Crypto Market Forecast: Midweek Update 30th September

A mid-week summary of forward-focused crypto news that matters. Today, crypto companies reorganize after China's crypto ban, Coinbase halts plans for a lending product, and the dydx exchange hits trading volume records.
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It has been a difficult September for the digital asset markets, however, a strong Wednesday has provided a glimmer of hope as the month comes to an end. Bitcoin (BTC) and Ethereum (ETH) are up ~1% and down ~2% so far this week.
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The crypto industry is continuing to process China’s latest crypto ban which encompasses trading, order matching, token issuance, and derivatives. The new rules state that overseas crypto exchanges can no longer provide services to mainland Chinese exchanges or traders.
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Following the announcement, Hangzhou based Sparkpool, the world’s second largest Ethereum mining pool, announced it plans to shut down all services. Bitmain, one of the world’s largest producers of ASIC miners, has suspended sales of machines to Chinese users and is relocating its factories from Shenzhen to Southeast Asia.
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Huobi, a popular crypto exchange that has continued to operate in China even following the country’s ban of renminbi to crypto trading, is also set to exit the country. It is no longer accepting Chinese phone numbers from users, will try to remove China-based users, and it has shuffled China-based employees out of the country.
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September is set to be Bitcoin’s worst month since May of this year, with BTC falling ~10.2%. After the hostility towards the industry by the PBoC, regulatory pressure from the United States added further momentum to the price drop. Adverse commentary by the SEC has forced Coinbase to scrap its planned lending product.
Altcoin Watch
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Much of the altcoin market followed a similar pattern to BTC and ETH. Cardano (ADA) is down ~7% so far this week. However, Binance Coin (BNB), and XRP (XRP) are up ~1%, and ~7% respectively this week.
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The Terra blockchain (LUNA) is set to undergo its biggest upgrade yet on September 29th, Columbus 5. The upgrade will add new cross-chain communication features and allow Terra to integrate with Dapps on other blockchains like Solana.
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Coinbase Pro announced on September 29 that it will enable the trading of Avalanche (AVAX) tokens on its platform. Avalanche is also available on Binance (for global users) and Bitpanda (European users).
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__Avalanche is a__ multi-chain, DAG-based initiative with a big budget with backing from Three Arrows Capital. Avalanche has had a strong six weeks of price-performance backed by a recent liquidity incentive program that has created new demand for AVAX.
What we’re looking at: dYdX and DEX volumes boom
dYdX has captured the attention of the crypto ecosystem this week after surpassing centralized exchange giant Coinbase in 24-hour daily trading volume. dYdX is an Ethereum based decentralized exchange that offers spot, perpetual, and futures trading. It was founded by ex-Coinbase employee Antonio Juliano. On September 27th, the volume on dYdX reached US$3.69 billion, compared to Coinbase’s US$3.61B. While dYdX offers margin trading on its derivative products, which skews its volume estimates upwards, its ability to compete in volume terms with a blue-chip behemoth is impressive.
The buzz amongst the crypto community is that the surge in volume on dYdX is due to the disruption of offshore global exchanges servicing users in China. Following the PBoC’s statements regarding the legality of international exchanges in the country, Huobi, Okex, and Binance have all taken measures to block and remove Chinese users from their platforms. As a Dex that can be accessed with just a Web 3.0 wallet, dYdX, and similar defi platforms, with fewer KYC and AML restrictions, is an alternative to the now-banned exchanges. dYdX volumes were also likely boosted by a recently concluded liquidity mining program.
Colin Wu, a leading blockchain journalist from China tweeted that “Chinese communities are discussing how to learn defi.”
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