Dear Teroxx Community,
This week we saw a digital asset market, which again showed positive movements and thus continued to stabilize.
Weekly overview
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Digital Asset News
At the weekend, the Bitcoin price can once again increase noticeably, but analysts are divided as to whether the development is also sustainable. So, just in time for the end of the week, the market-leading cryptocurrency is still putting in a final spurt, but against the backdrop of very low trading volumes, which are common at the weekend. “Overall, we see that there is still strength in the market and that’s why I expect it to go even higher. The key level for now is $21,000,” as the analyst explained.
As Cointelegraph had reported, the next major price targets are at US$22,000 and at the 200-week moving average (200-week MA) at US$22,600.
Meanwhile, the latest order book data from Binance, provided by crypto data service Material Indicators, shows that $20 million worth of new demand is piling up at $21,200, which could provide downside protection for the bitcoin price. The market continues to look “thin-skinned,” but the strong bounces in altcoins temporarily suggest a positive upswing.
70 days of “extreme fear” and no end in sight, but the slow decoupling from the stock market brings hope. While the mood at the beginning of the year was already “comparable to a funeral”, the subsequent slumps in Bitcoin and the Altcoins have made the situation even worse.
This is now clearly reflected on the Crypto Fear & Greed Index, which draws a sentiment picture from various factors, expressed in a score from 1 to 100.
As of July 15, the index has now been in the lowest category of “extreme fear” for 70 days, which is a new negative record in this regard. Philip Swift, one of the founders of the analytics service LookIntoBitcoin, points out that the period of “extreme fear” has now lasted even significantly longer than during the bear market of 2018 and the great Corona crash of March 2020. Crypto market researchers Santiment suspect that Bitcoin will not be able to move back into these realms until the correlation with the traditional stock market can be reduced.
This is already on the decline, however, BTC needs to decouple further to prevent the price from reacting with similar panic to the US Federal Reserve’s monetary policy decisions as the stock market.
“The crypto market grows fastest when the correlation with the stock market is minimal,” as the experts state to that effect. To this they add:
“After the recent release of the new inflation figures (CPI), Bitcoin and the altcoins are slowly going back up, while stocks and gold are losing. If this decoupling can be maintained, it would be a good sign.”
Ethereum is getting closer to moving to proof-of-stake (PoS). A DeFi researcher now says the platform could challenge Bitcoin (BTC) for its throne as the largest cryptocurrency.
In a Twitter thread, researcher Vivek Raman highlighted that the planned Ethereum Merge could create a better economic structure for the smart contract platform. According to Raman, the move to PoS lowers Ether (ETH) inflation, provides more security, and positions the cryptocurrency as a digital bond.
Raman said ETH inflation would drop from 4.3 percent to 0.22 percent after the merge. He further said this allows the ecosystem to reduce issuance by 95 percent and limits the number of ETH that can be sold in a day.
A so-called “flippening” is far from in sight, but the current developments in Ether are also visible in terms of price, as ETH is currently rising significantly more than most altcoins and Bitcoin.
Technical term of the week
Proof of stake: A process by which a blockchain network reaches a consensus on which participant may generate the next block. Weighted random selection is used, with the weights of individual participants determined from participation time and/or wealth (the “stake”). In contrast to the proof of work used in Bitcoin, proof of stake does not require time- and energy-intensive mining, and it is not possible to take over the network simply by possessing computing power (“51% attack”).
Digital asset market
The digital assets markets could “rejoice” for the second positive week in a row. The support zones in the market were not retested, resulting in investments flowing into the market. This resulted in heavily sold altcoins in particular, such as Ethereum and Solana, outperforming the market. Although institutional investors and large investors are still holding back on investments, the market movements allowed for good and profitable day trades.
In the bigger picture, of course, the market remains bearish and should be traded with caution. Slightly positive global financial markets, however, provide relief and thus for temporarily rising prices. Bitcoin is currently hovering around the resistance zone between $22,000 and $23,000. Should this be breached, $25,000 would be the next price target.
Bullish outlook: A positive week without major setbacks would fuel investment and could catapult Bitcoin towards $25,000.
Bearish outlook: Sell-offs down towards $20,000 would end the temporary trend.
