Egg yolk!
What is going on with the viewers of the tube!
Hope you are ready for a wild and wonderful ride, cuz we are going to break down the crypto
markets….so you don’t have to!
Bitcoin...are we going to stay bullish?
Ethereum...why is it having a tough time.
All those questions will be answered, in about 10 minutes.
Because it’s time for Chico Crypto!
So what is up with the granddaddy of them all asset…..Bitcoin!?
What are the technicals saying about BTC?
Well last week, last friday I posted a pretty dang technical video….and showed that with
the bearish days, 3 red daily candles, which brought the price down to the 44k range, we
had fallen under the 200 day MA, moving average indicator after just breaking over it.
This is a long term indicator of bull or bear markets.
Above it, signals bullish, below it signals bearish!
For the past 3 months, we have been below..and the recent break last week was a sign we may
be out of the woods with the bears!
But falling back under after just testing it...wasn’t good...
But then we had….weekend bullishness, which got bitcoin back above 47k & it pushed it
above the 200 Day MA once again!
But as of early morning yesterday, the price was falling back down to 46k and getting close
to falling under the 200 day MA once again!
The blue line in this chart is the 200 day MA, if bitcoin was able to close above 45.5k
and stay above that as of today Monday, we are bullish, as the weekly candle closed above
this technical indicator…
I shoot my videos 24 hours in advance, So I’m crossing my fingers, for us all that
we are above 45.5k today!
Hopefully I’m not completely wrong by the time this video goes live…Although, it’s
obvious from the price jumping above and below this indicator, the BEARS and the BULLs are
in a fight.
This could go on for another week, hanging around this indicator...jumping above, falling
below...but based on some things in the space, I think $50k BTC is coming really soon!
Yesterday, another big Tether print happened….A billion dollar one!
This is the 2nd time in a week that a billion dollar mint of USDT has happened after the
printer was quiet for over 2 months!
And on both occasions the CTO of Tether, Paulo tweeted “Note this is an authorized but
not issued transaction, meaning that this amount will be used as inventory for next
period issuance requests and chain swaps”
They are minting or printing, in anticipation of requests for USDT throughout the end of
the year!
Everyone in the space knows, having the Tether printer go quiet...is a sign that the markets
are going bearish and a cool off.
Having the printer turned on, means the markets are going to fire back up….let’s just
look at the bitcoin price over the past year, with Tether’s marketcap side by side.
As you can see, since December of last year, the Tether printer went wild...and so did
the bitcoin price!
The market cooled off and then crashed when the tether printer went sideways.
We are having a bullish divergence since the bear market….and as you can see, the tether
printer is also having an uptick, a small slight one, but an uptick nonetheless…
There is another reason I think the markets are going to POP off very soon & it has nothing
to do with Bitcoin….but the 2nd biggest cryptocurrency.
Ethereum!
Ethereum has almost 2x’d in under 30 days.
Reaching a low of about 1700 July 19th….and as of yesterday, was near $3200.
That puts ethereum just above 1000 dollars away from it’s all time high, of just above
4300 set on May 12th!
It’s down just about 25 percent from it’s all-time high!
Bitcoin on the other hand is about 30 percent down from it’s all time high!
Ether is outperforming its precursor!
I wonder why?
Well to understand why, we have to go watch the BURN!
As of yesterday, it had only been 10 days since EIP 1559 and the burn upgrade, and look
how much Ether had been destroyed!
Over 46 thousand 800 ether, which is a USD value of over 148 million freaking dollars.
10 days….148 million!
If this rate keeps up, there will be 1 billion Ether burned in just 70 days.
Just over 2 months!
This is amazing to see, Ether getting burned, but it’s a double edged sword!
The burn increases, the more Ethereum is being used!
The more Ethereum is being used, the higher the gas fees are on the ether network….
Doing a swap on Uniswap, cost you nearly 50 dollars, for just a slow or average transaction.
If you wanted fast, you were paying over 100!
Yeah, that is unsustainable even at slow speeds.
50 bucks for a swap isn’t OKAY!
And that over 100 dollars isn’t correct...it’s Metamask funking up with their calculations!
So what the freak is going on!?
Will there be some relief here soon!?
