Bitcoin Trails Ethereum In Gains: 'Insane' Relief Rally Or 'Massive Fakeout', What's Next?

Benzinga

Published Aug 09, 2022 02:35

Updated Aug 09, 2022 03:10

Bitcoin Trails Ethereum In Gains: 'Insane' Relief Rally Or 'Massive Fakeout', What's Next?

Ethereum dominated among major coins Monday evening as the global cryptocurrency market cap rose 2.5% to $1.1 trillion at press time.

Price Performance Of Major Coins Coin 24-hour 7-day Price
Bitcoin (CRYPTO: BTC) 2.5% 2.1% $23,792.67
Ethereum (CRYPTO: ETH) 4.6% 8.8% $1,777.91
Dogecoin (CRYPTO: DOGE) 1.7% 2.15% $0.07
Top 24-Hour Gainers (Data via CoinMarketCap) Cryptocurrency 24-Hour % Change (+/-) Price
Celsius (CEL) +25.6% $1.82
The Graph (GRT) +16% $0.15
Flow (FLOW) +15.4% ​​$3.04
See Also: Best USDC Interest Rates

Why It Matters: The second-largest cryptocurrency by market cap crossed the $1,800 level for the first time in two months on Monday. On an intraday basis, Ethereum was up 4.6%, while Bitcoin rose 2.45%.

Traders appear to be betting big with call options on Ethereum’s move to a proof-of-stake model, said on-chain analytics firm Glassnode on Twitter (NYSE:TWTR).

Glassnode noted that for the first time in history, Ethereum options open interest at $6.6 billion has surpassed that of Bitcoin open interest at $4.8 billion.

Ethereum is powered by a “steadily rising rate of unique addresses interacting” on its network, according to Santiment.

The market intelligence platform tweeted that ETH’s continued recovery will depend on Bitcoin staying relatively stable and mitigated trader FOMO.

Cryptocurrencies and stocks were aligned upwards at press time as investors await U.S. consumer price index data, set to be released on Wednesday.

“This week is all about inflation and many traders are expecting to see the inflation decelerate. Headline inflation is widely expected to decrease on a month-over-month basis. The focus will probably fall on core and those prices will remain elevated,” said Edward Moya, a senior market analyst at OANDA, in a note seen by Benzinga.

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Bitcoin traders are on the lookout to see if the crypto winter has ended. Moya said, “The return of some meme stock mania is taking away some attention from cryptos, but that might not matter. The selling pressure has significantly eased and momentum traders could pounce on the break of the $25,000 level.”

Global liquidity growth is currently on the downtrend of the cycle, said Delphi Digital in a note. This is leading to less exuberant institutional investors in the cryptocurrency segment.

BTCUSD YoY% Vs Global M2 YoY% As On Aug. 2 — Source Bloomberg Via Delphi Digital

“The explosion in liquidity in the aftermath of COVID also led to a sharp rise in institutional inflows. Given today’s challenging macro backdrop, and the subsequent contraction in global liquidity, it’s no surprise institutional interest is a lot quieter now than it was 12 months prior,” said the independent research boutique.

Even so, cryptocurrencies are slowly beginning to see pockets of upwards movement. Michaël van de Poppe noted that while the apex coin faces resistance at the $24,300 mark, it could be headed to the $28,000 level if it clears it.

Avalanche (AVX) is accelerating and already nearing $30, according to the cryptocurrency trader.

Justin Bennett said on Twitter that it was strange that Bitcoin cleared the $23,810 level on Aug.6, 2021, and it was about to do it again on Monday.

“This will either start an insane relief rally or a massive fakeout. This week's inflation data will have something to say about it,” said the trader.

Read Next: Bitcoin Breaks Bullishly From This Pattern: Here's What To Watch Next For The Crypto

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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