The ethereum price is up 8% on the last 24 hours, with its rally helping the bitcoin price to tick slightly higher and sending ethereum’s biggest rivals—Binance’s BNB, cardano, polkadot and solana—up between 3% and 10%.
Ethereum’s London upgrade, designed to improve network efficiency and fee predictability, is scheduled to go live around 8am EDT and is part of ethereum’s long-awaited move away from the energy-intensive proof-of-work model used by bitcoin to proof-of-stake—allowing users to generate new ether tokens via their exising holdings.
The London upgrade will also see some of ethereum’s ether tokens destroyed, or “burned”—a change that some think will mean ethereum is able to further close the gap on bitcoin’s $700 billion market capitalization as its tokens become more scarce. Ethereum currently boasts a market capitalization of around $300 billion. Earlier this year, ethereum cofounder Vitalik Buterin said the upgrade could mean ethereum becomes more “sound” than bitcoin.
Ethereum’s price, up a massive 500% on this time last year, has outpaced bitcoin and most other major cryptocurrencies in recent months as the market for decentralized finance (DeFi) and non-fungible tokens (NFTs) explodes.
DeFi, the idea that the likes of lending and insurance can be replicated by software protocols cutting out banks, and NFTs, unique digital crypto tokens tied to media, have both become multi-billion dollar markets over the last couple of years. Almost all DeFi funds and NFTs are currently based and traded on ethereum’s blockchain.
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However, some of ethereum’s rivals, including Binance’s BNB, cardano, polkadot and solana which proponents claim are already more technologically advanced than ethereum, are hoping to win DeFi and NFT market share.
“Just like in 2017, ethereum has proven itself to once again be at the epicenter of crypto market activity,” Pete Humiston, manager at U.S. bitcoin and crypto exchange Kraken’s Intelligence division, said in a report out this week.
“Both DeFi and the NFT space, two robust industry subsectors worth tens of billions of dollars in their own right, take place almost exclusively in ethereum’s ecosystem today. This may explain why demand has been so resilient. Ether has been an outperformer all this year, and we see no reason why that will change in the near-term.”
In what seems like an ongoing streak towards market penetration, prominent crypto exchange FTX has launched support for BSC BEP20 tokens within its wallet services. While no official announcement was made, FTX CEO Sam Bankman-Fried confirmed the development by saying:
“ftx.com/wallet now supports BSC for BUSD and BNB! (Withdrawals are live — I *think* deposits are; otherwise they will be very soon.)”
Based on the information available, FTX wallets now actively support withdrawals for Binance USD (BUSD) and BNB, both native to the Binance Chain. The company will soon enable users to make deposits via BSC BEP20 tokens.
However, the services are not yet available for the US-focused FTX platform, FTX.US and other prohibited jurisdictions. In a previous interview, Bankman-Fried opined that governments would require more than three to five years to provide regulatory clarity for crypto businesses that wish to operate within their jurisdictions. The entrepreneur also reportedly spends “five hours a day on everything from regulation to licensing.”
Recently, the company has also limited its users to leverage trades up to 20x instead of offering 101x leverage. The intention behind this move was to minimize the inherent volatility risks associated with crypto trading. Surprisingly, the exchange has not witnessed a reduction in trading volumes following the announcement.
Complimenting the crypto exchange’s technological developments, FTX’s latest Series B investment round saw over 60 participants. The resultant deal placed FTX’s valuation to a whopping $18 billion, a 1400% increase from previously $1.2 billion.
Other market leaders such as Binance also follow similar methods to promote low-risk trading and increase market adoption. Crediting this move to the “interest of Consumer Protection,” Binance CEO stated that limiting new users to 20x leverage on futures trades was something “he didn’t want to make a thingy.”
Bitcoin (BTC) dropped back below $39,000 on Aug. 2, suggesting that short-term traders were booking profits after the price failed to close above $42,451.67.
However, lower levels could again attract buying as seen in late July. Data from Santiment showed that Bitcoin held on wallet addresses storing between 100 and 10,000 Bitcoin rose to a new all-time high at 9.23 million Bitcoin on Aug. 1. The previous all-time high for this group of investors was recorded on April 5, just over a week before Bitcoin hit an all-time high of $64,854 on April 14.
Santiment highlighted that the “addresses have accumulated approximately 170,000 more Bitcoin” in the last four weeks. A similar pace of purchase was seen in late December 2020, just before the start of the strong bull move in 2021.
CoinShares data showed that the assets under management in Bitcoin-focused funds dropped by $20 million last week, its fourth successive weekly decline. Over the past month, Bitcoin funds have witnessed cumulative outflows of $67.8 million.
