Daily News | BTC Stalls as DOGE Soars Amidst Equity Outflow, Ether Hits 7-Month Despite Concerns Over Rally's Sustainability and Overvaluation
Crypto Daily Digest: Ether Hits Highest Price Since August While BTC Stalls and DOGE Surges 20% as Investors Turn to Bonds Amid Recession Fears and Anticipated Asian Equity Decline
Good morning, traders!
Let’s seize this Thursday relentlessly and make the most of it! 🧠
Crypto: BTC stalls, DOGE surges 20%, Ether reaches highest price since Aug.
“Bitcoin‘s advance has stalled near $28k, while Dogecoin advanced 20% this week. Additionally, Ether’s price has reached its highest level since last August. Bitcoin and Ether’s momentum appears to be moving in opposite directions, with Bitcoin‘s price halting while Ether’s indicates a potential push higher.”
Bitcoin has been range-bound around the $28,000 level for the past three weeks, following its surge from $20,000 in the wake of a handful of US lenders last month. The cryptocurrency’s advance has stalled, with little changing in the world of digital assets. However, other tokens, such as Dogecoin, have captured speculators’ attention and surged as much as 30% this week. Cryptocurrency market liquidity and trading volumes have also dried up as investors who had waded in during the pandemic stay on the sidelines.
In contrast, the price of Ether has reached $1,941, its highest level since last August, and is currently trading at $1,913, up 2.2%. The Shanghai hard fork upgrade, marking the completion of Ethereum‘s full transition to a proof-of-stake network, is set to go live on April 12, which has contributed to the increase in value. The deflationary trend of ETH continued, with the annualized inflation rate at -0.32%, and the amount of ETH being burned greater than what is being minted. Other altcoins, such as Stargate Finance’s STG token, have also seen gains, rising more than 14% on Wednesday.
Overall, Bitcoin and Ether’s momentum appears to be moving in opposite directions, with Bitcoin‘s Relative Strength Index (RSI) suggesting that its price may have temporarily halted, while Ether’s RSI indicates a potential push higher in the near future. ETH.D (Ether dominance %) is currently at 19.8%, approaching its March 12 high of 20% and January 20 high of 20.5%, while BTC.D (Bitcoin dominance %) is at 46.95%, losing momentum as it approached its June 20 high of 48%.
Macro: Investors shift from stocks to bonds amidst recession fears, anticipating Asian equity decline.
“Weak economic data has led to a flight to safety on Wall Street, with investors moving towards bonds and away from equities, indicating a lack of confidence in the stock market and the broader economy. Asian stocks are expected to decline due to weaker-than-expected economic data in the US, fueling forecasts for an impending recession. Government bonds have rallied, while private payroll data from ADP suggests deteriorating labor-market growth.”
The recent weak economic data has caused a renewed flight to safety on Wall Street, with investors moving towards bonds and away from equities as they fear a potential recession on the horizon. As a result, Treasury 10-year yields have fallen to their lowest levels since September, indicating that the economy may be headed for a slowdown. This flight to safety has also led to a rise in the value of the dollar, as well as the Japanese yen, while gold prices have reached a 13-month high. The trend reflects concerns among investors that a strong economy is necessary to keep stocks performing well, leading many to consider opportunities in bonds.
In addition, there has been a wave of cash flowing into the safest of money-market mutual funds, with Barclays Plc predicting that as much as another $1.5tn could enter over the next year. These investments in bonds and money-market mutual funds are a clear indication of the lack of confidence investors currently have in the stock market and the broader economy.
Meanwhile, Asian stocks are also expected to decline due to weaker-than-expected economic data in the US, which has fueled forecasts for an impending recession. This has caused share benchmarks in Japan and Australia to fall, while government bonds have rallied. The Nasdaq 100, which performed strongly in the first quarter of 2023, has also dropped by 1%, underperforming major benchmarks in a rotation away from growth shares. Private payrolls data from ADP has also underwhelmed relative to expectations, suggesting deteriorating labor-market growth.
Topic of the Day: ETH Rally Sparks Doubts
Ethereum (ETH) has reached a seven-month high in anticipation of upcoming network upgrades, including the Shanghai and Capella releases. The Shanghai upgrade, which is expected to occur in July, will bring about changes to the Ethereum Virtual Machine (EVM) to improve network efficiency and reduce gas costs. The Capella upgrade, on the other hand, will introduce significant changes to Ethereum‘s fee structure, making it more predictable and user-friendly. These developments have generated Optimism among Ethereum investors and users, leading to a recent rally in ETH’s price.
However, some analysts are questioning the sustainability of this rally, citing several key metrics that suggest ETH may be overvalued. For instance, the Ethereum network’s daily transaction count has fallen in recent months, suggesting a decline in network usage. Additionally, the amount of ETH held on centralized exchanges has increased, indicating a lack of confidence in the token’s long-term value.
Despite these concerns, many investors remain bullish on ETH, citing the network’s strong fundamentals and the potential for continued growth in the decentralized finance (DeFi) sector. As Ethereum continues to evolve, it will be interesting to see how these competing factors shape the token’s long-term trajectory.
Ether (ETH) $1899.48 (-0.5%) - Neutral Outlook
Based on the analysis of the daily timeframe, it appears that ETH is still experiencing a bullish trend, with a predicted resistance level of approximately $1945, as well as an expected retracement above $1800 and a retarget of $2075. However, if the price of ETH falls below $1720, this would disprove the bullish scenario and necessitate a retracement above $1800.
Meanwhile, analysis of the 1H timeframe suggests that if ETH fails to retest and close above the resistance channel, then the bears may aim to push the price down to $1860. Conversely, the bulls may seek to retest the previous supply zone between $1920 - $1940.
Overview:
- Closest daily support zone: 1899 - 1873
- Closest daily resistance zone: 1940 - 1945
- Key Level: 1945.91 (Monthly High of Mar. 2021)
Daily Resistance zones
- 1940 - 1945
- 2030 - 2075
- 2150 - 2320
Daily Support zones
- 1899 - 1873
- 1831 - 1800
- 1720 - 1687
