Ether Price

Nomad reportedly ignored security vulnerability that led to $190M exploit

The altcoins that were stolen in the Nomad bridge hack suffered as much as 94% decline in price after the exploit.

The Nomad token bridge hack on Aug. 3 was the fourth largest crypto hack in history, seeing nearly $200 million worth of crypto assets drained from the platform. However, more than the hack, the methodology behind it garnered widespread attention.

The exploit took place due to a smart contract vulnerability that saw hundreds of users other than the hacker getting involved and taking away as much as they could by simply copy-pasting the transaction data used by the initial hacker and changing the wallet address to theirs. The event was later deemed as a decentralized robbery by many due to the involvement of normal community members.

Later, the Nomad team revealed to Cointelegraph that some of the people who took funds were acting benevolently to protect the crypto from getting into the wrong hands.

In the aftermath of the hack, the crypto analysis group BestBrokers found that the first exploit took place on Aug. 1, which drained 400 Bitcoin (BTC) in four different transactions. The hackers later diverted all 22,880 Ether (ETH), then moved on to the over $107 million worth of stablecoins and finally started diverting the altcoins supported by the project.

The incident has seen WBTC, Wrapped Ether (WETH), USD Coin (USDC), Frax (FRAX), Covalent Query Token (CQT), Hummingbird Governance Token (HBOT), IAGON (IAG), Dai (DAI), GeroWallet (GERO), Card Starter (CARDS), Saddle DAO (SDL) and Charli3 (C3) tokens taken from the bridge.

Some altcoins that were stolen from the platform suffered as much as a 94% decline. Data collected by the analysis firm showed that the following altcoins suffered the biggest collapse after the hack:

The exploited smart contract vulnerability was highlighted in a security audit report done by Quantstamp in the first week of June. The Nomad team responded by claiming it to be “effectively impossible to find the preimage of the empty leaf.”

The auditors believed that the Nomad team had misunderstood the issue at the time, and within two months, the same vulnerability was the reason behind nearly $200 million in losses.

Cointelegraph reached out to Nomad with queries related to the discovery and will update the story accordingly.

Ethereum futures backwardation hints at 30% ‘airdrop rally’ ahead of the Merge

Backwardation reflects a market condition wherein spot prices trade higher than future prices.

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.

*ETH230-ETHUSD daily price chart. Source: TradingView*

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.

ETH could rally on “airdrop” hopes

Moreover, a potential chain split will likely be bullish in the run-up to the Merge in September, according to some analysts.

Roshun Patel, former vice president of institutional lending at Genesis Trading, noted that the December Ether futures have flipped into backwardation due to Ethereum “fork odds,” which could prompt traders to buy spot ETH ahead of the Merge.

Meanwhile, Patel hinted that traders could be offsetting their upside spot risks by taking bearish positions on December futures contracts.

dec flipping into backwardation on eth starting to price in fork odds. Back in 2020 the play with the bchabc fork was buy spot and short the quarts pic.twitter.com/Oyde1htnz8

— Roshun Patel (@roshunpatel) July 31, 2022

The statement came after Galois Capital’s survey on the Merge . In the July 28 Twitter poll, the crypto hedge fund asked its followers whether or not the Merge would end up splitting the Ethereum chain into the proof-of-work (PoW) ETH1 and a proof-of-stake (PoS) ETH2.

Of the respondents, 33.1% said ththe upgrade would lead to a hard fork, while 53.7% anticipated a smooth network transition.

Question 1: What happens during the merge? If Choice 2 or 3 go to Questions 2-5.

— Galois Capital (@Galois_Capital) July 27, 2022

Ethereum’s potential chain split means that ETH holders will have an equal amount of tokens on both chains. In other words, an airdrop that grants ETH holders the same amount of ETH1 tokens, a la Ethereum Classic (ETC) in 2016.

ETH price technicals flash “golden cross”

Ether now consolidates inside a key $1,650–$1,750 resistance bar that served as support during the May–June 2022 session.

Meanwhile, the token’s 20-day (green) and 50-day (red) exponential moving averages (EMA) have also formed a “golden cross,” suggesting an interim bullish outlook.

*ETH/USD daily price chart. Source: TradingView*

A breakout emerging from the $1,650–$1,750 resistance bar could have ETH eye $2,150 as its next upside target. This level was instrumental as resistance in May and June and support in January. It now coincides with the 200-day EMA (the blue wave) near $2,180, up almost 30% from August 1’s price.

