Decentral Block Post

Ether (ETH) price is up 60% since May 3, outperforming leading cryptocurrency Bitcoin (BTC) by 32% over that span. However, evidence suggests the current $1,600 support lacks strength as network use and smart contract deposit metrics weakened. Moreover, ETH derivatives show increasing sell pressure from margin traders.

The positive price move was primarily driven by growing certainty of the Merge, which is Ethereum's transition to a proof-of-stake (PoS) consensus network. During the Ethereum core developers conference call on July 14, developer Tim Beiko proposed Sept. 19 as the tentative target date for the Merge. In addition, analysts expect the new supply of ETH to be reduced by up to 90% after the network's monetary policy change, thus creating a bullish catalyst.

Ethereum's total value locked (TVL) has vastly benefited from Terra's ecosystem collapse in mid-May. Investors shifted their decentralized finance (DeFi) deposits to the Ethereum network thanks to its robust security and battle-tested applications, including MakerDAO (MKR) — the project behind the DAI stablecoin.

Currently, the Ethereum network holds a 59% market share of TVL, up from 51% on May 3, according to data from Defi Llama. Despite gaining share, Ethereum's current $40 billion deposits on smart contracts seem small compared to the $100 billion seen in December 2021.

Demand for decentralized application (DApp) use on Ethereum seems to have weakened, considering the median transfer fees, or gas costs, which currently stand at $0.90. That's a sharp drop from May 3, when the network transaction costs surpassed $7.50 on average. Still, one might argue that higher use of layer-two solutions such as Polygon and Arbitrum are responsible for the lower gas fees.

MicroStrategy (MSTR) stock opened higher on Aug. 3 as investors digested the news of its CEO Michael Saylor's exit after a depressive quarterly earnings report.

Microstrategy stock up 142% since May lows 

On the daily chart, MSTR's price surged by nearly 14.5% to $324.55 per share, the highest level since May 6.

The stock's intraday gains came as a part of a broader recovery that started on May 12 at $134. Since then, MSTR has grown by 142% versus Nasdaq's 26.81% gains in the same period.

Bad Q2, Saylor's resignation

The Aug. 3 MSTR rally came a day after MicroStrategy reported a billion dollar loss in its second quarter (Q2) earnings call. Interestingly, the company's major Bitcoin exposure was a large reason for its poor quarterly performance.

To recap: MicroStrategy is an information technology firm that provides business intelligence, mobile software and cloud-based services. But one of its primary corporate strategies is to invest in Bitcoin to hold it long-term.

Bitcoin (BTC) rose to daily resistance at the Aug. 3 Wall Street open as United States equities gained on relief over Taiwan.

Stocks gain as US dollar coils

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD returning to the area just below $23,500, which had figured as resistance since the start of the month.

The pair had previously held the same zone as support, and was now deciding on whether a new resistance/ support flip was on the cards.

For popular trader Crypto Tony, $23,500 was thus the price to watch to long BTC.

To the downside, fellow trader Pentoshi highlighted the area between $21,800 and $22,000 as the "line in the sand" for BTC.

Fifty-one days have passed since Bitcoin (BTC) last closed above $24,000, causing even the most bullish trader to question whether a sustainable recovery is feasible. However, despite the lackluster price action, bulls have the upper hand on Friday's $510 million BTC options expiry.

Investors have been reducing their risk exposure as the Federal Reserve raises interest rates and unwinds its record $8.9 trillion balance sheet. As a result, the Bloomberg Commodity Index (BCOM), which measures price changes in crude oil, natural gas, gold, corn and lean hogs, has traded down 9% in the same period.

Traders continue to seek protection via U.S. Treasuries and cash positions as San Francisco Fed president Mary Daly said on Aug. 2 that the central bank's fight against inflation is "far from done." With that being said, the tighter monetary impact on inflation, employment levels and the global economy are yet to be seen.

