Cardano Price Prediction: ADA Probes $0.55 Resistance, Eyes Breakout Towards $0.69

Key Points

  • Cardano is currently trading just below $0.55 resistance and eyeing a push towards $0.69.
  • Cardano’s Vasil hard fork upgrade was delayed once again this week.
  • But CoinMarketCap users remain bullish in their forecasts for ADA by the end of August.

ADA, the native token that powers the Cardano blockchain, was last trading just above $0.53 per token, up just shy of 2.0% on Saturday and up a little over 2.5% in the last 24 hours, according to CoinMarketCap. The cryptocurrency thus continues to trade with an upside bias and is roughly 18% higher versus earlier weekly lows in the $0.45 area.

ADA is also on course to end the month about 16% higher, which would mark its first positive month since March. That despite the fact that the developers of the cryptocurrency announced earlier in the week that its highly anticipated major upgrade (the Vasil hard fork) would be delayed.

Cryptocurrencies have rallied in the last few weeks in tandem with global equities amid a growing belief that a weakening US and global economy will deter central banks like the Fed from getting too aggressive with rate hikes for the remainder of 2022/in 2023. Powell did not push back against this idea in his dovish post-FOMC meeting appearance from Fed Chair Jerome Powell this week.

Amid thin weekend liquidity conditions and a lack of fresh fundamental, ADA’s price appears to have run into a wall of resistance in the form of earlier monthly highs around $0.55. A break above $0.55, which is looking increasingly likely from a technical perspective, would likely trigger a surge of buying that could vault the cryptocurrency as high as late-May highs around $0.69.

Beyond that, the next key area of resistance is February and April lows in the $0.75 area and then the 200-Day Moving Average near $0.80.

ADA/USD
ADA/USD eyes break above $0.55 resistance area. Source: FX Empire

Cardano’s Vasil Hard Fork Delayed Again

In a YouTube update released on Thursday, Cardano’s developer Input Output Global (IOG) said that the blockchain’s Vasil hard fork upgrade has been delayed once again. IOG’s technical manager Kevin Hammond explained that the delay is so that exchanges and API developers are “ready”, while IOG has also been focused on fixing a few testnet issues. “There could be a few more weeks before we go to the actual Vasil hard fork… All the users must be ready to progress through the hard fork to ensure a smooth process,” Hammond said.

According to IOG co-founder and CEO Charles Hoskinson, the Vasil hard fork project is “code complete” and “you probably could flip the switch and get away with it”. However, Hoskinson said that the Cardano development team want to ensure everything goes smoothly following the Terra collapse.

Recall that the Vasil hard fork was initially scheduled to go ahead in late-June, but was delayed, resulting in downside in ADA’s price at the time. Analysts think a successful upgrade could be a big potential bullish driver for ADA in the months ahead.

Cardano’s developers say that the upcoming upgrade is the most complex program of development and integration on Cardano since its Alonzo hardfork added smart contract functionality to the blockchain back in September 2021. The Vasil hardfork aims to improve the network’s speed and scalability by reducing transaction size and, as a result, increasing the network’s throughput whilst also lowering transaction fees on the network.

Experts responding to a recent finder.com survey were split over how the upcoming Vasil hardfork will impact Cardano. 20% said it would positively impact ADA’s price, 18% said it would have an adverse effect, while 50% said it would increase the functionality of the Cardano blockchain.

CoinMarketCap Users Bullish on ADA Price Over Next Few Weeks

Of the 14,741 users to have submitted a ADA price forecast on CoinMarketCap, the mean view is that ADA will have reached just above $0.72 by the end of August. The median view is that the cryptocurrency will rally to $0.63. Clearly, retail traders are bullish, likely amid hopes that the Vasil hard fork upgrade will have gone through by the end of next month.

CoinMarketCap users are less bullish about the outlook for the rest of 2022. By the end of September, the mean of 9,221 votes forecasts ADA’s price at $0.70. The mean of 7,092 votes sees ADA’s price then falling to $0.6250 by the end of October, while the mean of 2,400 votes sees ADA at $0.47 by the end of December.

Crypto Hardware Wallet Provider Ledged Expands Support For Cardano Native Tokens

Popular crypto hardware wallet provider Ledger has added support for a further 100 Cardano native crypto tokens, including ADAX, DANA, DRIP, FIRE and CLAP. Ledger said it selected these tokens to add support based on the number of transactions performed in a given time period, as opposed to based on their market capitalization.

Cardano’s blockchain, much like Ethereum, allows developers to create and distribute their own tokens. Including Non-fungible Tokens, over 5 million tokens have already been issued by developers on Cardano’s blockchain. Ledger’s move to add support for 100 Cardano native tokens comes one month after the hardware wallet provider added support for Cardano’s token ADA.

5 Things to Know in Crypto Today: BTC On Course For Best Month Since October 2021

Key Points

  • Major cryptocurrencies are broadly flat on Saturday in thin weekend trading conditions.
  • Bitcoin is on course for its best month since October 2021 and Ethereum its best month since January 2021.
  • Scwhab Asset Management is to launch a crypto-linked ETF and KuCoin a new fractional NFT ownership ETF.

Bitcoin On Course For Best Month Since October 2021

Major cryptocurrencies are trading little changed on Saturday in this weekend trading conditions. Bitcoin was last changing hands at around $23,800 and Ethereum just under $1,700, with both not much changed in the last 24 hours according to CoinMarketCap. In terms of other major altcoins, BNB, XRP, ADA and SOL are all a tad in the red in the last 24 hours.

Major cryptocurrencies are looking to close out their best month in quite some time. Bitcoin, up nearly 20% in July, is on course for its best month since October 2021. Ethereum, last up over 55% this month, is on course for its best month since January 2021. Cryptocurrencies have rallied in the last few weeks in tandem with global equities amid a growing belief that a weakening US and global economy will deter central banks like the Fed from getting too aggressive with rate hikes for the remainder of 2022/in 2023. Powell did not push back against this idea in his dovish post-FOMC meeting appearance from Fed Chair Jerome Powell this week.

Schwab Set to Launch Crypto-linked ETF

Schwab Asset Management will list its first crypto-linked Exchange Traded Fund (ETF) on the New York Stock Exchange as of 4 August. The ETF will track Schwab’s Crypto Thematic Index and will provide investors with exposure to companies that are involved in the crypto industry in some way, such as crypto miners and digital asset trading platforms. The ETF will not offer direct exposure to digital assets.

David Botset, Schwab’s head of equity product management and innovation, said in a statement that “for investors who are interested in cryptocurrency exposures, there is a whole ecosystem to consider as more companies seek to derive revenue from crypto directly and indirectly”.

KuCoin to Offer Fraction NFT Ownership Via New ETFs

In further ETF-related news, crypto exchange KuCoin has become the first major exchange to offer its users the chance to own a fraction of top Non-fungible Token (NFT) collections such as Bored Ape Yacht Club (BAYC) via a new ETF. KuCoin is offering a range of USDT-denominated ETFs in conjunction with Fracton Protocol.

Fractol Protocol is a Decentralized Finance (DeFi) protocol that fractionalizes valuable NFT collections into fungible ERC-20 tokens. The new ETFs lower the bar for retail investors to own valuable NFTs, KuCoin said, adding that they also remove the need to manage NFT infrastructure elements, such as wallets and smart contracts.

South American Soccer Team Buys Player in USDC

Sao Paulo, one of the largest football (soccer) teams in Brazil, just bought a player from mid-table Argentinian team Banfield using USDC, a US dollar-pegged stablecoin issued by US-based Circle Internet Financial. The exchange of funds took place on Bitso, one of South America’s largest cryptocurrency exchanges.

Bitso became the sponsor of Sau Paulo football club back in January. The firm’s CEO Thales Araújo de Freitas called the transaction a “historic moment for Bitso, São Paulo and South American soccer more broadly”. The transactions was viewed in Argentina as an attempt by Banfield to bypass the country’s restrictive foreign exchange restrictions.

Under current rules, exports must convert their newly acquired US dollars to Argentinian pesos within five days at a punitive rate of just 131 pesos on the dollar. In informal markets, the exchange rate is closer to 300 pesos per dollar. The forex restrictions, which are imposed by the Central Bank of Argentina, do not reference “crypto”, however.

CoinFLEX Reduces Headcount Amid Cost Reduction Push

Beleaguered crypto exchange CoinFLEX announced on Friday that it has reduced its employee headcount by a significant amount across all departments and geographies, as part of a push to reduce its costs by 50-60%. The remaining team is focused on product and technology, the firm said. CoinFLEX recently halted withdrawals and is currently attempting to recover an $84 million debt owed by a single large individual investor.

“We will monitor costs to ensure we operate as efficiently as possible and scale as volumes come back,” the company’s co-founders Sudhu Arumugam and Mark Lamb said in a blog post. “The intention is to remain right-sized for any entity considering a potential acquisition of or partnership opportunity with CoinFLEX”.

How a US Recession Can Boost Crypto

Key Points

  • Data this week showed that the US economy was in recession in the first half of 2022.
  • Meanwhile, other recent data has shown a further worsening of economic conditions in early Q3, but crypto has been resilient.
  • A worsening economy could result in easier financial conditions as Fed tightening bets are pared, which is crypto bullish.

Crypto Resilient Despite Growing US Economic Pessimism

US GDP growth data released this Thursday revealed that the US economy shrunk at an annualized pace of 0.9% in the second quarter, a big miss on median economist forecasts for a modest expansion. That marked a second successive quarter of negative GDP growth in the US after the economy shrunk at an annualized pace of 1.6% in the first quarter.

Two consecutive quarters of negative GDP growth is often cited as the main definition of an economy in recession. US Treasury Secretary Janet Yellen on Thursday argued that the US economy wasn’t actually in recession in the first half of 2022, given that the labor market remained strong. Typically, the labor market worsens in a recession.

But the labor market has shown some signs of moderating in recent weeks, with weekly initial jobless claims rising. Moreover, while consumer confidence has been in the dumps and inflation-adjusted consumer spending stagnant for a while amid the bite of high inflation, other indicators are also blinking of weakness elsewhere in the economy.

