On Sunday Bitcoin finally cleared the psychologically important $50K level and today has already jumped to as high as $51,900. Top crypto analysts had previously suggested that $51K was a key hurdle that needed to be overcome in order to climb back to $60K. Little resistance was felt at the $51K level, but as of this writing the price has pulled back to around $51,400. Holding this $51K level, and especially the $51,200 area which was the 0.618 Fib retracement resistance level will be crucial. Assuming it will hold, the next resistance level is found at $51,800. However, if the $51K level doesn’t hold, $46K could be the next stop. The breakout above $50K occurred with insignificant volume and September is historically a bad month for bitcoin as the chart below shows, so the price direction certainly has not been confirmed. Furthermore, last week’s CoinShares' digital asset fund flows for Bitcoin showed a negative flow for the eighth consecutive week with fourteen of the last sixteen weeks showing outflows. On the other hand, according to data from CryptoQuant, whales on the Bitfinex exchange are not opening a large number of short positions suggesting prices could move higher. Adding to the bullish argument, El Salvador will officially start using Bitcoin as a national currency along with the U.S. dollar starting tomorrow.
Source: Bybt
Last week, Ether briefly broke above the $4K mark only to lose steam and fall back to a $3K handle. Will this week be different? As of this writing, ETH is moving in a range from $3,800 to $3,950. The bullish narrative has definitely grown stronger as Ethereum recorded its first ever deflationary day on September 3rd meaning that more Ether was destroyed than created due to the London Hard Fork update that was implemented last month. To be exact, over 13,814 ETH was burnt with 12,932 ETH minted. Since August 5th, the daily net issuance of ETH has been on a deflationary trend. As transaction demand for Ether grows due to the booming DeFi and NFT spaces that are heavily concentrated on the Ethereum network, more ETH will be destroyed due to the new burning mechanism. In addition, according to Bybt, the aggregated open interest of Ethereum futures reached an all-time high today, signifying increasing trader activity.
This will be the final week before Cardano’s highly touted Alonzo Hard Fork goes into effect, finally enabling smart contract functionality. The upgrade is still slated for Sunday, September 12th. Cryptocurrency betting platform Polymarket is currently assigning odds of 88% that Cardano will support smart contracts by October 1st, an increase from last week’s 83% indicating increased confidence that the target will be met, but still reserving a healthy dose of skepticism due to past history. Last week, ADA hit an all time high of $3.10, but the price has since fallen back to just north of the $2.80 area. As anticipation builds, it’s very possible that the $3 level will be breached. Smart contract functionality on a proof-of-stake network is quite a major development.
Ripple’s XRP is one to watch, currently sitting around the $1.36 level, up 7% on the day. The increased investor sentiment is a result of optimism building around the SEC court case. It is believed by some that the SEC has been backed into a corner. Ripple has put forth the defense of fair notice which rests on whether they knew or should have known that xrp is or was a security. Court case aside, there has been a great deal of whale movement since the start of the month with whales moving tens of millions of XRP between unknown wallets, Bittrex, Binance, and even Ripple. The largest transfer was for around $280M equivalent of XRP.
Another notable crypto to keep an eye on is Filecoin (FIL). It’s up 53% over the past seven days and has moved into the top 20 cryptocurrencies by market capitalization, now sitting in the #18 spot at $11.3B. It’s ascent began last Tuesday when it was still in the $70s. Since then it has steadily risen and as of this writing is moving around the $110 area. The price hasn’t been this high since May. One possible catalyst for the bullish price action is that many NFT projects are starting to host their JPEGs on Filecoin. In May, Filecoin announced NFT.Storage, a free service enabling NFT creators to store their NFTs with them. This policy might be starting to bear major fruit.
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