Bearish bets are mostly below $22,000

Bitcoin's recovery above $22,000 on July 27 took bears by surprise because only 28% of the put (sell) options for Aug. 5 have been placed above such a price level. Meanwhile, Bitcoin bulls may have been fooled by the $24,500 pump on July 30, as 59% of their bets lay above $25,000.

A broader view using the 1.60 call-to-put ratio shows more bullish bets because the call (buy) open interest stands at $315 million against the $195 million put (sell) options. Nevertheless, as Bitcoin currently sits above $23,000, most bearish bets will likely become worthless.

Lido DAO (LDO) price edged higher on Aug. 3, primarily due to similar upside moves elsewhere in the crypto market and a rising euphoria around Ethereum's network upgrade in September.

On the daily chart, LDO's price reached an intraday high of $2.40 a day after bottoming out locally at $1.84. The sharp upside reversal amounted to nearly 30% gains in a day, suggesting traders' strengthening bullish bias for Lido DAO.

Lido DAO is a liquid staking solution for Ethereum by total value deposited. In other words, it allows users to participate in the running of Ethereum's upcoming proof-of-stake (PoS) chain in exchange for daily rewards. 

Ethereum's Ether (ETH) token has rallied by more than 90% since mid-June in part due to buzz around its blockchain's PoS upgrade called the Merge, expected in September. 

Lido DAO, the biggest Merge staking serve provider, has benefited from the craze simultaneously, with LDO, its governance token, rallying nearly 500% in the same period.

Bitcoin (BTC) miners now own more BTC than at any time in history as the impact of the past months' turbulence wears off.

According to data from on-chain analytics firm CryptoQuant, miners' BTC holdings increased dramatically in July.

Miners keep stacking sats

In the latest sign of miners recovering from recent price weakness, the amount of BTC in their wallets has hit a fresh all-time high.

As noted by CryptoQuant contributor and analyst Jan Wuestenfeld, their combined balance totaled 1,865,272 BTC as of July 29. The start of August saw a slight decline, with the total as of Aug. 3 being 1,864,842 BTC.

Between July 6, when reserves hit a local low, and the July 29 record, miners' wallet balance increased by 0.37%, or 6,885 BTC.

Bitcoin (BTC) has been trending up since mid-July, although the current ascending channel formation holds $21,100 support. This pattern has been holding for 45 days and could potentially drive BTC towards $26,000 by late August.

According to Bitcoin derivatives data, investors are pricing higher odds of a downturn, but recent improvements in global economic perspective might take the bears by surprise.

The correlation to traditional assets is the main source of investors' distrust, especially when pricing in recession risks and tensions between the United States and China ahead of House Speaker Nancy Pelosi's visit to Taiwan. According to CNBC, Chinese officials threatened to take action if Pelosi moved forward.

The U.S. Federal Reserve's recent interest rate hikes to curb inflation brought further uncertainty for risk assets, limiting crypto price recovery. Investors are betting on a "soft landing," meaning the central bank will be able to gradually revoke its stimulus activities without causing significant unemployment or recession.

The correlation metric ranges from a negative 1, meaning select markets move in opposite directions, to a positive 1, which reflects a perfect and symmetrical movement. A disparity or a lack of relationship between the two assets would be represented by 0.

Polkadot (DOT) looks ready to extend its ongoing price recovery due to a classic bullish pattern forming on its daily chart.

DOT paints "cup and handle" pattern

Notably, DOT has been forming a "cup and handle" pattern since mid-June, confirmed by its price crashing and recovering in a rounding, U-shaped trajectory (cup), followed by the development of a trading range on the right-hand side (handle).

Cup and handle patterns are typically bullish continuation setups that form during an uptrend. But in rare cases, they appear at the end of a downtrend, leading to a bullish price reversal. As a result, the possibility of DOT continuing its price recovery seems high.

Thus, from the technical perspective, DOT initially eyes a breakout above its cup and handle's resistance line near $8.50.

A decisive close above the resistance line, i.e., a breakout move accompanied by a rise in volume, could have DOT eye approximately $12 as its upside target by September, up more than 50% from Aug. 's price.

