Despite the increase in the U.S. inflation rate to 9.10%, a multi-year high, the cryptocurrency market capitalization has reclaimed its trillion-dollar status, doing so in the face of worrying macroeconomic data and contractionary monetary policies seen worldwide.
We are seeing significant rallies in the Altcoin market, particularly Ether, the second largest token by market capitalization, leading the charge because of the announcement of an update, “The Merge” mainnet upgrade, which has been scheduled to launch on the 19th of September 2022. This upgrade is part of the final steps for the Ethereum blockchain to move from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) mechanism.
The bullish week we are seeing in the crypto market largely tracks a positive rally in the traditional markets, which are up modestly despite analyst estimates that the Federal Reserve intends to raise interest rates by at least 75 basis points at the Federal Open Market Committee meeting on July 27. Major U.S. indexes like the tech-dominated NASDAQ, the DOW and the S&P 500, are up over 2% for the week.
Bitcoin rallies 16% in one week
- While traders welcome this week’s positive price action, however, many analysts caution that the upswing is nothing more than a bear market pump, following an extended selloff which we have witnessed in the market.
- Data from CoinMarketCap shows that over the past week, Bitcoin has rallied significantly and at the time of writing BTC holds a 16% weekly gain from its recent low at $18,907.
- The top cryptocurrency now finds itself running square into the resistance found at its 200 Week Moving Average (WMA), which also happens to be the upper bound of the trading range BTC has been trapped in since the middle of June.
- According to On-Chain Analytics expert, William Clemente, Bitcoin reclaiming the 200 WMA has only happened for the first time in over a month but traders should keep in mind that there are still five days left until the weekly candle closes. This he expressed as, “So far so good.”
- William also suggested in another tweet that Bitcoin could potentially rally to somewhere around the $30,000 trading zone, as that price zone is the next resistance level. He said we could see this, “over the next few weeks.”
- So far, it is important to note that this level has proven to be a tough nut to crack over the past five weeks as multiple attempts to break above it have been met with rejection. It remains to be seen if Bitcoin will manage to break free of this level and move higher or spend longer trading between $19,000 and $22,000 trading zones.
Ether leads altcoins as it gains over 40% in 5 days as “The Merge” becomes the focus
- The price of Ether, the biggest smart contract blockchain in the crypto ecosystem, has experienced a boost in momentum and price over the past week, climbing 43% from a low of $1,005 on July 13 to a daily high at $1,530 on July 18, reaching its highest price since June 12.
- Ether has been showing increased momentum since the successful July 6 completion of the Merge on what the Blockchain calls the “Sepolia testnet.” A further boost to its price was provided on July 15 when it was announced that the mainnet Merge is predicted to take place on September 19.
- While the September 19 date is still tentative and should be considered as a roadmap projection and not a hard deadline, the prospect of the Merge finally taking place after years of preparation is exciting the community and possibly driving demand for Ether.
- Another Altcoin of note is Polygon’s MATIC token. The token continues to lead the pack higher following a week of several major announcements including being selected to participate in Disney’s 2022 Accelerator Program, gaining 64% over the last seven days and trading near resistance at $0.94.
Other notable gainers in the last seven days include a 20.75% gain for Binance’s BNB token, a 36.20% gain for Solana’s SOL token, a 41% increase for Avalanche’s AVAX token and an 81% gain for Ethereum Classic’s ETC token. The overall cryptocurrency market cap now stands at $1.058 trillion and Bitcoin’s dominance rate is 42.1%.