Crypto Industry News:
MakerDAO (MKR), the staple protocol for decentralized finance on Ethereum, has hit a new record total value locked in its holdings. According to Defipulse data, MakerDAO’s collateral is now just over $ 1 billion after the steep growth that began on July 22.
Most of this increase is due to the strong price increase of Ethereum, which is still the most used hedging asset for DAI. Since July 22, the amount of ETH invested in Maker has increased by approximately 13%, while the value of the dollar has increased by nearly 60%.
The increase in ETH supply is no coincidence as the Maker community voted in favor of two separate proposals to raise the “debt ceiling” for ETH on 17 and 20 July. Together they increased the amount of DAI that could be knocked out in ETH from 160 million to 220 million. According to Daistats.com, the new cap is almost full as 213 million DAI are now minted with Ether.
From around July 2, DAI has become the preferred asset to power the COMP token. At one point, more than $ 800 million was borrowed in DAI, even though the total supply was only $ 200 million. The discrepancy between the two numbers is due to recursive borrowing. COMP farmers will deliver DAI to Compound, then borrow 75% of the tokens provided and re-deliver them. Repeating this process enough times gives you about a 3x leverage, increasing the total value of the compound locked in the process.
Technical Market Outlook:
The ETH/USD pair has made the recent swing high at the level of $332.43, but the bulls do not seem to stop just yet as the momentum is still strong and positive despite the overbought market conditions. It is worth to notice, that there is a High-Tide Doji candlestick pattern made at the top of the recent rally, so the market might position itself for a quick pull-back. The next target is seen at the level of $355 and the nearest technical support is located at the level of $320.92 and $300.00. There is only 4 days until the month’s end and the current monthly candle looks bullish.
Weekly Pivot Points:
WR3 – $435.28
WR2 – $378.51
WR1 – $351.41
Weekly Pivot – $292.40
WS1 – $265.43
WS2 – $206.30
WS3 – $178.38
The volatility on Ethereum is higher than usual, so all the dynamic moves up and down might reverse quickly. The larger time frame trend on Ethereum remains down and as long as the level of $365 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred. The key long-term technical support is seen at the level of $174.82.
The material has been provided by InstaForex Company – www.instaforex.com