Crypto Weekly Roundup: ETH is on a Mega Run Amid the London Hard Fork While Bitcoin Had a Massive Short Squeeze

2021/08/09 07:14:59

As part of our crypto weekly roundup series, we will discuss the market driving factors, trends, and main events that happened in the crypto sector throughout the week.

The bulls are back in control, as we saw a huge pump in BTC and ETH last week with an altcoin rally. ETH was the biggest gainer this week due to the London Hard Fork (EIP-1559) upgrade, and the upward price rally increased the overall ETH domination by 4%. Bitcoin is catching up, and is currently fighting against the 200-day moving average as resistance after a short squeeze.

Let's discuss some of the key events that happened last week in the crypto space.

Bitcoin

  • According to Glassnode on-chain analysis data, more than 70,З28 BTC exchange outflow was recorded on 28th July 2021, which is the highest since 2016. As more Bitcoins are depleted from the exchange reserves, it puts an upward pressure on the price action due to a decreased supply.
  • The total exchange outflow in the month of July stood at 100,000 BTC, and only 13.2% of the Bitcoins in circulation are held by centralized exchanges (lowest since January 2021).
  • Square, a payments company owned by Twitter co-founder Jack Dorsey, made $55 million gross profit from selling BTCs in the second quarter of 2021.
  • According to an analysis by Santiment, Bitcoin whales now own half of all the Bitcoins mined to date. Bitcoin supply held by those addresses that contain 100 - 10,000 BTC has now peaked at 9.23 million BTC (~$364 billion at the time of writing).
  • According to the data shared by CoinShares, Bitcoin investment products saw a total outflow of $67.8 million in July, whereas $19.7 million outflow was recorded in the last week alone.
  • Saudi Aramco, one of the largest oil companies, has denied the rumors that the company is getting into Bitcoin mining after an outrage from Aramco investors and shareholders . This news was spread by many reputed publications that Aramco plans to mine Bitcoin.
  • Over the last week, the Bitcoin active addresses jumped from 250k to 325k, a straight 30% increase in just one week, according to on-chain analysis data by Glassnode. This increase in Bitcoin active addresses indicates a strong accumulation trend as more people are joining the network.
  • As of today, Bitcoin is currently fighting against the 200-day moving average as resistance at ~45K after a short squeeze. This 200d MA is hard to break, but if we can get enough volume, there can be a sweep upward trend after breaking the resistance.

The Takeaway

Bitcoin has seen a massive exchange outflow, and centralized exchanges only hold 13.2% of the Bitcoins in circulation. On the other hand, there has been an increase on the demand side as 30% more addresses were created in just one week. This decrease in supply on exchanges and increase in demand from the institutions and retail is a bullish indicator, and it will reflect soon in the price action.

Ethereum

  • The London Hard Fork (EIP-1559) is officially live on the Ethereum mainnet. Since the first EIP-1559 block, 13008.3 ETH have been burnt so far with a burn rate of 2.95 ETH/min (24h). The burn rate is directly correlated with network utilization. More activity on the network means more ETH will be burned. You can track the live burn rate of Ethereum on this Ether Chain dashboard.
  • According to an analysis by Santiment, the Ethereum whales have increased their holdings by 7.3 million ETH. 39% of the total ETH supply is now held by whale entities.
  • Ethereum had a massive squeeze as it crossed the $3,000 price mark this week. The price drop was expected by the community after the EIP-1559 upgrade in the hope of ‘sell the news’ but a sell-off didn’t happen and we saw an upward trend in the price action.
  • The NFT craze is back on Ethereum as people are shilling some ETH on Crypto Punks. The average price of a Crypto Punk went from ~$8K in January 2021 to $147.26K in August 2021, a straight 1,740% increase in value over just a couple of months.
  • OpenSea, one of the largest NFT marketplaces, went from $4.5 million transaction volume in January 2021 to over $56 million in August 2021 as the NFT craze has been ignited once again.
  • Ethereum miners’ revenue has been down by 2% to $1.08 billion after the EIP-1559 upgrade. However, the revenue is expected to go down further once all the wallets and nodes are following the EIP-1559 standard for fees burning. As of writing, only 5% of the wallets are using the new standard and haven’t been upgraded.
  • After the price rally, Ethereum domination has increased by 4% and is challenging Bitcoin which still holds the largest share of the market. The flippening won’t be happening anytime soon as Bitcoin bulls are back fighting key resistance levels.

The Takeaway

So two big things for Ethereum; London Hard Fork (EIP-1559) upgrade and a sudden uprise in the NFT craze. London Hard Fork is a key upgrade that brings a lot of changes in Ethereum's monetary policy by introducing a deflationary characteristic through burning the base fees.

The NFT craze has started yet again. Opensea, the largest NFT marketplace went from $4.5 million transaction volume in January 2021 to over $56 million in August 2021. The average price of a Crypto Punk increased by 1,740% in value, from ~$8K in January 2021 to $147.26K in August 2021. This shows a rising demand of the NFTs from the community, and the creators are jumping in to ride the wave.

Altcoins

  • Ripple is launching an on-demand liquidity service between Japan and the Philippines through a partnership with SBI Remit.
  • Morning has predicted that Cardano is getting traction, and with it’s upcoming updates, it might join the list of top 3 (Bitcoin and Ethereum).
  • The Bitcoin Cash team has launched a SmartBCH sidechain to enhance scalability of the main Bitcoin Cash chain.
  • Emeris, a cross-chain portal for decentralized applications is planned to launch on the Cosmons network in mid August.
  • ZEC might shift to Proof of Stake soon, according to Zcash creator, Zooko Wilcox.
  • Chainlink successfully conducted the SmartCon summit on August 5-7, 2021 where they announced new partnerships with Google Cloud and others.

The Takeaway

Chainlink’s SmartCon summit went really well and they announced a lot of new products, partnerships, and initiatives. Two main highlights of the event are: the launch of CCIP (Cross-Chain Interoperability Protocol) and partnerships with Google Cloud and other companies for data gathering.

Closing Thoughts

This week has been a week of ‘gains’, with many upswings and downswings. It seems like the bulls are back in control, but we need more volumes to break the upcoming levels of resistance. The Ethereum miners are expected to lose a big chunk of their revenue in the coming weeks as more transactions on the network follow the EIP-1559 standard.

Do you think the current market structure indicates another bull run?


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