The data was not all bearish because multi-asset funds attracted cumulative inflows of $7.5 million last week and $11.9 million over the past month.
Could Bitcoin break out of its range and lead the crypto markets higher? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin peeked above the overhead resistance at $42,451.67 on Aug. 1 but the bulls could not sustain the higher levels. This shows that bears are attempting to keep the range-bound action intact.
The upsloping 20-day exponential moving average ($36,968) and the relative strength index (RSI) above 62 suggest that the sentiment is positive. If the price rebounds off the 20-day EMA, the bulls will again try to push and sustain the price above $42,451.67.
If they succeed, it will signal the start of a new uptrend. The first target on the upside will be a move to the overhead resistance zone at $50,000 to $51,500 where bears may again mount a stiff resistance.
This bullish view will invalidate if the price turns down from the current level and breaks below the $36,670 support. That will indicate that the BTC/USDT pair could extend its consolidation between $28,805 and $42,599 for a few more days.
Ether (ETH) broke above the downtrend line on July 31, invalidating the descending triangle pattern. The bears sold at higher levels on Aug.1 as seen from the long wick on the day’s candlestick but the positive sign is that bulls did not allow the price to drop below the downtrend line.
The upsloping 20-day EMA ($2,273) and the RSI in the overbought territory indicate that bulls are in control. The ETH/USDT pair could now rally to the psychological level at $3,000 where the bears may again mount a stiff resistance.
Contrary to this assumption, if the bears pull the price back below the 20-day EMA, it may trap the aggressive bulls. This could result in long liquidation, which may sink the pair to $2,000 and then to the critical support at $1,728.74.
Binance Coin (BNB) rose above the overhead resistance at $340 on Aug. 1 but the long wick on the day’s candlestick suggests that bears are attempting to defend this level.
Although the price dipped back below $340 on Aug. 1, the positive sign is that the bulls have not given up much ground. If the price consolidates between the moving averages and $340, it will improve the prospects of a break above $340.
If that happens, the BNB/USDT pair will complete a bullish ascending triangle pattern. This setup has a target objective at $454.58 but the climb may not be easy because the bears will erect roadblocks at $380 and then again at $433.
On the downside, if bears sink the price below the moving averages, the pair could drop to the trendline. This is an important support to watch out for because if it cracks, the next stop could be $211.70.
Cardano (ADA) rose above the downtrend line on Aug. 1 but the long wick on the day’s candlestick suggests that bears are defending the resistance aggressively.
The marginally rising 20-day EMA ($1.27) and the RSI above 56 suggest that bulls have a slight advantage. If buyers can push and sustain the price above the downtrend line, it will invalidate the descending triangle pattern.
The ADA/USDT pair could then rise to $1.50 where the bears may again pose a stiff challenge. If buyers can overcome this resistance, the pair could start its journey toward $1.94.
This positive view will be negated if the price turns down and plummets below $1.20. That could open the doors for a further slide to $1.14 and then $1.
XRP has been consolidating near the overhead resistance at $0.75 for the past few days, which suggests that bulls are not booking profits as they anticipate the relief rally to extend further.
The moving averages have completed a bullish crossover and the RSI is above 63, suggesting the path of least resistance is to the upside. If buyers drive and sustain the price above $0.75, the XRP/USDT pair will complete a double bottom pattern, which has a target objective at $1.
If bulls fail to sustain the price above $0.75, short-term traders may close their positions. That could drag the pair down to the moving averages. A break below this support will suggest that the pair may extend its stay inside the $0.50 to $0.75 range for a few more days.
Dogecoin (DOGE) has been consolidating near the overhead resistance at $0.21 for the past few days. This suggests a state of uncertainty among the bulls and bears.
The flat 20-day EMA ($0.20) and the RSI near the midpoint indicate a balance between supply and demand. Usually, a tight consolidation near the stiff resistance resolves to the upside. If buyers thrust the price above the $0.21 to 50-day simple moving average ($0.22) resistance zone, the DOGE/USDT pair could rise to $0.28 and then to $0.33.
On the contrary, if bulls fail to clear the overhead hurdle, it could attract profit-booking. The pair could then gradually slide down to the critical support at $0.15. A bounce off this level may keep the pair range-bound between $0.15 and $0.21 for some more time.
The $16.93 level had acted as a stiff resistance between June 22 to July 8 but the bulls propelled Polkadot (DOT) above it on Aug. 1, which is a positive sign.
The moving averages are on the verge of a bullish crossover and the RSI is just below the overbought territory, suggesting that buyers have the upper hand. If bulls flip $16.93 to support, the DOT/USDT pair may continue its journey to $26.50.