Conversely, a pullback from the resistance bar could expose ETH toward the 20-day EMA (~$15,250) and the 50-day EMA ($1,500) waves.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Ethereum Merge: How will the PoS transition impact the ETH ecosystem?

Ethereum is all set to transition to PoS by the third week of September, but most of the promised scalability features will only be available after 2023.

The Ethereum blockchain is on the verge of one of the most crucial technical updates since its inception, moving from proof-of-work (PoW) to proof-of-stake (PoS), also called Ethereum 2.0, or Eth2.

Ethereum devs gave Sept. 19 as the perpetual date for the merger of the current PoW chain to the PoS chain. The Merge is expected to be deployed on the Goerli testnet in the second week of August. After the successful integration of the Goerli testnet, the blockchain will initiate the Bellatrix update in early August and roll out the Merge two weeks later.

The discussion around the transition began with a focus on scalability, so Ethereum developers proposed a three-phase transformation process. The transition itself is nearly two years in the making, starting on Dec. 1, 2020, with the launch of Beacon Chain, initiating Phase 0 of the three-phase process.

The Beacon Chain began the shift to PoS, enabling users to stake their Ether (ETH) and become validators. However, Phase 0 did not affect the main Ethereum blockchain: The Beacon Chain exists alongside Ethereum’s mainnet. However, both the Beacon chain and mainnet will eventually be linked with the Merge.

Phase 1 was meant to launch in mid-2021 but was delayed to early 2022, with developers citing unfinished work and code auditing as major reasons. From Phase 1 onward, Eth2 will house Ethereum’s entire history of transactions and support smart contracts on the PoS network. Stakers and validators will officially step into action, as Eth2 will take mining out of the network.

Phase 2, the final phase of the transition, will see the introduction of Ethereum WebAssembly, or eWASM, over the current Ethereum Virtual Machine (EVM). WebAssembly was created by the World Wide Web Consortium and is designed to make Ethereum significantly more efficient than it currently stands. Ethereum WebAssembly is a proposed deterministic subset of WebAssembly for the Ethereum smart contract execution layer. The eWASM was specifically designed to replace the EVM, which would see implementation in Phase 2.

Marius Ciubotariu, co-founder of Hubble Protocol — a decentralized finance (DeFi) lending platform — told Cointelegraph that he is not really worried about the delays, as any new technology with such vast implications on the ecosystem would take time:

“PoS is not live yet; however, I do not see this as a concern. I understand the Merge has taken longer than some would expect. But, with new technology and the opportunity for critical issues, a non-rushed approach is the best one. As this Merge goes live, I’m confident more protocols will show up. We’ll continue innovation within the Ethereum community; something I have and continue to enjoy seeing/experiencing.”

Merge’s impact on the Ethereum ecosystem

The upcoming Merge will see the current PoW mainnet merge with the Beacon Chain, transferring the whole Ethereum history to the new chain. A complete change of consensus for an ecosystem as large as Ethereum will have a dramatic impact from both a technical and political perspective.

Barney Chambers, co-founder and co-lead developer at cross-chain DeFi platform Umbria Network, told Cointelegraph that the Merge will be challenging:

“The accumulation of Ethereum will centralize in the hands of validators who already hold the majority of the tokens. The Ethereum Foundation claims that the merge will not impact the price of Ethereum, but the Merge will cause a fundamental shift in the way that new tokens are distributed and this will have a dramatic effect on the price of both Ethereum and the entire cryptocurrency ecosystem.”

The proof-of-work mining difficulty level will skyrocket due to the difficulty bomb, making it unable to conduct mining at economically viable scales. The difficulty bomb is a code ingrained in the Ethereum protocol since 2015. It is set to execute every time a specific number of blocks have been mined and added to the blockchain. It makes the mining activity on the existing proof-of-work blockchain significantly harder.

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As a result, Ethereum’s proof-of-work chain would be compelled to stop generating blocks, as the difficulty bombs would make mining a block nearly impossible. This situation is described by its developers as an “Ice Age.” The bomb’s simple goal is to encourage miners to merge completely, which will increase the adoption of the proof-of-stake chain.

