Ethereum

ETH CC: Crypto winter “reinforces” validity of blockchain, says 0x Labs employee

0x Labs developer advocate believes the current crypto winter provides a chance for “rationalization” and “validates” underlying blockchain systems.

Both the ongoing downturn across cryptocurrency markets, and Ethereum’s upcoming merge were under the spotlight on the second day of ETH Community Conference. The wider Ethereum community descended on Paris for the largest annual European Ethereum event, with key roleplayers, companies and individuals taking part.

Cointelegraph spoke to Jessica Lin, developer advocate for decentralized exchange infrastructure firm 0x Labs, to unpack the biggest talking points in the ETH community. Despite the space continuing to endure a significant market slump, Lin believes Ethereum still provides a flexible and secure system on which to build, connect and monetize services and products:

“We’ve been around since 2016, we saw the 2018 crash and realized that these times in the market allow for rationalization and ultimately reinforces the validity of the underlying blockchain system.”

The Ethereum ecosystem is set to undergo its own acid test with the long-awaited move away from its current proof-of-work consensus protocol to a proof-of-stake-based system. The ETH 2.0 is earmarked to take place in the second half of 2022 and Lin believes that the ecosystem is ready to make the shift:

“The successful merge on the Ropsten and Sepolia test nets raises hopes that the mainnet merge in September will go well. We’re excited about it and we are preparing ourselves as well integrators that build on our platform.”

Lin also anticipates that the Merge should be straightforward, with any potential challenges likely to present themselves in the back-end of decentralized applications running on the Ethereum blockchain.

Solana price enters correction territory after 80% monthly gains

SOL’s bear flag setup sees its price declining to $21 by September 2022.

Solana (SOL) ticked modestly lower on July 20 after testing a critical technical resistance, suggesting further pullback moves in the coming weeks.

SOL price eyes 50% wipeout

SOL’s price decreased by over 4% to $44 after failing to breach a multi-week ascending trendline resistance. Interestingly, this resistance level comes as a part of what appears to be a bearish continuation pattern dubbed the “bear flag.”

A previous test of the same resistance trendline in late June had preceded a 30%-plus price drop, illustrating a higher distribution sentiment among SOL traders near the level. Therefore, the latest pullback from the same range could lead to an extended downside retracement.

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

Meanwhile, the bear flag’s lower trendline has been capping SOL’s sharp pullback moves. As a result, SOL’s extended correction scenario could have its price hit the support level, now near $35.40 — a 20% drop from current price levels.

Additionally, a decisive close below the lower trendline would risk triggering the bear flag breakdown setup, wherein the price falls by as much as the height of the downtrend (called “flagpole”) that preceded the flag’s formation.

*SOL/USD daily price chart featuring “bear flag” breakdown scenario. Source: TradingView*

That puts SOL on the road to levels near $21 by September, down over 50% from July 20’s price.

What experts are saying about Solana

The bear flag setup appears after SOL’s 80%-plus price rally since June 14, primarily driven by a similar recovery across the crypto market.

For instance, Ether (ETH), Solana’s top rival in the smart contract space, has risen over 85% more than a month after bottoming out locally at $880. Similarly, Bitcoin (BTC) is up 35% in the same period.

*SOL/USD and BTC/USD daily correlation coefficient at 0.97. Source: TradingView*

Independent market analyst Altcoin Sherpa sees SOL’s price rising to the $60–$80 area in 2022 if Bitcoin continues to climb.

Conversely, Andrey Diyakonov, chief commercial officer at Choise, notes that demand for SOL could drop due to Ethereum’s transition to proof-of-stake in September.

“The new Ethereum protocol has the same advantages as Solana, and investors may choose to stick with Ethereum should the high gas fees and scalability woes be solved,” Diyakonov explained.

Paweł Łaskarzewski, co-CEO at Synapse Network, fears SOL’s ongoing price rally could be a bull trap, noting that SOL, alongside the rest of the crypto market, still faces macro hurdles led by higher inflation and rising lending rates.