PMI data released last Friday showed that the dominant US service sector likely contracted in July. So while, Yellen can argue that the US actually wasn’t in a recession in the first half of the year, things are not looking good for the second half of the year.

Despite growing pessimism about the US economy in the last few weeks, cryptocurrency prices have risen. At current levels around $23,800, Bitcoin is trading over 35% higher versus its June lows in the $17,500 area. Meanwhile, at current levels above $1,700, Ethereum is nearly up 100% from its June lows around $880 per token.

If things in the economy are so bad, then why have cryptocurrency prices been able to recover?

Easing Financial Conditions Boost Speculative Risk Assets

The reason why crypto, as well as other highly speculative risk assets like certain US tech/growth stocks, has been able to perform so well in the last few weeks is because US financial conditions have loosened significantly.

Amid growing evidence that the US is entering/already in a recession, optimism is growing that sky-high inflation may have peaked. As optimism about a more benign inflation outlook grows, so do bets that the US Federal Reserve won’t have to be so aggressive with its rate hikes in the coming quarters, which the bank is implementing in order to attempt to get inflation back to its 2.0% long-run target.

Indeed, at this week’s Fed meeting, where the bank lifted interest rates by 75 bps for a second successive meeting and back to roughly in line with the so-called neutral rate of 2.25-2.50% that neither stimulates nor slows the economy, Fed Chair Jerome Powell sounded a little more dovish. He noted the recent slowdown in the economy and evidence that US prices pressures might have already peaked and refused to back further outsized rate hikes at the Fed’s upcoming meetings.

Money markets, which can be viewed as the market’s view on where the Fed will take interest rates, have subsequently moderated bets on tightening for the rest of 2022 and in 2023. The market’s base case now seems to be for a 50 bps rate hike in September, followed by a series of 25 bps rate hikes in the rest of 2022/early 2023 that will take interest rates to close to 3.5%.

Money markets then see the Fed cutting rates back to around 3.0% for the remainder of 2023. In response to the recent moderation of Fed tightening bets, US inflation-expectation adjust bond yields have fallen sharply. The 5-year TIP yield ended the week around -0.09%, down nearly 70 bps versus earlier monthly highs. 10-year TIPS yields were last around 0.11%, down around 60 bps from earlier monthly highs.

Analysts interpret real yields in positive territory, as they were earlier this month, as being restrictive to the economy, while real yields close to zero have a neutral impact. In other words, financial conditions have arguably moved back from being slightly restrictive to around neutral.

Easier financial conditions have historically boosted speculative risk assets like US tech stocks and cryptocurrencies. This is because easier financial conditions reduce the appeal of holding now lower-yielding bonds, which forces investors into riskier asset classes.

Given the above, a further worsening of economic conditions in the US, if it helps bring inflation under control and results in a further reduction of Fed tightening bets, has the potential to boost crypto prices. As inflation starts to fall, traders may continue to boost Fed rate cut bets for the second half of 2023 and beyond.

If the Fed starts to give credence to such bets by coming across as more dovish at its last few meetings in 2022, that could result in a further easing of financial conditions, which could act as a major tailwind for crypto.

WTI Briefly Pushes Above $100 With OPEC+ In Focus, Gold Rallies As US Real Yields Dump

Key Points

  • WTI briefly rallied above $100 and its 21DMA though ended the week closer to $98 with OPEC+ in focus.
  • Copper continued to surge on Friday, with focus turning more to supply woes amid a drop in Chilean production.
  • Gold also saw further upside, buoyed amid the ongoing drop in US real yields/rally in inflation expectations.

WTI Briefly Rallies Above $100 and 21DMA, Breaks Out of Downtrend

Front-month futures prices for the American benchmark for sweet light crude oil, West Texas Intermediary or WTI, rallied on Friday, breaking out of a downtrend that has been in play since mid-June and briefly surpassing the 21-Day Moving Average just under $100 per barrel for the first time since mid-June. However, since reaching intra-day highs of just shy of $102 per barrel, WTI has since dropped back to just above $98, where it closed out Friday trade with gains of about $1.0.

Sources told the financial press that OPEC+ will consider keeping output unchanged in September when they meet to discuss policy next week, though a modest increase may also be discussed. Market commentators said this highlighted the tight supply backdrop faced by global oil markets, boosting prices on the day.

Even prior to Russia’s invasion of Ukraine that prompted tough sanctions that have seen Russia’s oil output substantially decline, OPEC+ had been struggling to keep up with its own output hikes. According to a report in the Russian media on Friday, OPEC+ compliance with its output pact reached 320% in June, with the group underproducing by 2.84 million barrels per day.

Oil bulls will be pleased with how well the commodity has managed to find support at its 200-Day Moving Average and from March/April lows in the mid-$90s area in recent weeks. US inventory data this week, which showed large drawdowns in US crude and gasoline inventories, eased some concerns about so-called “demand destruction” in the US due to high fuel prices. Meanwhile, the rapid recent rise in equity markets is likely helping, as traders price in a less aggressive rate hiking cycle from the Fed amid weakening growth.

But unlike stocks, oil prices tend to respond much more to economic conditions as opposed to financial conditions. Data this week showed the US economy was already in a technical recession in H1 2022 and global economic indicators in recent months have shown further slowing, weighing on the outlook for global oil demand.

Copper’s Bullish Run Continues Into Weekend

Copper prices surged on Friday to hit new three-week highs as supply side concerns came into focus. Copper rallied 2.75% to near $3.60, taking its gains on the week to over 8.0%. Data showed that copper production in Chile, the world’s largest producer, dropped 4.7% YoY in June. Meanwhile, major global producer Glencore reduced its copper production forecasts for the remainder of the year.

Copper prices have also received tailwinds from other factors this week including 1) a weakening US dollar as traders pare their Fed tightening bets, 2) a surge in global equity markets that has lifted risk-sensitive commodities and 3) Chinese stimulus hopes amid reports the country is taking action to boost infrastructure projects and aid the country’s struggling property sector.

Gold Gains as Real Yields Dump, Inflation Expectations surge

Gold, meanwhile, also gained on Friday. XAU/USD ended the week in the mid-$1,760s, taking its weekly gains to around 2.2%. US real yields have fallen sharply this week as traders price in a less aggressive Fed tightening cycle in wake of this week’s more dovish sounding policy announcement and weak US GDP data.

US 5-year TIPS yields (real yields) fell back into negative territory on Friday and ended the week around -0.09%, down nearly 70 bps from earlier monthly highs in the 0.60% area. A fall in real yields is positive for gold as it reduces the opportunity cost of holding the non-yielding precious metal.

Much of the drop in real yields have been driven by a surge in inflation expectations. US 5-year breakeven inflation expectations (the difference between the nominal and real US 5-year yield) ended the week around 2.85%. That’s nearly 40 bps higher versus earlier monthly lows when the market was pricing a more aggressive Fed tightening cycle.

This might also be offering gold some support. Many investors look on gold as an inflation hedge, as well as a safe-haven asset.

Yen Continues to Dominate Amid Short-Squeeze, EUR/USD Rises 0.3% on Hot Eurozone Inflation Figures

Key Points

  • The yen continued to outperform amid more downside in US yields, with some suggesting a short squeeze is at play.
  • The DXY dropped to new three-week lows under 106.00 despite data showing hotter than expected wage and consumer price pressures.
  • The euro got a small boost after data showed Eurozone CPI hitting a fresh record high in July.

Yen Rally Continues, DXY Drops

The Japanese yen continued to outperform on Friday and the US dollar fell to fresh more than three-week lows, with the yen benefitting from continued downside in US nominal and real yields. Some analysts said that yen strength may also reflect a short-squeeze, given that the yen had been one of the most heavily shorted currencies over the last few quarters as markets priced in aggressive rate hikes in the US versus no tightening in Japan.

USD/JPY dropped another 0.8% on Friday, breaking convincingly below its 50-Day Moving Average around 134.20 for the first time since Q1 and at one point even dropping as low as 132.50. The pair was last changing hands around 133.20. A deluge of US data on Friday that showed US wage pressures running hotter than expected in Q2 and consumer price pressures running hotter than expected in June failed to shift the narrative for the pair, which remained focused on Fed Chair Jerome Powell’s dovish tone at Wednesday policy announcement and on Thursday’s weak US GDP numbers.

The DXY fell to its lowest since July 5 in the 105.00s and was last changing hands around 105.80. A rally in US stocks in the last few weeks has dented the appeal of the safe-haven currency. The S&P 500 closed July 11% higher versus its mid-month lows, while the DXY has pulled back over 3.0% from the multi-decade highs it hit earlier this month.

Spicy Eurozone Inflation Lifts Euro (Slightly)

The unloved euro got a minor boost on Friday after data out of the Eurozone showed consumer price pressures hit a new record high in July, while Q2 GDP figures showed a more robust than expected pace of growth last quarter. Eurozone CPI came in at 8.9%, above expectations for it to remain unchanged versus June at 8.6%. Meanwhile, the Eurozone economy grew at a QoQ pace of 0.7% in Q2, though recent data suggests that the economic activity has been stagnating at the start of Q3.

EUR/USD pushed back above 1.0200, but remains below recent highs in the upper 1.0200s amid ongoing concerns about the impact of the energy crisis on the Eurozone economy as Russia reduces gas exports to the bloc. Elsewhere, GBP/USD was choppy, swinging nearly 200 pips within a 1.2060 to 1.2240ish intra-day range as focus turns to next week’s BoE meeting. USD/CAD, meanwhile, edged below 1.2800 for the first time since early June on stronger than expected Q2 GDP growth figures and a modest rise in oil prices. The Aussie and kiwi didn’t see much action.

Stocks Boosted by Strong Apple, Amazon Earnings, Nasdaq 100 Ends July 12.5% Higher

Key Points

  • Major US indices rallied on Friday amid earnings optimism following strong reports from Apple and Amazon.
  • The S&P 500 and Nasdaq 100 indices both posted their best monthly gains since 2020.
  • Stronger than expected/inflationary US data failed to dent the mood, despite slightly boosting Fed tightening bets.

