Ethereum remains under pressure in a key support zone, teetering between a potential rebound and further decline. While bullish patterns like the cup-and-handle and ascending triangle are shaping up, confirmation is required before any decisive move.
Last Defense Zone: $2,274–$2,104 And The Libra Reversal Setup
Kamile Uray shared that Ethereum is currently trying to hold above the critical support zone between $2,775 and $2,623. This area has become a key battleground for bulls and bears, with buyers attempting to defend it to prevent further downside. If this support continues to hold, ETH could regain short-term stability and make another attempt to move higher.
On the upside, a sustained bounce from this zone could allow Ethereum to revisit the pink box resistance around the $3,445 level. A clean breakout above this resistance would activate bullish structures such as a cup-and-handle or an ascending triangle, signaling growing bullish momentum and opening the path toward the $3,894 level. However, this becomes possible if ETH manages to close above the $3,661 peak, confirming the formation of the first major high.
The $3,894 level carries technical significance, as it represents the 0.618 Fibonacci retracement of the most recent downward wave. A decisive close above this level would suggest continuation of the recovery. Failure to hold above it, however, could trigger renewed selling pressure and lead to another corrective move lower.
On the downside, if Ethereum loses the $2,623 support, a deeper decline toward the pink box zone between $2,274 and $2,104 would become likely. This area is notable for the potential formation of a bullish Libra pattern. Should reversal confirmation emerge from this zone, ETH could attempt another recovery phase, with the broader objective of retesting its previous highs.
Waiting For Confirmation: ETH’s Next Move Depends On Price Action
Ethereum is currently following the trajectory outlined by Crypto Candy in a recent update on X. As predicted, the asset dipped into the lower support range between $2,600 and $2,700 and is now attempting to stage a recovery from the zone. Should this upward momentum persist, the immediate objective for bulls is a return to the $3,070 level.
However, for Ethereum to firmly re-enter bullish territory and shift the broader market structure, it must close decisively above the $3,070 threshold. This level serves as the primary gateway for any sustained recovery beyond the current relief rally. Until that breakout occurs, the prevailing market bias remains firmly bearish, as the failure to reclaim and hold above $3,070 suggests that the path of least resistance is still to the downside, with lower price points remaining the primary expectation for the short term.
]]>In the Lightning Network, inbound liquidity is a precious resource. The Galoy Research team detected an irregularity, and, trying to fix it stumbled into a whole business model. Their elegant solution transforms a problem into dollars, which is remarkable. This case reads like a detective novel. Let’s dive in.
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Liquidity Leechers And Inbound Liquidity
In the article “Galoy Research: Self-Balancing Fee Structures for Inbound Liquidity,” the company describes the problem to then lay on us the solution. Galoy are the creators of the Bitcoin Beach Wallet that Bitcoinist described here. The irregularity that the team detected was this one:
“Galoy CEO Nicolas Burtey noticed that the onchain hot wallet was being depleted by a subset of users. These users consistently sent offchain bitcoin to the Bitcoin Beach Wallet only to withdraw it again onchain.”
The company had to “use submarine swaps to replenish our onchain wallet and regain some inbound liquidity.” The thing is, “inbound liquidity is a valuable resource on the Lightning Network. The “liquidity leechers” were using Bitcoin Beach Wallet as a less expensive alternative to a service like Loop from Lightning Labs.”
How Does Loop Manage Outbound And Inbound Liquidity?
The service’s official website describes Loops as “the easiest way to manage inbound and outbound liquidity on the Lightning Network”. The service has two sides. On the one hand, “Loop In enables typical users to “refill” their Lightning wallets when funds are depleted”. On the other, Loop Out is for:
“Merchants, services, and users who primarily receive funds via Lightning, Loop Out serves as a bridge, allowing funds to be sent out of the Lightning Network to “on-chain” destinations like exchange accounts or cold storage systems.”
Instead of trying to catch the people who were “using Bitcoin Beach Wallet as a less expensive alternative to a service like Loop,” Galoy developed a product for them.
BTC price chart for 03/16/2022 on Binance | Source: BTC/USD on TradingView.com
A Dynamic Fee
Back to the article, the adventure begins. “Nicolas and Galoy data scientist José Rojas Echenique set out to diagnose the issue and try to find an appropriate solution”. The duo “first looked at historical data to get a better sense of the problem”. Surprisingly, they found out that “the price of inbound liquidity is roughly similar, no matter how you get it.”
Here’s where the product appears:
“They then looked for a solution that would charge this roughly similar market rate across the full range of use cases – including those using Bitcoin Beach Wallet as a loop out service. The result is a dynamic fee structure (as described in the report) that charges each user a fair amount based on how they are using the service.”
Instead of excluding “those using Bitcoin Beach Wallet as a loop out service,” the company included them. They put a price tag on the service and kept it pushing. How does the actual report describe this “dynamic fee structure”?
“From the perspective of user experience, this approach trades high fees for simplicity. It does not account for the balancing effects of a user’s previous or future transactions, and therefore over-charges users.”
“A smoother dynamic fee formula would take into account a user’s previous transactions, and charge users less if their current transaction balanced their previous transactions.”
Continues Business Operations As Usual
From a problem to a product in three easy steps. Back to the article, Galoy states their approach’s value proposition:
“By solving the issue with fees, Bitcoin banks and other Lightning services can continue business operations as usual vs. attempting to detect and regulate actors who use their liquidity for looping.”
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And, to close it off, the company summarizes the product’s advantages. “The result? An automated solution for Bitcoin banks, a good user experience for end users, and the right fees for all.”
Featured Image by Jason Dent on Unsplash | Charts by TradingView