Analysts debate whether Ethereum’s London hardfork is a “sell the news” event

Analysts caution against a potential “buy the rumor, sell the news” pullback for ETH while historical data shows that the price tends to rise following major network upgrades.

Ethereum advocates are bubbling with anticipation over the upcoming London hardfork which is scheduled to take place at block height 12,965,000 on Aug. 5.

Data from Cointelegraph Markets Pro and TradingView shows that the price of Ether rallied from a low at $2,450 in the early hours on August 4 to an intraday high at $2,772 for an 8.2% gain on the day.

ETH/USDT 4-hour chart. Source: TradingView

One of the most common occurrences in the crypto market is a large price run-up ahead of a major news announcement or protocol upgrade which is subsequently followed by a price dump as those who got in early cash-out to lock in gains and those who were late to the party become bag holders.

Ethereum’s London hard fork has been one of the most talked-about events of 2021 so it would be short-sighted to assume that the price is only going to go up, a point highlighted in the following tweet from Murfski, a pseudonymous analyst on crypto Twitter.

As shown in the chart provided, the analyst cautioned against assuming Ether price would pump above $3,000. According to Murski, if the price managed to hit $3,000, it could quickly be followed by a pullback to as low as $2,000 if the token sells off following the upgrade.

While nothing is certain, the historical trend of price dumps following major developments should not be dismissed despite the bullish price-performance seen from Ether.

Murfski said:

“In my defense, I was bullish at the bottom. As we approach the range highs you better be cautious. Good luck.”

Hard forks have historically been bullish for Ether price

Insight into what to expect from Ether price following the London hard fork can be gleaned from looking at how past upgrades affected the price. According to cryptocurrency analyst Josh Olszewicz, local highs in Eth come an average of 80 days following major upgrades.

These observations by Olszewicz were further confirmed by crypto economist Ben Lilly, whose detailed breakdown shows that the average returns after upgrades were “5.1% in the following 30 days, 28.8% after 60 days and 64.4% after 90 days.”

Due to this historical performance, Lilly is cautiously optimistic that there are still gains to be had in the future for Ether following the London upgrade.

Lilly said:

“While at first glance a lot of the gains we typically see with Ethereum upgrades might have already played out, I suspect there is still room. This is especially true when we lean on our internal signals, which are hinting at bullishness for ETH. London is definitely a great catalyst event to watch unfold in the coming days to weeks.”

Related: DeFi attracts 2.91M Ethereum addresses, according to ConsenSys

A short-term correction could occur in the short term

According to Cointelegraph contributor Michaël van de Poppe, there is a possibility of a pullback once the hard fork is implemented. 

While van de Poppe expects a short-term correction in Ether price, his long-term perspective for the altcoin is bullish and he predicts that “the heaviest bull run of them all” will come after the pullback.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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This key Bitcoin price indicator shows pro traders buying each dip

Derivatives data shows Bitcoin whales added to their leveraged positions after BTC price topped out at $42,600.

Bitcoin (BTC) might have failed to sustain the $42,000 support, and for many, this is a slightly bearish sign. Interestingly, the downward move occurred shortly after Saudi Aramco, KSA’s largest oil exporter, denied claiming to start mining Bitcoin.

Top traders at exchanges seized the opportunity to add leverage-long positions, a clear bullishness indicator. Furthermore, margin traders have been increasing their stablecoin borrowing, indicating that whales and professional traders are expecting more upside from cryptocurrencies.

The 24% weekly rally that took Bitcoin from $34,000 to its highest level since May 20 was fueled by a 30% surge in the number of “active entities,” according to Glassnode. This indicator could have triggered these savvy traders to increase their positions despite the lackluster price performance.

Pro traders are using leverage to buy below $40,000

OKEx top traders BTC long-to-short ratio (above) and BTC price at Bistamp in USD (below). Source: OKEx & TradingView

Notice how OKEx top trades have increased their Bitcoin longs from 0.68 on July 31 to 1.16 two days later. A 0.68 ratio indicates those whales and professional traders’ long positions were 32% smaller than their respective short bets, positions that benefited from a price decrease.

On the other hand, the 1.16 long-to-short favored bullish positions by 16% and reflected confidence even as the Bitcoin price dropped below $40,000 on August 2.

However, there is no way to know if those traders closed short positions or effectively added longs. To better understand this movement, one needs to analyze margin lending data.

Lending markets provide additional insight

Margin trading allows investors to borrow cryptocurrency to leverage their trading position, therefore increasing the returns. For example, one can buy cryptocurrencies by borrowing Tether (USDT), thus increasing the exposure. On the other hand, borrowing Bitcoin can only be used to short it, betting on the price decrease.

Unlike futures contracts, the balance between margin longs and shorts isn’t always matched.

OKEx USDT/BTC margin lending ratio. Source: OKEx

The above chart shows that traders have been borrowing more Tether recently, as the ratio increased from 2.00 on July 30 to 2.50. The data leans bullish in absolute terms because the indicator favors stablecoin borrowing by 2.5 times. It also shows resilience in the face of the recent BTC price drop.