He said:

“We might see small ups on the price of Solana but due to the current market state, I would not expect any big changes”

Solana funds add $110.8M in 2022

Meanwhile, institutional interest in Solana continues to look better compared to Ethereum, according to CoinShares’ latest weekly report.

*Net flows into crypto funds in 2022 (by assets). Source: CoinShares*

Notably, Solana-backed funds have attracted $110.8 million into its coffers since the beginning of this year. In comparison, Ethereum-based investment vehicles have witnessed withdrawals worth $446.1 million from their reserves in the same period, including $2.5 million in the week ending July 15.

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.

Will Ethereum Merge hopium continue, or is it a bull trap?

ETH has gained 48% over the past week, leaving most of its crypto brethren behind — though it’s still risky days ahead given the macroeconomic factors at play.

Ethereum is outperforming the broader cryptocurrency market as the highly anticipated Merge approaches, but the bigger picture is still largely bearish.

Ether (ETH) has gained a whopping 48% over the past seven days, outperforming its big brother Bitcoin (BTC), which has only managed to achieve 19% in the same period. It’s also up 66% from its market cycle bottom of $918 on June 19, reaching its current price of $1549.

However, the current ETH rally could be a bull trap with the macroeconomic clouds darkening. A bull trap is a signal indicating that a declining trend in a crypto asset has reversed and is heading upward when it will actually continue downward.

The primary driver of recent momentum for the asset has been linked to announcements regarding its final switch to proof-of-stake (PoS), which has been slated for Sept. 19.

The Merge will reduce the network’s energy consumption by more than 99%. However, it will not necessarily reduce transaction fees significantly, as this will occur when scaling takes place via sharding, which is expected sometime next year.

On Tuesday, a Coinbase report on the Merge explained that the next major step and last dress rehearsal is the Goerli testnet Merge, which has been planned for August 11.

Goerli is the most battle-tested Ethereum environment with the most user activity and the closest simulation of the real thing.

Is This Me who is Thinking that Ethereum will start the BULL RUN with his Merge ??#eth #Ethereum #ethereum2 #ethereum #Bullish #bullish pic.twitter.com/oSHDKTz6vw

— Crypto Diamond (@ImCryptoDimond) July 19, 2022

While the major upgrade is the fundamental driver of current ETH market sentiment, the asset is still trading down 68% from its November 2021 all-time high.

There have also been concerns that a significant amount of ETH may flood the market after the Merge and its release from its staking smart contracts.

However, director of research at 21Shares, Eliézer Ndinga, told Cointelegraph that this is unlikely to happen:

“The withdrawals of Ether won’t occur until 6-12 months post Merge after the Shanghai upgrade. The withdrawals will be limited to six validators every epoch or ~ 6 minutes to avoid bank runs and keep the network secure.”

According to a recent survey by Finder, conducted before the most recent rally, said there is still a lot of negative sentiment regarding short-term Ether prices.

The panel of 54 industry experts polled thought ETH would be worth $1,711 by the end of 2022, climbing to $5,739 by 2025, before hitting $14,412 by 2030. However, they also thought it would dump to $675 before the year was out.

Finder said there are a couple of macroeconomic factors that could cause this retreat. The United States Federal Reserve is expected to hike rates again by 75 basis points during their July 26-27 meeting, which is generally bearish for crypto markets. If Bitcoin (BTC) takes a dive, Ether is sure to follow.

Additionally, the U.S. Bureau of Economic Analysis (BEA) will release its advance estimate of second-quarter GDP growth on July 28. Another negative quarter, which is expected, will mean that the country is in a technical recession, which is also very bad for risk-on assets such as Ether.

Bitcoin lurks by $22K as US dollar falls from peak, Ethereum gains 20%

It’s all about Ethereum for crypto traders on the day as Bitcoin faces crucial resistance and a slew of sellers lying in wait.

Bitcoin (BTC) hugged $22,000 on July 19 as macro conditions slowly turned to favor risk assets.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Stocks, crypto rise as dollar weakens

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD cooling volatility immediately below the crucial 200-week moving average (WMA).

The Wall Street open saw further gains for United States equities in the face of a declining U.S. dollar, which extended its retracement after hitting its latest two-decade peak.

