September saw the crypto market start a new wave. Bitcoin has soared back above 115,000, pushing the total market capitalisation to over 4 trillion. As the U.S. Federal Reserve suggests potential rate cuts, a wave is exceeding the digital assets. Against this background, four particular types of cryptocurrencies—Ripple, Dogecoin, LayerZero, and Arbitrum—are worth paying specific attention to this week.
Ripple (XRP)
The news around XRP is still going on with the introducing of new Exchange-Traded funds (ETFs) based on the token. The most recent one, introduced in the Cayman Islands by Rex Osprey, is based on earlier ETF approvals by companies such as Teucrium and ProShares. These products will enable the increased involvement of institutions and increased exposure to investors.
Technically, the XRP is approaching a very important resistance level of approximately 3.00. A further advance beyond this could create extra strength to the higher levels of up to 3.40, but a series of failures might lead to a form of rest back to the ranges of 2.85-2.90.
However, there are risks. The balance of XRP against XRP and the dollar has been increasing, which indicates the potential of a sell-off. The XRP Ledger is not aggressively used in DeFi, and retail users, as in search trends, are not as active as they were at the beginning of the year. The market will be watching this week with all the focus on how the market takes in the ETF launch and whether the institutional flow can offset the increasing supply on the exchanges.
Dogecoin (DOGE)
Dogecoin has recorded an impressive run within the past few months as the cryptocurrency rose to almost $0.30 in mid-September, after being at just $0.13 in April. Its increase has been promoted by increasing speculation and the expectation of the first Dogecoin ETF, as well as by Rex Osprey.
DOGE has technically developed a double bottom pattern with a neckline of approximately $0.29. Breaking out of this resistance decisively would put the token on the path of reaching $0.35. The best support is on the downside of between 0.25 and 0.26.
Open Interest in the Dogecoin derivatives has also skyrocketed to over 2 billion, which is an indication that there has been high involvement of traders. Although this helps in the upward movement of the markets, it also poses risks of sudden liquidations in case the mood changes. In the meantime, DOGE is one of the riskier but potentially up-and-coming stocks of the week.
LayerZero (ZRO)
Stacking on a valuable reputation of facilitating the interoperability between blockchains, LayerZero has a week to reckon with. Approximately 21 per cent of the available number of ZRO tokens are set to be emitted on September 20, which is approximately $48 million in value. These programs of massive token unlock tend to push the price down, especially when the initial participants decide to sell.
Despite this short-term risk, the long-term fundamentals of the project are good. The need to communicate across chains is becoming more popular, and LayerZero is becoming more relevant in a multi-chain world. There might be deflationary tailwinds to ZRO should protocol fee proposals in the future amount to buybacks or burns.
Shareholders will be paying attention to the way the market swallows this unlock of the week. The event may proceed without significant disturbance in case the demand is equal to or even higher than the supply. Otherwise, a trough can provide an access point to long-term interoperability believers.
Arbitrum (ARB)
Arbitrum, which is also one of the biggest Layer-2 scaling solutions of Ethereum, has a high presence within the DeFi scene. This week it has the challenge of a token unlock of 50 million, which is approximately 2 per cent of the supply in circulation.
Historically, unlocks are prone to initiating selling activity. The robust developer activity of Yet Arbitrum, the amount of transactions, and its firmly established place among scaling networks give it some buffer. Should the new projects keep on constructing on Arbitrum and the need for block space increases, the network could readily accommodate the new supply than the others.
For traders, the key will be to monitor post-unlock price action. A temporary dip could present an accumulation opportunity if the broader growth story remains intact.
Final Thoughts
September of Week 3 is proving to be a week of events in the crypto space. On the one hand, ETFs and institutional flows are characterised by the presence of bullish catalysts, and on the other, token unlocks are characterised by the threat of supply shocks.
The major conclusions for the investors during the week:
XRP and DOGE are enjoying the ETF wave, which is critically challenged.
- Large token unlocks are exerting pressure on ZRO and ARB and can cause short-term volatility.
- Macro factors such as possible interest cuts by the U.S will have a lasting impact on the overall sentiment.
Risk management and preparation are all in a market like this. Be it short-term trends that you are trading or long-term stories that you are investing in, there may be a difference between staying awake this week and not.
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