Kategorie: Crypto Analysis

Buy the rumour, sell the news. 

The Ethereum Merge was completed without a hitch, but prices in the immediate aftermath have disappointed investors. I dive in quickly here to take a temperature check on all things on-chain.

Funding rate turns positive 

In the run-up to the Merge, funding rates on Ethereum hit all-time lows. This caused headlines but was to be expected. With holders of Ethereum receiving an ETH PoW token, it meant investors moved to long spot ETH and short futures in order to receive the token while removing price exposure.

Given this was an apparent arbitrage opportunity, the laws of simple market dynamics dictate that the funding rate has to come down to reflect the outsized number of investors shorting ETH futures into the Merge in order to long spot and receive the ETH PoW token.

Post-Merge, the all-time low funding rates have now reverted to normal levels – and even turned slightly positive. So, nothing to see here and normal service resumed.

Why did Ethereum fall post-Merge?

As I ate my breakfast Wednesday morning (toast and a croissant with honey), Ethereum completed its Merge – at block 15,337,393, to be precise.

The price of ETH traded at around $1,598 and jumped slightly to $1,620, a rise of 1.4%. However, it then pulled back and as I write this over my breakfast on Friday morning (this time oats and blueberries) ETH is trading at $1,470, 8% below the level of the Merge.

 And so, the Merge turned out to be a classic sell-the-news event. Given Bitcoin is only trading 2% below the level it was at as the Merge completed, there does seem to be some underperformance from ETH.

Options also give a hint at the bearish sentiment. There was a volatility smile with a bearish divergence visible in the run-up to the ETH. This means that when the strike price was plotted against implied volatility, there was greater implied volatility (of over 100%) at lower strike prices – showing traders were betting on a sell-the-news scenario.

Looking at options open interest by strike price, there were also more puts than calls – meaning traders were betting on the price falling rather than rising.

Federal Reserve will ultimately dictate price

Of course, all this will be overshadowed by the key Federal Reserve meeting being held on September 20^th and 21^st, when the Fed is expected to announce another substantial rate hike following the disappointing inflation reading this week.

Nonetheless, it hammers home the point that simply because there is a large event in the pipeline does not mean the price will rise. It’s an absolutely classic example of a buy-the-rumour, sell-the-news event, one we see in the stock market all the time.

Having said that, in terms of Ethereum’s long-term future, the Merge is now in the past and it went by smoothly. It’s a huge achievement and very bullish for Ethereum overall. Jerome Powell and the economy just need to cooperate now!

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The post Why has Ethereum fallen post-Merge? ETH slides 8% appeared first on CoinJournal.

One of the most covered criticisms of Ethereum since its creation in 2015 has been its mammoth energy usage.

While not as heavy as Bitcoin, it nonetheless consumes 0.2% of the world’s electricity, and is responsible for between 20% and 39% of cryptocurrency’s electricity consumption as a whole (Bitcoin claims between 60% and 70%).

Now – and going forward – that energy consumption has fallen 99.95% following the successful completion of the Merge. It’s an incredible achievement.

What is the Ethereum PoW token?

Miners will thus have to find another coin to mine. However, some are clinging to hope that a fork of Ethereum will maintain the Proof-of-Work validation consensus which will allow them to continue to mine.  

The PoW token will be received via airdrop to holders of Ethereum, with its price varying over the last few days quite drastically. Peaking as high as $60, it currently trades at $18.

How does Ethereum mining work?

Ethereum miners have to date used powerful computers known as ASICs to validate transactions. With staking, this is no longer necessary, meaning their livelihoods are in question. Many have swapped to other cryptos in order to continue to mine, and the effect of this can be seen in the hash rate of these other cryptos.

Hash rate is a measure of the computing power on a network, and is a key security indicator – the higher the hash rate, the higher the security, as more miners have to verify transactions. For Bitcoin, the hash rate hit an all-time high last week. 

Let’s zoom in on this year, which may be more indicative.

This shows the hash rate opened the year at around 170 EH/s, yet is now north of 200 EH/s (and hit 280 EH/s earlier this week). This is despite the price of Bitcoin plummeting from the mid $40K’s to below $20,000.

Ethereum Classic

More interestingly, however, is the uptick in hash rate seen on Ethereum Classic. This has been drastic, rising from around 50 TH/s last week to over 300 TH/s. This points towards Ethereum miners flipping over to the Classic variant with their equipment – a much easier shift than would be required to move to Bitcoin.

Indeed, other coins have seen upticks in hash rate as well – Monero, Ravencoin, Ergo, to name a few.

For the miners that have not flipped to alternatives, they will hold out hope that the Ethereum PoW alternative takes hold. Otherwise, they’ll be left with expensive ASICs and no real use case, now that Ethereum is Proof-of-Stake and no longer generating miner revenue.

The post Ethereum miners flock to Ethereum Classic and elsewhere, in wake of Merge appeared first on CoinJournal.

Firo price rose to the highest level since July 16 of this year as demand for the coin rose. It jumped by more than 28%, bringing its total market cap to over $43 million and its diluted cap to more than $80 million. Other privacy-focused coins also did well.

What is Firo and why did it rise?

Cryptocurrencies like BTC and LTC were created to facilitate transactions in an anonymous way. However, since Bitcoin works on a public ledger, its role as a privacy coin has been diminished since authorities can easily track transactions.