The U.S. dollar index (DXY) stood at around 106.5 at the time of writing, down 2.6% from the high seen July 14.

For Bitcoin analysts, it was thus a case of wait and see as markets bided their time between buy and sell levels.

$BTC / $USD – Update

These are the options on #Bitcoin right .. If we can sustain above the $21,700 range high and gain momentum, we can pump for the wave 3 ..

However, if we die down i am looking for another corrective wave down .. pic.twitter.com/cLGVGdTivK

— Crypto Tony (@CryptoTony__) July 19, 2022

“Shared this chart before, but just like that the $DXY is tanking, resulting into risk-on assets showing some momentum,” Cointelegraph contributor Michaël van de Poppe tweeted in an update on the day alongside a DXY chart.

“Yields need to drop now too, but the weakness on the Dollar could put more strength on crypto and Bitcoin.”

*U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView*

On-chain monitoring resource Material Indicators, meanwhile, flagged the difference in strength between “psychological” levels such as $21,000 and $22,000 and the 200 WMA closer to $23,000.

“IMO, resistance at $21k and $22k are psychological, whereas the 200 WMA serves as legit technical resistance. FireCharts shows more BTC bid liquidity coming in to support an R/S flip at $21k,” it told Twitter followers on the day publishing data from the Binance order book.

“Looking for more bid liquidity to challenge the ever important 200 WMA.”

*BTC/USD order book data (Binance). Source: Material Indicators/ Twitter*

The day belongs to Ethereum

Deja vu for altcoin traders, meanwhile, came in the form of outperformance from Ether (ETH) versus other major cryptocurrencies’ intraday gains.

ETH/USD, already up 25% in a week, added to its momentum overnight, climbing another 20% in just over 24 hours to briefly pass $1,600.

Resistance in the form of the 2018 high at $1,530 posed little problem for bulls, with the level forming a support focus at the time of writing.

“Ethereum relative to Bitcoin has closed above a key resistance,” popular trading account Game of Traders forecast.

“Buckle up for some big moves.”

*ETH/USD 1-day candle chart (Binance). Source: TradingView*

New token by ConsenSys enables security audits for the highest bidder

Security auditing is set to be tokenized by ConsenSys Diligence as TURN tokens are unveiled — creating an open market for the in-demand service.

ConsenSys is set to tokenize smart contract and security auditing services through the upcoming auction of eight “timeboxed” TURN tokens.

The Ethereum-focused blockchain software company has developed the offering through its smart contract audit service ConsenSys Diligence. TURN, short for Time-Unit Representative NFTs, will create an open marketplace for security auditing services, which are in high demand in the burgeoning blockchain and cryptocurrency space.

The firm touts TURN as the first nonfungible token (NFT) purpose-built for smart contract security auditing services in the industry. It essentially tokenizes the labor powering these auditing services and allows the open market to price them appropriately.

TURN tokens are ERC 721-compatible and represent 40 hours of auditing time to holders. TURN will be able to be bought and sold on secondary markets from there, allowing new users to dictate the value of these services as and when they need them.

ConsenSys Diligence’s co-founder Gonçalo Sa told Cointelegraph that the solution was primarily driven by struggles to meet demands for manual code reviews in the Ethereum ecosystem. As a result, companies are looking at a six-month waiting time for an audit of their systems. Scheduling and pricing of audit slots have also been an area calling for innovation, according to Sa:

“With TURN, we aim to introduce an open marketplace for buyers and sellers of security auditing services and potentially other time bound human services. TURN is designed to be a token representing timeboxed services in general. Nothing about it is tailored to security services per se.”

ConsenSys Diligence will offer eight weeks of services, tokenized in eight NFTs, which consist of five working days each. Auctions will start at 100,000 DAI ($99,995) and have a cut-off date by which the NFTs must be redeemed.

ConsenSys is set to tokenize smart contract and security auditing services through the upcoming auction of eight “timeboxed” TURN tokens.

Ethereum staking service Lido announces layer-2 expansion

Lido Finance has announced plans to offer its ETH staking services across the entire L2 system, as long as specific networks have “demonstrated economic activity.”

