Bitazza Crypto Weekly: Buzz Surrounding Ethereum Still Going Strong With “The Merge” Coming Soon -

Crypto Weekly: 22 – 28 August 2022

According to the Ethereum Foundation, “The Merge” upgrade will have no significant effect towards lowering gas fees and transaction speeds. The only significant change in the upcoming upgrade is the transition from the Proof of Work (PoW) to the Proof of Stake (PoS) algorithm.

Data from Dune Analytic shows that over 13.2 million worth of ETH has been deposited in ETH 2.0 staking contracts, with approximately 80,000 unique depositors.

CME Group, the world’s leading derivatives marketplace, announced plans to launch options contacts for Ether futures on 12 September, sized at 50 ETH per contract and subject to regulatory review. The new product release follows the increase in the demand for Ethereum Futures.

Ethermine, the world’s largest Ethereum mining pool, has announced the organization plans to drop proof-of-work (PoW) Ethereum mining entirely. As soon as “The Merge” takes place, Miners will no longer be able to mine Ether on the Ethereum network using graphic cards (GPUs) or ASICs after the Ethereum mainnet transitions from a PoW network to a PoS network.

Ethereum Layer 2 scaling solution token Optimism suffered a drastic price drop of over 10% in a matter of minutes following rumors that its multisignature wallet had been hacked. The Optimism team clarified that the fund movements were preplanned Coinbase Custody-related transfers to investor wallets. The value of the funds transferred is around $450 million, according to Etherscan data.

Tether, the world’s largest stablecoin issuer, has announced that it is working with accounting firm BDO Italia to conduct monthly Tether assurance reports based on the stablecoin issuer’s reserves. Tether has since published its quarterly assurance opinion by BDO, which notes that Tether has seen a 58% decrease in commercial paper reserves. According to the announcement, Tether’s exposure to commercial papers will be down to $200 million by the end of August 2022 and aims to hit zero by the end of the year.

In a recent interview Michael Saylor, former CEO and founder of MicroStrategy argued that: “Bitcoin is digital money for the 21st century [and] Gold was metallic money for the 19th century.” Saylor goes on to opine that he thinks: “Bitcoin is a better gold than gold. You can move it at the speed of light; you can see with the Lightning Network evolving that pretty soon, we’ll have a billion people able to able to move…Bitcoin friction-free.”

Digital asset management firm CoinShares published its weekly Digital Asset Fund Flows Report revealing inflows of digital asset investment products from providers such as Grayscale, CoinShares, ProShares, and CI Investment. Overall this year, digital investment remains positive with an inflow of $475 million; however, there has been a negative outflow of $13.8 million in August alone.

Crypto intelligence platform Blockdata reports that major companies have been steadily investing in businesses operating in the blockchain and cryptocurrency industries since 2021. Samsung leads the pack in the number of funding rounds participated in with 13 investments, followed by UOB, Citigroup Inc, and Goldman Sachs Group Inc. Meanwhile, Alphabet, Google’s parent company, is also one of the most prolific investors in blockchain companies, with over $1.5B invested in 4 companies, including Fireblocks, Dapper Labs, Voltage, and Digital Currency Group.

Weekly Technical Analysis: 22 – 28 August 2022

Bitcoin (BTC)

BTC fell below its major support level of $22,500 but has managed to remain above creating a lower low at the $20,700 level. If BTC can remain above $20,700, we may see a recovery to test its previous resistance level at $22,500. However, if initial support at $20,700 cannot remain intact, BTC will likely see a downwards reversal that could potentially push BTC as low as the $17,500 mark.

Ethereum (ETH)

ETH is mirroring BTC’s downward move coming into this week. ETH’s current position remains above the $1600 level, ensuring that, for now at least, the leading Smart Contract Platform is in a short-term uptrend. It is possible that ETH could accumulate enough momentum to challenge the $2000 resistance mark again. If this resistance cannot be successfully broken through, investors are advised to pay attention to the $1200 support level, which could prove to be a profitable entry point.

Stargate Finance (STG)

STG is up by +92.8% from the past week; however, its sudden increase in price is too drastic, and the overall technical outlook remains bearish. Investors are advised to avoid chasing the market and wait for prices to contract while remaining above STG’s critical support level at the 18 THB mark. If this support level can remain intact, the resistance level will be set at 34 THB.

Wrapped NXM (wNXM)

wNXM is up by +35.8% over the past week. Its overall trend remains downwards, and traders are advised to focus on short-term trading strategies and to take profit when they can. The current market conditions are still not suitable for long-term investment due to high volatility; Entering at the 720 THB support level and taking profit at the 1040 THB resistance level could prove to be a profitable strategy if market conditions prove favorable.

Trading and Investment Considerations For The Week

Although figures indicate that the US inflation rate is beginning to fall, James Bullard, President of the Federal Reserve Bank of St. Louis, has taken a predictably hawkish stance and argued that the FED should continue to increase interest rates to combat inflation. As a result, the US Dollar Index (DXY) has rallied to near its July highs, likely making Bitcoin prices fall as a result.

This week, investors are advised to keep a close eye on the annual Jackson Hole Economic Symposium on 25-27 August. Federal Reserve Chairman Jerome Powell will be giving a speech on 26 August at 10:00 AM (EDT), which could set the tone for what direction the FED will look to take regarding monetary policy moving forward.

If Powell’s speech indicates that the interest rate hikes could slow to around the 0.75% level, this could prove beneficial for Bitcoin. However, increasingly conservative monetary policy and more aggressive interest rate hikes could adversely affect the market. It is likely that whether DXY is able to set a new high above 109 will impact the FED’s decision-making process.

Bitcoin has lost its Sideways Up momentum, leading to concerns of a downwards reversal for the market leader. Keep an eye on Bitcoin’s initial support at $20,700. If prices fall past this level, that could be the first sign that the market could see a correction.

Over the past week, most altcoins have generated negative returns with a few exceptions. Despite market conditions, now could prove to be a profitable opportunity to enter positions on tokens that have been able to maintain the momentum of their short-term uptrend, such as OP. If Bitcoin prices are able to stabilize, it is possible that investors will begin speculating on the higher-performing altcoins, so it is advised that investors keep track of Bitcoin’s performance.

Disclaimer: Cryptocurrency is highly risky; investors may lose all investment money. Investors should study and verify information carefully and make investments according to their own risk profile.

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