Bulls dig in

On Friday, Bitcoin retraced toward $67,000, capping a helter-skelter first week of April that left the largest crypto down 4.6% over the past seven days and down 9% since the all-time high price of about $73,700 was reached roughly three weeks ago.

Nevertheless, legions of long-positioned traders remain a dominant force in the dance-on-the-razor's-edge world of perpetual swaps, CryptoQuant says.

Connected with this market is a closely tracked sentiment metric, the "futures funding rate," and it is nearing a record high level.

The difference between BTC spot prices and forward-looking futures contracts gets balanced out via periodic payments. Positive funding rates indicate that long position traders are willing to pay funding to short traders betting on lower prices, and that they are doing so in droves.

When there are disproportionately way more traders betting on higher BTC prices – in the wake of a peak and despite a pullback – flags start to present themselves as red. The last time funding rates were this high was in April 2021, as CoinDesk pointed out.

At the time, BTC was above $60,000. Three months later, BTC fell to below $30,000.

Meanwhile, the U.S. Commodities Futures Trading Commission (CFTC) has new data showing record levels of short BTC positions being amassed by hedge funds.

XRP is slightly down over the past day and drifting further from the key sixty-cent mark.

But yesterday, Ripple, the ledger technology company, with which XRP is closely associated, announced plans to launch a USD-pegged stablecoin as part of a wider effort to build out what's being envisioned as an XRP payments ecosystem.

According to Ripple, the stablecoin will be backed 1-to-1 by U.S. dollar deposits, government bonds and cash equivalents to be held in reserves subjected to transparent monthly audits.

Ethereum's layer-2 networks are girding for growth. So say researchers at fund manager Van Eck. In a recently published report, Van Eck's analysts forecast that the ETH scaling sector, which includes Arbitrum and Optimism (and at least some 40-odd other projects), will reach a market value of $1 trillion by the end of this decade.

The report presumes the Ethereum network will come to own a 60% market share among all public blockchains.

However, the Ethereum-based project that has most captivated the crypto space lately has to be Ethena (ENA).

The newly issued governance token of the Ethena stablecoin protocol, ENA reached $1.25 on Wednesday but has since taken a dump. As of Friday morning, entering its third full day of trading, ENA was $0.89, or nearly 30% off that high.

One of the champions of this project is Arthur Hayes, founder of BitMEX and an investor in Ethena Labs. Hayes is bullish beyond belief, predicting ENA will eventually hit $10, per The Daily Hodl. 

The project is centered on the yield-earning “synthetic dollar” token, USDe, launched in February and touted as a reliable, scalable means of exchange, one that is unbound to the burdensome confines and vulnerabilities of the world's traditional banking systems.

Delphi Labs CEO José Maria Macedo says USDe could eventually become the third-largest stablecoin-like asset, owing to its competitive annual yield, currently 35%. According to Macedo, the $150 billion stablecoin market is craving a fresh approach to the notions of what's meant by stability versus pragmatic risk/reward considerations.

“In my view, USDe is the most scalable fully collateralized stablecoin ever created," he said. "It’s not fully decentralized, nor can it ever be, but it nevertheless sits at a very interesting point on the tradeoff spectrum.”

Ethena is one of the incubator investor's "highest-conviction bets," Macedo adds.

Meanwhile, superstar DeFi developer Andre Cronje just published a social media post questioning whether USDe will be the next Terra stablecoin, UST, which imploded in the spring of 2022, taking the Terra ecosystem and a big chunk of the crypto industry down with it.

Cronje said he sees a critical vulnerability in the USDe minting and maintenance system, that is, a reliance on collateral that comes in the form of income-generating assets, such as staked Ethereum (stETH), as well as on overly complex strategies involving perpetual futures contracts.