Crypto staking service provider Lido Finance has announced plans to expand staked Ether (stETH) support across the ecosystem of Ethereum layer-2 (L2) networks.

In a Monday blog post, the Lido team noted that it would initially begin by supporting Ether (ETH) staking via bridges to L2s using wrapped stETH (wstETH). Moving forward, it will eventually enable users to stake directly on the L2s “without the need to bridge their assets back” to the Ethereum mainnet.

In terms of partnered L2s, the team stated that before the announcement, it had already integrated its bridged staking services with Argent and Aztec. It added that the next collection of partnerships and integrations would be unveiled over the next few weeks.

Once the fully-fledged L2 staking support is ready, the Lido team noted that it will first start with L2 heavyweights Arbitrum and Optimism before expanding out to other L2s that have sufficiently “demonstrated economic activity.”

Given that L2s are designed to reduce the cost of Ethereum transactions, the team touted this move will enable users to stake ETH with lower fees while also gaining “access to a new suite of DeFi applications to amplify yields:”

“There are several types of L2s. We believe that in the future, a large portion (if not a majority) of economic activity and transaction volume will migrate to both general use and purpose-specific Layer 2 networks.”

“Each of these networks will benefit from or need staking solutions to support their users’ economic activities and ensure that all users of Ethereum ecosystem networks have the ability to participate in securing Ethereum,” it stated.

According to Lido’s website, it currently has more than 4.2 million ETH staked on the platform, which is worth around $6.5 billion, making it one of the largest providers in terms of total stETH value and second overall in terms of total value locked (TVL) for decentralized finance (DeFi) platforms.

Lido provides staking rewards on a host of other assets, including Solana (SOL), Kusama (KSM), and Polkadot (DOT), but is primarily used for its ETH staking services, which offer annual yields of around 3.9%.

Once a user deposits their ETH into the platform, a tokenized version of their deposit is then minted as stETH, which can be used in other borrowing or yield services from other DeFi protocols.

stETH is pegged at an intended ratio to ETH of 1:1. However, the peg famously fell off to represent 0.95 of 1 ETH in May during the aftermath of the $40 billion Terra ecosystem collapse.

The depegging of the asset poses limited risks to long-term hodlers and stakers. However, it runs the severe risk of causing liquidations for anyone who takes out leveraged positions against the asset. Now defunct firms such as Celsius Network and Three Arrows Capital have been reported as significant users of stETH.

At the time of writing, the peg is sitting at the correct ratio, with Lido offering a 1:1 exchange for ETH and stETH. However, partnered decentralized exchange (DEX) aggregator 1inch is also offering a 2.36% discount to mint stETH, suggesting that depositors can currently get back more stETH value than the amount of ETH they deposit via 1inch.

Price analysis 7/18: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, MATIC, AVAX

Did Bitcoin bottom? The weekend crypto rally has extended into the start of a new week, leading traders to question whether the bottom is in.

Bitcoin (BTC) rose above $22,000 and Ether (ETH) traded above $1,500 on July 18, indicating that bulls are gradually returning to the cryptocurrency markets. This pushed the total crypto market capitalization above $1 trillion for the first time since June 13, raising hopes that the worst of the bear market may be behind us.

In another positive sign, more than 80% of the total Bitcoin supply denominated in the United States dollar has been dormant for at least three months, according to crypto intelligence firm Glassnode. During previous bear markets, such an occurrence preceded the end of the bear phase.

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

However, a report by Grayscale Investments voices a different opinion. It suggests that the current bear market in Bitcoin started in June 2022 and if history repeats itself, the bear phase could continue for 250 more days.

Can buyers maintain their momentum at higher levels or will bears continue to sell on rallies? Let’s study the charts of the top 10 cryptocurrencies to find out.

BTC/USDT

After hesitating near the 20-day exponential moving average (EMA) ($20,986) for two days, Bitcoin made a decisive move higher on July 18. This up-move has broken above the resistance line of the symmetrical triangle, indicating a possible trend reversal.

The 20-day EMA is flat but the relative strength index (RSI) has risen into the positive territory, indicating that the momentum favors the buyers. The bulls will now attempt to overcome the barrier at $23,363.

If the price turns down from this level but rebounds off the breakout level from the triangle, it will suggest buying at lower levels. That could increase the possibility of a break above $23,363. The pair could then rally to the pattern target of $28,171.

Conversely, if the price fails to sustain above the triangle, it will indicate that the bears are aggressively defending the overhead zone between the resistance line of the triangle and $23,363. That could keep the pair inside the triangle for a few more days.

ETH/USDT

Ether broke and closed above the overhead resistance at $1,280 on July 16, which completed the ascending triangle pattern The bears tried to stall the up-move at the 50-day simple moving average (SMA) ($1,336) on July 17 but the bulls did not relent.

The buyers resumed their purchase on July 18 and pushed the price above $1,500. This suggests the start of a new uptrend. The ETH/USDT pair could rally to the overhead resistance at $1,700 where the bears may pose a strong challenge.

If the next correction gets arrested at the 20-day EMA ($1,234), it will suggest that the sentiment has shifted from selling on rallies to buying on dips. That could enhance the prospects of a break above $1,700.

This positive view could invalidate in the short term if the price turns down and slips below the 20-day EMA. That could pull the pair to the support line of the triangle.

BNB/USDT

BNB rose above the 20-day EMA ($238) on July 14 and cleared the overhead hurdle at the 50-day EMA ($247) on July 16. The bears tried to pull the price back below the 50-day SMA on July 17 but the bulls held their ground.

The BNB/USDT pair resumed its up-move on July 18, suggesting that the low may have been made at $183. The 20-day EMA has started to turn up and the RSI is in the positive zone, indicating that bulls are in control.

If the price sustains above the 50-day SMA, the pair could rally to $300 and then attempt an up-move to $350. This level is likely to act as a stiff resistance.

This positive view could invalidate in the short term if the price turns down and breaks below the 20-day EMA. That could pull the pair to $211.

XRP/USDT

Ripple (XRP) broke above the downtrend line on July 16 but the bears stalled the relief rally at the 50-day SMA ($0.35). The sellers tried to pull the price below the 20-day EMA ($0.34) on July 17 but the bulls did not budge and bought the dip.

The 20-day EMA has started to turn up gradually and the RSI has jumped into the positive zone, indicating advantage to the bulls.

The XRP/USDT pair cleared the overhead hurdle at the 50-day SMA on July 18, invalidating the bearish descending triangle pattern. If bulls sustain the price above the 50-day SMA, the pair could pick up momentum and rally to $0.45.

To invalidate this bullish view, the bears will have to pull the pair back into the triangle. Such a move could trap the aggressive bulls and sink the pair to the important support at $0.30.

ADA/USDT

After struggling to push Cardano (ADA) above the 20-day EMA ($0.46), the bulls finally managed the feat on July 18. The price has reached the 50-day SMA ($0.50) which could act as a strong resistance.

The RSI in the positive territory indicates that the momentum favors the buyers. If bulls push the price above the 50-day SMA, the ADA/USDT pair could rise to $0.60 and then make a dash toward the stiff overhead resistance at $0.70.

Alternatively, if bulls fail to sustain the price above the 50-day SMA, it will suggest that bears continue to sell aggressively on rallies. The pair could then drop back toward the critical support zone between $0.44 and $0.40.

SOL/USDT

Solana (SOL) broke above the symmetrical triangle pattern on July 16, indicating that the uncertainty resolved in favor of the buyers. The bears attempted to pull the price back into the triangle on July 17 but the bulls held their ground.

The SOL/USDT pair is attempting to rise above the immediate resistance at $43. If that happens, the pair could rally to the psychological level at $50. This level may act as a hurdle but if crossed, the up-move could reach $60.

Conversely, if the price turns down from $43 and breaks below the moving averages, the pair could drop to the support line. A break and close below this level could suggest that bears are back in the game.

DOGE/USDT

Dogecoin (DOGE) is trying to form a higher low at $0.06 and the bulls are attempting to push the price above the stiff overhead resistance at the 50-day SMA ($0.07).

If they manage to do that, the DOGE/USDT pair could rally to $0.08. This is an important level to keep an eye on because a break and close above it could clear the path for a rally to $0.09 and then to $0.10.

This positive view could invalidate in the short term if the price turns down from the current level and slides below the intraday low made on July 13. That could sink the pair to the critical level at $0.05.

DOT/USDT

Polkadot (DOT) broke and closed above the 20-day EMA ($7.08) on July 16 but the bears pulled the price back below the level on July 17. This tough tussle between the bulls and the bears was resolved in favor of the buyers on July 18.

The 20-day EMA is flattening out and the RSI is just above the midpoint, indicating that the selling pressure may be reducing. The bulls will have to push and sustain the price above the 50-day SMA ($7.79) to gain the upper hand. If they manage to do that, the DOT/USDT pair could rally to $10.

On the contrary, if the price turns down from the current level, it will suggest that the bears are defending the 50-day SMA aggressively. The pair could then remain stuck between $6.36 and the 50-day SMA for a few days.

MATIC/USDT

Polygon (MATIC) bounced off the 50-day SMA ($0.55) on July 13 and rose above the overhead resistance at $0.63. This completed the bullish ascending triangle pattern.

The MATIC/USDT pair picked up momentum and reached the pattern target of $0.95 on July 18. The sharp rally of the past few days has pushed the RSI into the overbought territory and the pair is near the psychological level of $1. This points to a possible consolidation or correction in the near term.

The first support on the downside is the 20-day EMA ($0.63). If the price rebounds off this level, it will suggest that bulls continue to buy on dips. The pair could then attempt a rally to the 200-day SMA ($1.25). This bullish view could invalidate on a break below $0.63.

AVAX/USDT

Avalanche (AVAX) has broken above the overhead resistance at $21.35, indicating the completion of the ascending triangle pattern. This increases the likelihood of a trend reversal.

The 20-day EMA ($19.56) and the 50-day SMA ($19.79) are close to completing a bullish crossover and the RSI is in the positive territory indicating advantage to buyers. If bulls sustain the price above $21.35, the AVAX/USDT pair could start a new up-move. The pattern target of the breakout from the triangle is $29.

Contrary to this assumption, if the price turns down and breaks below the 50-day SMA, it will suggest that bears continue to sell aggressively at higher levels. That could pull the pair down to the support line.

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

Market data is provided by HitBTC exchange.

Bitcoin price nears critical 200-week moving average as Ethereum touches $1.5K

The 200-week moving average keeps bulls in check, and traders are keeping quiet on the chances of a breakthrough so early.

Bitcoin (BTC) hovered at $22,000 at the July 18 Wall Street open as analysts warned that bulls would not break resistance in one go.

Can Bitcoin win back bear market support?

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD returning to consolidate after hitting highs of $22,500 on Bitstamp.

That level represented the start of sell-side positions on exchanges clustered around the 200-week moving average (WMA), a key area which commentators argued would be hard to crack.

“Not expecting continuation on Bitcoin, at this point, as we’re facing 200-Week MA & range resistance,” Cointelegraph contributor Michaël van de Poppe told Twitter followers in his latest update.

Fellow trader and analyst Rekt Capital, as others, was also skeptical about the potential for Bitcoin to continue upward momentum immediately.

#BTC still remains below the 200-week MA resistance

Until that level breaks, it’s technically premature to assume this is now a sustained relief rally$BTC #Crypto #Bitcoin

— Rekt Capital (@rektcapital) July 18, 2022

Van de Poppe nonetheless added that a breather for the market would be profitable at current levels. He concluded:

“Slight consolidation would trigger continuation and break above $22.6K would activate massive longs towards $28K. Good times.”

Both Bitcoin and altcoins made the most of relief on equities markets on the day, with Asia and the United States making modest gains as the U.S. dollar retreated.

The S&P 500 and Nasdaq Composite Index were up 0.7% and 1%, respectively, at the time of writing, one hour after the opening bell.