Bitcoin (BTC) saw volatility after the Aug. 2 Wall Street open amid ongoing market reactions to tensions between the United States and China.

BTC price U-turns as Pelosi lands in Taipei

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD spiking above $23,000 on the day as news came in that Nancy Pelosi, speaker of the U.S. House of Representatives, had landed in Taipei, Taiwan after warnings of retaliation from Beijing.

The visit, which had raised concerns of a major incident occurring, appeared to go without a hitch — something an analyst at major banking giant JPMorgan had previously said would spark a market rally.

Both the S&P 500 and Nasdaq Composite Index were slightly higher at the time of writing, reversing initial losses. Previously, Asian markets had fared worse on the uncertainty, with both the Shanghai Composite Index and Hong Kong's Hang Seng losing around 2.3% on the day.

As traders eyed an end to the recent few days' calm on BTC, it remained to be seen whether important trendlines nearby would continue to hold after seeing retests overnight.

Bitcoin (BTC) is pressuring newly-won support levels this week as geopolitical uncertainty raises the stakes for risk assets.

After an impressive monthly close, momentum appears to be waning for Bitcoin's latest gains, data from Cointelegraph Markets Pro and TradingView shows, and stock markets are not helping the bulls.

Volatility was cool as August began, but angst over a potential showdown between the United States and China over House Speaker Nancy Pelosi's visit to Taiwan is already showing in Asian trading on Aug. 2.

Amid talk of a "bear market rally" being all that can describe the current setup, Cointelegraph takes a look at the crucial support and resistance levels currently facing the market on short timeframes.

Traders unconvinced over fate of 200-week moving average

Analyzing order book data on Binance, the largest exchange globally by volume, pockets of buy and sell interest stand out immediately.

Polygon (MATIC) had a promising July, gaining an impressive 83% in 30 days. The smart contract platform uses layer-2 scaling and aims to become an essential Web3 infrastructure solution. However, investors question whether the recovery is sustainable, considering lackluster deposits and active addresses data.

According to Cointelegraph, Polygon rallied after being selected for the Walt Disney Company's accelerator program to build augmented reality, nonfungible token (NFT) and artificial intelligence solutions.

Polygon announced on July 20 plans to implement a zero-knowledge Ethereum Virtual Machine (zkEVM), which bundles multiple transactions before relaying them to the Ethereum (ETH) blockchain. In a recent interview with Cointelegraph, Polygon co-founder Mihailo Bjelic stated this solution would slash Ethereum fees by 90% and boost throughput to 40–50 transactions per second.

Another reason for Polygon's rally was the growing number of platforms that started to offer liquid staking for MATIC tokens, which enabled holders to earn additional rewards. Examples include Lido Finance, Balancer, Meshswap and Ankr Staking, according to DeFi Pulse.

Despite currently being 69% below its -time high, Polygon remains a top-12 token by capitalization rank. Moreover, the network holds $1.72 billion worth of deposits locked on smart contracts, known in the industry as total value locked, or TVL.

Bitcoin (BTC) tested $23,000 as support on the Aug. 1 Wall Street open with key moving averages in focus. 

200-week moving average gets big attention

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as bulls and bears battled for control amid a tight trading range.

Bitcoin had inspired with its highest weekly close since mid-June the day prior, with its monthly candle also producing the biggest gains since before last year's $69,000 all-time highs.

Among analysts and traders, however, it was the market's ability to remain higher for several more candles that was important.

Despite reclaiming important trendlines such as the 200-week moving average (MA) and realized price, Bitcoin would not be out of the woods until it began producing whole weekly candles without retests of those levels.

Ether (ETH) bulls like a positive spread between its spot and ETH futures prices because the so-called contango reflects optimism about a higher rate in the future. But as of Aug. 1, the Ethereum futures curve slid in the opposite direction.

Ethereum quarterly futures in backwardation

On the daily chart, Ethereum futures quarterly contracts, scheduled to expire in December 2022, have slipped into backwardation, a condition opposite to contango, wherein the futures price becomes lower than the spot price.

