Bitrabo Editorial
Since last Wednesday, Bitcoin has experienced a notable rise of over 5%, although recent weeks have been marked by volatility and uncertainty. Nevertheless, the latest announcement from Coinbase is rejuvenating hope for Bitcoin enthusiasts interested in decentralized finance (DeFi).
Coinbase has recently rolled out Coinbase Wrapped BTC (cbBTC), an ERC20 token fully backed by Bitcoin (BTC) at a 1:1 ratio. At this time, cbBTC is set to be supported on both Base and Ethereum, with future plans to branch out to additional blockchain networks.
This innovative platform offers Bitcoin holders new avenues to participate in DeFi, enhancing their options for utilizing BTC across a variety of platforms.
The launch of cbBTC by Coinbase is a significant stride towards increasing financial freedom within the cryptocurrency realm. It provides BTC users with more avenues to utilize their digital assets while remaining engaged with the expanding DeFi environment.
Bitcoin’s Launch on Base
Coinbase is making a pioneering advancement by connecting extensive off-chain Bitcoin liquidity to efficient, cost-effective financial networks on Base and Ethereum.
With cbBTC, Coinbase enables Bitcoin holders to engage across multiple blockchain networks, promoting a more integrated financial landscape. Wrapped tokens such as cbBTC facilitate the use of Bitcoin in innovative ways, bridging the traditional holds of Bitcoin with the dynamic world of decentralized finance.
By removing barriers between chains, cbBTC allows seamless integration with various DeFi applications, leading to new opportunities such as providing Bitcoin liquidity to DeFi protocols or using it as collateral for acquiring other cryptocurrencies.
Upon its launch, cbBTC will be accessible on decentralized exchanges (DEXs) like Aerodrome, Curve, Matcha, and Uniswap, along with lending platforms including Aave, Compound, Morpho, Moonwell, and Spark. Furthermore, cbBTC can engage with real-world asset (RWA) protocols like Maple.
When Bitcoin is transferred from a Coinbase account to an address on Base or Ethereum, it will automatically switch to cbBTC at a 1:1 ratio. Conversely, receiving cbBTC in Coinbase accounts will convert it back to Bitcoin.
It’s important to note that cbBTC will not feature a distinct trading pair or order book on Coinbase but will be tradable through DEXs using Coinbase Wallet and potentially through other exchanges that opt to support it.
Bitcoin Approaching Critical Resistance
Currently, Bitcoin (BTC) is trading at $58,302 and is nearing potentially higher prices. For an extended upward movement, it needs to surpass the 4-hour 200 exponential moving average (EMA) at $58,717, which is just under 1% away from its present price.
This EMA has stood as a vital short-term resistance since early August, underscoring its significance. Successfully breaking through and maintaining a position above this EMA could indicate a trend reversal, potentially guiding BTC towards the subsequent key supply level around $61,500, which will be a crucial resistance to monitor.
On the other hand, if Bitcoin fails to close above $60,000 in the next few days, it may enter a consolidation phase or even experience a deeper correction. This situation would imply that the current resistance is holding strong, potentially leading BTC to face additional hurdles in its quest for higher ground. Traders and investors should watch Bitcoin’s ability to navigate this resistance for insights into its near-term direction.
Image sourced from Dall-E; chart provided by TradingView