“Prime time for Bitcoin,” on-chain analytics resource Whalemap meanwhile forecast, offering a more optimistic take based on major buyer interest below spot price.

Prime time for #Bitcoin

Bounce from whale supports at ~$21k and we are ready to pic.twitter.com/x8hcmcgUw0

— whalemap (@whale_map) July 18, 2022

Data from fellow monitoring resource Material Indicators showed similar support building on the Binance order book.

*BTC/USD order book data (Binance). Source: Material Indicators*

Ethereum preserves performance

On altcoins, the show was still being stolen by Ether (ETH), which lingered near $1,500 after sealing its highest levels in over a month, with huge gains against BTC included.

Beating even Bitcoin’s progress, ETH/USD was the darling of traders on the day, firmly upending the previously dire price action in place from May onwards at the start of the Terra (LUNA) — now called Terra Classic (LUNC) — debacle.

This is the first time, in 110 Days, that #Ethereum has broken into a bullish trend, printing Higher Lows & Higher High.

Bears in disbelief.#cryptocurrency pic.twitter.com/MA2KAYzyWu

— wolf (@ImNotTheWolf) July 17, 2022

Upcoming resistance lay in the form of Ethereum’s all-time high from the previous Bitcoin halving cycle at $1,530, which it touched in early 2018.

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.

Top 5 cryptocurrencies to watch this week: BTC, ETH, MATIC, FTT, ETC

Bitcoin’s attempt to form a bottom has lured altcoin traders to focus on ETH, MATIC, FTT and ETC.

The United States equities markets recovered from their intra-week lows last week, suggesting demand exists at lower levels. On similar lines, Bitcoin (BTC) also recovered from $18,910 last week, indicating that traders may be getting back into risky assets.

However, analysts remain divided in their opinion on the recovery of Bitcoin. While some believe that the relief rally is a bull trap, others expect the up-move to retest the crucial resistance at the 200-week moving average of $22,626.

*Crypto market data daily view. Source:* *Coin360*

The current bear phase has damaged sentiment as seen from the Crypto Fear and Greed Index, which has remained in the “extreme fear” zone since May 6. According to Philip Swift, creator of on-chain analytics platform LookIntoBitcoin, the time spent in the “extreme fear” category is longer than during the 2018 Bitcoin bear market.

Could the sentiment stage a turn around boosting crypto prices higher? Let’s study the charts of the top-5 cryptocurrencies to identify potential breakout assets.

BTC/USDT

Bitcoin rose above the 20-day exponential moving average (EMA) of $20,894 on July 15, but the bulls have not been able to build upon this advantage. The bears are likely to defend the resistance line of the symmetrical triangle with vigor.

The 20-day EMA has flattened out and the relative strength index (RSI) has risen close to the midpoint. This suggests a balance between supply and demand.

The first sign of strength will be a break and close above the 50-day simple moving average (SMA) of $23,445. That could clear the path for a possible rally to the pattern target at $28,171. Such a move will suggest that the BTC/Tether (USDT) pair may have bottomed out at $17,622.

Alternatively, if the price turns down and breaks below the 20-day EMA, the pair could extend its stay inside the triangle for a few more days. The price action inside the triangle is likely to be random and volatile. A break and close below the triangle could signal that bears are back in the driver’s seat.

*BTC/USDT 4-hour chart. Source: TradingView*

The moving averages have been crisscrossing each other for some time, indicating a range formation. The bears will try to pull the price below the moving averages. If they manage to do that, the pair could decline to $20,000. A break below this support could open the doors for a possible drop to the support line.

On the other hand, if the price rebounds off the moving averages, it will suggest that bulls are buying on dips. That could improve the prospects of a breakout from the triangle. The pair could then rally to the overhead resistance at $23,363.

ETH/USDT

Ether (ETH) completed an ascending triangle pattern when bulls pushed the price above $1,280 on July 16. The bears are currently trying to pull the price back below the breakout level and trap the aggressive bulls.

The critical level to watch on the downside is $1,280. If the price rebounds off this level, it will suggest that bulls have flipped $1,280 into support. That could improve the prospects of the resumption of the up-move. The ETH/USDT pair could then rise to $1,700, where the bears may again pose a strong challenge.