The transition to a new PoS network became necessary for Ethereum, given its expanding ecosystem leading to several network congestion and very high gas fees. Over the past year, however, the narrative has also shifted toward PoS being more environment-friendly than PoW. While some laud Eth2 as paving the way for a more environmentally friendly protocol, Patricia Trompeter, CEO of carbon-neutral crypto mining company Sphere3D, has other thoughts. Trompeter told Cointelegraph:

“PoS only leads to unnecessary spending and misallocated energy resources, as ‘Band-Aid solutions,’ and marketing schemes like the ‘Change The Code’ campaign don’t offer any solutions to a full industry shift toward renewable resources.”

Patricia believes PoS rather dismantles crypto’s decentralized infrastructure, “pushing power toward the wealthiest holders with unimpeachable control over users.”

Post-Merge, ETH issuance will drop to about 0.6 million per year, with a similar 2.7 million ETH burned, meaning a net 2.1 million ETH burned per year, or -7% in yearly ETH supply, making it a deflationary asset. ETH miners will be out of business officially once the difficulty bomb hits, being forced to mine other PoW coins with the same hashing algorithm for their existing equipment or fully exit the market.

Ethereum co-founder Vitalik Buterin has predicted that the transition would not only help scale the network but also bring down the energy consumption by 95%. The transaction processing speed is expected to get on par with centralized payment processors. However, none of these features would arrive with the Merge on Sept. 19.

The major scalability solution called sharding that allows for parallel transaction processing will only arrive after the completion of Phase 2, which is expected to take place in the second half of 2023.

Daniel Dizon, co-founder and CEO of noncustodial and liquid ETH staking protocol the Swell Network, told Cointelegraph:

“The Merge represents a significant change to Ethereum’s underlying economic model and hardware requirements, resulting in massive energy output reduction. It is expected there will be a significant demand for ETH as the rewards from participation in ETH staking will be increasing significantly from priority fees and MEV capture. The implication of the Merge is not fully priced in. Increased demand and reduced issuance for ETH will result in structural upward pressure on price compared to the existing state of Ethereum today.”

Does the Merge make Ethereum a security?

Apart from the technical and financial impact of the Merge, the biggest discussion seems to be around whether Ether would qualify as security once the network makes the move to PoS. The discussion has gained a lot of steam online in recent days and the answer to the question would depend on who you ask.

The debate around Ethereum’s security status was prevalent long before the transition to PoS came into the picture. The debate gained a lot of momentum after the United States Securities and Exchange Commission filed a lawsuit against Ripple, deeming its sale of XRP tokens as a security.

Many XRP proponents have since pointed to the “pre-mine” of ETH and have often blamed the SEC for giving Ethereum a free pass. The confusion and dilemma around security status arise from a lack of clear regulations for the crypto market. While lawmakers agree that Bitcoin (BTC) can be regarded as an independent asset class, the status of Ethereum has been a topic of debate.

Adam Levitin, a research professor at Georgetown University Law Center, outlined what could make the PoS-based Ethereum network a security in the eyes of regulators:

I’ve gotten some pushback here, so let me elaborate. “Security” includes an “investment contract.” “Investment contract” is defined by SCOTUS in Howey as a K for investment in a common enterprise where profits are expected “solely from the efforts” of a third party. 2/

— Adam Levitin (@AdamLevitin) July 24, 2022

He added that “Howey speaks of an investment of ‘money,’ but that has always been interpreted just to mean an investment of value. Putting up a stake readily satisfies this element.”

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Coin Metrics co-founder Jacob Franek countered Levitin’s argument, suggesting that Ethereum is one of the most decentralized platforms with open-source support.

3/ Is there an issue with disclosures today?

Ethereum is an open-source, distributed project.

It arguably has the most transparent and real-time disclosures of any distributed project and certainly more than a traditional, centralized company.

— Jacob Franek (is Hiring) (@panekkkk) July 24, 2022

Another major concern about the PoS transition has been the centralization in the decision-making process. Konstantin Boyko-Romanovsky, CEO of reward-monitoring and block transactions validation platform Allnodes, told Cointelegraph:

“While the risk of centralization with Ethereum’s new consensus mechanism PoS exists, it is ways away from being realized. So far, the strong community behind the Ethereum network has tackled every challenge, and there is no reason to assume that the issue of centralization won’t be resolved either.”

The Ethereum blockchain has become the backbone of the DeFi, nonfungible tokens and decentralized autonomous organizations. While the ecosystem will continue to support such nascent use cases, the true transition to PoS with sharding and high scalability features will only be available after 2023. The success of Eth2 will highly depend on the execution of the final phase, but many market pundits are still skeptical about it, given the past delays.

