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## Crypto Daily Digest: Stablecoin Demand Declines as Crypto Trading Stabilizes within a Narrow Range

Good morning, traders! Shapella update coming on Sepolia testnet soon. Let's seize this amazing Tuesday and make the most of it! 🚀

On Monday, US stocks had a modest increase as investors tried to make sense of the Federal Reserve's policy. After a weak week for Wall Street, the S&P 500 and Nasdaq 100 recovered. The dollar index decreased, while the 10-year Treasury yield hovered around 3.92%. Investors are adjusting their forecasts for where rates will end up since inflation doesn't seem to be moderating as the Fed expects.

According to Bernstein analysts, cryptocurrency prices have been trading in a similar range as the correlation with US equities and macro events weakens. <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> was trading at $23,500, while Ether was trading around $1,630. The crypto market appears to be waiting for further catalysts and is sensitive to traditional markets, with every dip being bought after down days in US equity markets. The weakening correlation with the US suggests a bull case for crypto, as more global flows drive the crypto market. 

Although <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> and Ether have seen significant gains this year, investment in other crypto assets, such as Stablecoins, has not increased proportionally. Stablecoin supply has been declining, indicating there is less capital to purchase crypto assets. The Stablecoin supply ratio (SSR) has been increasing, suggesting that the buying power of Stablecoins has decreased relative to BTC. This may indicate a decrease in demand for BTC, but it could also mean that capital is waiting on the sidelines to be deployed. BTC and ETH are establishing new levels of support near $23,000 and $1,600, respectively. The supply of Stablecoins may be an important signal to watch for a potential move higher.

 

## Topic of the Day: Velodrome's Weekly Fees Hit Record Highs Amidst Growing <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> Ecosystem

Velodrome, a trading and liquidity marketplace built on the <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> layer two scaling system, has experienced a surge in weekly fees and trading volume, as well as a rise in its native token VELO. 

Velodrome's native token VELO has soared 84.3% in the past seven days, and the platform had $263 million in weekly trading volume, a six-month high. The platform has over 14,000 users, 81,000 transactions, and a TVL of over $315 million, making it the seventh-largest decentralized exchange (DEX). This increase can be attributed to several factors, including Coinbase's announcement of Base, another layer two network that uses <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> technology. Base aims to address the issue of high gas fees and slow transaction times on <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> and is expected to bring more users and liquidity to the <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> ecosystem.

With more users and liquidity entering the ecosystem, trading and liquidity marketplaces such as Velodrome can benefit from increased trading volume and fees. The rise of VELO can be attributed to the increased demand for the token as users are incentivized to hold and use it for liquidity provision on Velodrome. Its limited supply and the hype surrounding the growth of the <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> ecosystem have also contributed to the token's price increase.

In addition to these factors, Velodrome's user-friendly interface and low fees compared to other decentralized exchanges (DEXs) have also contributed to its recent success. The platform is designed to offer a seamless trading experience with high-speed order matching and low transaction fees. Velodrome's competitive edge in the crowded DEX market can attract more users, leading to further increases in trading volume and fees.

As the cryptocurrency market continues to evolve, it will be interesting to see how Velodrome and other DEXs adapt and grow to meet the demands of users and traders. This goes without saying, traders should be wary of these narrative plays and always conduct their own research.

## Velodrome (VELO) $0.01171 (-16.02%) - Neutral Outlook

 **Overview:**

- ***Closest daily support zone: 0.01108 - 0.00990***
- ***Closest daily resistance zone: 0.01205 - 0.01257***
- ***Key Level: 0.00799 (Weekly Close of Sep. 05 - 12. 2022)***
<br>
![](https://gimg2.gateimg.com/image/article/1677550041Untitled0228.png)

Since Feb. 11, when the rise really began, five leg-ups can be seen on the daily timeframe, with each one retracing slightly lower than the last. The last significant leg-up between Feb. 20 - 23 saw a follow-up bearish candle with a wick as low as 61.8% before rebounding above 38.2%, and the bullish candles between Feb. 25 - 26 lost significant momentum as a result. In addition to weakening candlestick strength, which indicates the increasing disparities of sentiment between bulls and bears, the last two price peaks coincided with two lower peaks on the RSI which presented a bearish divergence. Overall, it is likely VELO will retrace back to a weekly Fibonacci golden zone (0.00869 - 0.00718) before we see more buyers coming in to push the price above the descending trendline, and therefore make a new daily breakout.

 **Daily Resistance zones**

1. 0.01205 - 0.01257
2. 0.01310 - 0.01520
3. 0.01755 - 0.02026

<br>

 **Daily Support zones**

1. 0.01108 - 0.00990
2. 0.00869 - 0.00718
3. 0.00552 - 0.00468



<div class="blog-details-info">
<div>Author:** Peter L.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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Crypto market is currently waiting for more significant events and is still influenced by traditional markets, as both BTC and ETH are trading in a limited range. Despite their impressive performance this year,

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Daily News | Crypto Market Stabilizes, Stablecoin Demand Falls, Velodrome's Weekly Fees Surge