The spread between Ethereum's spot and futures price grew to -$8 on Aug. 1. 

One one hand, the current ETH spot price being higher than its year-end outlook appears like a bearish sign. However, the conditions surrounding the current negative spread between the Ether spot and futures price suggests traders may actually be bullish on ETH.

For instance, Bitcoin (BTC) has gained 15% since its futures entered backwardation in late June for the first time in a year. 

Bitcoin (BTC) starts a new week and a new month on a cautiously positive footing after protecting crucial levels.

After an intense July in which macro factors provided significant volatility, BTC price action managed to provide both a weekly and monthly candle favoring the bulls.

The road to some form of recovery continues, and at some points in recent weeks, it seemed like Bitcoin would suffer even harder on the back of June’s 40% losses.

Now, however, there is already a sense of optimism among analysts, but one thing remains clear — this “bear market rally” does not mean the end of the tunnel yet.

As Summer 2022 enters its final month, Cointelegraph takes a look at the potential market triggers at play for Bitcoin as it lingers near its highest levels since mid-June.

Bitcoin (BTC) miners have been capitulating for almost two months, but an end to the squeeze could already be here.

That was the conclusion from Blockchain infrastructure and cryptocurrency mining firm Blockware as it published its latest Intelligence Newsletter on July 29.

Report: “Expect” capitulation to be done by September

The most recent edition of the market research series highlighted changes in the mining ecosystem apt to switch up a trend in place since early June.

Miners, judging by the hash ribbons metric, have been retiring for an “extended period of time,” Blockware says, and as of Aug. 1, hash ribbons have been signaling capitulation for 55 days.

“The current miner capitulation began June 7th, 2022, and it has lasted a significant amount of time. It’s important to note that miner capitulations are particularly relevant because it reveals that a large number of machines are no longer hashing,” the firm wrote:

Ether (ETH) is reaching a make-it or break-it point as the network moves away from proof-of-work (PoW) mining. Unfortunately, many novice traders tend to miss the mark when creating strategies to maximize gains on potential positive developments.

For example, buying ETH derivatives contracts is a cheap and easy mechanism to maximize gains. The perpetual futures are often used to leverage positions, and one can easily increase profits five-fold.

So why not use inverse swaps? The main reason is the threat of forced liquidation. If the price of ETH drops 19% from the entry point, the leveraged buyer loses the entire investment.

The main problem is Ether's volatility and its strong price fluctuations. For example, since July 2021, ETH price crashed 19% from its starting point within 20 days in 118 out of 365 days. This means that any 5x leverage long position will have been forcefully terminated.

How pro traders play the “risk reversal” options strategy

Despite the consensus that crypto derivatives are mainly used for gambling and excessive leverage, these instruments were initially designed for hedging.

Bitcoin (BTC) has made a strong comeback in the month of July and is on track for its best monthly gains since October 2021. The sharp recovery in Bitcoin and several altcoins pushed the Crypto Fear and Greed Index to 42/100 on July 30, its highest level since April 6.

Investors seem to be making the most of the depressed levels in Bitcoin. Data from on-chain analytics firm Glassnode shows that Bitcoin in exchange wallets has dropped to 2.4 million Bitcoin in July, down from the March 2020 levels of 3.15 million Bitcoin. This has sent the metric to its lowest level since July 2018.

Bloomberg Intelligence senior commodity strategist Mike McGlone highlighted that the United States Federal Reserve’s indication to consider rate hikes on a “meeting by meeting basis” may lay the groundwork for Bitcoin to outperform most assets. He said that Bitcoin’s “risk vs. reward tilted favorably for one of the greatest bull markets in history."

Could Bitcoin extend its rally in the short term and could that trigger buying in select altcoins? Let’s study the charts of the top-5 cryptocurrencies that may outperform in the near term.

BTC/USDT

Attempts by the bulls to sustain the price above $24,276 have failed in the past two days, indicating that the bears are defending the level with vigor. However, a minor positive is that the bulls have not ceded ground to the bears.