05 Sep 2022

Ethereum keeps outperforming in anticipation of the merge

The past seven days have mostly been flat for the most prominent cryptocurrencies, with BTC floating around $20k for ten days. ETH keeps outperforming and is up 7% after a big pump on Tuesday.
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Traders are bullish on ETH ahead of the merge, which is scheduled to take place between September 13th and 15th. Today ETH activated the Bellatrix upgrade, making the Ethereum node operators technically ready for the merge.Apart from Ethereum’s merge, the crypto market’s main price-driving events are the big macro announcements and decisions.
Source: Tradingview (Coinbase, Binance US)
The US CPI for August will be released on September 13th, and the ECB will make its interest rate decision on Friday, which is estimated to hike by 75bps. These macro events, combined with the merge, might be catalysts for increased volatility going forward.While the large caps’ performances have been mostly flat over the previous seven days, we see massive increases in some of the smaller coins. Terra Luna Classic surged by 222% amid plans to revive the chain, while Ethereum Classic increased by 20%.
Source: CoinGecko,
Bitcoin dominance nearing all-time lows
September has started with varying returns among our indexes. Bitcoin has started the month the worst and is down 1%. All other indexes are in the positive territory, with the Large Caps gaining 1%, the Small Caps 2%, and the Mid Caps 7%.
Source: Bletchley Indexes, Tradingview (Coinbase)
Bitcoin's recent underperformance relative to other cryptocurrencies, particularly ETH, has led its dominance to fall towards all-time lows. The all-time low occurred during the ICO craze in January 2018.An essential caveat of the bitcoin dominance sitting close to an all-time low is that stablecoins are far more significant now than the last time bitcoin showed this low dominance. Excluding the USDT and USDC from the equation, we see that bitcoin still makes up half of the crypto market.
Source: CoinMarketCap
Five months of fearful sentiment in the crypto market
The Fear and Greed Index has dipped below 'extreme fear', marking the end of July and August's optimism buildup. While the market sentiment climbed steadily during these months, the Fear and Greed index never managed to enter the 'greed' territory, meaning that the crypto market has been in a fearful state since April. This five-month stay in the fearful territory is the longest since the index's creation in February 2018.
Binance continues being on the offensive to increase market share
Binance continues its offensive push to grab a larger share of the trading volume as well as the stablecoin market. This summer, the exchange behemoth removed fees on all stablecoin BTC pairs and their ETH-BNB pair, and now they announced that they will stop supporting USDC on their platform. Binance has been massively successful in its offensive strategy, as they have now captured an enormous share of crypto trading volumes. Still, a large percentage of this volume is likely inorganic, as indicated by the prolonged depressed trading volumes on other exchanges.
Source: Skew, Tradingview (Binance, Binance US, Bitfinex)
The volatility is currently very low in the crypto market
During the past seven days, bitcoin has been subject to minimal price movements as its price has stabilized at around $20k. This recent price stability has led the 7-day volatility to fall to 1.8%, among the lowest levels observed this year. Bitcoin has recently been in a structural trend of declining volatility, as indicated by the gradual fall of its 30-day volatility since mid-July. Be aware that volatility at such low levels doesn't usually last very long.
Source: Tradingview (Coinbase)
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