Crypto Market Review, August 1

Ahead of the earnings week, Bitcoin and Ethereum are at important crossroads. The rate hike is already slowing down as investors slowly unwind the lack of positive fundamentals that should help the cryptocurrency market recover.

Bitcoin is strong technically, weak fundamentally

Earlier on U.Today, we described how many chain and market indicators show that Bitcoin is considered undervalued after nearly nine months of decline after reaching the current ATH of $69,000.

The Puell Multiple used by Dan Tapiero suggests that the first cryptocurrency entered the buy zone, giving investors, almost every time, massive returns over the next 18 months. The Relative Strength Index is another tool that considers Bitcoin oversold on longer time frames.

Unfortunately, indicators that rate Bitcoin oversold and underbought are at odds with everything going on in the background: the Fed is still aiming for another rate hike, inflows from institutional investors are still at extremely low levels and the largest economy in the world has just entered a technical recession .

Advertisements

The only positive sign for Bitcoin is the weakening of the US dollar, according to the DXY index which compares the USD’s performance against foreign currencies. The European Central Bank’s interest rate increase accelerated the rise of the euro and halted the currency’s rise.

Unfortunately, that’s not enough to help Bitcoin on its way up, but it could actually help the digital gold stay above critical levels like $22,000.

Ethereum does not feel good before the merger

Previously on U.Today, we described how Ethereum is struggling in the market after losing the majority of its income since 2021. After the critical reduction of gas prices, Ethereum’s burning mechanism lost all its effectiveness in the market as the highest issuance of the second largest resource in the market since the implementation of EIP1559.

Additionally, Ethereum’s hashrate migration is not yet over, as some major mining pools are awaiting the release of the PoW ETH 1.0 fork and are not yet willing to set their machines to mine Ethereum Classic, which recently saw the massive hashrate spike.

With a number of new features and a PoW shutdown, the merger could bring many different issues that could directly affect holders of Ethereum derivatives and various tokens backed by the original ETH coin.