Cointree Crypto Market Update - July 7th 2021

Market report for traders

Jump to the Technician's Take

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Market Recap

Is Ethereum outperforming bitcoin?

While bitcoin has continued to consolidate in a tight range between AU$44.5K and AU$48K over the past week, Ethereum rose 10% — giving it an increase of 20% over the past two weeks.

In a bullish signal for both coins, the amount of bitcoin and Ethereum moved into cold storage has increased, lowering the risk of major sell-offs. In fact, the amount of Ethereum held on exchanges is the lowest it has been in two-and-a-half years. This bullish Ethereum sentiment comes as the network moves another step closer to Ethereum 2.0.

As part of the roadmap leading to Ethereum 2.0, which replaces their proof-of-work protocol with a more energy-efficient proof-of-stake network, Ethereum’s London Hard Fork has been planned to launch on the 4th of August. Many Ethereum investors are excited as the updates will make ETH less inflationary.

In anticipation of the update, the growth of the Ethereum network has exploded. For the first time ever, the number of daily active Ethereum addresses has overtaken the active number of bitcoin addresses. Ethereum now has slightly over 750,000 addresses — 50,000 more than bitcoin.

Validating the Ethereum community's expectations, JPMorgan has released a report that Ethereum 2.0 will generate a lucrative staking industry. While the Ethereum network already generated estimated staking revenues of AU$12 billion, the JPMorgan analysts predict revenues will surge to AU$27 billion in the quarters following the launch of Ethereum 2.0. By 2025, it could reach AU$53 billion.

While bitcoin currently remains the premier store-of-value, the DeFi ecosystem built on Ethereum has seen ETH outperform bitcoin by a factor of three over the past year, increasing over 900%.

Technician's Take

Low volume sees lacklustre action, but steady accumulation.

While still firmly trading in the AU$43k and AU$51k range bitcoin (BTC) has moved into a slightly tighter range of AU$44.5K and AU$48k which is a good indication that buyers are accumulating and no one is really panic selling anymore. This means we might be moving into a bit of a squeeze here which could see a nice positive move.

Confirming what the chart is telling us is the news that bitcoin whales have accumulated 60,000 BTC in a single day! To illustrate the positive indication of this, large holders have increased their BTC positions by a cumulative $2.88 billion, yes that’s AU$2,880,000,000 in a single day at a price of AU$48k.

Technical indicators illustrate that we’re in a rather flat trading range, however if we bring in the Accumulation / Distribution to the chart it paints a clearer picture of how we’re in an accumulation phase. Is this all building for another bull run? That is truly the million (or should I say billion?) dollar question. While there could be multiple reasons for the accumulation, it definitely confirms that people are still quite bullish on BTC and see this as a good level to buy in at.

Beginner's Recap

• Bitcoin (BTC) moving into a tighter trading range
• Firmly in accumulation territory, meaning people are soaking up BTC at these prices, showing that the market feels there is value to be had here
• BTC whales accumulated a massive AUD $2.88 billion in a single day

Disclaimer: Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.