- Pre-“Merge” FOMO has driven Ethereum towards $1,500, with bulls eyeing a retest of $1,700.
- Bulls continue to target $1.0 as Polygon’s post-Disney Accelerator Program selection melt-up continues.
- Avalanche broke above the key $22 support-turned-resistance level on Monday amid a more than 15% intra-day surge.
Though most major cryptocurrencies have pulled back from earlier session highs in the run-up to the open of US markets, most continue to trade with solid gains on the day/over the past 24 hours. Bitcoin was last trading around $22,100, a little below earlier highs in the $22,500 region, but still up over 6.0% on the day and more than 3.0% in the last 24 hours, according to CoinMarketCap.
The world’s largest cryptocurrency and broader crypto markets are being lifted in tandem with a rise in global stock prices as investors take a more positive view on recent global macro developments. Data released out of the US on Friday revealed a drop in Consumer Inflation expectations, easing fears about a 100 bps rate hike from the Fed later this month, with Fed policymakers having also pushed back against the idea of an even larger hike last week.
Meanwhile, data last Friday revealed that US Retail Sales are holding up better than expected, easing recession fears. In sum, markets have been lifted by the combination of reduced fears about an overly hawkish Fed and weakness in economic growth.
Ethereum is one of the best performing major cryptocurrencies on Monday and was last trading higher by nearly 10% over the last 24 hours according to CoinMarketCap. ETH/USD was last trading in the $1,470 area, having earlier probed the psychologically important $1,500 level.
The surge in Ethereum buying pressure has resulted in a spike in short-position liquidations in recent days, according to data on the crypto derivative analytics website CoinGlass. When ETH broke out to fresh multi-week highs and above the key $1,280 resistance level on Saturday, short-positions worth nearly $180 million were liquidated that day, the highest in more than three months.
Meanwhile, short-position liquidations have already reached nearly $130 million so far this Monday, with Ethereum up a further more than 10% on the day as it surges above its 50-Day Moving Average. ETH bulls continue to target a test of resistance at $1,550 (the late-March 2021 lows) and then the $1,700 level above that (mid-2021 and May 2022 lows).
Pre-“Merge” FOMO Driving ETH Upside
According to analysts, anticipation about the Ethereum blockchain’s so-called “Merge” to a Proof-of-Stake consensus mechanism in September has driven the latest upturn in sentiment towards ETH.
Some are pointing to a closing of the staked ETH token to the actual ETH token, which has narrowed to only about 2% from around 4% last Thursday, as further evidence that pre-Merge FOMO (Fear Of Missing Out) has arrived. The price of staked ETH, which is supposed to remain around 1:1 to actual ETH, rose to around 7% in May when the Terra ecosystem (LUNA classic and UST classic) collapsed.
“ETH has undergone a rapid change in narrative over the past week with speculators purely focused on the upcoming ‘merge’ as a catalyst for appreciation,” said COO and co-founder of Stack Funds Matthew Dibb, as quoted by CoinDesk. “Adding to this, we believe that there is a significant amount of sidelined capital that has been waiting on bullish momentum to establish new positions”.
Polygon is once again the stronger performer in the top 20 cryptocurrencies by market capitalization, with its native MATIC token last up about 20% on Monday alone. MATIC/USD was last trading around $0.91 but went as high as $0.93 earlier in the day. The popular Ethereum scaling solution has now surged around 75% since last Wednesday’s sub-$0.52 lows.
While a broad upturn in cryptocurrency market sentiment has helped drive the recent surge, news last week that Polygon had been selected by massive multinational media and entertainment conglomerate Disney for its Accelerator business development program has fuelled much of the rally. Technicals have also helped, with MATIC last week breaking to the north of a downtrend that had been capping the price action since mid-May.
MATIC/USD bulls continue to target a near-term test of the next area of significant resistance to the north of the $1.0 level.
The native token to the Avalanche blockchain AVAX surged above a key level of resistance on Monday amid a more than 15% on-the-day jump in its price to at one point higher than $24 from earlier session lows around $20.50. $22 had been a significant area of support turned resistance since mid-May.
Now that AVAX has broken to the north of this level, its near-term technical outlook has shifted significantly for the better. A test of the $28 area, another area of support turned resistance, is likely, implying the probability of a further 18% ish rally from current levels.
If AVAX can get above here, a test of $30 is on the cards. Beyond that, there aren’t any clear levels of resistance until the October 2021 lows around the $48 mark.