Ethereum price ‘cup and handle’ pattern hints at potential breakout versus Bitcoin

Ether has printed a classic bullish reversal pattern against Bitcoin weeks before the Merge launch date.

Ethereum’s native token Ether (ETH) has rebounded 40% against Bitcoin (BTC) after bottoming out locally at 0.049 on June 13. Now, the ETH/BTC pair is at two-month highs and can extend its rally in the coming weeks, according to a classic technical pattern.

ETH paints cup and handle pattern

Specifically, ETH/BTC has been forming a “cup and handle” on its lower-timeframe charts since July 18.

A cup and handle setup typically appears when the price falls and then rebounds in what appears to be a U-shaped recovery, which looks like a “cup.” Meanwhile, the recovery leads to a pullback move, wherein the price trends lower inside a descending channel called the “handle.”

The pattern resolves after the price rallies to an approximately equal size to the prior decline. The ETH/BTC chart below illustrates a similar bullish technical setup.

*ETH/BTC four-hour price chart. Source: TradingView*

Notably, the pair now trades lower inside the handle range but could pursue a recovery toward the neckline resistance near 0.071 BTC. Afterward, a decisive cup and handle breakout above the neckline level could lead ETH/BTC to 0.072, up 12.75% from today’s price.

The success rate of the cup and handle pattern in reaching its profit target is 61%, according to veteran investor Tom Bulkowski.

The Merge factor

The bullish setup for ETH/BTC also takes cues from Ethereum’s network transition from proof-of-work (PoW) to proof-of-stake (PoS) potentially via “the Merge” slated for mid September.

Meanwhile, market analyst Michaël van de Poppe says that Ether could see more upside versus Bitcoin due to the Merge hype as momentum builds in the coming weeks.

Basically a few levels on $ETH.

Facing resistance at 0.0725 $BTC.

Facing support at either 0.0645 $BTC or 0.057 $BTC.

Overall, expecting more momentum going towards the merge in September. pic.twitter.com/QpmkyTwjyb

— Michaël van de Poppe (@CryptoMichNL) July 23, 2022

Van de Poppe anticipates ETH/BTC to test 0.072, the cup-and-handle profit target, as interim resistance while holding either 0.0645 or 0.057 level as support.

*ETH/BTC weekly price chart. Source: TradingView/Michaël van de Poppe*

Conversely, the range of risks for Ethereum with the Merge update include potential technical issues, delays or even a contentious hard fork. For instance, a bug had split the Ethereum chain during a 2020 network upgrade.

Ethereum price ‘cup and handle’ pattern hints at potential breakout versus Bitcoin

Ether has printed a classic bullish reversal pattern against Bitcoin weeks before the Merge launch date.

ETH paints cup and handle pattern

Specifically, ETH/BTC has been forming a cup and handle on its lower-timeframe charts since July 18.

A cup and handle setup typically appears when the price falls and then rebounds in what appears to be a U-shaped recovery, which looks like a cup. Meanwhile, the recovery leads to a pullback move, wherein the price trends lower inside a descending channel called the handle.

The pattern resolves after the price rallies to an approximately equal size to the prior decline. The ETH/BTC chart below illustrates a similar bullish technical setup.

The success rate of the cup and handle pattern in reaching its profit target is 61%, according to veteran investor Tom Bulkowski.

The Merge factor

The bullish setup for ETH/BTC also takes cues from Ethereum’s network transition from proof-of-work (PoW) to proof-of-stake (PoS) potentially via the Merge slated for mid-September.

Meanwhile, market analyst Michaël van de Poppe says that Ether could see more upside versus Bitcoin due to the Merge hype as momentum builds in the coming weeks.

Basically a few levels on $ETH.

Facing resistance at 0.0725 $BTC.

Facing support at either 0.0645 $BTC or 0.057 $BTC.

Overall, expecting more momentum going towards the merge in September. pic.twitter.com/QpmkyTwjyb

— Michaël van de Poppe (@CryptoMichNL) July 23, 2022

Van de Poppe anticipates ETH/BTC to test 0.072, the cup-and-handle profit target, as interim resistance while holding either 0.0645 or 0.057 level as support.

Conversely, the range of risks for Ethereum with the Merge update includes potential technical issues , delays or even a contentious hard fork. For instance, a bug had split the Ethereum chain during a 2020 network upgrade.

