News
19
Jul
crypto market overview

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Market overview 7/19: Ethereum is pushing the market higher

Bitcoin’s price is up 10 percent since the last week, but now it’s facing a strong resistance level. Altcoins have done really well. The uptrend is led by Ethereum. In fact, the coins with the biggest gains are all Ethereum-related.

Bitcoin is facing strong resistance

Bitcoin’s price is $21,900 at the time of writing this article. The price was $19,700 a week ago, which translates to a gain of more than 10 percent. The entire crypto market has been moving higher. There is green color everywhere even though prices have fallen a little bit today (7/19).

The graph below shows Bitcoin’s price with daily candles. The blue line is the 50-day moving average and the purple line is the 200-day moving average.

btc-1907

Bitcoin’s price is at an important juncture now. It’s testing the resistance level set in June-July and the 50-day moving average. This point was reached already yesterday (7/18). Unfortunately, the price action we are seeing today suggests that the price couldn’t get through this resistance.

The past week has still been really positive for cryptos. Bitcoin saw a dip of $1000 last week when the latest inflation print was published in the United States. The 9.1% CPI was yet another record. However, investors quickly turned more positive.

Bitcoin’s price is up five out of the previous six days. Last night we almost reached $23,000 depending on the exchange. This price level has acted as a strong resistance since early June. It’s been tested multiple times now without a breakthrough.

But why is the crypto market up so much lately? The reason is the stock market. Nasdaq has been on a tear lately and this has reflected on cryptos. It means that the correlation between the stock and the crypto market remains high.

We also mentioned a shift in investor sentiment last week. The discussion has moved from inflation to recession in previous weeks. This means that investors don’t put that much weight on high CPI prints anymore. Many are counting the days to Fed pivot already.

The weaker the US economy looks like the sooner Fed must stop hiking rates. Eventually, it has to reverse the course and start to support the market. This is when we’ll see the next bull run begin.

Crypto investors are also debating the possible market bottom. Was the June crash to $17,500 the lowest point of this bear market? Have we started a new bull run?

We recommend investors remain cautious. The market doesn’t look strong just yet. It still seems more likely that we’ll take one leg down before the bear market bottom is finally reached.

Ethereum and Polygon with big gains

There haven’t been many weeks in 2022 with positive news from the altcoin market. Especially when talking about the so-called blue-chip projects. This time it’s different. Altcoins have had an excellent week through the market.

The list below shows the biggest cryptocurrencies and how they have performed against Bitcoin lately.

alts-1907

When we ignore stablecoins, everything is up vs. Bitcoin except the Dogecoin. Ethereum and Polygon have made the biggest gains.

We already wrote about Ethereum in our news overview. Investors are excited because of the positive developments in the Merge update. One of the head developers, Tim Beiko, suggested a date for the Merge in late September. This made Ether’s price rise significantly.

Ethereum’s price is up more than 40% in US dollar terms in seven days. It’s now 70% up from June’s bottom when Ether crashed to below 900 dollars. Bitcoin is up only 24% in the same period.

Polygon is one of the most important Ethereum scaling solutions. It’s been boosted by Ethereum, which is also the case for other smart contract platforms. There is also other positive news regarding Polygon.

Polygon was chosen for Disney’s accelerator program. It’s one of the six companies that will develop experiences with AR, AI, and NFT technologies.

Polygon’s MATIC token is the third-best performer in the top 100 list of cryptocurrencies. Only two coins have done better, and they are also Ethereum-related: Lido and Ethereum Classic.

Lido is one of the biggest DeFi protocols in the market. It makes it possible to stake Ethereum on the new Beacon Chain and earn staking rewards. Lido is also known as a liquid Ethereum staking service.

lido

Lido is up because of previously mentioned news about The Merge. Its governance token LDO is up 123 percent vs. Bitcoin! It’s been a long time since we’ve reported any coins to be up more than 100% in one week.

How about Ethereum Classic? This is the original branch of the Ethereum blockchain from which Ethereum hard forked out in 2016. ETC is probably up because of pure investor speculation.

Ethereum becomes a Proof of Stake chain after the Merge, but this is not the case with Ethereum Classic. It remains as a PoW blockchain. The Merge will make Ethereum Classic as the biggest and the best-known PoW smart contract platform. It could bring a significant boost to the project if it gets backed by “PoS haters”. Many miners might also switch to Ethereum Classic when Ethereum mining ends.

Lido is moving up also in the DeFi sector

The DeFi sector has also seen significant gains in the past seven days. The total DeFi liquidity (TVL) is up about 15% from last week. Today the TVL is 84.69 billion dollars.

defi-1907

The market is still far from the spring 2022 highs, meaning the time before Terra collapsed. Back then the TVL was hovering around 200 billion dollars. In November 2021 the TVL even breached 250 billion dollars. Though, the 15% rise in TVL is more than we’ve seen in three months in a single week.

The top 10 protocol list looks also green. Up to 18 largest protocols have gained liquidity in the past seven days. We have also seen some significant changes in the top positions. This means Lido has jumped from fifth to second place in just one week.

defi-apps-1907

You already know the reason why Lido is doing so well. The closer the Merge gets the safer investors to feel about staking ETH.

Lido is not the only liquid Ethereum staking app, but it dominates the market with more than 90% market share. There is more than 4.1 million ETH staked via Lido, which has even raised concerns in the Ethereum community. Some even consider Lido a systemic risk.

Uniswap has also overtaken Curve, though, with a thin margin. Other than that there are no changes in the top 10 protocol list.

Finally, let’s look at the blockchains.

defi-chains-1907

Ethereum’s good run has also given a boost to other smart contract platforms. This is shown in the prices of the native tokens and the liquidity in DeFi apps. Solana has made the biggest gains with a 26.4% TVL growth. This has moved Solana to fourth place. It’s the only change in the blockchain top 10 rankings.

Tron has recently made some big gains in the DeFi sector. Tron is still in a category of its own when looking at the 30-day TVL growth. Now it’s been left behind when “old favorites” have woken up.

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