5 Things to Know in Crypto Today: BTC Rallies Above $22,000, ETH Probes $1,500

Key Points

• Cryptocurrencies are starting the week in bullish fashion with Bitcoin rallying above $22,000 amid an upbeat macro mood.
• Ethereum has continued its surge higher on bullish technicals and Merge optimism and was recently probing $1,500.
• Current HODLing activity is similar to that observed around the time of major previous Bitcoin market bottoms – Glassnode.

Crypto Sentiment Upbeat as Bitcoin Eyes Test of 50DMA

Cryptocurrencies have started the week firmly on the front foot, as they benefit from an upbeat tone to global macro trade. In pre-open trade, futures of major US equity indices are up in the region of 1.0%, extending on closer to 2.0% rallies seen last Friday. Traders are citing US data that came out last Friday as easing concerns about a mammoth 100 bps rate hike from the Fed later this month.

According to the preliminary version of the University of Michigan’s Consumer Sentiment survey for July, the one and five-year consumer inflation outlook has fallen this month. This will ease Fed fears that inflation expectations are becoming “de-anchored”, thus taking the pressure off of them to hike interest rates more aggressively. But given that headline price pressures as per the US Consumer Price Index hit a fresh four-decade high last Wednesday above 9.0%, a large 75 bps rate hike is still expected later this month.

Major US equity indices are now at a point where they are probing the top of recent ranges. A break higher could drag crypto higher with it. But the US economic calendar is pretty empty this week and Fed policymakers are in their pre-meeting blackout, meaning a lack of macro drivers in the US. Of course, crypto sentiment could be impacted by global themes.

The European Central Bank and Bank of Japan both announce monetary policy later this week with the latter likely to implement its first-rate hike in many years. Meanwhile, we will know by the end of the week whether Russia has started an embargo of its gas exports to Europe – gas flows through the Nord Stream 1 pipeline are currently halted until Thursday due to routine maintenance, with many fearful that they won’t restart. A gas embargo would all but guarantee a European recession.

Bitcoin was last up over 7.0% on the day on Monday and trading in the $22,300 region, a sharp bounce from earlier session lows under $21,000. The world’s largest cryptocurrency by market cap briefly surpassed its high from earlier in July at $22,400, taking it to its highest levels since 16 June. Bitcoin bulls are eyeing a test of 50-Day Moving Average near $23,300.

Bitcoin HODLing Activity Reminiscent of Prior Market Bottoms

According to on-chain data analytics firm Glassnode, more than 80% of the total USD-denominated wealth invested in Bitcoin has been left untouched for at least three months. Glassnode shared a chart on Twitter suggesting that similar levels of HODLing were observed at the time of prior major bear market bottoms. “This signifies that the majority of the $BTC coin supply is dormant, and HODLers are increasingly unwilling to spend at lower prices,” Glassnode said.

Ethereum Probes $1,500 as Surge Continues Bullish Technicals/Merge Optimism

Ethereum has continued its recent surge and was last up over 10% on Monday in the $1,475 area, having earlier probed come within a whisker of testing the $1,500 level. Monday’s move higher marks a convincing break above the cryptocurrencies 50DMA in the $1,330 area and a continuation of its bullish momentum since breaking above key resistance in the $1,280 area.

Analysts are citing optimism about continued progress in the implementation of Ethereum’s Merge to Proof-of-Stake on its various testnets and the fact that developers have tentatively announced a September date for the mainnet merge as benefitting the cryptocurrency.

In terms of the other major altcoins, most are also performing well at the start of the new week. BNB, XRP, ADA, SOL, DOGE, DOT and AVAX were all between 2-5% higher in the past 24 hours, as per CoinMarketCap. In the crypto top 20, Polygon is the outperformer. MATIC/USD was last up close to 19% on Monday, having surged from around $0.75 to around $0.90, taking its gains since last week’s sub-$0.52 lows to over 70%. Bulls are targeting a test of $1.0 since the cryptocurrency broke above a key downtrend last week that had been constraining the price action since mid-May.

Experts Predict Cardano Will Surpass Record Highs By 2025, Says Finder Survey

According to a survey of 53 FinTech experts conducted by researchers at finder.com, the median year-end forecast for Cardano was $0.60. The participants were mostly bullish on the cryptocurrency in the years ahead, the median expert forecast showing that it would recover to around $3.0 by 2025, before hitting $7.0 in 2030.

While still bullish, this is far less optimistic an outlook than that given by experts in a similar survey conducted back in January. Back then, when Cardano was trading in a $1.1 to $1.6 range versus current levels under $0.50, experts saw the cryptocurrency ending the year closer to $3.0 and hitting $58 by 2030.

In terms of some notable commentary, according to Iwa Salami, the Co-Director of the Centre of FinTech at the University of East London, “the relevance of the Cardano blockchain, particularly as it seeks to foster financial inclusion in developing economies, is very significant and is likely to expand its long-term use, and therefore have a positive impact on the price of ADA”.

Experts responding to finder.com’s survey were split over how the upcoming Vasil hardfork will impact Cardano. 20% said it would have a positive impact on ADA’s price, 18%, said it would have an adverse effect, while 50% said it would increase the functionality of the Cardano blockchain.

Australian Central Bank Favors Private Sector Crypto Technology

Commenting last week at a meeting of G20 finance ministers and central bankers in Indonesia, the governor of the Reserve Bank of Australia (RBA) Philip Lowe said that a private solution will be better for crypto, so long as regulators can mitigate risks. Regarding stablecoins, Lowe said; “if these tokens are going to be used widely by the community, they are going to need to be backed by the state or regulated just as we regulate bank deposits”.

Lowe argued against the idea of an Australian central bank digital currency. Private crypto firms are “better than the central bank at innovating”, he said. Moreover, “there are also likely to be very significant costs for the central bank setting up a digital token system”, he added.