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Crypto Week Ahead: BTC, ETH Bull Run Resumes Post FOMC Meeting, BTC Hits 6-Week High

Crypto Week Ahead: BTC, ETH Bull Run Resumes Post FOMC Meeting, BTC Hits 6-Week High

Zain Vawda, Analyst

Crypto Key Points:

  • Bitcoin Price Performance is Taking in Increasingly Higher Resistance Levels,July Gains Could Top 20%.
  • Ethereum Developers Round-Up Merge Testnet Details, ETH surges 14%.
  • Ethereum Sees Huge Surge in Address Activity, Surpasses All-time High.

Bitcoin, Ethereum & Alt-Coins: A Brief History of Crypto Winters

Crypto investors have been liking what they've been hearing lately about inflation-busting efforts and the possible economic path forward as bitcoin, ether and most other major digital assets climbed handsomely for a third consecutive day as we approach the weekend.

Bitcoin (BTC) was recently trading at nearly $23,900, a more than 4% gain over the past 24 hours as markets continued to embrace the latest steps by the U.S. central bank to quell inflation and indicators showing the economy slowing but not falling into recession. The largest cryptocurrency by market capitalization cracked $24,000 for the first time in more than a week at one point despite US GDP tumbling more steeply than expected. Large institutions have sold at least 236k BTC over the past two months, leading to selling pressure that had pushed the bitcoin price down. The rally since creating the bottom seems to suggest the effects are over for now.

The Fear and Greed Index briefly hit a high of 34 last week as the strong recovery in the crypto market spurred increased optimism among investors.

Source: Arcane Research

ETH Sees Huge Surge in Address Activity, Surpasses All-time High

Ethereum (ETH), the second-largest crypto by market cap behind bitcoin, jumped over $1,700 for the first time since early June. Other major cryptos were deeply in the green with ETC and BCH both up more than 20% at one point. It is estimated that around 1.06 million ETH addresses madetransactions on Tuesday alone. This is a 48% increase from the previous record, but the team is still not certain what led to this spike in activity.ETH’s 24-hour trading volume is also up about 47.30% to now stand at $24,877,953,626.

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‘The Merge’ Update

Ethereum lead developer Tim Beiko has announced the final details for the network’s last dress rehearsal ahead of the final testing phase of ‘The Merge’. The latest proof-of-stake testnet transition will be on the Goerli testnet.

According to the July 27 announcement, Prater, the Goerli version of the Beacon Chain will be merged with the testnet between August 6 and 12 in an upgrade called Paris. However, a prior upgrade called Bellatrix slated to happen on August 4 needs to occur to prepare Prater for the Merge with Goerl.

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Economic and Regulatory Uncertainty Remains a Threat

Thursday's GDP report spurred more uncertainty about a global economy that has suffered one stomach punch after another for more than nine months. However, many economists – and even Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen – have refrained from calling a recession because other factors like the labor market show signs of a strong economy. Both the government and the Fed defer to the National Bureau of Economic Research (NBER) to declare a recession, which considers employment, personal income and industrial production, in addition to GDP. On Wednesday, investors reacted favorably to the U.S. central bank's 75-basis-point rate hike and dovish signals by Powell that the Fed might not have to raise rates in a few months.

Regulatory scrutiny meanwhile continues to ratchet up with Coinbase Global Inc. facing a US probe into whether it improperly let Americans trade digital assets that should have been registered as securities, according to people familiar with the matter

Meanwhile, the crypto bankruptcy roll call lengthened on Thursday with beleaguered crypto exchange Zipmex filing applications in Singapore seeking protection amid the threat of legal action from creditors. Zipmex's solicitors, Morgan Lewis Stamford, filed five applications on July 22 on behalf of the firm's different entities seeking moratoriums on legal proceedings for up to six months.

BTCUSD Daily Chart

Source: TradingView, prepared by Zain Vawda

Final Thoughts and the Week Ahead

The market reaction following the Federal Reserve rate hike announcement showed once again the resilience of Bitcoin as risk appetite returned to markets. The short-term outlook for Bitcoin remains bullish, as we have just made a new high on the daily timeframe. Immediate Support remains at $22800 while a daily candle close below $21100 (the most recent lower swing high) will invalidate the opportunities for buyers. The 100-SMA remains in sight currently around the $27200 area.

As Investors and more importantly US Federal Reserve continues to closely monitor data and sentiment seems to shift after every release at the minute we have some big events which could drive volatility next week. We have business survey results and jobs report due which should give markets another important data point moving forward. A poor showing on both releasescould confirm the economy is slowing quite quickly, boosting risk appetite once more.

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--- Written by Zain Vawda for DailyFX.com

Contact and follow Zain on Twitter: @zvawda

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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