Strong Apple, Amazon Earnings Lift Sentiment

Despite US data on Friday showing elevated inflationary pressures in June and elevated wage growth in Q2, resulting in a modest rebuilding of Fed tightening bets, major US indices saw solid gains amid earnings optimism. The S&P 500 rallied 1.4% to 4,130, with bulls eyeing a test of early June highs in the upper-4,100s. The Nasdaq surged 1.8% to hit its highest level since May and came close to retesting 13,000.

The S&P 500 posted a monthly gain of 9.1%, its best monthly performance since November 2020. The Nasdaq 100 index, meanwhile, rose over 12% in July, its best monthly performance since April 2020.

Apple share price jumped over 3.0% above its 200-Day Moving Average and to its highest since early May after the company gave an upbeat outlook. The company, which is the largest by market capitalization in the world, said supply chain snags are easing and that demand for its iPhones remains strong.

Meanwhile, fellow US tech heavyweight Amazon saw its share price rally over 10% and to its highest level since April after the e-commerce giant forecasted strong Q3 revenues amid higher Prime subscription fees. Q2 Earnings have been a big tailwind for US equity markets in the last two weeks. According to Reuters, of the 279 S&P 500 companies to have reported thus far, 77.8% have beaten analyst expectations.

Another major tailwind for stocks this week was the less hawkish tone from Fed Chair Jerome Powell at Wednesday’s Fed policy announcement, as well as data on Thursday that showed the US was already in technical recession in H1 2022, which investors interpreted as likely to deter the Fed from overly aggressive rate hikes in the quarters ahead.

Markets (Slightly) Rebuild Fed Bets

Friday saw a deluge of US data drop. The widely followed US Employment Cost Index rose 1.3% QoQ in Q2, showing that the labor market remained hot even though the economy contracted. Meanwhile, the PCE price index (the Fed’s preferred inflation gauge) rose at a YoY pace of 6.8% in June, its highest since 1982, amid a 1.0% MoM gain, which was the highest since 2005.

Meanwhile, Personal Income and Spending both saw slightly better than expected MoM growth in June, underpinning some optimism that the US economy might be able to avoid a contraction in Q3. The money market-implied probability of another 75 bps rate hike from the Fed rose slightly in wake of the strong data dump to just under 40% from closer to 30% before.

But equity markets seemed much more focused on earnings optimism. In terms of the S&P 500 GICS sector performance breakdown, Health Care (-0.4%) and Consumer Staples (-0.7%) were the only two out of the eleven sectors in the red. Energy was the best performer, gaining 4.5% amid higher oil prices and after Chevron and Exxon Mobil reported record quarterly revenues. Consumer Discretionary was the next best performer, up 4.2%.

Cardano Price Prediction: ADA Probes $0.55 Resistance, Eyes Breakout Towards $0.69 Despite Vasil Delay

Key Points

  • Cardano tested but was unable to break above its recent highs in the $0.55 area on Friday.
  • ADA seemed unfazed by the news that the Vasil hard fork upgrade has been delayed for a few more weeks.
  • Most ADA proponents on Twitter were not phased by the delay, saying it is better to do the upgrade properly.

Despite the somewhat disappointing news that Cardano’s Vasil hard fork upgrade will not take place for another few weeks, the native token that powers its blockchain ADA is performing well, in tandem with a positive tone to trade across cryptocurrency markets. ADA/USD was last changing hands around $0.52, having tested monthly highs near $0.55 earlier in the session.

If sentiment in the crypto space continues to improve in the coming sessions, helped by further upside on Wall Street, then ADA is in with a decent shot of breaking above $0.55 resistance. Analysts think this could open the door to a run higher towards late-May highs near $0.69.

ADA/USD
ADA/USD eyeing breakout towards $0.69. Source: FX Empire

Cardano’s Vasil Hard Fork Delayed Again

In a YouTube update released on Thursday, Cardano’s developer Input Output Global (IOG) said that the blockchain’s Vasil hard fork upgrade has been delayed once again. IOG’s technical manager Kevin Hammond explained that the delay is so that exchanges and API developers are “ready”, while IOG has also been focused on fixing a few testnet issues. “There could be a few more weeks before we go to the actual Vasil hard fork… All the users must be ready to progress through the hard fork to ensure a smooth process,” Hammond said.

Recall that the Vasil hard fork was initially scheduled to go ahead in late-June, but was delayed, resulting in downside in ADA’s price at the time. Analysts think a successful upgrade could be a big potential bullish driver for ADA in the months ahead.

This seems to be the view of users of the popular cryptocurrency intel website CoinMarketCap. According to the website’s “Price Estimate” feature that allows users to submit their views on where a cryptocurrency will be trading at some specified time in the future, Cardano is seen rallying between now and the end of August.

Out of 14,607 votes cast, the average forecast is for ADA to reach $0.7249 per token, over 40% higher than current levels, by the end of August. The median forecast was for a rise to $0.6347, a more than 20% gain from current levels.

Twitter Reacts to Hard Fork Delay

“Kinda depressed by confirmed delays for Vasil,” said one Twitter user. “With all the dapps awaiting Vasil functionalities to drop, this is like declaring that Christmas is delayed. #Cardano is the worst Santa. I want my presents damn it.”

Crypto enthusiast and founder of Crypto Capital Venture CEO Dan Gambardello encouraged those irked by Cardano hard fork delay to “relax” and “let it take place”.

Elsewhere, Twitter user @Bitboy_Crypto opined that “There have been numerous delays in crypto recently… ETH 2.0, difficulty bomb, Cardano hard fork, Spot ETF applications, #Ripple lawsuit, etc… You need to realize these are GOOD things due to current market conditions. You want these things to sort out closer to next bull run.”

Meanwhile, according to @ADA_King_, “delay is nothing in the grand scheme of things” and “I want things done right…done the #Cardano way”.

5 Things to Know in Crypto Today: BTC Slides Back Under $24,000 After Posting Multi-week Highs

Key Points

  • Cryptocurrencies are consolidating just under multi-week highs on Friday ahead of more US data.
  • Bitcoin nearly rallied as high as $24,500 earlier in the session, but has since dropped back under $24,000.
  • Data on Thursday confirmed that the US economy was in a technical recession in H1 2022.

Cryptocurrencies Consolidate Near Multi-week Highs

Most major cryptocurrencies hit fresh multi-week highs on Friday, having rallied hard over the past three sessions, though prices have seen a modest intra-day pullback. Bitcoin was last changing hands around $23,750, below earlier session highs closer to $24,500, but still nearly 15% higher versus earlier weekly lows under $21,000. Ethereum was last changing hands just under $1,700, having nearly hit $1,800 on Thursday.

Looking ahead, data on Friday will further inform investor expectations regarding the US economy and Fed policy. US PCE Price Index figures for June will be released and are likely to show that core price pressures remain below their peak hit earlier this year.

Employment Cost Index data for Q2 is likely to show a slight deceleration in the pace of wage gains, which should ease Fed concerns about the tight US labor market’s contribution to current elevated inflation. Meanwhile, Personal Income and Spending growth figures for June will give an update as to the health of the consumer at the end of Q2.

US Enters “Technical” Recession

Data out on Thursday revealed that the US economy shrunk at an annualized pace of 0.9% in Q2, much worse than the 0.5% growth rate that analysts had been expecting. That now marks two consecutive quarters of negative growth, with GDP having contracted 1.6% in Q1, thus meeting the traditional definition of recession. Crypto was boosted in wake of Thursday’s weak US GDP data as a result of investors scaling back their Fed tightening bets.

US Not in a Recession, Argues US Treasury Secretary Yellen

The US economy was not in recession in the first half of 2022, despite two consecutive quarterly declines in US GDP, US Treasury Secretary Janet Yellen argued in a press conference on Thursday.

Yellen said the real definition of a recession is a “broad-based weakening of the economy”, which is “not what we are seeing right now”. Yellen cited the fact that the labor market continued to improve in H1 2022 as evidence that the US economy had not fallen into recession. Yellen said that the labor market remains “exceptionally strong”.

Cardano’s Vasil Hard Fork Delayed Again

In a YouTube update released on Thursday, Cardano’s developer Input Output Global (IOG) said that the blockchain’s Vasil hard fork upgrade has been delayed once again. IOG’s technical manager Kevin Hammond explained that the delay is so that exchanges and API developers are “ready”, while IOG has also been focused on fixing a few testnet issues. “There could be a few more weeks before we go to the actual Vasil hard fork… All the users must be ready to progress through the hard fork to ensure a smooth process,” Hammond said.

Recall that the Vasil hard fork was initially scheduled to go ahead in late-June, but was delayed, resulting in downside in ADA’s price at the time. Analysts think a successful upgrade could be a big potential bullish driver for ADA in the months ahead.

This seems to be the view of users of the popular cryptocurrency intel website CoinMarketCap. According to the website’s “Price Estimate” feature that allows users to submit their views on where a cryptocurrency will be trading at some specified time in the future, Cardano is seen rallying between now and the end of August.

Out of 14,222 votes cast, the average forecast is for ADA to reach $0.73 per token, over 55% higher than current levels, by the end of August. The median forecast was for a rise to $0.6488, a near 38% gain from current levels.

US Legislation Creates New Blockchain Advisory Role Within Government

Bipartisan legislation to boost US chip manufacturing that cleared both chambers of the US Congress on Thursday will also create a new role for a blockchain and cryptocurrency advisor within the government. The new advisor will work within the Office of Science and Technology Policy. Earlier this year, US President Joe Biden issued an executive order to the Office of Science and Technology Policy to assess the impact that digital assets and crypto are having on climate change. A report is expected later this year.

Stocks Rally as Traders Pare Aggressive Rate Hike Bets; US GDP Contracts Again

Key Points

  • Major US indices rallied again on Thursday as weak US GDP data saw markets further reduce Fed tightening bets.
  • The US economy contracted for a second successive quarter, meeting the classic definition of recession.
  • The S&P 500 was last up 1.1% above 4.050 while the Nasdaq 100 was last up 0.6% near 12,700.

