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The global crypto market capitalization currently hovers just above the $1 trillion mark with rapid jump in Bitcoin (BTC) dominance from 38.8% to 41.6%. BTC registered gains for the sixth consecutive day liquidating more than $500 million of short positions over same period. BTC is currently trading near $22,600 as of 5pm IST today. In today’s article, we will briefly cover price actions of Bitcoin and Ethereum with a short-term outlook for BTC.
BTC, which is widely notorious for being highly volatile than other risk-on assets, has had a rather muted activity since June. While experts argue that BTC is attempting to form a bottom, bulls pushed the price above $20,450, the 20-day exponential moving average (EMA) on 9th September and $21,900 which is the 50-day simple moving average (SMA) on 12th September putting bears in disadvantage.
If buyers sustain the price above 50-day SMA, BTC could attempt a rally to overhead resistance at $23,700. However, bears are expected to come in at full selling force. If bears are successful, then BTC could swing between $18,000 and $24,000 for a few more weeks. Another possibility is that the price turns down and breaks below the 20-day EMA. If that happens, BTC could once again revisit local lows formed near the $17,000 region during June.
All eyes are currently on Ethereum (ETH), the largest altcoin in the crypto market. With hardly a day or two left for the Merge to occur, the crypto industry is on the verge of one of most important experiments in history. With more than $200 billion in market capitalization, market participants are anxiously awaiting the transition of ETH network from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism as any mistakes will have ramifications across the entire crypto market.
Post the Merge, the chain will split. Ethereum will continue normally on PoS while miners will fork the chain and create ETHW token (on PoW chain). The entire blockchain has two identical instances now. All ETH, tokens and transactions will exist both in PoS and PoW. Users are advised to stay away from ETHW as miners don’t seem to have clarity on resolving replay attacks.
In an interesting coincidence ahead of Merge transition to PoS, BTC’s network hashrate (based out of PoW) has hit an all-time high leaving the blockchain more secure than ever. Though hash rates don’t affect the price directly, there’s another external macro data coming out today, that is, US CPI inflation. The general rule for investors to keep in mind is, if it's higher than expected, then markets will dump. If lower than expected, then markets will rally.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.