The cryptocurrency sector has advanced over the past week amid positive sentiment on equity indices. However, the market still cannot be sure, are we ready for another “relief rally” or a reversal of the several months long downtrend? Will digital assets come back in favor of investors again?
- Bitcoin fell from levels above $24,000 yesterday and is trading around $23,200. Ethereum has clearly been struggling to break above $1750 for days, but is still above 1680. The capitalization of the entire cryptocurrency market is still above $1 trillion;
- The vast majority of small cryptocurrencies called altcoins have risen significantly again. Leading the last few days, Filecoin has risen over 90% in the last 5 days. Nevertheless, the vast majority of smaller cryptocurrencies are still 80-90% below their price, indicating both significant upside potential and a warning against a return of negative sentiment which would cause further new supply waves;
- The first half of August will be full of significant events for the Ethereum blockchain. The success of the “final stretch” tests before the planned “merger” on September 19 will probably determine the price reactions of the second largest cryptocurrency;
- The Ethereum blockchain will undergo a “Bellatrix” update on August 4th, as part of the landmark “Prater merger”. The main tests will take place on the Goerli network and will take place from August 8 to 12. Possible problems in the test network may cause developers to postpone the date of September 19 ‘The Merge’, about which the market has built up significant expectations, while waiting for an already “final” version of Ethereum 2.0;
Filecoin is a cryptocurrency that dropped in price from nearly $150 per token to $5.5 less than a week ago. Despite the massive price volatility, the creators of Filecoin are developing the blockchain and creating decentralized competition to the centralized “cloud computing” created by Amazon Web Services or Microsoft Azure;
- Filecoin announced a partnership with Harvard University yesterday, with which it will work on decentralized libraries that store information. Venture capital firm Holon Global has announced the creation of an investment fund that will include Filecoin, Bitcoin and Ethereum;
- In the past, funds such as Sequoia and Andreessen Horowitz have invested in Filecoin, and at the end of May this year they announced the creation of a $4.5 billion cryptocurrency fund. Sequoia, in turn, launched a similar, smaller fund in the second half of February that began a $500 million investment in the cryptocurrency market; the fund’s targets included Filecoin. In the past, funds such as Sequoia and Andreessen Horowitz have invested in Filecoin, and at the end of May this year they announced the creation of a $4.5 billion cryptocurrency fund. Sequoia, in turn, launched a similar, smaller fund in the second half of February that began a $500 million investment in the cryptocurrency market; the fund’s targets included Filecoin.The market-oriented gradient indicator known as MRGO over a 28-day time frame suggests that sellers are continuing to weaken. The instrument is designed to help determine which increases have only “speculative value” and denote an improvement in the short-term trend, and which are due to large capital inflows. The indicator equates the market price and the ‘realized price’, i.e. the average purchase price of Bitcoin on the blockchain. Last week’s price breakout confirmed that the balance was still tipped in favor of the buyers. Nevertheless, maintaining momentum may pose a demand challenge in the face of increased volatility and risk in global markets. Source: Glassnod
- The chart shows the so-called cost basis for long-term investors (LTH), that is, investors who do not sell Bitcoin for at least 155 days. The base cost on LTH addresses cyclical returns above the so-called realized price, that is, the average purchase price of the blockchain, which can be determined by the cost base of the rest of the market. In order for the “realized price” for long-term investors to increase, they must buy above their own average, or the purchased tokens must exceed the 155-day threshold and be part of the LTH-owned pool. Such situations, even during a bull market, are very rare and indicate a huge level of oversold in the market. The duration of previous such phenomena varied from 248 to 575 days. As it is 23 days into the current cycle, the market may still hold lower. This means that the long-term hodlers are currently the “victims” of the recent declines, even though due to the cyclicality they have made significant returns and bought “cheaper” Bitcoins than the market average. Source: Glass node
Filecoin chart, interval H4. Filecoin’s market capitalization has increased by nearly 100% since Friday thanks to a major rally in the cryptocurrency. News of a partnership with Harvard University and interest in the Holon Global Investments fund bolstered buying power. Source: xStation 5
Bitcoin chart, H4 range. From a technical analysis perspective, BTC is still struggling to break out sustainably above the upper limit of the uptrend marked by the dashed red line. The short-term supports currently remain EMA 50, EMA 100 and EMA 200 (blue, purple and gold curves respectively). Also important are the psychological levels of $21,000 (support) and the upper trend line just formed (black dashed line). Source: xStation 5
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