Dovish Fed Bets Support Stocks

Major US indices rose on Thursday as investors interpreted data showing that the US economy contracted for a second successive quarter in Q2 as lessening the outlook for further rate hikes from the US Federal Reserve for the rest of 2022 and early 2023. Real US GDP was revealed to have contracted at an annualized pace of 0.9% in Q2 after contracting at a rate of 1.6% in Q1. Two consecutive quarters of negative growth meet the classic definition of a “technical” recession.

Fed funds futures markets are now priced for the Fed’s benchmark interest rate to peak this December at just 3.24%, less than 100 bps above current levels. On Monday, prior to the Fed’s “dovish” 75 bps rate hike on Wednesday and Thursday’s ugly growth figures, money markets were priced for rates peaking at 3.39% next February.

Money market pricing also implies a 74% chance of a 50 bps rate hike in September, according to CME, versus a 26% chance of a 75 bps rate hike. One week ago, the likelihood of a 50 bps rate hike was seen at around 40%, while the implied odds of a 75 bps move were at 47%.

Markets are sending a message – they think the Fed will get much more dovish in the coming months as the realities of the weak US economy bite and stocks seem to like the idea of a friendlier Fed. Looking ahead, data on Friday will further inform investor expectations regarding the US economy and Fed policy. US PCE Price Index figures for June will be released and are likely to show that core price pressures remain below their peak hit earlier this year.

Employment Cost Index data for Q2 is likely to show a slight deceleration in the pace of wage gains, which should ease Fed concerns about the tight US labor market’s contribution to current elevated inflation. Meanwhile, Personal Income and Spending growth figures for June will give an update as to the health of the consumer at the end of Q2. The playbook for Friday’s data likely remains the same as on Thursday – weaker data may well support further stock market upside, if it results in a moderation of Fed tightening bets.

S&P 500 Rallies 1.1%, Nasdaq 100 Gains 0.6%

The S&P 500 was last trading with gains of around 1.1% on the day in the 4,050 regions, with the index printing fresh six-week highs and bulls eyeing a test of early June highs in the upper-4,100s. The Nasdaq 100 index was also higher, but only by about 0.6%, with the index failing to break above recent highs in the 12,700 area. Sharp post-earnings losses in index heavyweights Meta Platforms and Qualcomm weighed on its upside.

Meta Platforms reported another quarter of big losses on its metaverse-focused Facebook Reality Labs division and posted its first-ever quarterly drop in revenue. Meanwhile, Qualcomm outlined a downbeat outlook and warned that a slowdown in global mobile phone demand could hit its main chip-making business. Apple and Amazon will be posting Q2 earnings after the close.

The Dow Jones Industrial Average rose 1.1% and, like the S&P 500, also broke out to fresh six-week highs. Thursday’s sharp drop in US bond yields as investors moderate Fed tightening expectations helped support outperformance in the S&P 500 Utilities and Real Estate GICS sectors. Communications Services was the only of the eleven GICS sectors in the red, amid the aforementioned losses in Meta Platform’s share price.

USD/JPY Drops 1.5% as Yen Rallies on Falling Yields Following Another US GDP Contraction

Key Points

  • The yen dominated in currency markets on Thursday, benefitting as US and European bond yields slumped after weak US data.
  • The US economy contracted for a second successive quarter, resulting in a further paring of Fed tightening bets.
  • EUR/USD was flat in the mid-1.0100s despite hotter-than-expected German inflation figures for July.

Yen Dominates As Bond Yields Pullback Post-weak US GDP Data

The Japanese yen was the standout performer in currency markets on Thursday, with the rate-differential sensitive currency benefitting from a substantial drop in US and European bond yields after data showed the US economy contracting for a second successive quarter in Q2, and amid ongoing concerns about the impact of the energy crisis on the European economy.

US 10-year yields fell nearly 10 bps to fresh three-month lows on Thursday under 2.70% after data showed that the US economy contracted at an annualized pace of 0.9% in Q2 after shrinking at a pace of 1.6% in Q1. The drop in bond yields reflected investors paring back on their expectations for Fed hawkishness in the coming quarters as the reality of weak US growth bites.

Fed funds futures markets are now priced for the Fed’s benchmark interest rate to peak this December at just 3.24%, less than 100 bps above current levels. On Monday, prior to the Fed’s “dovish” 75 bps rate hike on Wednesday and Thursday’s ugly growth figures, money markets were priced for rates peaking at 3.39% next February.

The difference between US 10-year yield and the Japanese 10-year yield fell under 250 bps on Thursday, down from nearly 280 bps at the start of the month. This has helped pressure USD/JPY, which was last around 1.5% lower on Thursday and eyeing a test of its 50-Day Moving Average in the 134.10 area, having earlier dropped under 134.50 for the first time since late June.

The yen is sensitive to long-term rate differentials because the BoJ has a policy of keeping Japanese 10-year yields anchored at no more than 25 bps away from zero. A narrowing of the rate differential increases the yen’s relative attractiveness as a place to park money.

Analysts suspect that if markets continue to push long-term US yields lower as then further moderate Fed tightening bets/US growth expectations, the recent USD/JPY drop could have further to go.

Euro Ignores Hot German Inflation Figures as Growth Fears Dominate

EUR/USD was flat on Thursday, with traders reluctant to sell the US dollar against the euro given the prevailing mindset that, yes, the economy in the US is suffering and Fed tightening bets are being wound down, but things are even worse in the Eurozone. Earlier this week, Russia stoked European energy crisis fears after it reduced gas flows to Germany via the Nord Stream 1 pipeline, widely seen as a retaliatory move over the EU’s support for Ukraine.

The pair was last trading roughly flat on the day having chopped between the 1.0100 and 1.0200 levels, with hotter-than-expected German inflation figures according to a preliminary July release unable to turn sentiment in favour of the euro. The kiwi, Canadian dollar and pound were all broadly unchanged versus the US dollar as well, with the DXY holding in the mid-1.0600s. The Aussie was a modest underperformer amid concerns about global growth.

Friday’s Macro Risk Events

Looking ahead, data on Friday will further inform investor expectations regarding the US economy and Fed policy. US PCE Price Index figures for June will be released and are likely to show that core price pressures remain below their peak hit earlier this year.

Employment Cost Index data for Q2 is likely to show a slight deceleration in the pace of wage gains, which should ease Fed concerns about the tight US labor market’s contribution to current elevated inflation. Meanwhile, Personal Income and Spending growth figures for June will give an update as to the health of the consumer at the end of Q2.

Outside of the US, the Eurozone inflation story will receive further inputs with the release of French, Spanish and then Eurozone aggregate July figures on Friday.

WTI Fails Attempted Push Above $100, Reverses Lower as Gold Rallies on Post-weak US GDP Yield Slump

Key Points

  • WTI reversed lower from an early session attempt to push above $100 per barrel with growth worries in focus.
  • Copper continued to trade with an upside bias, with China stimulus headlines providing ongoing support.
  • Gold prices rallied as weak US GDP data spurred fresh downside in US yields.

WTI Falls After Failing to Break Above $100 as Focus Shifts to Growth Worries

Front-month WTI futures prices attempted to push back above the $100 per barrel mark on Thursday, in an attempt to track global equity market upside, but have since reversed back into the $96.00s, where they now trade in the red on the day. Traders of the American benchmark for sweet light crude oil seemed to shift their focus back to a worsening demand outlook after data showed that the US economy unexpectedly contracted for a second successive quarter in Q2, confirming the economy is in a technical recession.

Copper Nears Three-week Highs Amid Risk-on Flows, China Stimulus Bets

Copper prices failed to hold at earlier session highs above $3.50, but continued to trade with an upside bias in the latter part of the US trading session in the $3.48 area, with prices getting a boost from upside in global equity markets. Stocks rallied and bond yields fell in the US and Europe on Thursday as traders bet that fresh signs of economic weakness in the US would encourage the Fed to take a slower approach to rate hikes in the coming quarters, reducing the medium-term downside risk of higher interest rates.

Copper is now up over 4.5% on the week and trading at near three-week highs, with hopes for more stimulus in China to support infrastructure projects and the country’s flagging property sector also boosting sentiment. China will issue $148.2 billion in loans to struggling property developers, the Financial Times reported on Thursday. Earlier in the week, reports suggest that China will set up a more than $44 billion infrastructure fund. China is the world’s largest copper consumer.

Gold Rallies as Real Yields Slide

Thursday’s ugly Q2 US GDP growth report added further fuel to the rally in US bond markets that has pressured yields in the past few days, thus spurring further upside in rate-sensitive precious metals markets. Spot gold prices rallied into the $1,750s on Thursday, gaining another 1.0% and taking their gains since last week’s $1,680 lows to over 4.0%.

US 10-year TIPS yields (the US 10-year real yield) are now down nearly 50 bps from earlier monthly highs in wake of the recent dovish Fed meeting and Thursday’s soft data. Lower real yields reduce the so-called opportunity cost of holding non-yielding precious metals. Break-even inflation expectations are also sharply up in recent days on the idea that a less hawkish Fed will result in a stronger economy in the long run and this may be boosting demand for precious metals as an inflation hedge.

Top 3 Trending Coins: ETH Holds Above $1,600 Despite Ugly US GDP Figures, UNI & BCH Surge

Key Points

  • Ethereum is holding above $1,600 despite ugly US GDP numbers confirming a recession, with bulls still eyeing $1,700.
  • A majority of fintech experts partaking in a survey earlier this month think the Ethereum merge will positively impact price.
  • Uniswap and Bitcoin Cash are amongst the best performing top 50 cryptocurrencies on Thursday.

Ethereum Holds Above $1,600 Despite Awful US GDP Figures

ETH, the native token that powers the Ethereum blockchain, was last changing hands just above the $1,600 level and only very slightly in the red on the day, despite the release of ugly US GDP growth figures for Q2 that confirm the US was in a so-called “technical recession” in H1 2022. The downbeat data, which showed that the US economy contracted at an annualized pace of 0.9% in Q2 after shrinking at a pace of 1.6% in Q1, has triggered a classic risk-off response in markets.

US bond yields are sharply down amid demand for the safe-haven asset and on bets that the Fed will tighten less aggressively. The yen and gold have also been performing well, while stocks have been knocked a little, which is weighing on crypto. Still, both highly risk-sensitive asset classes are higher in wake of Wednesday’s dovish 75 bps rate hike from the Fed. Indeed, ETH still trades 19% up versus earlier weekly lows and is only 3.0% lower versus the monthly highs it hit earlier in the session.

