Daily Archives: May 12, 2022

Data shows the Bitcoin carnage has awakened the dead trading volume that had persisted since many months now.

Bitcoin Trading Volume Surges To Highest Value Since December

As per the latest weekly report from Arcane Research, the latest bloodbath in the crypto market has awakened BTC’s spot trading volume.

The “trading volume” is an indicator that measures the total amount of Bitcoin being moved on the chain on any given day.

When the value of this metric rises, it means the market is becoming more active as investors trade larger amounts of the crypto.

On the other hand, a downtrend in the indicator suggests the Bitcoin market activity is going down at the moment.

Historically, high trading volumes have made up for an ideal environment for pushing large price moves. This is because to sustain any such move, a large number of active traders are needed.

Related Reading | Bitcoin Market Cap Falls By $315 Billion As Crypto Adoption In 2022 Fails To Materialize

It’s also true that any significant price move attracts more traders in return as interest in Bitcoin goes up. Thus, it fuels itself to keep going. In cases when the volume hasn’t surged up in response to a move, the move hasn’t lasted for long before dying off.

Now, here is a chart that shows the trend in the BTC trading volume over the past year:

Looks like the value of the metric has surged up recently | Source: Arcane Research's The Weekly Update - Week 18

As you can see in the above graph, the Bitcoin trading volume had been very quite since a couple of months now.

However, this week the indicator’s value has sharply spiked up as the market has panicked due to the crash in the crypto’s price.

Related Reading | Extreme Fear Back In Focus: Is It Time To Buy Bitcoin?

On Monday, the daily trading volume amounted to around $13 billion in Bitcoin travelling on the network. This is the highest the value of the metric has been since the 4th of last December.

It now remains to be seen whether the fresh spot volumes will remain to the next week, or if the market will once again fall back to sleep when the selloff is over.

BTC Price

Bitcoin’s price has now crashed down to lesser values than the low formed in summer 2021. At the time of writing, the coin trades around $28.1k, down 28% in the last seven days. Over the past month, the crypto has lost 29% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have crashed down over the last few days | Source: BTCUSD on TradingView

Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

Mangata Finance, the Polkadot-based DEX, is all set for launch on June 6th.

Recently, it had a successful crowdloan that was closed in just under an hour that secured it a slot on Polkadot’s innovation network Kusama. Over $2 million in value was bonded through the crowdloan, a process of staking Polkadot (DOT) tokens to support a specific project in the Polkadot Slot Auction, in return for which participants receive rewards from the projects.

The project also raised $4.2 million in equity, which came shortly after the launch of its first blockchain on the Kusama network, which raised the Polkadot startup’s valuation to $60 million. New investors including Signum Capital, IVC, Figment, ZMT Capital, AngelDAO, and Paribu Ventures joined the returning investors Altonomy, Polychain, and TRGC in this strategic round.

“Altonomy believes in Mangata’s efforts around connecting major blockchains, improving security for traders, and helping reduce fees by eliminating gas from the equation, which is why we returned for a second round of funding,” said Altonomy Director Ricky Li.

Olaf Carlson-Wee, the founder and CEO of investment firm Polychain Capital, was actually the first one to fund Mangata’s vision of efficient DEXes without MEV.

Leveraging Polkadot Interoperability

The Slovakia-based Mangata is both a blockchain and DEX that will be connected as a parachain in the Polkadot ecosystem. By choosing Polkadot for its multi-purpose DEX, Mangata wants to leverage the key value proposition of Polkadot, which is interoperability.

Polkadot is a layer 1 blockchain network designed to support various interconnected, application-specific chains called parachains. Each chain built within its network uses the Substrate modular framework of Parity Technologies, allowing developers to select specific components that suit their chain the best and optimize their chains for specific use-cases

This entire ecosystem of parachains plugs into a single base platform called Relay Chain. This base platform is responsible for providing security to the network’s parachains and contains Polkadot’s consensus and voting logic.

Mangata is a one-stop-shop for easy and secure trading of Polkadot (DOT) assets while serving as a bridge between Ethereum and Polkadot so that assets can be seamlessly migrated on-demand between the two ecosystems.

It is actually the first parachain to build a specialized ETH <> Polkadot trading UI. Besides connecting these two significant blockchains, Magnata connects other popular layer 1 blockchains; Cosmos, Solana, and Avalanche.

Novel Proof of Liquidity Mechanism

Founded in 2020 by Peter Kris, who previously founded European web3 studio Block Unison, and CTO Gleb Urvanov, a computer scientist, Mangata aims to solve some of the biggest problems in terms of insider trading and institutional adoption that DeFi and the crypto market faces at large. Other barriers to mainstream DEX adoption involve complex structure, price oracle manipulation, and flash loan attacks.

With a team of 14 people, which includes software engineers, product designers, blockchain experts, and business strategists, Mangata believes it is uniquely positioned to deliver on its goal of eliminating these problems.

To advance the adoption of DeFi and crypto, Mangata will be using its funding to offer low fixed fees per operation, capital efficiency via on-chain limit orders, and MEV prevention while providing the first UI to trade ERC20 tokens with native Polkadot assets.

This community-driven DEX is secured through its unique Proof of Liquidity mechanism, which reuses liquidity to ensure chain security. This helps create deeper liquidity pools, increases capital efficiency, and allows stakers to be rewarded twice.

“Mangata’s unique Proof-of-Liquidity mechanism raises the bar on chain security and staking rewards, and our no-gas economy does away with slow, expensive settlements rampant on other blockchains. This latest round of funding will enable us to continue our mission to create a better crypto market for everybody within the Polkadot ecosystem and beyond,” said CEO Kris.

Moreover, the project deliberately does not support smart contracts, self-executing contracts directly written into lines of code, to further shield itself from exploitation by malicious actors or bots.

The first production-ready Layer-1 DEX blockchain also prevents dominant forms of price manipulation and maximal extractable value (MEV). While other blockchains are vulnerable to frontrunning bots, Mangata DEX stops them on the consensus layer with a new block production method, Themis architecture, which makes frontrunning next to impossible.

On top of all these benefits, Mangata’s design eliminates gas from the swaps equation entirely, while other blockchains like Ethereum charge extremely high gas fees, pricing out small users. This allows for faster settlements at no additional cost, as well as new strategies like dollar-cost averaging.

Algorithmic buy & Burn

The way the DEX is designed ensures fixed fees while providing greater control over trading costs and increased opportunities for arbitrage.

Besides addressing the limitations of DeFi, Mangata has also implemented a novel algorithmic buy and burn mechanism that will reflect the protocol’s success in the price of its native token MGX.

The way this mechanism works is 0.05% of the 0.3% commission charged by Mangata X will be used for this algorithmic buy and burn. Meanwhile, 0.2% will go to liquidity providers as LP fees and 0.05% to the Treasury.

MGX is hard-capped at 4 billion, and right at the launch, 1 billion MGX will be released to allow for deep liquidity. Eighty percent of MGX tokens’ supply will actually be distributed to the community, out of which 30% is set aside for validation rewards, and 37.5% is for LP rewards.

Now, ahead of its launch, Mangata is partnering with other DeFi protocols like Acala, Oak Network, Bifrost and Moonriver as it moves forward to make the cross-chain future happen and allow tokens to flow freely from one blockchain to the other.

All in all, Magnata aims to create a high-quality trading system that facilitates community access to early-stage Polkadot projects.

Despite the majority of tokens trading in red on Thursday, AXS was up by over 20% in today’s session. While LUNA dropped below $0.01 earlier today, MATIC was another notable crypto to fall, dropping to its lowest point since last April.

Axie Infinity (AXS)

AXS was one of the biggest gainers in crypto markets on Thursday, as prices rallied following a three-day losing streak.

Following a low of $16.42 on Thursday, AXS/USD surged to an intraday peak of $24.26 during today’s session.

As a result of today’s rebound in price, AXS moved away from historical lows close to $13, which came in July last year, around the time of the token inception.

The recent decline in strength had pushed the 14-day RSI toward a multi-month low of 19, however, Thursday’s surge has sent this above 25.

Ultimately, prices are still oversold, which is one of the only positives for bulls looking to find a support point, and eventually force an upward shift in momentum.

Should bulls choose to buy this current dip, they will likely face market uncertainty the closer it gets to $30, with some traders likely looking to liquidate positions to secure marginal gains.

Polygon (MATIC)

Although LUNA was down by almost 100% in today’s session, markets have already begun to accept the demise of the token.

However, a token which has not yet met its end, but a notable mover on Thursday nonetheless, is MATIC.

MATIC/USD slipped to an intraday low of $0.4769 in today’s session, which is its lowest point since April 2021.

Today’s move has pushed price strength off the charts, with the 14-day RSI now trading at a low of 23, which is also a long-term support level.

Despite history showing that this floor has never been broken, the current market conditions could potentially push prices further down.

Bears have already targeted the $0.4000 level in recent days, however to no avail, should the floor of 23 break, we will likely see another move towards this level.

Could MATIC find a firm level of support this week, if so at what level? Let us know your thoughts in the comments.

Eliman Dambell

Eliman brings a eclectic point of view to market analysis, having worked as a brokerage director, retail trading educator, and market commentator in Crypto, Stocks and FX.