Upbit Issues Warning for WAVES Investors
The Waves blockchain platform was founded by entrepreneur Sasha Ivanov in 2016 with the aim of making open finance more accessible to everyday users. Waves allows for the creation and trading of crypto tokens without the need for advanced smart contract programming.
Instead, tokens can be created and managed using scripts that run within user accounts on the Waves blockchain. The goal is to make the process of token creation as simple as launching a traditional web application, meaning users can issue tokens without any programming skills.
The WAVES cryptocurrency is vital to the Waves network, with a maximum supply capped at 100 million tokens. WAVES can be used to create custom tokens and pay transaction fees. Importantly, owning WAVES tokens entitles holders to a share of the fees collected from transactions.
The Impact of USDN on WAVES
Forgive the pun! The risk of further decline for WAVES is not yet over. This week, cryptocurrency exchange Upbit warned its users against investing in WAVES due to the volatility caused by the USDN depegging.
USDN is an algorithmic stablecoin backed 1:1 by WAVES, and according to CryptoSlate data, USDN is currently trading below its peg at $0.8. This means that the USDN protocol may liquidate WAVES through an automatic arbitrage process to restore the peg. This has led to an increase in WAVES’ volatility, but it is important to note that the USDN stablecoin has been criticized as a “Ponzi scheme” since its value fell below $0.8 in April.
Sasha Ivanov, the founder of Waves, stated that he took on a $500 million debt to provide liquidity and help bring USDN back to its peg. However, Upbit has advised against investing in WAVES due to its heightened volatility, which could lead to unexpected losses for investors. The South Korea-based exchange reported:
“Algorithmic stablecoins are not fully collateralized and rely on different mechanisms to maintain their peg to a fiat currency, making them inherently fragile during market volatility. Due to WAVES’ increased price volatility, we will suspend the WAVES/KRW and WAVES/BTC pairs.”
Given the current market conditions, investors are continuing to avoid riskier assets, and WAVES may continue to decline further in the coming days.
WAVES Teknisk analys
WAVES has fallen from $3.76 to $1.95 since November 5, 2022, with the current price at $2.03. The price of WAVES may struggle to stay above the $2 level in the coming days, and a break below this level could lead to a test of $1.80.
On the chart below, I have marked the trendline. As long as the price of WAVES remains below this trendline, there can be no talk of a trend reversal, and WAVES will remain in the SELL ZONE.
Key Support & Resistance Levels for WAVES
In the chart (from April 2022), I have highlighted the key support and resistance levels to help traders understand potential price movements. WAVES remains under pressure, but if the price breaks through the resistance at $4, the next target could be $5. The current support level is at $2, and if the price falls below this level again, it would trigger a “SELL” signal, opening the way to $1.80. If the price dips below the $1.50 level, an important support zone, the next target could be around $1.
Factors Supporting a Price Rise for WAVES
Negative news for WAVES emerged this week after Upbit warned against investing in WAVES due to its volatility. However, the potential for an upside remains limited for now, although if the price moves above $4, the next target could be $5 or even $6, depending on resistance levels.
Indicators of Further Decline for WAVES
WAVES has fallen over 40% since November 5, and despite this, market participants should remain prepared for a potential further decline. Upbit recently warned against investing in WAVES due to its high volatility from the USDN depegging. The current support level is at $2, and if this level breaks again, the next target could be $1.80 or even lower.
Expert- och analytikerutlåtanden
WAVES remains under pressure following Upbit’s warning about its volatility. WAVES serves as collateral for USDN, a stablecoin designed to peg its value to 1 USD through an algorithm. Currently, USDN is trading below one dollar, and according to Upbit, investing in WAVES may result in unexpected losses for investors. The price of WAVES is now more than 95% lower than its peak in March 2022, and if it falls below $2, the next target could be $1.80 or even lower.
Varning: Cryptocurrency is highly volatile and may not be suitable for all investors. Never speculate with money you cannot afford to lose. The information on this site is intended for educational purposes only and should not be considered as investment or financial advice.
