Hi everyone, happy Sunday...or is it? Let's find out shall we?
Before I post my first chart, I want to address the elephant in the room, the ending of stage 2 liquidity farming at 1INCH and what this potentially means. For anyone keeping an eye on the TVL, you'll know that 1INCH has lost 40% in TVL, this is not people pulling their investments from 1INCH but rather just a natural state of affairs with regards to a farming round coming to an end. Now there are a couple of scenarios that we need to be aware of.
A) Everyone whom farmed brings their 1INCH rewards to market and dumps them thus suffocating the price...again....in order to move to the next "attractive" farming opportunity.
B) Everyone keeps their rewards and actually stake it for 25% APY as 1INCH has the best staking APY on the DeFi scene. Prices remain stable as people opt for stable long returns.
C) We see a mix of A and B where the price will wobble but remain largely stable (sideways consolidation).
It's always good to break these events down to worst case, best case and most likely case as it allows us to put things firmly in to perspective. I for one see option C as the most realistic outcome because of a number of factors. There will be gold rush farming elsewhere, few want "small but stable" rewards, 1INCH may yet announce a stage 3 or the 1inch community may decide to scrap farming rewards in favour of focusing on increasing the staking reward further than 25% to reward long-term investment and to offer stability to the ecosystem.
It's going to be interesting, come what may.
Anyway, on to the charts!
1INCH continues a clear sideways consolidation trajectory, this is really good because it is signalling price stability but bear in mind about the end of stage 2 liquidity farming which could see the price fall to the bottom of my trade channel but I don't think we'll see a complete breakdown of price when considering the best, worst and most likely case scenario.
As it stands, continued consolidation is positive as we can finally be in a position to move up especially as Bitcoin is now in to it's sixth day of consolidation marking a full slowdown, if not stop, to the Bitcoin Bull-Run and so, historically speaking, we know that alts tend to build up traction as Bitcoin becomes "boring" in terms of price action.
The median line of the Bollinger Band is coming down to meet the price point of 1INCH and could see the price rise above the median line in a good signal for a trend reversal but to add a cloud to that silver lining, I would prefer if the price broke the median line as opposed to the median line falling below the active price on the grounds of averages, still, I'll take it as a small win.
1INCH remains firmly in the trade channel created by the two linear projection lines which is positive as we are still on course for $17 by the end of the year.
Another interesting thing to note is that the zone of the trade channel is almost an identical match to the first zone of the Fib Extension tool which could be a confirmation that the lines on that zone are indeed the lines of significant support and resistance. Just something to ponder over for the future.
The RSI and StochRSI are convergent in as much as they both are in the active trade zone but the MACD still shows we are in negative pressure territory, if the MACD crosses over then I'd be inclined to suggest that the RSI and StochRSI are both going to continue their journey to the overbought zone as a pump ensues.
So yesterday's depth chart margin has slipped a little but remains firmly in the grasp of buyers from the active price point down to $3.5. This could see 1INCH move back to finishing the week on $4 which will be a nice way to end the week.
On the overall picture via the depth chart, the buyer to seller ratio is at 2.1:1 meaning that sellers have the overall strength in the market but with buyers holding the line and showing more demand in and around the current price point, we could see sellers start to move their assets further up the ladder to let that price accumulate a small portion of pace.
Sentiment has bounced back but I believe this may drop with the ending of stage 2 liquidity farming so don't be worried if this falls in dramatic fashion as people rush to assess their positions.
There have been no dramatic moves on the market cap/price point so figures are all showing continued sideways consolidation.
Now for the spreadsheet. As I pointed out earlier, the TVL has shed 40%, this is normal as liquidity farming comes to an end. The big questions are, will 1INCH offer a stage 3? Will investors want the abnormally large APY reward for long-term staking? What will be the new "normal" for the TVL if no stage 3 is offered? It's slightly frustrating as we were just forming a stable picture of the TVL through the Bitcoin wobbles but as much as it can be unnerving when such a situation occurs, it will be interesting to watch what exactly happens.
The M.Cap/TVL ratio is currently at 0.6:1 so even with a shedding of 40% of the TVL, 1INCH remains firmly undervalued which is a strong indicator that even if a stage 3 for farming was not announced, investors would continue to see 1INCH as a lucrative opportunity.
The PSR value has only fallen marginally as the market cap and traded 24 hour volume stabilise at their current prices so 1INCH remains over-priced and at this point I would not suggest looking at buying more 1INCH until we have a clearer picture of what to expect with the end of stage 2 farming.
I hope you all continue to find this reporting helpful in making the best informed decisions as to do with your 1INCH positions or if you are looking to acquire a position.
Remember, I currently offer 5 weekly reports on my Patreon which will moving to 7 reports so feel free to pop by my Patreon page at https://www.patreon.com/isce if you want to support my reporting.
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As always, I hope you have a good day and KEEP IT GREEN!
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