Some analysts think that bad data may support speculative risk assets like tech stocks and crypto in the months ahead, if it dissuades the Fed from raising interest rates so aggressively in the latter part of 2022 and into 2023. As a result, ETH bulls will be keeping their sights set on resistance in the $1,700 area. A break above here could open the door to a run higher towards the $2,000 level and resistance in the mid-$2,100s just above it.

ETH/USD
ETH/USD bulls eye $1,700. Source: FX Empire

Ethereum Merge Not Yet “Priced In”, Says Vitalik Buterin

Ethereum co-founder Vitalik Buterin said in an interview at last week’s Ethereum Community Conference (EthCC) in Paris that after the Ethereum blockchain transitions to Proof-of-Stake (PoS) from Proof-of-Work (PoW) later this year, “morale is going to go way up”. Buterin added that the so-called “Merge” isn’t yet “priced in”, as it hasn’t happened yet, and that it needs to take place on schedule.

In Merge relevant news, Ethereum developers implemented their tenth so-called “shadow fork” of the blockchain’s mainnet on Tuesday and reported no significant glitches. A shadow fork is where developers copy data from the mainnet onto a test environment to run experiments.

Ethereum will use this shadow fork to test releases similar to those that be used in the Goerli merge on 10 August, Ethereum developer Parithosh Jayanthi told CoinDesk. The merge of the Goerli testnet to PoS from PoW will be Ethereum’s last trial run before the merge of its mainnet in September.

Analysts framed the latest shadow fork success as another small step towards a successful mainnet merge. Pre-merge Fear Of Mission Out (FOMO) has been touted as one of the reasons why Ethereum has been an outperforming cryptocurrency in recent weeks. Versus 30 days ago, ETH is around 35% higher, according to CoinMarketCap.

Ethereum “Merge” To Have a Positive Impact on Price, According to Finder.com

In a quarterly survey of 53 fintech experts conducted by finder.com and released earlier this month, an overwhelming majority (78%) said they thought Ethereum’s so-called “Merge” would have a positive impact on its price. However, one of the experts, Elbaite’s cofounder and CEO Mortaza Tollo, warned that its “hard to predict a short-term price after The Merge, there might be a case of buy the rumor, sell the news, so in the lead-up to The Merge prices might rise by up to 25% but decline shortly after”.

In answer to the question as to whether now is the time to buy, hold or sell Ethereum, the panel was fairly evenly split between buy (43%) and hold (41%), with only 16% recommending to sell. One expert, the founder and chairman of CoinFlip Daniel Polotsky, argued that ETH is currently selling for a discount given the ongoing bear market.

“Bitcoin, while still being a risk asset in the eyes of the general population, is still the most trusted blockchain among all cryptocurrencies… That means that people will flock to it over other, more speculative blockchains in times of unrest,” he explained. “What this means is that more speculative, growth-oriented blockchains like Ethereum will be on a steeper discount during the bear market, presenting potential buying opportunities for investors.”

In finder.com’s July survey, the 53 experts also gave their new Ethereum price forecasts for the end of 2022, 2025 and 2030. The mean forecast for the year-end is for ETH to hit $1,711, then to rally to $5,739 by 2025, before moving above $14,400 by 2030.

Meanwhile, experts at CoinPedia are bullish in their ETH forecasts. They see the cryptocurrency hitting $2,142.3 by the year’s end. In a bullish scenario where the network sees a reduction in congestion and gas fees following developments work, which they think could lead to new buyers and projects arriving, ETH could even end the year as high as $2,474. In a bearish scenario where the Merge doesn’t go so smoothly, ETH might only reach $1,785.

That compares to a much more bearish outlook amongst CoinMarketCap website users. Of the 291 that have submitted a forecast as to where they see Ethereum ending 2022, the mean forecast is for it to fall over 20% from current levels back to around $1,280.

Uniswap

Having gained 23% in the last 24 hours according to CoinMarketCap, Uniswap is the best performing cryptocurrency in the top 50. Price action on Thursday could be particularly significant as, in recent trade, the cryptocurrency has broken above its 200-Day Moving Average (at $8.38) for the first time since November 2021. A clean break above the 200DMA could open the door to a run higher towards the $10 level and resistance above that around $12.

UNI/USD
UNI/USD probes 200DMA. Source: FX Empire

Bitcoin Cash

Bitcoin Cash, meanwhile, is another strong performer. According to CoinMarketCap, the Bitcoin forked cryptocurrency is up close to 20% in the last 24 hours. However, it does seem to have run into resistance in the form of its 12 May lows around $150 per token. BCH has since dipped back from earlier session highs to the $143 area. It is still up over 25% versus earlier weekly highs.

BCH/USD
BCH/USD hits resistance. Source: FX Empire

Cardano Price Prediction: ADA Bulls Eye $0.55 Retest As Focus Turns to US GDP

Key Points

  • Cardano is a little lower amid profit-taking on Thursday and trading near $0.50, after big post-Fed gains on Wednesday.
  • Traders are braced for US GDP data and, all going well on the macro front, ADA could retest $0.55 soon.
  • Despite the major upcoming Vasil hard fork upgrade, ADA trading volumes and social media hype recently hit six-month lows.

ADA, the native token to the Cardano blockchain, was last trading with losses of close to 2.5% on Thursday, amid some profit-taking after the cryptocurrency posted an outsized 9.0% gain on Wednesday. Cryptocurrencies were at the time boosted by a “dovish” 75 bps rate hike from the Fed.

ADA surged above its 21 and 50-Day Moving Averages in the $0.473 and $0.481 areas on Wednesday and was last trading just below the $0.50 level, having nearly hit $0.52 in earlier Thursday trade. Crypto markets are currently bracing for the release of Q2 US GDP figures later in the day that will confirm whether or not the US economy has been in a technical recession in the first half of 2022.

Analysts think that weaker data is likely to be bullish for risk assets like stocks and crypto if it results in markets paring Fed tightening bets. Fed tightening in 2022 amid persistently high US (and global) inflationary pressures has been a key headwind for crypto this year.

ADA Bulls Eye a Retest of $0.55?

Cardano bulls interpreted the fact that ADA found such strong support earlier this week at a downtrend that had been capping the price action from mid-June to mid-July as a bullish sign. The cryptocurrency now appears to have formed a bullish flag structure, which Cardano bulls will be hoping might preceded a rally back to monthly highs in the $0.55 area.

ADA/USD
ADA/USD forms bullish flag as bulls eye test of $0.55. Source: FX Empire

All going well on the macro front and assuming risk appetite remains on an improving trend in the coming sessions (a big assumption that shouldn’t be taken for granted), a break above $0.55 is possible. Technicians think this would open the door to a run higher towards the late-May highs in the $0.69 area.

ADA/USD
A break above $0.55 could quickly send ADA/USD towards $0.69. Source: FX Empire

Cardano Twitter Hype/Trading Volumes Hit Six Month Lows Despite Upcoming Vasil Upgrade

According to developers, despite its upcoming Vasil hard fork upgrade that will mark the blockchain’s biggest improvement since it added smart-contract functionality back in 2021, Cardano’s popularity on Twitter recently hit a six-month low. That according to crypto data provider The TIE, which posted a chart on Twitter that also showed trading volumes to have recently fallen to a six-month low.

Regarding the upgrade, Input Output Global (formerly Input Output Hong Kong), Cardano’s creator, released a progress update on Monday. The long and short of it was pretty much that, after performing the Vasil hard fork on Cardano’s testnet at the start of July, developers in the node, ledger and consensus teams are still at work.

No date was given when the hard fork on Cardano’s mainnet will officially go ahead, but most still expect it to go ahead before the end of this month. One Cardano analyst and builder did, however, share his thoughts on why he expected another delay last week, as well as why he doesn’t think a delay really matters.

Recall that the Vasil hard fork was initially scheduled to go ahead in late-June, but was delayed, resulting in downside in ADA’s price at the time. Thus, if it does get announced this week that the upgrade is being delayed again, that could deliver some short-term pain to ADA.

Analysts think a successful upgrade could be a big potential bullish driver for ADA in the months ahead. This seems to be the view of users of the popular cryptocurrency intel website CoinMarketCap. According to the website’s “Price Estimate” feature that allows users to submit their views on where a cryptocurrency will be trading at some specified time in the future, Cardano is seen rallying between now and the end of August.

Out of 14,222 votes cast, the average forecast is for ADA to reach $0.73 per token, over 55% higher than current levels, by the end of August. The median forecast was for a rise to $0.6488, a near 38% gain from current levels.

In a separate survey of ADA price forecasts conducted by finder.com earlier this month, the median expectation of 53 fintech experts was for ADA to end the year around $0.60. Experts responding to finder.com’s survey were split over how the upcoming Vasil hardfork will impact Cardano. 20% said it would positively impact ADA’s price, 18% said it would have an adverse effect, while 50% said it would increase the functionality of the Cardano blockchain.

ADA Owners HODLing Longer Versus Other Major Cryptos, According to Coinbase

According to Coinbase data, ADA has a median hold time of 125 days, higher than Ethereum’s typical hold time of 105 days and Solana’s hold time of 100 days. Coinbase says that a longer hold time “signals an accumulation trend”, while a shorter hold time points to an “increased movement of tokens”. Analysts noted that Coinbase’s introduction ADA staking, which offers holders a 3.75% APY on their tokens, has likely lifted HODL time on the platform.

5 Things to Know in Crypto Today: Dovish 75 bps Fed Hike Sends Crypto Surging Pre-US GDP

Key Points

  • Cryptocurrency prices surged in wake of a “dovish” 75 bps rate hike from the Fed on Wednesday.
  • Bitcoin was last changing hands just under $23,000, while Ethereum is above $1,600.
  • Focus has turned to upcoming US GDP growth data for Q2 which could confirm the US has entered a technical recession.