On the contrary, if the price turns down and breaks below the 20-day EMA of $1,206, it will suggest that bears are selling on rallies. That could sink the pair toward the support line of the triangle.

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

The 20-EMA on the 4-hour chart is sloping up, and the RSI is near the overbought zone, indicating that bulls are at an advantage. If the price turns up and rises above $1,423, the pair could pick up momentum and rally to $1,550 and then to $1,700.

Conversely, if the price slips from the current level, the bulls will attempt to arrest the decline at the 20-EMA. This is an important level to keep an eye on because a break and close below it could sink the pair to the 50-SMA.

MATIC/USDT

Polygon (MATIC) completed an ascending triangle pattern when the price broke above the overhead resistance at $0.63 on July 13. This was the first indication of the start of a new uptrend.

The moving averages have completed a bullish crossover, suggesting that buyers have the upper hand. However, the price action of the past few days has pushed the RSI near the overbought zone, indicating that a minor pullback or a consolidation is likely in the near term.

The critical level to watch on the downside is $0.63. If the price rebounds off this support, it will suggest that lower levels are attracting buying by the bulls. That could increase the possibility of the resumption of the uptrend. The MATIC/USDT pair could then rally to the pattern target at $0.95.

This positive view could invalidate if the price turns down and plummets below the 50-day SMA of $0.54.

*MATIC/USDT 4-hour chart. Source: TradingView*

The recovery rose above the overhead resistance at $0.75, but that pushed the RSI into the overbought zone. This suggests a minor correction or consolidation in the near term.

The bears will try to pull the price below the 20-EMA. If that happens, the pair could drop to the 50-SMA.

Alternatively, if the price rebounds off $0.75 or the 20-EMA, it will indicate that bulls are in control. That will increase the likelihood of the resumption of the uptrend.

FTT/USDT

FTX Token’s (FTT) price action in the past few days has resulted in the formation of a symmetrical triangle. This usually acts as a continuation pattern, but in some cases, it also performs as a reversal setup.

The moving averages are on the verge of a bullish crossover, and the RSI has risen into the positive zone, indicating that buyers have a slight edge. A breakout of the resistance line of the triangle will suggest that the uncertainty has resolved in favor of the buyers.

That could indicate the start of a new uptrend which could rise to $32 and later to the pattern target at $36.50. Contrary to this assumption, if the price turns down from the resistance line, the FTT/USDT pair could extend its stay inside the triangle for a few more days.

*FTT/USDT 4-hour chart. Source: TradingView*

The 4-hour chart shows that the price has reached the resistance line of the triangle, where the bears are expected to mount a strong defense. If the price turns down from the current level but rebounds off the 20-EMA, it will indicate that traders are buying on dips. That could enhance the prospects of a break above the triangle.

This positive view could invalidate in the short term if the price continues lower and breaks below the 20-EMA. That could pull the pair to the 50-SMA, signaling that the range-bound action may continue for a few more days.

ETC/USDT

Ethereum Classic (ETC) broke out of the $12.50 to $18 range it had been stuck in for the past few days. This suggests that bulls are attempting to form a double bottom pattern.

The 20-day EMA of $15.87 has started to turn up, and the RSI has risen close to the overbought territory, indicating that bulls have the upper hand. The critical level to watch on the downside is $18. If bulls sustain the price above this support, the ETC/USDT pair could start its northward march toward $23.50 and then $25.

Contrary to this assumption, if the price turns down and slides below 18, the pair could drop to the moving averages. A break below the 20-day EMA could suggest that the bears remain active at higher levels.

*ETC/USDT 4-hour chart. Source: TradingView*

The sharp up-move above $18 has pushed the RSI into the overbought territory. This suggests a minor pullback or consolidation in the near term. The bears will try to pull the price back below the breakout level while the bulls will attempt to defend it.

If the price rebounds off $18, it will suggest that bulls have flipped the level into support. That could increase the possibility of the resumption of the up-move. Alternatively, a break below $18 could strengthen the bears who will try to pull the pair to $16.

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