And why is Metamask shatting the bed so bad with calculations!?
Well Vitalik Buterin created a post within the Ethereum subreddit which explains just
that.
The post was titled...why has the Chain capacity increased by about 9 percent after London.
3 answers…
The post says “Looking at the daily gas used chart, we see that average gas used per
day has increased from ~92B to ~100B: a 9% increase.”
which we can confirm by looking at the chart!
So why the increase in capacity, yet gas prices are high?
Vitalik explains “I think that the effect is roughly evenly split between three different
causes: (1) ice age delay, (2) pre-London blocks being not full, and (3) imperfections
in the basefee adjustment formula.
Vitalik then explains each reason in the most Vitalik way possible...but I’ll try and
break it down for those who can't understand Vitalik.
So #1 Ice age delay?
Well to understand that reason we need to know what the ice age is.
This refers to a mechanism...the difficulty bomb...that, at a predefined block number,
increases the difficulty level of puzzles in the Proof of Work mining algorithm resulting
in longer than normal block times (and thus less ETH rewards for miners).
This mechanism increases the difficulty exponentially over time and eventually leads to what is
referred to as the "Ice Age" - that is, the chain becomes so difficult to mine that it
grinds to a halt and stops producing blocks
As Vitalik explained, in the reddit post pre London, the ice age and difficulty bomb was
just starting to take effect….
..but there was another EIP included in London, besides the one everyone talked about eip
1559.
The other eip was 3554...which delayed it another 6 months until December of this year….
So why delay the ice age?
Well, Nethermind tweeted about it.
They said “EIP 3554 is part of the London hard fork, will delay the difficulty bomb
on Ethereum until December when PoS can *hopefully* be merged in.
But what's the reason for the delay?
Why don't we just remove the difficulty bomb so we don't have to worry about it?
They explain below.
First “It’s a defense against attackers that fork Ethereum.
Although changing the code is relatively simple, distributing clients(like ours) that ship
with the code change is very difficult”
Second “The other benefit is that, it ensures there is continued maintenance and urgency
for changes.
If allcoredevs drag their feet with implementing changes, the difficulty bomb sets in and Ethereum
becomes unusable.
And finally 3rd “Finally and perhaps most importantly, when the merge happens, it'll
encourage everyone to hop onto the Proof of Stake system, or else they risk staying on
a chain that is unusable.”
So by delaying this, it has allowed miners to stay on the network!
Miners are important for the health of Ethereum when it’s proof of work...the more miners,
producing blocks...the faster it goes!
Which vitalik explains “Pre-London, average block times were ~13.5s, and post-London average
block times are back down to their long-run normal level of ~13.1s.
This is a ~3% difference in block speed, which explains 3% out of the 9% increase in on-chain
gas usage.
What about Vitaliks 2nd reason for the higher capacity in Ethereum.
Pre-London blocks not being full?
Well vitalik explains this pretty well so let’s just read what he had to say “Pre-London,
the maximum block gasused was 15M.
But not all blocks used the entire 15M.
An analysis from April suggests that ~2% of blocks were empty.
Altogether, we might suppose a pre-London unused space of ~2-3%.
Post-London, however, 15M is not the maximum, it's the target.
This means that if average gas used, including the empty blocks, is below 15M, the basefee
will decrease until the average is back to 15M.
So this accounts for another ~2-3%.
This is great news, as it means blocks are being filled like they are supposed to, and
miners not abusing the platform to mine empty blocks!
Which was happening pre-london.
His final reason?
Imperfections in the base fee adjustment algorithm.
Now this one isn’t good like the others...as these imperfections are yes allowing another
3 percent capacity...but at the cost of what users have to pay!!
Remember how I showed metamask and it’s imperfect calculation...trying to charge over
100 dollars for a fast transaction?
This is because wallet’s, dapps and the like are trying to calculate, off of an imperfect
algorithm.
This causes mess ups in calculations & users are the ones who suffer.
I didn’t make that trade...I’m going to wait until metamask is more in-line with calculations
of fees...which is going to take some time as Ethereum works out it’s kinks…..no
one said this was going to be easy.
Gas Fees will be high until we get to the Merge….December where are you!
Cheers I’ll see you next time!