Despite Second DeFi “Attack” Ethereum Bulls are Eyeing $300 Target
There’s no doubt that decentralized finance (DeFi) has been central to Ethereum over the past year.
Speaking to me, Jon Jordan of DappRadar remarked that DeFi is arguably the blockchain’s first-ever “killer use case,” not digital kitties, on-chain gambling, or the issuance of initial coin offerings:
DeFi certainly is the first category of dapps to attract significant amounts of value (both ETH and ERC20 tokens). In terms of wider issues such as user numbers, however, it’s not clear DeFi will attract millions of users. But, yes, DeFi is the first killer dapp category on Ethereum.
This was echoed by Coinbase, who wrote that “DeFi is an essential part of an open financial system,” confirming the firm’s belief that on-blockchain finance will be crucial for the future of cryptocurrency, from Bitcoin to Ethereum.
Thus, when it was revealed that some facets of Ethereum’s DeFi ecosystem were subject to brutal “attacks” that may deter future users, some were sure that the cryptocurrency would take a beating in the market.
Though, this wasn’t the case, with the cryptocurrency surging to near $290. And interestingly, analysts across the board expect even more upside for ETH in the coming weeks.
Analysts Expect ETH to Rally Even Higher from Here
After a brutal drawdown seen on the weekend that made investors fear an impending return to a bear market, Bitcoin and Ethereum bounced back hard on Tuesday, gaining around 6% each.
At the peak of the recovery on Tuesday, ETH was trading as high as $287 — just shy of the previous high of $289.5 and 21% higher than the low seen on the weekend.
Despite this already impressive move, market commentators are currently eyeing more upside for the second-largest cryptocurrency.
Financial Survivalism, the trader who called Bitcoin’s surge to $9,000 at the start of 2020, noted that Ethereum has just “confirmed an inverse head and shoulders” bottoming pattern when it surged yesterday. The measured move of this bullish chart pattern, marked by a strong trend higher after a bottoming process, is $305 — 8% above the current price of $282.
Not to mention, Ethereum’s market dynamics are purportedly looking relatively bullish with the “average ETH trading volume during the past week [being] four times larger than the average volume for the second half of 2019,” as pointed out by macro analyst and crypto commentator Alex Krüger.
The average $ETH trading volume during the past week has been 4 times larger than the average volume for the second half of 2019. Somebody has been buying a lot of $ETH. pic.twitter.com/haWJ4JO6W0
— Alex Krüger (@krugermacro) February 18, 2020
Ethereum’s Surge Comes Amid DeFi Debacles
Again, this surge comes at a weird time; over the past few days, Ethereum decentralized finance protocol bZx has suffered two “attacks,” as some have dubbed the situations we are about to describe.
The two attacks weren’t exactly the same, but the gist of both of them are as follows:
- A user took out a “flash loan” of a large sum of ETH from bZx. A flash loan is where a user borrows and returns the loaned capital in the same transaction.
- The ETH was used to purchase another Ethereum-based asset.
- The user deployed manipulation to change how other protocols see the price of said Ethereum-based asset, allowing for profits to be made due to oracles registering the false market prices.
The attacks saw bZx lose $300,000 and around $650,000, for a total of nearly $1 million.
While some have argued that this manipulation is more of a feature than a bug, commentators across the cryptocurrency field have said that these debacles in DeFi proves that Ethereum’s killer use case is not killer just yet, potentially hampering adoption in the near future.
So this trend of ETH rallying amid much-publicized issues with applications in the ecosystem is interesting, to say the least.
The post Despite Second DeFi “Attack” Ethereum Bulls are Eyeing $300 Target appeared first on Blockonomi.
OhNoCryptocurrency via https://www.ohnocrypto.com/ @Nick Chong, @Khareem Sudlow