Ether price stalls at $1,630 after gaining 50% in under a week

The ETH price stalls following a week of gains, leading analysts to call for a pullback in the short term followed by a rally into September when the mainnet Merge is predicted to occur.

Price action across the cryptocurrency market was largely subdued on July 21, as traders took a day to digest gains over the past week and book profits following the biggest relief rally since early June.

Amid speculation about what drove the recent rally, the Ethereum Merge has consistently ranked at the top of the list. The market rally shifted into high gear after a tentative date of Sept. 19 was set for the mainnet Merge .

Data from Cointelegraph Markets Pro and TradingView shows that after hitting a high of $1,620 on July 20, Ether’s (ETH) price retraced to a low of $1,463 in the early trading hours on July 21 and has since climbed back above support at $1,500.

*ETH/USDT 1-day chart. Source: TradingView*

Now that the initial price surge brought on by the Merge announcement has subsided, here’s what several analysts are expecting to unfold as Ether’s mainnet transition to proof-of-stake approaches.

A healthy pullback

Ether’s pullback on July 21 is a positive development according to market analyst Rekt Capital, who posted the following chart highlighting the importance of its weekly close above $1,300 and subsequent move higher.

Rekt Captial said:

“Though #ETH could just continue higher to reach the upper orange region, it would be healthier for ETH to dip. Such a retest of the lower orange area would only increase probability of continuation.”

July 21’s pullback aligns with this outlook and suggests the possibility of a move up to $1,700 in the near future.

Watch out for a sharp drop to $1,200

Ether’s modest retrace was also an anticipated development by crypto trader and pseudonymous Twitter user Team Lambo, who provided the following chart showing the clear rejection at $1,630 and 10% retracement.

Team Lambo explained in a Twitter post:

“Now the bigger correction will come below $1,440 and almost certainly will see a sharp drop towards $1,200 so keep on waiting for that move for #Ethereum.

Lower highs and higher lows

A more nuanced analysis of the recent price action for Ether was offered by market analyst CryptoLinns, who posted the following chart noting that the move on July 20 did not set a new high while the drop on July 21 did not establish a new low on the 4-hour chart.

*ETH/USDT 4-hour chart. Source: Twitter*

CryptoLinns said,

“The last candle showed a long lower shadow line, which proves demand appeared. But volume is not enough. Watch out whether the demand of this candle now is persistent.”

According to CryptoLinns, the current support level is located at $1,450 while overhead resistance is found at $1,630.

A final bit of insight into the critical levels to watch on the Ethereum chart was provided by crypto trader Altcoin Sherpa, who posted the following chart identifying lower levels of support at $1,012 and $1,281 and overhead resistance at $1,701, $2,145 and $2,465.

The overall cryptocurrency market cap now stands at $1.039 trillion and Ether’s dominance rate is 18%.

Bitcoin price hits $24K, but analysts say on-chain data points to an ‘inevitable’ pullback

The crypto market rally continues, but analysts are on the fence about whether BTC and ETH will slip back into range or push closer to higher-timeframe resistance levels.

Cryptocurrency investors continue to enjoy this week’s bullish price action after Bitcoin (BTC), Ether (ETH) and a handful of altcoins rallied on July 20 alongside gains in the traditional markets.

Data from Cointelegraph Markets Pro and TradingView shows that a midday rally by Bitcoin bulls managed to lift the top crypto to a daily high of $24,281, which sparked a new round of bullish proclamations on Crypto Twitter.

*BTC/USDT 1-day chart. Source: TradingView*

While the week-long climb has helped boost investor sentiment , several analysts are warning traders to not get too far ahead of themselves because the market is still providing some red flags worth taking note of.

Prepare for an inevitable pullback

Bitcoin’s climb above $24,000 officially confirmed a breakout from the previous trading range between $18,000 and $22,500, according to market analyst Caleb Franzen, who posted the following chart noting the question the market now faces.

Franzen said,

“Regardless, my belief is that the next pullback will be a major test within this bear market. Will buyers step in aggressively on a pullback or capitulate?

Whale wallets remain dormant

One reason to be wary of the current rally’s ability to sustain itself is the lack of whale wallet activity, according to on-chain research firm Jarvis Labs.

*Bitcoin divergence chart. Source: Jarvis Labs*

The red and orange dots on the BTC divergence chart above represent buying activity by large and small whale wallets at different points in time. As shown in the red highlighted box, activity from whales has been almost non-existent over the past few months as Bitcoin trended down.