Crypto Rallies After Dovish Fed 75 bps Rate Hike

Cryptocurrency markets surged on Wednesday in wake of what analysts saw as a “dovish” 75 bps rate hike from the US Federal Reserve. The central bank lifted interest rates to 2.25-2.50%, above pre-pandemic levels and back to roughly in line with the so-called “neutral” rate.

The Fed acknowledged recent softening in the US economy and acknowledged recent favorable developments relating to global commodity prices and inflation expectations, with falls in both modestly easing inflation fears. Powell reiterated the Fed’s nimble, meeting-by-meeting approach to rate hikes and markets responded by reducing their Fed rate hike bets for the remaining three meetings this year, whilst boosting rate cut bets for 2023.

Speculative risk assets including US tech stocks and crypto surged. The Nasdaq 100 finished Wednesday’s session up more than 4.0%, while Bitcoin and Ethereum surged 8% and 13% respectively. BTC was last changing hands just below $23,000, having neared $23,500 in earlier Thursday trade and is now comfortably back above both its 21 and 50-Day Moving Averages.

Bitcoin bulls are eyeing a test of last week’s highs in the mid-$24,000s. Ethereum, meanwhile, was last changing hands just above $1,600, having hit fresh multi-week highs in the $1,670s earlier in the day. ETH bulls continue to target a test of the key $1,700 resistance area. In terms of the major altcoins, the likes of BNB, XRP, ADA, SOL and DOGE were all up 5-8% in the last 24 hours, as per CoinMarketCap.

Markets Brace for US GDP Figures

Cryptocurrency traders are now bracing for the release of US GDP figures for the second quarter. According to a Reuters survey of economists, the US economy is expected to have grown at an annualized rate of 0.5% in Q2. Some analysts have argued that in wake of data released earlier this week that showed a surge in exports in the latter stages of Q2, Q2’s growth figure could be even higher.

If growth was to come in negative for the quarter, that would confirm that the US entered into a so-called technical recession in Q1 2022 (defined as two consecutive negative quarters of growth). However, given that the labor market has remained strong thus far this year, most economists would be reluctant to classify a H1 2022 technical recession as an official recession.

In terms of how cryptocurrency markets might react, traders would likely interpret weaker growth figures as bullish, given that this is likely to deter the Fed from hiking interest so aggressively at its upcoming meetings and in 2023. Stronger than expected growth figures thus might weigh on crypto sentiment, if the data is interpreted as boosting Fed tightening prospects.

Facebook Stocks Slumps Post-Earnings, Zuckerberg Reiterates Co.’s Metaverse Focus

Meta Platforms, the parent company of Facebook, has seen its share price drop sharply in pre-US market open trade after the US social media giant posted worse than expected earnings figures for Q2 after the close on Tuesday. Meta’s earnings per share (EPS) for Q2 came in at $2.46, below analyst expectations for $2.54. The company’s topline revenue, meanwhile, came in at $28.8 billion for the quarter, just shy of analyst expectations for $28.9 billion.

In the company’s earnings call, CEO Mark Zuckerberg reiterated the company’s focus on its longer-term meta-verse goals, as opposed to maximizing short-term revenue from platform monetization. “Developing these platforms (on the metaverse) could unlock hundreds of billions if not trillions in revenue over time,” Zuckerberg told analysts on the call. In Q1, Zuckerberg had remarked that Meta Platforms is “laying the groundwork for a very successful 2030s”. Meta Platform’s metaverse-focused Facebook Reality Labs division posted a $2.81 billion loss in Q2, slightly less than its $2.96 billion loss in Q1.

Ethereum Implements Tenth Mainnet “Shadow Fork” Successfully as September Merge Approaches

Ethereum developers implemented their tenth so-called “shadow fork” of the blockchain’s mainnet on Tuesday and reported no significant glitches, as traders monitor the blockchain’s progress towards its “Merge” from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in September. A shadow fork is where developers copy data from the mainnet to onto a test environment to run experiments.

Ethereum will use this shadow fork to test releases similar to those that be used in the Goerli merge on 10 August, Ethereum developer Parithosh Jayanthi told CoinDesk. The merge of the Goerli testnet to PoS from PoW will be Ethereum’s last trial run before the merge of its mainnet in September.

Analysts framed the latest shadow fork success as another small step towards a successful mainnet merge. Pre-merge Fear Of Mission Out (FOMO) has been touted as one of the reasons why Ethereum has been an outperforming cryptocurrency in recent weeks. Versus 30 days ago, ETH is around 35% higher, according to CoinMarketCap.

SEC’s Coinbase Investigation Could Have “Chilling” Effect, Says Lawyer

An investigation that the US Securities and Exchange Commission (SEC) has reportedly initiated against US-based crypto exchange Coinbase Global over its suspected listing of unregistered securities could have a “chilling effect” on the cryptocurrency industry, a legal expert told Cointelegraph, even if Coinbase isn’t ultimately found to have listed unregistered securities.

Australian digital assets lawyer Michael Bacina told the crypto news outlet that “given many of the tokens the SEC has called securities in their insider trading prosecution are listed and trading on Coinbase and other exchanges, this investigation could have serious and chilling effect for both those exchanges and the token projects, whether or not an ultimate finding is the tokens are or are not securities.”

Bacina was critical of the action, saying that it “wouldn’t seem aligned with encouraging pro-active industry engagement”. “Coinbase has a history of good faith engagement on regulatory matters and has indicated the SEC has reviewed their token listing criteria,” he added. The crypto exchange could face “substantial fines,” he noted.

ETH Reconquers $1.6K, BTC Briefly Rallies Above $23,000 After Dovish 75 bps Fed Rate Hike

Key Points

  • Crypto rallied in wake of the latest less hawkish than feared Fed policy announcement.
  • Bitcoin briefly rallied back above $23,000 while Ethereum pushed back above $1,600.
  • If the Fed signals a dovish outlook for 2023 as markets seem to be betting on, this could benefit crypto.

Fed Meeting Recap: A Dovish 75 bps Rate Hike

The US Federal Reserve raised interest rates by 75 bps to 2.25-2.50% target range on Wednesday as a majority of market participants had been expecting, defying a minority of market participants who had been expecting a 100 bps move and bringing interest rates back above their pre-pandemic levels. US interest rates are now roughly in line with the so-called “neutral rate” that neither stimulates nor slows the economy.

The Fed reiterated its stance that, given the backdrop of inflation running well above its 2.0% target, it still intends to lift interest rates into so-called “restrictive” territory in the coming quarters. Fed Chair Jerome Powell reiterated the Fed’s intentions to take interest rates above 3.0% by the end of the year in the post-meeting press conference.

While Powell was keen to emphasize that the Fed intends to continue taking things meeting-by-meeting and remaining “nimble” to economic developments, he acknowledged recent economic weakening as seen primarily in consumption and consumer sentiment, though also more recently cropping up in business sentiment/activity data.

Moreover, when pressed to comment on money markets that are pricing in Fed rate cuts in 2023, Powell refused to push back against expectations for easier policy next year. Markets thus interpreted the meeting as dovish, or at least, not as hawkish as feared.

Dovish Market Reaction Supports Crypto

As a result, investors began paring Fed tightening bets, with another 75 bps rate hike in September now seen as a 50/50 rather than the probable outcome prior to the meeting, according to Reuters. As a result, markets saw a classic “dovish” reaction. Yields fell at the short-end of the US treasury curve, whilst rising at the long-end as traders priced in a combination of slightly lower interest rates in the next few years and stronger growth (and thus higher rates) in the long run.

Stocks surged, the US dollar dropped, and gold rallied amid a fall in US real yields, which reflected a jump in US break-even inflation expectations. As a result, it was a bullish cocktail for crypto, which is positively correlated to risky assets like US stocks and tends to carry a negative correlation to the US dollar and US yields.

Bitcoin surged back above both its 21 and 50-Day Moving Averages in the $21,600 and $21,800 areas and briefly surpassed the $23,000 level to hit new weekly highs. It has since pulled backed to about $22,700, where it trades with gains of about 6.8% on the day and 8.5% over the past 24 hours, according to CoinMarketCap.

BTC/USD
BTC/USD rallies post-Fed. Source: FX Empire

Ethereum saw an even more impressive run higher. ETH/USD was last changing hands just above $1,600 and eyeing a test of recent highs in the $1,660 area, ahead of a potential push to the long-term $1,700 resistance level that bulls have been eyeing since the cryptocurrency’s mid-month break higher. ETH was last about 11% higher on the day and over 16% higher in the past 24 hours, according to CoinMarketCap.

ETH/USD
ETH/USD rallies post-Fed. Source: FX Empire

Other major altcoins are also performing well, with the likes of BNB, XRP, ADA, SOL and DOGE all between 6-12% higher in the past 24 hours.

Why a Less Hawkish Fed Benefits Crypto

Cryptocurrencies are seen as one of the most speculative asset classes alongside a portion of the US (and global) tech stock space. They are amongst the first that investors will want to sell when they want to adopt a more defensive portfolio stance as global financial and economic conditions worsen.

The Fed’s significant hawkish turn in the last eight months that has seen it lift interest rates by 225 bps already this year represented a significant tightening in financial conditions and crypto was naturally one of the biggest casualties. Persistently elevated US inflation is the main reason why the Fed turned so hawkish in 2022, but there are early signs that core price pressures have peaked and the recent pullback in commodity prices from recent highs suggests lower headline inflation ahead.

That, combined with signs of a weakening US (and global) economy – something the Fed acknowledged at Wednesday’s meeting – could encourage the Fed to be less aggressive with its rate hikes in 2023. Indeed, this seems to be what markets are betting on, with interest rates seen peaking around 3.5% in early 2023 before dropping back to about 3.0% by the end of the year.

A less hawkish Fed stance benefits crypto in just the same way as a more hawkish Fed stance hurts it. A less hawkish Fed means a loosening/improvement in financial conditions that may inspire enough confidence in investors to get back into risky asset classes like crypto.

WTI Gains Over $2.50 Amid Post-Fed Risk-on Flows and Bullish Inventory Data, Copper Rallies 2.4%

Key Points

  • WTI rallied over $2.50 on Wednesday amid post-Fed risk-on flows and after bullish US inventory data.
  • Copper rallied on risk-on flows plus the weaker dollar, but analysts remain skeptical of a rebound.
  • Gold prices rallied as US real yields fell post-Fed, primarily as a result of a spike in US inflation expectations.

Oil Rallies on Bullish Weekly US Inventory Figures

Front-month futures contract prices for WTI, the US benchmark for sweet light crude oil, rallied on Wednesday after the latest official weekly US oil inventory report dispelled fears about US gasoline demand weakness and amid risk-on flows in wake of a dovish 75 bps rate hike from the US Federal Reserve. Post-Fed US dollar weakness also helped support USD-denominated US oil prices. WTI was last trading just above $98 per barrel, slightly more than $2.50 up on the day.

According to the US Energy Information Agency’s latest week inventory report, crude oil stocks dropped by 4.5 million barrels last week, with WTI exports having surged thanks to its growing discount to its European peer Brent. That was much larger than the roughly 1 million barrel expected to draw.

Meanwhile, gasoline inventories dropped by 3.3 million, much larger than the 0.85 million barrel drop that had been expected. According to one analyst at Mizuho, “all talk about demand destruction stopped in its tracks (with) this report… the situation has changed dramatically in two weeks”. Concerns about weakening demand for US gasoline had weighed heavily on crude oil prices last week.

Oil traders noted that WTI remains stuck within a bearish trend channel that has been in play since mid-June, though it is once again testing the upper bounds of this trend channel, having found support at its 200-Day Moving Average near $95 once again earlier in the session.

Worries about the global oil demand outlook amid recent softening of global economic activity has been the main factor weighing on crude prices in recent weeks. With things likely to get worse for the US and global economy before they can get better, and with the threat of lockdowns still there in China, analysts suspect the worst for oil prices may yet be to come.

Elsewhere in energy, US natural gas prices continued their reversal back from their near-annual high levels hit on Tuesday. Spot prices were last around $8.66, down roughly 1.5% on Wednesday and down about 9.0% from Tuesday’s highs around $9.50, though still up about 60% versus early July lows.

Copper, Gold Rally on Dovish-Fed Induced Buck Weakness

USD weakness in wake of the Fed’s latest not as hawkish as feared policy announcement, where it lifted interest rates by 75 bps as expected, has supported both copper and gold prices on Wednesday. Copper, which as a risk-sensitive asset, also derived a boost from risk-on flows that supported strong gains on Wall Street, was last changing hands at just under $3.50, up nearly 2.5% on the day and now up over 10% versus earlier monthly lows.

Prior to Wednesday, copper prices have been supported by 1) data showing a heating up of economic activity in China and 2) government announcements of new money to support infrastructure development and the country’s property sector. But analysts remain reluctant to bet on a lasting economic rebound amid the ongoing threat of further Covid-19 lockdowns. Such concerns, combined with worries about weakening global growth, are keeping many analysts bearish on copper’s near-term prospects.

Spot gold prices, meanwhile, were last up about 1.0% after hitting fresh weekly highs in the $1,730s, though prices did find resistance at their 21DMA just above $1,740. Gold was also supported by a sharp post-Fed drop in US real yields that was primarily driven by a rise in inflation expectations, which is itself perhaps a reflection of some modest concerns that a Fed that is becoming more concerned about growth may be less able to get inflation back to target beyond 2023.

DXY Drops Following Dovish 75 bps Fed Rate Hike, GBP/USD Hits Monthly Highs in mid-1.21s

Key Points

  • The US dollar was hit on Wednesday by a not as hawkish as feared Fed meeting.
  • The central bank raised interest rates by 75 bps as expected but acknowledged recent economic weakness.
  • EUR/USD rebounded to the 1.0200 area and GBP/USD to fresh monthly highs in the 1.2150s.

Buck Slides as Markets Pare Fed Tightening Bets

The US Federal Reserve raised interest rates by 75 bps to 2.25-2.50% target range on Wednesday as a majority of market participants had been expecting, bringing interest rates back above their pre-pandemic levels and roughly in line with the so-called “neutral rate” that neither stimulates nor slows the economy.

The Fed reiterated its stance that, given the backdrop of inflation running well above its 2.0% target, it still intends to lift interest rates into so-called “restrictive” territory in the coming quarters. Fed Chair Jerome Powell reiterated the Fed’s intentions to take interest rates above 3.0% by the end of the year in the post-meeting press conference.

While Powell was keen to emphasize that the Fed intends to continue taking things meeting-by-meeting and remaining “nimble” to economic developments, he acknowledged recent economic weakening as seen primarily in consumption and consumer sentiment, though also more recently cropping up in business sentiment/activity data.

Moreover, when pressed to comment on money markets that are pricing in Fed rate cuts in 2023, Powell refused to push back against expectations for easier policy next year. Markets thus interpreted the meeting as dovish, or at least, not as hawkish as feared.

Investors began paring Fed tightening bets, with another 75 bps rate hike in September now seen as a 50/50 rather than the probable outcome prior to the meeting. As a result, the US dollar, which has been propped up substantially so far in 2022 by the Fed’s relatively more hawkish stance versus most of its major peers, fell.

The DXY was last changing hands below the 106.50 mark, having dropped about 0.7% on the day. The index has now given back all of its Tuesday gains that were spurred by euro weakness on energy crisis-induced Eurozone recession concerns.

Data that showed a sharp drop in the size of the US trade deficit in June amid a surge in exports and stronger than expected core durable goods orders figures failed to prevent the slide, even though they contributed to a slight lessening of US recession concerns.

EUR/USD Recovers to 1.0200, GBP/USD Hits Fresh Monthly Highs in the 1.2150s

As a result of the weaker buck, EUR/USD rallied about 0.8% back to near the 1.0200 level, where it is once again testing its 21-Day Moving Average. GBP/USD jumped 1.0% to the 1.2150 area and printed a new monthly high, with the bulls now eyeing a test of the 50DMA and a downtrend that has been in play since February.

The only very muted drop in longer-term US bond yields, which initially fell after the Fed’s policy announcement, but have since risen again amid a pick-up in inflation expectations, means that USD/JPY was unable to break substantially lower. The pair was last trading around 136.50, only down about 0.2% on the day, with the market’s risk-on mood also preventing the safe-haven yen from getting much traction.

Risk-sensitive G10 currencies like the Aussie, kiwi and loonie all also performed well. A slightly larger than expected moderation in the QoQ rate of headline Australian consumer price inflation was offset by another big rise in the YoY rate, which supported RBA tightening bets and gave AUD/USD a modest overnight lift. US Q2 GDP growth figures will be the market’s main focus on Thursday.

Nasdaq 100 Rallies Over 4.0% on Dovish Fed/Strong Earnings, Alphabet Up 8.4%

Key Points

  • The Nasdaq 100 rose over 4.0% and the S&P 500 rose 3.0% in wake of a dovish Fed policy announcement.
  • The central bank raised interest rates by 75 bps as expected but noted recent economic weakness.
  • Wall Street also got a boost from strong Microsoft and Alphabet earnings, with big tech/growth stocks leading the upside.

Dovish Fed Sends Wall Street Surging

Wall Street surged higher on Wednesday after the US Federal Reserve raised interest rates by 75 bps as expected, defying a minority of market participants who had been expecting a 100 bps move. Meanwhile, in his post-FOMC meeting press conference, Fed Chair Jerome Powell noted the recent softening of US economic activity and, while he reiterated that uncertainty remains very high and the Fed is taking things meeting by meeting, noted some recent positive trends regarding inflation, such as the recent pullback in commodity prices and inflation expectations.

Markets interpreted the policy decision and Powell’s remarks as dovish (or, at least, not as hawkish as feared) and US yields slumped, with the Fed interest rate expectation sensitive 2-year yield dropping 7 bps to below 3.0%. While Powell reiterated the Fed’s intention to get interest rates to 3.0-3.5% by the year’s end, his remarks did not push back against the idea that the Fed might be cutting interest rates before long in 2023.

“The Fed’s work is not yet done and we look for a further 125bp of hikes before the end of the year,” said analysts at ING in a note. “But with recession risks mounting and inflation set to fall sharply in 2023, rate cuts will be the key theme for next year,” they added.

Nasdaq 100 Rises Over 4.0%, Eyes Early June Highs

The big tech/growth stock-heavy Nasdaq 100 index rallied over 4.0% on Wednesday, its best one-day performance since the pandemic-induced volatility of early 2020. Index heavyweights Microsoft, Alphabet (Google’s parent company), Tesla, Apple, Amazon, and Meta Platforms (Facebook’s parent company) all gained between 3.0% to 8.0%.

The big tech names got an added boost from Microsoft and Alphabet earnings that were both significantly stronger than expected, with the former forecasting double-digit growth for the 2022/2023 fiscal year on strong demand for its cloud computing services and the latter posting stronger than forecast Google search ad sales.

After downbeat earnings reports from Twitter and Snap last week, there had been some concerns about weakness in the ad market. Meta Platforms will be reporting earnings after the market close and Apple and Amazon will both be reporting on Thursday.

The Nasdaq 100 index just missed out on hitting fresh highs for the month in the mid-12,600s, with the bulls again eyeing a test of early June highs above 12,800. The index’s strong rebound following Tuesday’s retest of its 50-Day Moving Average just above 12,000 is likely to be interpreted as a bullish sign by technicians.

The S&P 500 was last up around 3.0%, having broken convincingly above the 4,000 mark and to fresh one-month highs in the 4,030s. The Dow Jones was last up about just shy of 2.0%. In terms of other notable movers, PayPal’s share price jumped on news that activist investor Elliot Investment Management is building a stake in the firm, while T-Mobile’s share price was up after posting better-than-expected top and bottom line Q2 earnings and upgrading its subscriber growth forecast for the second time this year.

Top 3 Trending Coins: MATIC Bulls Eye Return to $1.0, ETH Bulls Still Hoping for Return to $1,700

Key Points

  • MATIC is the best-performing top 20 cryptocurrency and eyeing a push back towards $1.0.
  • Ethereum is also performing strongly, with bulls still eyeing a rally to $1,700 provided macro events go well this week.
  • Ethereum Classic has been surging recently and is testing its 200DMA and eyeing rally to $30.

Polygon (MATIC) Bounces At 21DMA, Eyes Test of Short-term Downtrend

Cryptocurrency sentiment has taken a turn for the better amid a recovery in global equities following solid earnings from the likes of US mega-cap tech giants Microsoft and Alphabet, we well as European luxury behemoth LVMH. This has supported MATIC, the native token to the Polygon blockchain. Polygon is an Ethereum scaling solution.

MATIC was last changing hands just above $0.81 per token, having seen a solid 12% bounce from Tuesday’s lows around $0.72. According to CoinMarketCap, Polygon is the best performing cryptocurrency out of the top 20 by market capitalization in the last 24 hours, having gained around 8.5% during this time period. MATIC bulls will be pleased with how the cryptocurrency responded to support in the form of its 21-Day Moving Average at $0.74 and mid-May highs.

Macro risk is now in focus with Wednesday’s Fed meeting, Thursday’s US Q2 GDP growth figures and Friday’s Core PCE inflation numbers capable of triggering volatility. But all going well on these fronts (i.e. the Fed is not too hawkish, growth is not too weak, and inflation showing further signs of easing), MATIC bulls will be hoping that the cryptocurrency can recover back towards recent highs near $1.0.

On the way back to $1.0, MATIC will face resistance in the form of a downtrend linking recent highs. Perhaps a break above here will provide the cryptocurrency with enough momentum to rally above $1.0 and towards its 200-Day Moving Average just below $1.20.

MATIC/USD
MATIC/USD eyes return to $1.0. Source: FX Empire

Polygon Ecosystem Shows Robust Growth

According to a tweet from Polygon’s official Twitter account, its blockchain was home to 5.34 million unique addresses in Q2 2022, a 12% increase versus Q1. Total transaction volume increased to $284 million in Q2, 4% up versus Q1. Average transaction costs, meanwhile, fell to just $0.018.

Meanwhile, Opensea saw 1.2 million new Non-fungible Token (NFT) wallets come online on Polygon in Q2, while new NFT mints jumped by 50% on the quarter to 66.6 million. “But the most bullish signal, and a sign that the Polygon ecosystem is building through the bear (market), comes from developer activity,” Polygon continued. “The network added on average 1,000 new contract creators a day for a total of 90,514, more than triple the pace of growth in the last quarter”.

Ethereum (ETH) Also Bounces At 21DMA, Bulls Still Eyeing Test of $1,700 Resistance

Ethereum is the second-best performing cryptocurrency in the top 20 by market cap over the last 24 hours, according to CoinMarketCap. During this time, it has rallied just over 6.0%, in tandem with a broader upside across the crypto space. ETH was last changing hands just below $1,500, having now bounced around 10% from Tuesday’s lows in the $1,350 area, where the cryptocurrency found support from its 21DMA.

Bulls hoping for a slightly deeper pullback to test support in the upper $1,200s, which would have offered a fresh opportunity to reload on longs, will be disappointed. With macro risk in focus, traders now wait to see if ETH can recover back to its recent highs in the mid-$1,600s. Many continue to think that a test of resistance at $1,700 is likely, all going well on the macro front.

ETH/USD
ETH/USD bulls keep their sights set on $1,700. Source: FX Empire

Capital Flows Return to Ethereum

A return of institutional inflows into Ethereum-linked investment products has been acting as a tailwind for the cryptocurrency as of late. According to CoinShare’s weekly Digital Asset Fund Flows report that was released on Monday, Ethereum investment products saw $8 million in inflows last week following $120 million in inflows the week before.

Ethereum has still experienced a net outflow of $315.8 million this year, but if the current rate of investment continues, that will quickly turn positive. Investors seem to have warmed to Ethereum in wake of the announcement of a date for its so-called “Merge” from the energy-intensive Proof-of-Work (PoW) consensus mechanism to the much more efficient Proof-of-Stake (PoS) mechanism, which is touted to go ahead in September.

11 August will be the next big date to watch for Ethereum. The last of Ethereum’s public testnets Goerli will run through the merge transition. Success will pave the way for the mainnet merge in September and could further boost ETH sentiment.

Supply Shocks Could Help Ethereum Outperform Bitcoin Once Again, Says Raoul Pal

Macro expert and Real Vision CEO Raoul Pal said in a new video this week that Ethereum is set for a number of supply shocks that could allow its price to significantly outperform Bitcoin. Once the transition to PoS has taken place, Ethereum users will take their coins of the market and stake them for yield, reducing selling pressure, Pal argued.

Meanwhile, Pal said that Ethereum will also benefit from the absence of PoW miners selling as they pay for operational costs, as happens in PoW blockchains (like Bitcoin). Pal added that he thinks the ETH/BTC chart is about the breakout of a multi-year descending channel.

Ethereum Classic (ETC) Eyes Break Above 200DMA, Rally Above $30

Ethereum Classic, the original, non-forked version of the Ethereum blockchain that has played second fiddle to the dominent forked version since the post-DAO hack split in 2016, has been surging in the last few days. ETC is up around 20% versus Tuesday’s lows in the $22s and is once again testing its 200DMA in the $27s.

A break above could open the door to a swift rally above $30. Some analysts think that Ethereum’s transition to PoS in September could boost the investment appeal of Ethereum Classic, which is sticking with PoW. Last week, Ethereum’s co-founder Vitalik Buterin called Ethereum Classic a “totally fine chain” and said that “if you like proof of work, you should use Ethereum Classic”.

ETC/USD
ETC/USD probing its 200DMA. Source: FX Empire

Cardano Price Prediction: ADA Bounces at Key $0.45 Technical Support With Macro Risk In Focus

Key Points

  • ADA bounced at a key area of technical resistance but attention is now on broader macro themes. 
  • The Fed’s upcoming policy decision could trigger volatility in cryptocurrency markets. 
  • Cardano remains the most developed blockchain, according to Santiment. 

Cardano (ADA) Bounces At Key Downtrend Resistance Ahead of Major Macro Risk

ADA, the native token to the Cardano blockchain, slipped as low as the $0.45 level on Tuesday but, as predicted in previous articles, found solid short-term support from a downtrend that had previously been capping the price action between mid-June and mid-July. ADA has since recovered to trade back close to its 21-Day Moving Average near the $0.47 level, with upside in global equity markets in wake of strong earnings from US mega-cap stocks like Microsoft and Alphabet, as well as European luxury giant LVMH, helping support crypto prices.

Cryptocurrency markets are focused on upcoming macro risk in the form of this evening’s US Federal Reserve policy announcement. Today’s 5 Things to Know in Crypto Today article contains a brief preview for those interested in how it might impact crypto. With ADA having responded well technically to support to the downside and, assuming all goes well on the macro front (a big assumption!), ADA has a shot at rallying back towards recent highs in the $0.55 area.

ADA/USD
ADA/USD bounces at technical support. Source: FX Empire

Cardano Still the Most Developed Blockchain, According to Santiment Analysis

Cardano remains the most developed asset in the crypto space, crypto analytics firm said in a tweet on Tuesday, referring to its “analysis of code pushes, issues interactions and more”, where “routine updates from teams are excluded to ensure only relevant development is included”.

Cardano “continues to see the most frequent notable GitHub activity”, Santiment said in a separate earlier tweet. The next most developed blockchains are Flow, Polkadot & its canary network Kusama and Ethereum.

Capital Flows Returns to Crypto, Including Cardano

According to CoinShare’s latest weekly digital asset fund flow report released on Monday, digital asset investment products saw an inflow of $27 million last week. The week prior, digital assets saw $343 million in inflows, the largest in any given week since November 2021, back when most major coins were at or close to record highs.

Cardano-focused investment products saw an inflow of $1.4 million last week, lifting year-to-date inflows to around $13.3 million. Year-to-date inflows into the entire digital asset space currently start at around $415 million, with the vast majority of this coming this month. Analysts said the recent acceleration of inflows into the digital asset space represents increased institutional demand. So long as the macro backdrop doesn’t worsen too substantially in the months ahead, this could be a big tailwind for crypto.

BNB Chain Whales Boost Cardano Holdings

A tokenized version of Cardano is now a top 10 holding amongst the 2,000 largest whales on the BNB Chain (formerly known as the Binance Smart Chain), whale tracking and blockchain analytics website WhaleStats said in a tweet on Monday. Holders of the tokenized version of Cardano essentially hold a token that guarantees they can redeem it for an actual ADA token on Cardano’s blockchain.

Analysts said that the increased allocation towards Cardano amongst BNB Chain whales reflects investors placing bullish bets on Cardano ahead of its Vasil hard fork upgrade that is scheduled to take place prior to the end of the month, or soon thereafter.

Input Output Global (formerly Input Output Hong Kong), Cardano’s creator, released a progress update on Monday. The long and short of it pretty much is that, after performing the Vasil hard fork on Cardano’s testnet at the start of July, developers in the node, ledger and consensus teams are still at work.

No date was given when the hard fork on Cardano’s mainnet will officially go ahead, but most still expect it to go ahead before the end of this month. One Cardano analyst and builder did, however, share his thoughts on why he expected another delay last week, as well as why he doesn’t think a delay really matters.

Recall that the Vasil hard fork was initially scheduled to go ahead in late-June, but was delayed, resulting in downside in ADA’s price at the time. Thus, if it does get announced this week that the upgrade is being delayed again, that could deliver some short-term pain to ADA.

Vasil Hard Fork to Boost ADA? CoinMarketCap Users Seem to Think so

A successful upgrade has been touted as a big potential bullish driver for ADA in the months ahead. And users of the popular cryptocurrency intel website CoinMarketCap seem bullish. According to the website’s “Price Estimate” feature that allows users to submit their views on where a cryptocurrency will be trading at some specified time in the future, Cardano is seen rallying between now and the end of August.

Out of 14,222 votes cast, the average forecast is for ADA to reach $0.73 per token, over 55% higher than current levels, by the end of August. The median forecast was for a rise to $0.6488, a near 38% gain from current levels. CoinMarketCap users then think Cardano will consolidate in September, with the average estimate for its price to fall back to $0.7070 and the median estimate for it to fall back to $0.6270.