Decentral Block Post

Ethereum’s native token, Ether (ETH), recorded better gains than Bitcoin (BTC) over the past 24 hours despite the latter finally rising above the key $20,000 level.

Ether beats Bitcoin in risk-on rally

On the daily chart, Ether jumped approximately 14% to reach its weekly high of $1,554 (data from Binance) on Oct. 26. Bitcoin underwent a similar rally, but its week-to-date profits are just 6% by comparison. 

The ETH/BTC pair gained around 8%, climbing as high as 0.075 BTC on Oct. 26.

The boom across the top crypto assets has been synchronous with the United States stock market’s winning streak since Oct. 24. It also came on the backdrop of a weaker U.S. dollar index, which has been typically trading inversely to the crypto market since March 2020.

Bear fractal alarm

ETH/BTC’s latest price rally has taken it to a range that preceded a 35% correction in the April–May 2022 session (marked as “R1” in the chart below) and was instrumental in limiting its upside prospects in August–September 2022 (marked as “R3” in the chart below).

Bitcoin (BTC) saw its highest levels since mid-September on Oct. 26 as BTC/USD approached the pivotal $21,000 mark.

Bears lose big as Bitcoin climbs

Data from Cointelegraph Markets Pro and TradingView showed the pair tackling $20,700 at the time of writing, up over 7% in 24 hours.

What began as an assault on $20,000 continued on the day, liquidations mounting further after already sealing the biggest shorts obliteration of 2022.

According to data from analytics resource Coinglass, Bitcoin alone accounted for $550 million in liquidations in the past 24 hours.

$704 million in cross-crypto shorts were liquidated on Oct. 25, with the Oct. 26 tally so far standing at $275 million. Including long positions, the total was over $1 billion.

A sharp rebound in the Polygon (MATIC) market in the last four months has increased its price by 200% when measured from its June 2022 bottom of $0.31. And now, the token is showing signs of undergoing another major market rally.

MATIC exchange balance hits nine-month low

Notably, the MATIC supply held by all crypto exchanges fell to 802.15 million on Oct. 26, its lowest level since January 2022. The plunge came as a part of a broader downtrend that has witnessed over 600 million MATIC leaving exchanges in the last four months, data on Santiment shows.

A declining crypto balance across exchanges is perceived as bullish by the market since traders typically withdraw their funds from trading platforms when they want to hold the tokens long term.

The MATIC chart above shows a similar albeit erratic negative correlation between its price and supply on exchanges. As a result, a period of decline in MATIC reserves at exchanges has historically coincided with an uptrend in price, and vice versa. 

Therefore, the latest plunge in MATIC supply across exchanges hints at more upside for the token in the coming weeks.

A sharp rebound in the Polygon (MATIC) market in the last four months has increased its price by 200% when measured from its June 2022 bottom of $0.31. And now, the token is showing signs of undergoing another major market rally.

MATIC exchange balance hits nine-month low

Notably, the MATIC supply held by all crypto exchanges fell to 802.15 million on Oct. 26, its lowest level since January 2022. The plunge came as a part of a broader downtrend that has witnessed over 600 million MATIC leaving exchanges in the last four months, data on Santiment shows.

A declining crypto balance across exchanges is perceived as bullish by the market since traders typically withdraw their funds from trading platforms when they want to hold the tokens long-term.

The MATIC chart above shows a similar albeit erratic negative correlation between its price and supply on exchanges. As a result, a period of decline in MATIC reserves at exchanges has historically coincided with an uptrend in price and vice versa. 

Therefore, the latest plunge in MATIC supply across exchanges hints at more upside for the token in the coming weeks.

Crypto staking platform Freeway pointed at the failure of one of its trading strategies, along with market conditions as the leading reason for halting user withdrawals earlier this week.

The crypto yield platform on Oct. 23 announced it was halting various transactions relating to its high-yield “Supercharger” product, citing “unprecedented volatility” at the time, without giving any more details at the time, which saw its token price plummet.

In a 22-part Twitter thread on Oct. 25, Freeway shed more light on the situation, revealing that it was “one of Freeway’s trading strategies” that “appears to have failed” and has “dramatically impacted Freeway’s portfolio” and caused a “substantial loss” to its investors.

Freeway explained that an unprecedented rally of the United States dollar, along with crypto volatility led to the failure of the trading strategy. 

“The trading strategy was executed as it was programmed, but the market volatility caused a spike in margin utilization leading to the loss,” it explained.

Decentralized lending protocol Compound has paused the supply of four tokens as lending collateral on its platform, aiming to protect users against potential attacks involving price manipulation, similar to the recent $117 million exploit from Mango Market's, according to a proposal on Compound's governance forum. 

With the pause, users will not be able to deposit yearn finance (YFI), 0x (ZRX), basic attention token (BAT) and maker (MKR) tokens as collateral to take loans.

The proposal passed on Oct. 25 with 99% of all voters in favor. It stated:

"An oracle manipulation-based attack analogous to the one that cost Mango Markets $117m is much less likely to occur on Compound due to collateral assets having much deeper liquidity than MNGO and Compound requiring loans to be over-collateralized. However, out of an abundance of caution, we propose pausing supply for the above assets, given their relative liquidity profiles."

In a security review of Compound v2 performed in September, the Volt Protocol team identified potential market manipulation risks related to low-liquidity tokens. The report explained: