The Mechanics of Hype
Without lying to ourselves we are all well-aware that this market is heavily hyped-based due to the simple fact that the majority of market participants are inexperienced investors/traders. This means they FOMO and panic pretty easily. Give them some bullish news and they buy up a coin raising prices.. or so they think.
In reality the real profits are generated by those who anticipate the news or find it before it goes mainstream.
First “Coin” now “DeFi”
Back in 2013/14, anyone could create a cryptocurrency give it any name and add the word “coin” at the end and make it into the top largest market caps (fun fact: Dash was originally named DarkCoin). Today it’s DeFi, it’s sort of a “pump by association”.
XRP DeFi? Not really but..
Something came across our desk recently, something called “Flare Networks”. It’s basically a smart-contracts blockchain whose team has been funded by Xpring. Here is their value proposition:
- Open, permissionless and Turing complete.
- Token ownership does not confer power over the network.
- Safety does not rely on unscalable economic incentives.
- Flare will have a single base unit-of-account that is algorithmically stable in value, generated in part by burning XRP.
- The network adopts the XRP encryption and address schemes so that both XRP and Flare can be used with a single key, providing a virtually seamless experience for XRP users.
They thankfully do not have a native asset for this blockchain that people can speculate on, it’s honestly a very questionable blockchain because of the second and third points. A network that does not incentivize honest validators is either centralised or awaiting to be hacked by malicious users. The fourth point, the burning of XRP for this so-called stablecoin, is bullish because it decreases the XRP supply but unless this scales the burned coins won’t represent much.
BUT, and this is the point behind the post there is a narrative in here. They are offering DeFi products and are offering to wrap XRP tokens and put them on the Flare Network calling them “FXRP” to potentially farm some coins. This DeFi narrative, if/when announced by Ripple themselves or on their team will very likely cause some sort of short-lived pump.
Technical Analysis
We are taking a chance here on XRP, one with calculated risk. In order to do so, we conferred with the charts.
After having finally broken out of this long descending channel, price has hit $0.30. Now it has reclaimed support [$0.275-$0.30]. “IF” this area is not broken, we are maintaining a long targeting $0.45. If not, then $0.25 and the retest of the channel beyond that are both calculated risks we are willing to take. Ultimately, as you all know we start by building a position going in small to test the waters and increase size only if the scenario plays out well.
This trade we’re taking would be accelerated via the announcement of the FXRP/DeFi news.
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