Market

VCs Hold 1,100% Gains on These Altcoins, But for How Long?

Published

5 months ago

July 2, 2024

Coin2049 Newsletter

Venture capitalists have been reaping massive gains on a select group of altcoins. However, recent indicators suggest that these investors may be considering selling their holdings soon.

This outlook highlights the need for cautious optimism among token holders. While decisions to hold or sell the altcoins can significantly impact the overall profitability of these VCs, the ripple effect will likely extend to the other investors.

High Dump Pressure: VCs May Sell Altcoins with 1,100% Gains

Ethereum Name Service (ENA), Renzo (REZ), Ondo Finance (ONDO), Dymension (DYM), Saga (SAGA), and Celestia (TIA) token holders could be treading on dangerous ground. The data platform Dune Analytics shows that VCs are sitting at 1,100% unrealized profit on these altcoins, creating high dump pressure.

A high dump pressure indicates strong selling sentiment in the market or perceived risks associated with altcoins. This could result in losses for token holders as the VCs reassess their investment strategies and consider rebalancing portfolios.

“There are better ways to make money in this market than to wait for the inevitable dump from high FDV/Low Market cap Tokens,” crypto researcher Emperor Osmo warned.

Specifically, as dump pressure weighs heavy, they could diversify into other assets, adjust their risk exposure, or implement hedging. These strategies, which would protect them against market downturns, could affect token holders who are not forward-looking.

VC Holdings, Dune VC printer — VC Holdings. Source: Dune

BeInCrypto contacted Hitesh Malviya, the founder of on-chain analysis platform DYOR, to discuss the varying risk levels of VC-backed tokens. When asked about tokens with the highest risk of a VC sell-off, Malviya pointed to AltLayer and Connext. On the other hand, he considers zkSync and LayerZero to be at a lower risk spectrum, suggesting these tokens have a more stable investment base.

As an example of a token that experienced heavy VC investments and suffered significantly after a sell-off, Malviya cites Dimo. Despite substantial backing, Dimo remains underwater following the VC sell-off, serving as a cautionary tale in the volatile crypto market.

Venture Capitalists Flock to 2024 Hot Narratives

A close look at the altcoins shows that they participated in some of the hottest narratives in 2024. Among them, ONDO was central the Real World Assets (RWA) narrative, with Congress gathering for tokenization talks. This year, the sector has gained mainstream attention. Crypto-focused companies, global bankers, and asset managers like BlackRock are leading this interest.

Ethereum Name Service has also been a hot topic in 2024. The protocol allows humans to use easy-to-remember domain names for their cryptocurrency addresses. As the future of Web3 takes center stage, ENS, built using Ethereum’s smart contracts, has recorded growing adoption. In tandem, open interest for the token rose to multi-year highs on Monday.

For REZ, a liquid staking token, interest in the Renzo protocol surged after crypto exchange Binance added it to Launchpool program. The staking narrative also played a part in Celestia, with TIA token price reacting to top crypto exchanges enabling token staking.

On the other hand, SAGA, a GameFi Layer 1 blockchain token, came to the limelight with tailwinds from an airdrop campaign involving partnerships with over 100 projects.

Infrastructure firms attracting the most early-stage investments during hot sector seasons make sense. As the hype around these narratives eases, and with new themes coming up, VCs may identify new interesting projects to

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Market

XRP Price 25% Rally: Breaking Barriers and Surpassing Odds

Published

4 minutes ago

November 22, 2024

Coin2049 Newsletter

XRP price rallied above the $1.15 and $1.20 resistance levels. The price is up over 25% and might rise further above the $1.420 resistance.

XRP price started a fresh surge above the $1.20 resistance level.
The price is now trading above $1.250 and the 100-hourly Simple Moving Average.
There was a break above a key bearish trend line with resistance at $1.1400 on the hourly chart of the XRP/USD pair (data source from Kraken).
The pair is up over 25% and it seems like the bulls are not done yet.

XRP Price Eyes Steady Increase

XRP price formed a base above $1.050 and started a fresh increase. There was a move above the $1.150 and $1.20 resistance levels. It even pumped above the $1.25 level, beating Ethereum and Bitcoin in the past two sessions.

There was also a break above a key bearish trend line with resistance at $1.1400 on the hourly chart of the XRP/USD pair. A high was formed at $1.4161 and the price is now consolidating gains. It is trading above the 23.6% Fib retracement level of the upward move from the $1.0649 swing low to the $1.4161 high.

The price is now trading above $1.30 and the 100-hourly Simple Moving Average. On the upside, the price might face resistance near the $1.400 level. The first major resistance is near the $1.420 level. The next key resistance could be $1.450.

A clear move above the $1.450 resistance might send the price toward the $1.50 resistance. Any more gains might send the price toward the $1.550 resistance or even $1.620 in the near term. The next major hurdle for the bulls might be $1.750 or $1.80.

