make these services more accessible to millions of unbanked people worldwide. The Republic of Palau is partnering with Ripple to create its national digital currency, which is part of its mission to innovate financial services and make them more accessible to its citizens.

The Ripple CBDC Platform goes beyond just creating digital currencies. It also allows users to manage and customize the entire life cycle of transactions and distributions of these digital currencies. This move could majorly impact global finance, enabling more control over CBDCs.

This CBDC platform is a significant step in Ripple's mission to improve global financial inclusion. They aim to make money transfer as efficient as information transfer, and this platform is a major part of that.

So what does this mean for Ripple? It positions Ripple at the forefront of financial technology and digital currencies as they work to make global finance more inclusive. By providing tools to create and manage digital currencies, Ripple is making steps toward a future where everyone, no matter where they are, can participate in the global economy. This could increase the demand for Ripple's services, potentially leading to wider technology adoption.

Binance Banned in Australia

Based in Sydney, Westpac Bank has banned its customers from trading with Binance. This is due to the growing scrutiny of crypto exchanges worldwide. At the same time, Binance customers in Australia can't use PayID anymore to transfer Australian dollars into their Binance accounts. This is because of limits put on the exchange by another company, making it difficult for customers to withdraw money from the bank.

Binance is dealing with various problems, including increased pressure from regulators worldwide. The new ban from Westpac Bank makes these problems even bigger. More and more financial institutions are distancing themselves from cryptocurrency exchanges, which forms part of a larger discussion about the need for stricter rules in the crypto world.

Customers in Australia will have to wait for these issues to be solved or find other ways to trade crypto. This situation is a reminder of the potential instability and regulatory risks that can come with cryptocurrency exchanges. For Binance, this means it will face challenges ahead. As banks and financial institutions become more cautious about cryptocurrencies, Binance may have to work harder to maintain partnerships and customer trust. It could also need to change to meet new regulations and keep its global customers happy.

Voyager Returns Funds

Voyager Digital, a bankrupt crypto lending company, recently got approval from a U.S. bankruptcy judge to give back some of its users' cryptocurrency deposits. This means users can now get about 35% of their deposits back.

The total amount to be returned is $1.334 billion, showing how large the platform was before bankruptcy. This also highlights the damage done to users by the company's bankruptcy.The company plans to give back the funds before June 1. However, it's still being determined if they can return more than 35% in the future, which will depend on what happens in upcoming legal processes.

Earlier, there was a disagreement over the purchase of Binance US by the U.S. Department of Justice. This is one of several recent ups and downs in the crypto industry. The Voyager Digital situation shows the risks and unpredictability in the crypto lending industry, and it reminds investors to be careful and think about the risks before investing.

Crypto Market data

After Bitcoin broke its 8 Week range, it is trading slightly below support. There are a couple of scenarios that could play out here. Based on the US equity market having a bullish trend and looking good, crypto trades That does not blindly mean buying right now. 2 Possibilities of getting crypto exposure. 1. We have broken below support, and to be bullish on crypto, we need to reclaim $27,700. I would target about $30,000 as the first take profit. 2. Buying $24,000- $25,000. I have spoken about the 9-month retest for the last two months. I still stand by this. Buy the 9-month retest; if it doesn't hold, you can buy Bitcoin below $20,000. Buying below $20,000 is one of the best cases. It is crucial to note that these scenarios are hypothetical and can be changed because of different information.

Ethereum has been steadily trending lower. Until it can break the bearish market structure, it remains an asset I'm not buying. Until $2000 is reclaimed, I plan to buy Ethereum at $1450 or $900. Till then, Bitcoin looks like the better chart.

The DeFi Sector

With Ethereum being so weak, there wasn't a chain that did extremely well. The best-performing chain of this week has been Polygon.

While Polygon outperformed Ethereum this week, it outperformed so well because some unknown DeFi projects went up exponentially.

The Narrative

There isn't a narrative that currently has any mainstream attention. For some, this is a bad thing. For me, this is the perfect scenario to find a sector within the space that could do well in the future.

Currently, I'm looking at the growing Bitcoin Economy. While Bitcoin was not originally designed for DeFi and NFTs, developers have found innovative ways to build new NFT and token standards on the blockchain. This has caused a lot of congestion on the chain. Read more about it here.

Best and worst performers

There isn't a narrative with the top gainers. Two very interesting projects here are Lido and Rollbit. Rollbit is a crypto casino. Rollbit could be where new users start trading crypto in a new bull market. Lido was the best performer at the start of the year and slowly cooled off as the Shanghai update came. The recent Shanghai update has positively influenced the realm of liquid staking derivatives, particularly with Ethereum. One of the key benefits of this update is the reduction of risk and uncertainty traditionally associated with Ethereum's staking yield. This yield, which primarily originates from transaction fees, typically ranges from 4% to 9%. With the Shanghai update's influence, stakeholders can better manage and predict these yields, increasing confidence in Ethereum staking.

There isn't any narrative about the losers; the coins on this list are just random coins. Seeing Evmos on here is interesting because it is a very solid project, and Evmos could be a great project to pick up for your long-term portfolio.

The week ahead

Bitcoin is trying to reclaim its 8-week range support. A failure to do so would mean that this would be an underside retest of a range break. When an asset breaks out of its range, it usually takes a while to find balance again. We will be waiting for that balance to take place. That balance might take place at $24,000-$25,000. Till then, there is no point trying to catch a falling knife. The only person that cares about catching a falling knife is a degenerate gambler. Please wait for the knife to fall and then pick it up. The chances of you hurting yourself are smaller. The same goes for trading. Wait for the market to present an opportunity. Till the opportunity presents itself, it's best to wait from the sidelines. It's also great to start researching new narratives and projects. You can read those here.