On the other hand, if the bears pull the price below $16.93, the pair could drop to the 20-day EMA ($15.21), which may act as a support. If the price rebounds off this level, the buyers will again attempt to resume the relief rally. A break and close below the 20-day EMA could result in a retest of $13.
The long wick on Uniswap’s (UNI) candlestick on Aug. 1 suggests that bears are defending the overhead resistance at $23.45, but the positive sign is that bulls have not given up much ground.
The moving averages have completed a bullish crossover and the RSI is close to the overbought zone, indicating that buyers have the upper hand. A break above $23.45 will clear the path for a possible rally to $30.
If the price again turns down from the overhead resistance, the UNI/USDT pair is likely to find support at the 20-day EMA ($19.55). If the price rebounds off this support, it will improve the prospects of a break above $23.45.
Conversely, if the price turns down and breaks below the moving averages, it will suggest that the range-bound action may continue for a few more days.
Bitcoin Cash (BCH) has been trading between the 50-day SMA ($498) and the overhead resistance at $546.83 for the past four days. A tight consolidation near a stiff resistance suggests that buyers are not closing their positions as they anticipate a move higher.
If bulls sustain the price above $546.83, the BCH/USDT pair will complete a double bottom pattern. This bullish reversal setup has a target objective at $710.13. The moving averages are on the verge of a bullish crossover and the RSI is in the positive zone, which suggests that the path of least resistance is to the upside.
This bullish view will be invalidated if the price turns down from the current level and breaks below the moving averages. Such a move will suggest that the pair could extend its range-bound action between $383.53 and $546.83 for a few more days.
The bulls pushed Chainlink (LINK) above the overhead resistance at $22.07 on July 30 but the bears are not allowing the buyers to have a runaway rally.
The bears are attempting to pull the price back below $22.07 but the bulls have held the support for the past three days. The moving averages have completed a bullish crossover and the RSI is near the overbought territory, indicating that buyers have the upper hand.
If bulls drive the price above $24, the LINK/USDT pair could rise to $26.48. A break above this resistance could clear the path for a possible rally to $32.
Alternatively, if the price breaks below $22.07, the pair could drop to the 20-day EMA ($19.17). A strong rebound off this support will suggest that sentiment remains positive as traders are buying on dips. The bears will have to sink the price below the moving averages to gain the upper hand.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
However, many crypto traders are feeling increasingly nervous due to the $550 billion bipartisan infrastructure bill that’s currently making its way through U.S. legislature and includes a provision to raise $28 billion from crypto investors, with some warning it could “kill” the industry.
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“This is a deeply misguided provision that, if adopted, will do far more harm than good to U.S. interests,” Jake Chervinsky, a crypto-focused lawyer, wrote in a lengthy Twitter thread laying out how the bill could impact the burgeoning crypto industry and market.
The bill, which this week passed a preliminary Senate vote, proposes taxing bitcoin and cryptocurrency profits to fund U.S. infrastructure investment, with the definition of a broker being widened to the extent that crypto exchanges and wallet providers would need to collect far more information about their users than they currently do.
Any broker that transfers any digital assets would need to file a return under a modified information reporting regime, according to a draft copy of the bill seen by Coindesk.
“The provision includes updating the definition of broker to reflect the realities of how digital assets are acquired and traded,” the document said. “The provision further makes clear that broker-to-broker reporting applies to all transfers of covered securities within the meaning of section 6045(g)(3), including digital assets.”
“Things are moving fast, which can feel scary,” wrote Chervinsky, adding “don’t panic. This provision isn’t final yet and still can be changed.”
Chervinsky warned that “it defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry,” and “this could mean a de facto ban on [crypto] mining in the USA.”
Since China’s bitcoin and cryptocurrency mining crackdown in recent months—in which those who use powerful computers to secure blockchains and validate transactions in return for new crypto tokens were expelled from the country—the U.S. has emerged as a potential new home for many.
However, lawmakers who fear bitcoin and crypto mining could accelerate climate change have signaled they’re unhappy with the industry’s U.S. growth.
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Bitcoin and crypto experts are warning the language used in the bill risks broadening definitions of brokers to the extent it includes those that provide hardware and software.
“Unfortunately, in the drafts, we’ve seen the categories of persons who would be obligated to report is so broad that it potentially covers persons who only provide software or hardware to customers, and who have no visibility whatsoever into user transactions,” Jerry Brito, the executive director of Washington D.C.-based crypto think tank Coin Center said via Twitter, adding he was trying to “fix” the bill’s crypto provision.
“It potentially also covers miners’ indexes, the saving grace is that arguably miners’ indexes for that matter do not have customers as defined by the tax code.”