Firo is one of the few privacy tokens in existence today. Others are Monero, Dash, and Decred. These coins work by ensuring that no one can track transactions. They achieve that by automatically changing a user’s address as the transaction is being implemented. 

Investors have been focused on the privacy sector in the past few months as authorities got more concerned about the industry. Their most recent action was to sanction Tornado Cash, a cryptocurrency mixer that promoted privacy when using popular coins like ETH and BTC.

Firo is a privacy cryptocurrency that works using the proprietary technology known as Lelantum. This technology allows users to burn coins or destroy them so that they stop existing. After doing that, users can then redeem them at a later date for coins that do not have a previous history. 

Redeeming involves giving them zero-knowledge proof that you previously burned coins without showing those that you burnt.

Firo price has risen in the past few days even after a major development in the privacy token industry. Last week, Huobi, one of the biggest companies in the industry, said that it would delist the coin together with other privacy tokens. The company said that this delisting was done in order to comply with regulations. 

It is also rising as demand for proof-of-work cryptocurrencies following the success of Ethereum merge. Indeed, its hash rat has risen to the highest level in a few days.

Firo price prediction

The daily chart shows that Firo price has been in a strong bullish trend in the past few days. It has managed to move from the year-to-date low of $1.1715 to about $4. Along the way, the coin jumped above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved close to the overbought level. It also crossed the important resistance point at $3.42.

Therefore, Firo seems to have momentum, meaning that the coin will likely continue rising as buyers target the next key resistance level at $5.

Where to buy Firo now 

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The post Is it safe to buy Firo after crossing an important resistance level? appeared first on CoinJournal.

The Ethereum Merge is now completed, with the Ethereum network finally migrating to a proof of stake mechanism.

ETH, the native token of the Ethereum blockchain, has been underperforming over the last 24 hours. The poor performance coincides with that of the broader cryptocurrency market.

The crypto market has lost less than 1% of its value in the last 24 hours, with the total market cap still below the $1 trillion mark. Bitcoin is down by more than 1% so far today and risks dropping below the $20k threshold if the bearish momentum continues.

However, ETH should be rallying, considering the Ethereum Merge was successfully completed a few hours ago. The event was successfully completed a few hours ago after the network reached “terminal total difficulty” earlier on Thursday.

And we finalized!

Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.

— vitalik.eth (@VitalikButerin) September 15, 2022

The Merge has now changed how ETH tokens are created and how transactions on the Ethereum blockchain are validated.

In the past, Ether tokens were generated via mining, which is an energy-consuming process where miners direct huge amounts of computational power to solve difficult puzzles. 

With the proof of stake mechanism, new ETH would be generated by individuals or entities dedicating large amounts of pre-existing ETH tokens.

Key levels to watch

The ETH/USD 4-hour chart is bearish as Ether has been underperforming over the past 24 hours. The technical indicators are bearish despite the execution of the Merge a few hours ago.

ETHUSD Chart By TradingView

The MACD line is within the negative zone, indicating that the ETH market is bearish at the moment. 

The 14-day relative strength index of 36 shows that ETH could enter the oversold region if the momentum is maintained.

At press time, ETH is trading at $1,584 per coin. If the bearish trend continues, ETH could slip below the $1,513 support level before the end of the day.

However, with the Merge taking centre stage in the crypto space, ETH could bounce back and rally higher later. If that happens, ETH could surpass the $1,743 resistance level over the next few hours. 

Where to buy now

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The post Ethereum successfully completes the Merge: ETH price analysis appeared first on CoinJournal.

• Polygon has been witnessing strong fundamentals that boosted the native token

• Polygon’s MATIC retraced sharply on Tuesday 

• MATIC faces some more pressure as the price moves below moving averages.

Polygon’s MATIC/USD will rarely miss out on the basket of the go-to cryptocurrencies. It is one of the cryptocurrencies that has been making good headlines. The price has also been reacting well to the strong fundamentals.

The most recent fundamentals of Polygon are a partnership with Starbucks. The coffee chain giant said it would use Polygon for its collectible digital stamps. The move is part of the company’s entry into Web3 with the Starbucks Odyssey program.

On August 31, Robinhood said it would let users send and receive MATIC on the polygon network. That expands MATIC’s utility beyond the Ethereum network. The move was inspired by the need to cut the huge costs on the Ethereum network.

MATIC slides below the moving average adding bearish pressure

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Source – TradingView

From the technical outlook, MATIC is not yet in a buy zone. At the current trading of $0.85, the price could slide further to minor support at $0.76.

Another bear indicator is the moving average. MATIC is trading below the 20-day and 50-day moving averages. Similarly, an RSI reading of 48 suggests that MATIC is not yet oversold. With the growing bear sentiment after the inflation data, a more likely direction is to the downside. 

On the flip side, MATIC has maintained an ascending trendline. If the price keeps the trendline, MATIC could turn bullish. Investors should consider buying on price action signals or if the token recovers above the moving average (s).

Summary

While MATIC remains vulnerable, the ascending trendline could ignite a bullish move. Investors should watch for bullish signals. A break below the trendline will see the token slide to minor support at $0.76.

The post Is MATIC retracement an opportunity to buy the token? appeared first on CoinJournal.