Data from Jarvis Labs also showed that larger entities have yet to return to active buying, and the chart below shows the change in BTC whale holdings.

*BTC whale holding change. Source: Jarvis Labs*

Jarvis Labs said,

“We want to see this pattern of colored dots begin moving up and to the right. If we get it, then that’ll be a positive sign that any rally could have significant momentum behind it.”

Based on the trends identified, Jarvis Labs stated that “it is hard to get too excited about a rally extending beyond the liquidity that sits around $28,000,” and instead suggested that “For now, the lower band at $25K seems most likely.”

The high time frame trend remains bearish

The turnaround in sentiment over the past week was acknowledged by market analyst and swing trader il Capo of Crypto, who noted that the “Low timeframe trend is bullish, no doubt about it.”

But before jumping all in on this rally, il Capo of Crypto also posted the following chart warning that the “high timeframe trend is still bearish and this is another lower high.”

*BTC/USD 12-hour chart. Source: Twitter*

Il Capo of Crypto said,

“Ltf [low time frame] bearish confirmation is below $22K. Main target remains $15.8K-$16.2K.”

The overall cryptocurrency market cap now stands at $1.062 trillion and Bitcoin’s dominance rate is 42.7%.

Total crypto market cap reclaims $1 trillion as Bitcoin, Ethereum and altcoins breakout

The crypto market capitalization pushed above $1 trillion after notable weekly double-digit gains from BTC, ETH and several large cap altcoins.

Crypto traders found cause for celebration on July 18 as the total market capitalization climbed back above the $1 trillion mark following weeks of widespread selling after Bitcoin (BTC) price swept yearly lows below $18,000.

The green day for cryptocurrencies largely tracks a positive day 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.

*Daily cryptocurrency market performance. Source:* *Coin360*

While traders will welcome July 18’s positive price action, many analysts caution that the upswing is nothing more than a bear market pump. Let’s take a look at the current top performers.

Bitcoin holds a 16% gain

Data from Cointelegraph Markets Pro and TradingView 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, which also happens to be the upper bound of the trading range BTC has been trapped in since the middle of June.

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.

$BTC battling that 200 Week MA again. Rejected 3 times in the last 5 weeks here.

Decision time imo.

We either have a fat breakout or fat breakdown. $ETH has been leading the market so far, along with many other altcoins. Breakouts occurring everywhere.

Can $BTC follow suit? pic.twitter.com/6Cz49po8CH

— Taner ⚡️ (@Taner_Crypto) July 18, 2022

Ethereum Merge surge presents a 43% rally

Ethereum (ETH) has also 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 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.

MATIC keeps moving

On the altcoin front, Polygon (MATIC) 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 32.4% over the past 24 hours and trading near resistance at $0.94.

*MATIC/USDT 1-day chart. Source: TradingView*

Other notable gainers on the 24-hour chart include a 19.6% gain for STEPN (GMT), an 18.9% gain for Theta Fuel (TFUEL), and a 17.6% increase for Convex Finance (CVX).

The overall cryptocurrency market cap now stands at $1.019 trillion and Bitcoin’s dominance rate is 41.6%.

Ethereum price breaks out, hits 2-month high versus Bitcoin — Is the rally sustainable?

The rally has pushed ETH price toward strong resistance levels, increasing its pullback risks against Bitcoin.

Ethereum’s native token Ether (ETH) has successfully avoided a bearish technical setup to reach a two-month high against Bitcoin (BTC).

ETH price bear flag invalidated

The ETH/BTC pair invalidated its prevailing “bear flag” pattern after Ethereum developers announced this July 14 that their long-awaited switch to proof-of-stake (called the Merge ) will most likely occur in September.

ETH/BTC has rallied by more than 22% since the announcement, reaching 0.067, its highest level since May 25. Furthermore, the pair’s sharp upside move has pushed its net retracement gains to 37% when measured from June 13’s local bottom of 0.049.

*ETH/BTC daily price chart. Source: TradingView*

Ether tests key inflection zone

Strong fundamentals led by the Merge launch could have ETH/BTC pursue a run-up toward the 0.072–0.076 area. This range was instrumental as resistance in January and March–May. Therefore, it should serve as the next upside target for Ether bulls.

