Daily Flash | Optimism TVL Surged 300% Ahead of Ethereum Merge, Crypto Market Surges In Correlation To US Equity Market As July CPI Data Indicates Inflation Slowdown

Today's Headline - Optimism TVL surges nearly 300% MOM ahead of The Merge upgrade: Cointelegraph report

According to data from DefiLlama, total value locked (TVL) on Optimism, a layer-2 scaling solution for the Ethereum blockchain, has surged 284% in the past month. The vast majority of TVL consists of users lending and borrowing assets on Aave through Optimism's layer-2 chain.

According to a recent Ethereum developer call, the tentative date for The Merge coming online has been scheduled for Sept. 19. As a layer-2 Ethereum blockchain, Optimism seeks to scale the ecosystem via Rollups, or off-chain computations, to speed up transactions. Transactions are recorded on Optimism and finalized on Ethereum.

The project is home to 35 protocols, including derivatives exchange Synthetix, decentralized exchange Uniswap, and automated market maker Velodrome.

Due to the high volume of user trade orders on exchanges (including cancellations), the Ethereum blockchain's current capacity of 30 transactions per second is ill-equipped to handle such demand.

However, some experts predict that the network could potentially scale to 100,000 transactions per second after The Merge upgrade, with layer-2 solutions further enhancing such capacity.

Correspondingly to the TVL development, the project's namesake tokens (OP) have also rallied by 300% during the same period.

Chart of the Day - Highest Staking Yields On Native Coins

As of this writing,
Bitcoin (BTC) is changing hands at around $24,300, up 6.18% in the past 24 hours,
while Ether (ETH) is trading at $1,884, or up 12% during the same period.
Major altcoins are also surging in similar patterns, with Cardano (ADA) is up by 6.37%, Solana (SOL) +8.18%, Polkadot (DOT) +10.54%, Avalanche (AVAX) +7.21%, and Cosmos (ATOM) +10.64%.

Notable gainers include:
Mainframe (MFT) at $0.00681 (+45.68%),
iExec RLC (RLC) at $1.45 (+40.60%),
Celsius Network (CEL) at $2.41 (+33.17%).

Notable losers include:
Unus Sed Leo (LEO) at $4.81 (-3.91%),
Optimism (OP) at $1.66 (-2.26%),
Tellor (TRB) at $38.14 (-0.18%).

Wednesday’s Consumer Price Inflation (CPI) figures show inflation remained unchanged at 0.0% since June, however, it has increased 8.5% year-on-year, while this figure is below economists’ expectations of 8.7%, it is still high. This figures represent the first drop since April, which may well support the "peak inflation" narrative.

The Federal Reserve will likely continue to raise interest rates aggressively, even though Wednesday’s inflation data was a positive step, said Chicago Fed President Charles Evans.

Traders now see a 65% chance of a 50-basis-point rate hike in September, according to the CME FedWatch Tool, rather than another 75-basis-point increase, which was the likelier scenario just a day ago.

The Dow Jones rose 1.6%. The S&P 500 added 2.1% and the Nasdaq composite 2.9%.

As of this writing, Bitcoin (BTC) was recently trading just at roughly $24,085, up nearly 5% over the past 24 hours. Bitcoin dropped to the 20-day exponential moving average (EMA) ($22,978) on Aug. 9. The bulls aggressively purchased the dip on Aug. 10 and are attempting to push the price above the overhead resistance at $24,298.

A break above this level may bring BTC to 100-day EMA which coincides with 38.2% Fibonacci level measured from Mar. 28 - Jun. 18, which is between $25,844 - $26,096, or about 7.5% from its current price. The next resistance above this level will be the monthly resistance zone that stands at $29,300 which coincides with 50% Fibonacci level.

Conversely, if the price turns down from $24,298, the bears will again attempt to sink the pair below the 20-day EMA. If they manage to do that, BTC could decline to the 50-day SMA ($21,708), which coincides with the daily support level at $21,910. A break below this level could tilt the advantage in favor of the bears.

Ether cracked the $1,800 mark for the second time in three days, increasing more than 8% over the previous day. At the time of writing, ether was trading at $1,872, up 10.9% over the past 24 hours. The surge has broken through the weekly resistance level at $1,800, and if buyers sustain the price above this level, ETH could rally to the monthly resistance zone at $1,947.

A break above this level could bring ETH to the psychological level of $2,000 and then to $2,200. The rising moving averages and the RSI in the positive territory indicate that bulls have the upper hand.

This bullish view will be invalidated if the price turns down and plummets below the 20-day EMA ($1,661), which is close to the weekly support zone at $1,611. If that happens, ETH may drop toward the monthly support zone at $1,440. That could delay the start of the next leg of the up-move.

As all eyes are now on the September merge, in the case of unexpected but entirely plausible bearish market movements, the likelihood of Ether breaking correlation with Bitcoin is very likely, or as Glassnode put it, traders may continue to “buy on rumor and sell on news.”

Influencer of the Day - Mark Cuban says buying virtual real estate is 'the dumbest shit ever': Business Insider report

Shark Tank star and billionaire Mark Cuban spoke to the crypto YouTube channel Altcoin Daily

on Sunday about a range of topics, including the feasibility — or lack thereof — of buying virtual property in the metaverse.

Companies like Sandbox — where rapper Snoop Dogg's own metaverse lives — and Decentraland sell digital plots of land to users who can then buy, sell, or lease the space, or use it to build virtual structures.

In Cuban’s mind, what gives metaverse land value, in theory, is the same two principles of physical real estate: scarcity and location. This does not apply to the metaverse as there are some who argue it isn’t possible to artificially introduce scarcity.

In theory, the metaverse will be a sweeping digital world where people can interact via digital avatars, while tethered to the real world with AR glasses and VR headsets. But despite the year long hype, it's nowhere close to materializing, and it's seen a dip in interest and sales since November 2021 along with the rest of the crypto world.
In his own words,

"The worst part is that people are buying real estate in these places. That's just the dumbest shit ever. It's not even as good as a URL or an ENS, because there's unlimited volumes that you can create. Right now it's more talk than anything.”

Buzzes of Yesterday - #Ripple is considering to acquire Celsius, #Meta raises $10 billion in bond offering

Aave Companies requests $16.6 million compensation for work on Aave v3

Solana wallet provider Phantom says its systems were uncompromised in $4 million hack

Ripple Is Considering Buying Bankrupt Crypto Lender Celsius’ Assets

Alchemy and Infura Block Access to Tornado Cash

SoFi Launches Web 3 ETF Focused on NFTs, Metaverse, Blockchain

JPMorgan claims crypto market has ‘found a floor’

Meta raises $10 billion in first-ever bond offering

Nvidia ups its omniverse bet with new developer tools

CFTC and SEC propose amending reporting rules for large hedge funds on crypto exposure tools

NFT Collections Will Be Regulated Like Cryptocurrencies Under EU’s MiCA Law, Official Says

Paxos revealed as PicPay's crypto partner in Brazil

BitDAO to fund AfricaDAO with $20 million for web3 adoption in Africa

Author: Gate.io Researcher Peter L.
This article represents only the researcher's views and does not constitute any investment advice. Gate.io reserves all rights to this article.
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