Are Dips Supported?

If XRP fails to clear the $1.420 resistance zone, it could start a downside correction. Initial support on the downside is near the $1.3350 level. The next major support is near the $1.2850 level.

If there is a downside break and a close below the $1.2850 level, the price might continue to decline toward the $1.240 support or the 50% Fib retracement level of the upward move from the $1.0649 swing low to the $1.4161 high in the near term. The next major support sits near the $1.20 zone.

Technical Indicators

Hourly MACD – The MACD for XRP/USD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is now above the 50 level.

Major Support Levels – $1.3350 and $1.2850.

Major Resistance Levels – $1.4000 and $1.4200.

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Market

WisdomTree Europe Launches XRP ETP

Published

1 hour ago

November 22, 2024

Coin2049 Newsletter

ETF issuer WisdomTree’s European division just announced a new ETP based on XRP. This product is currently available in four EU countries, which has led XRP’s price to jump slightly.

ETPs are a common issuer strategy to earn revenue without ETF approval, but Europe will not necessarily approve one even if the US does so.

WisdomTree’s XRP ETP

WisdomTree, one of the Bitcoin ETF issuers in the US, announced that its European branch is offering an exchange-traded product (ETP) based on XRP. This new product is currently available in Germany, Switzerland, France, and the Netherlands. A growing number of issuers have filed for an XRP ETF, but WisdomTree is taking a slightly different tack.

“The WisdomTree Physical XRP ETP offers a simple, secure, and low-cost way to gain exposure to XRP, one of the largest cryptocurrencies by market capitalization. Backed 100% by XRP, XRPW is the lowest-priced XRP ETP in Europe, providing direct spot price exposure,” the announcement claimed.

The possibility of an official XRP ETF is growing with the current bull market, and Ripple CEO Brad Garlinghouse considers it “inevitable.” Still, it hasn’t happened yet, and ETP offerings allow issuers to somewhat address customers’ requirements. BitWise, which has also filed for an XRP ETF in the US, recently acquired a European ETP issuer to enter the same market.

WisdomTree, however, is no stranger to this market strategy. In May this year, it won approval to offer ETPs based on Bitcoin and Ethereum to British investors.

The UK has not yet approved a full ETF for either of these assets, but WisdomTree still gained market access. Even a fraction of the XRP market could also prove lucrative; the asset’s value spiked today.

XRP Price Spike — XRP Price Performance. Source: BeInCrypto

WisdomTree Europe’s strategy page does not describe any further actions upon full approval. Even if the US approves an XRP ETF under the SEC’s new leadership, that won’t necessarily benefit WisdomTree’s European branch. For now, these ETPs built on XRP will have to suffice for this market.

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Market

Rallies 10% and Targets More Upside

Published

2 hours ago

November 22, 2024

Coin2049 Newsletter

Este artículo también está disponible en español.

Ethereum price started a fresh increase above the $3,220 zone. ETH is rising and aiming for more gains above the $3,350 resistance.

Ethereum started a fresh increase above the $3,220 and $3,300 levels.
The price is trading above $3,250 and the 100-hourly Simple Moving Average.
There is a short-term contracting triangle forming with resistance at $3,360 on the hourly chart of ETH/USD (data feed via Kraken).
The pair could gain bullish momentum if it clears the $3,385 resistance zone.

Ethereum Price Regains Traction

Ethereum price remained supported above $3,000 and started a fresh increase like Bitcoin. ETH gained pace for a move above the $3,150 and $3,220 resistance levels.

The bulls pumped the price above the $3,300 level. It gained over 10% and traded as high as $3,387. It is now consolidating gains above the 23.6% Fib retracement level of the recent move from the $3,036 swing low to the $3,387 high.

Ethereum price is now trading above $3,220 and the 100-hourly Simple Moving Average. On the upside, the price seems to be facing hurdles near the $3,350 level. There is also a short-term contracting triangle forming with resistance at $3,360 on the hourly chart of ETH/USD.

The first major resistance is near the $3,385 level. The main resistance is now forming near $3,420. A clear move above the $3,420 resistance might send the price toward the $3,550 resistance. An upside break above the $3,550 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $3,650 resistance zone or even $3,880.

Another Decline In ETH?

If Ethereum fails to clear the $3,350 resistance, it could start another decline. Initial support on the downside is near the $3,300 level. The first major support sits near the $3,250 zone.

A clear move below the $3,250 support might push the price toward $3,220 or the 50% Fib retracement level of the recent move from the $3,036 swing low to the $3,387 high. Any more losses might send the price toward the $3,150 support level in the near term. The next key support sits at $3,050.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.

Hourly RSI – The RSI for ETH/USD is now above the 50 zone.

Major Support Level – $3,250

Major Resistance Level – $3,385

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