But there’s a catch. Notably, ETH/BTC has been showing signs of a weakening upside momentum near what appears to be a strong resistance confluence.

That includes a falling trendline resistance, a Fibonacci retracement line (near 0.066 BTC), and a support-turned-resistance area (the 0.064-0.068 BTC range), as shown below.

In addition, ETH/BTC’s daily relative strength index, a momentum oscillator indicator, has crossed into so-called “overbought” territory, suggesting elevated risks of a sell-off.

Independent market analyst “Altcoin Sherpa” cited a similar technical setup this July 18, noting that the ongoing ETH/BTC rally could be “unsustainable.”

$ETHBTC: This is a weird chart; super strong in the short term but I'm guessing this rally will be unsustainable. Really conflicting thoughts for this being 'the bottom'; lots of FA factors coming in w. merge. Maybe .075 is next up if this area gets cleared. $ETH #Ethereum pic.twitter.com/UyjsidVuP4

— Altcoin Sherpa (@AltcoinSherpa) July 18, 2022

In other words, ETH/BTC could see a reversal toward 0.06 by September if the inflection resistance zone holds for a 9.5% decline. The 0.06 BTC level also coincides with the 0.236 Fib line, as shown in the chart above.

2018 Ethereum price fractal suggests a $400 bottom, but analysts say the merge is a ‘wildcard’

A key ETH price indicator suggests the altcoin’s downtrend could extend to $400, but analysts are unsure whether the upcoming Ethereum Merge will be a bullish or bearish event.

There’s no rest for the weary during a bear market, and the Crypto Fear and Greed index shows that investor sentiment has been stuck in a state of “extreme fear” for a record 70 consecutive days.

As the market looks for a catalyst to reverse the trend, there is little on the horizon besides the Ethereum (ETH) Merge that seems capable of sparking a rally. If that is indeed the case, the market could continue to trend down or sideways until the tentative Merge date of September 19.

Data from Cointelegraph Markets Pro and TradingView shows that Ether price remains sandwiched in the trading zone it has been trading in since June 13 and it is currently running into the upper resistance near $1,240.

With the Merge still a couple of months away and little else on the roadmap for Ethereum in the near term, here’s what analysts are saying to watch out for.

Ether now trades above its moving averages

A short message of hope at this significant level of resistance was provided by futures trader Peter Brandt, who posted the following chart and simply stated “Maybe baby $ETH.”

Additional context to go along with Brandt’s observation was provided by crypto trader Albert III, who posted the following chart highlighting the fact that Ether is now trading above several key moving averages.

*ETH/USD 4-hour chart. Source: Twitter.*

The analyst said,

“We got a bullish cross between 200 & 50 moving averages on 4h. Looking for more upside locally.”

Ethereum’s Merge is the “wildcard”

A more in-depth perspective for Ether moving forward was offered in the recent “ETH 30d returns outlook” report released by cryptocurrency research firm Jarvis Labs, which used the 30-day returns metric to “measure the short-term profit and loss of the aggregated market at a given time.”

*30-day returns for Ethereum. Source: Jarvis Labs*

As shown on the chart above, the 30-day returns for Ether are now “moving towards 0% after being deeply negative since April,” which suggests that the market is getting more bullish as the Merge approaches.

According to Jarvis Labs, instances when the 30-da returns dip below 0% during bull markets, indicate “prime buying opportunities,” while “flips above 0% are ideal selling opportunities” during bear markets.

When compared to the Ether price action during Q4 of 2018 where it consolidated in the low $200 range before dipping to $82 in December, “a repeat of this fractal now would bring Ether to the $400 range by December 2022.”

According to Jarvis Labs, if this fractal does indeed replay itself, “all pumps up to the $1,700 level will trigger sell-offs for the next 1 year.”

Jarvis Labs said,

“Conversely, a flip of $1,700 from resistance back to support would be equal to summer 2020’s flip of ~$350 and could signal the start of a brand new bull run.”

As a final word of caution, Jarvis Labs warned that while “short-term rallies to the $1,400–$1,700 range are possible,” traders should be careful as “they’re likely to be met by strong selling.”

Eyeing the supply zone at $1,420

The outlook for Ether in the near term was covered by analyst and pseudonymous Twitter user Crypto Tony, who referenced the following chart, outlining the next level of resistance to keep an eye on.

Crypto Tony said,

“I am looking for the gap to be filled above as [we] make our way to the next supply zone at $1,420.”