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In the last seven days, the second-largest crypto asset in the world Ethereum (ETH) has surged by 30% and its close relative Polygon (MATIC) has registered more than 50% gains. The recovery in the market has caught the crypto participants by surprise because it was not long ago some were calling for $880 ETH. Last week, Bitcoin (BTC) experienced high volatility as weekly opening and closing prices were just a dollar apart yet intraweek swings touched $2,500. The main reason behind the volatility seems to be US inflation data that left investors hypothesizing about potential interest rate hikes by the Federal Reserve.
In todayâ€™s article, we will briefly cover interesting price actions of major crypto assets and what events to watch out for in the future.
Ethereum and Polygon defy odds
At a time when the macroeconomic situation is looking gloomy for the near future, ETH and MATIC were making inroads into bullish territory over the past week. ETH has had a steady growth in its total value locked (TVL) which is an indication of interest among the developers and investors who are ready to invest money into protocols built on top of Ethereum network. ETHâ€™S TVL is currently at over $53 billion, up by 20% over the past month. As far as the sustainability of the rally is concerned, trading volumes are at over 60% in the last 24 hours but they are declining over the week which can cause a trend reversal of ETH soon. ETH and the rest of the altcoin market will however hinge on BTCâ€™s ability to retain the key psychological level of $20,000. ETH is currently trading at $1,500.
Polygon (MATIC), a layer-2 solution built by Indians to scale the Ethereum network, was impressive with its price action over the week. MATIC is currently trading at $0.89, up by 2% in the last 24 hours. MATIC has been making some noise among the crypto community as the Polygon team raked in multiple partnerships. Letâ€™s understand why.
Meta is planning to launch a feature on Instagram by integrating Polygon that allows people to display their non fungible tokens (NFTs) on their timeline. British smartphone maker Nothing has announced a partnership with Polygon recently and social media giant Reddit too has integrated Polygon for their NFT avatar marketplace. More recently, Polygon has been selected one of six companies to join the 2022 Disney Accelerator program that heavily focuses on the metaverse ecosystem. All these combined contributed to the massive surge in MATICâ€™s prices.
Things to watch out
Like the US inflation data that came in hot on 13th July triggering concerns (evident from the market dump) about the Fedâ€™s propensity to continue the hawkish outlook on the economy, there are few more important dates to watch out for in the coming weeks. First is the FOMC meeting where the interest rate hike will be announced and most likely is expected to increase by 0.75%. Second is the US second quarter (Q2) GDP data that will be out by July 28. According to Goldman Sachs, growth expectations have been trimmed and are likely to be lower than the predicted estimates for Q2. The above events, as macro as they are, are expected to induce volatility in the crypto markets and investors are advised to tread with more caution.
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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.