Bitazza Crypto Weekly: Ethereum’s Upgrade Roadmap Continues with “The Merge” Just Around the Corner -

Crypto Weekly: 15 – 21 August 2022

Ethereum successfully integrated “The Merge” on its Ropsten testnet on 11 August without any issues as Ethereum moves ever closer to its complete transition from the current Proof of Work consensus mechanism to Proof of Stake, anticipated to be implemented on 19 September.

Binance, the world’s largest cryptocurrency exchange, has announced its support for the Proof of Stake(PoS) transition of the Ethereum blockchain. Binance will also evaluate and support new forked tokens that may occur during the Hard Fork process after “The Merge” from the previous Proof of Work(PoW) version of Ethereum.

Circle and Tether, the issuers of the USDC and USDT stablecoins, announced their full support for Ethereum’s transition to Proof of Stake under The Merge update. Circle explicitly stated that they will solely support Ethereum PoS chain post-merge, with Tether echoing their support for the Ethereum update and cautioning against potential confusion within the ecosystem during the transition to PoS.

JPMorgan analyst Ken Worthington argues that the highly anticipated – and rapidly approaching – The Merge upgrade of Ethereum was a reason behind the big July move in ETH’s price. ETH’s price surged over 70% in July, contributing to the rise in total value locked(TVL) in the overall decentralized finance (DeFi) sector by over 22% last month.

According to data from DefiLlama, the total value locked(TVL) on Optimism, a layer-2 scaling solution for the Ethereum blockchain, has surged over 284% in the past month, with the vast majority of TVL coming from users lending and borrowing assets on AAVE.

According to Glassnode, on-chain data indicates that the number of Bitcoin addresses with over 1 BTC surged to an all-time high of 894,303 despite the current bear market.

Blackrock, the world’s largest asset manager, revealed the launch of a spot bitcoin private trust to provide institutional clients in the United States exposure to the Crypto world. This was announced a week after Blackrock revealed its partnership with Coinbase.

The Fiscal Information and Investigation Service(FIOD) has arrested a developer suspected of being involved in the Tornado Cash protocol that has allegedly been linked to criminal activities and accused of facilitating money laundering. The arrest of the 29-year-old developer was sanctioned earlier this month by the US Treasury Department.

Weekly Technical Analysis: 15 – 21 August 2022

Bitcoin (BTC)

BTC remains in a sideways uptrend. To confirm an upwards reversal, BTC will have to surpass resistance at the $25,000 level – its 100 Exponential Moving Average (EMA). If this initial resistance can be successfully challenged, the next resistance BTC will look to target is at the $29,000 mark. Otherwise, investors are advised to focus on the short-term support level at $21,500; if it falls below this level, investors are advised to cut losses.

Ethereum (ETH)

ETH’s price has surged in anticipation of “The Merge” upgrade and will likely maintain its upward momentum. However, its RSI is approaching the Overbought threshold, which could suggest the possibility of a decrease in price in the short term. ETH has its first support level at $1,828 and a subsequent critical support level at $1,400. Resistance remains at the $2,400 mark.

Shiba Inu (SHIB)

SHIB is up by +38.5% over the past week. Despite its momentum, the popular meme token is still in a downwards trend, and investors are advised against chasing the price and instead wait to enter positions at the short-term support level at 0.0005 THB. Resistance level is set at 0.00075 THB in the short term.

Gala Games (GALA)

GALA is up by +15.7% over the past week; however, the trend remains uncertain, and it remains to be seen whether GALA can sustain its current bullish momentum. Investors interested in GALA are advised to enter short-term positions around the 2 THB support level and secure short-term profits by selling at 3 THB until further indications can confirm an upwards reversal before starting to consider longer-term investments.

Trading and Investment Considerations For The Week

US Consumer Price Index figures for July indicate an annual inflation rate of 8.5%, managing to beat both market expectations and the preceding month’s (June) CPI figures. This could indicate that US inflation has peaked, which could reduce pressure from the FED, which has been mulling over increasingly stringent monetary policy to curb rising inflation. If so, this could positively impact the overall crypto market.

However, Bitcoin prices remain largely stagnant, potentially due to the lack of good news or positive sentiment that could spur a market rally for Bitcoin.

This Wednesday, 17 August, the results from July’s FOMC meeting will be released; however, the minutes may not have much impact on the market as the subsequent 0.75% interest rate increase that came out of July’s meetings was essentially in line with market expectations. The minutes are unlikely to reveal anything revelatory or particularly damaging to the crypto market, particularly considering that the lower-than-anticipated inflation rate/CPI figures were not known to the meeting’s participants at the time.

The overall crypto market is still searching for positive news that could spark a sustained market recovery. Despite the rally over the previous weeks, positive momentum from The Merge upgrade to Ethereum could be exhausted soon – which could potentially trigger a sell-off as investors look to secure profits on tokens that have rallied recently.

For now, unless there’s unexpected negative news, the market is anticipated to continue trending sideways. The strategy is to focus on tokens that have been generating good returns that have benefited from news of “The Merge” – if these tokens see a price dip this week, entering a position on some of them could prove profitable. Buzz surrounding “The Merge” remains high, and tokens linked to Ethereum and its rapidly approaching upgrade should be able to carry some bullish momentum for this week.

*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.

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