Derivatives data leaves no doubt that OKEx top traders added long positions even as Bitcoin corrected 9% from the $42,600 top in the early hours of August 1.

Unlike retail traders, these heavyweights can withstand some troubled waters, although neither the long-to-short indicator nor the margin lending show signs of excessive leverage.

At the moment, longs appear confident in the face of a natural correction that occurred after an 11-day rally.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Price analysis 7/30: BTC, ETH, BNB, ADA, XRP, DOGE, DOT, UNI, BCH, LTC

Traders expect altcoins to move higher now that Bitcoin price finally pierced the $41,000 resistance.

Bitcoin (BTC) and most major altcoins seem to be faltering near their respective overhead resistance levels. This suggests that some investors are continuing to sell at higher levels.

However, 21st Paradigm co-founder Dylan LeClair said that on-chain data shows “big transfer volumes from over-the-counter (OTC) desks over the last week.” Cointelegraph also recently highlighted a historic 57,000 BTC outflow from exchanges on July 28.

Ecoinometrics also cited on-chain data to show that “whales” and “small fish” accumulated Bitcoin when the price recovered from $29,400 to over $40,800 this week.

Daily cryptocurrency market performance. Source: Coin360

Institutional investors are also not to be left behind in their plans to accumulate more Bitcoin. MicroStrategy, which holds about 105,085 Bitcoin, said in its second-quarter report that the company intends “to deploy additional capital into our digital asset strategy.”

Wealthfront, a popular US-based robo-investment firm $25 billion in assets under management, announced that it would allow its clients to allocate up to 10% of their portfolio into Grayscale’s Bitcoin Trust and the Grayscale Ethereum Trust.

With demand increasing from small investors and high-net-worth individuals, will cryptocurrencies stage a sharper recovery? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin formed a Doji candlestick pattern on July 29, indicating indecision among the bulls and the bears near the $40,000 mark. That uncertainty briefly resolved to the downside and if the price does not hold its recent surge above $40,000 the price could drop to $36,670.

BTC/USDT daily chart. Source: TradingView

The moving averages have completed a bullish crossover and the relative strength index (RSI) is in the positive zone, indicating that bulls have the upper hand. If the price rebounds off $36,670, it will suggest that bulls have flipped this level into support.

The buyers will then again try to push the price above the overhead resistance zone at $41,330 to $42,451.67. This may not be easy because bears will try to defend this zone aggressively.

If the price turns down from the zone, the BTC/USDT pair could remain range-bound between $36,670 and $42,451.67 for a few more days. A breakout and close above $42,451.67 will suggest the start of a new uptrend.

The bears will be back in the driver’s seat if they can sink the price back below the moving averages.

ETH/USDT

Ether (ETH) reached the downtrend line today but the bears are defending the resistance aggressively. The price could now drop to $2,200 where buyers may step in and arrest the correction.

ETH/USDT daily chart. Source: TradingView

The moving averages have completed a bullish crossover and the RSI is in the positive territory, suggesting that bulls have the upper hand. If the price rebounds off the 20-day exponential moving average, the bulls will again try to thrust the price above the downtrend line.

If they succeed, the ETH/USDT pair could rise to $2,600 and then to $3,000. This positive view will invalidate if the price turns down from the current level and breaks below the moving averages. Such a move could sink the price to $2,000 and next to $1,728.74.

BNB/USDT

The bulls pushed Binance Coin (BNB) above the 50-day simple moving average ($310) on July 29 but they could not challenge the overhead resistance at $340. This suggests that buying dries up at higher levels.

BNB/USDT daily chart. Source: TradingView

The bears will now try to take advantage of the lack of demand to pull the price below the 20-day EMA ($305). A break of this support could result in a drop to the trendline and next to the July 20 low at $254.52.

On the contrary, if the price rebounds off the 20-day EMA, it will suggest buying on dips. The bulls will then make one more attempt to clear the overhead resistance at $340. If they pull it off, the BNB/USDT pair could rise to $379 and next to $400.

ADA/USDT

The failure of the bulls to drive Cardano’s (ADA) price above the 50-day SMA ($1.32) indicates that bears are aggressively defending the resistance.

ADA/USDT daily chart. Source: TradingView

If the price breaks below the 20-day EMA ($1.25), short-term traders may close their positions and that could drag the price down to $1.10 and later to $1. A break below $1 could result in long liquidation.

On the other hand, if the price rebounds off the 20-day EMA, the bulls will again try to push the price above the downtrend line. If that happens, the DOT/USDT pair could rise to $1.50 where bears may again mount a stiff resistance.

XRP/USDT

The bulls have failed to push XRP above the $0.75 level for the past two days, which suggests that bears are defending this level aggressively.

XRP/USDT daily chart. Source: TradingView

The moving averages are on the verge of a bullish crossover and the RSI is in the positive territory, indicating that bulls have the upper hand. If bulls do not allow the price to break below the 20-day EMA ($0.64), the XRP/USDT pair may rise above $0.75. That will complete a double bottom pattern, clearing the path for a possible rally to $1.07.

This positive view will invalidate if the price turns down and plummets below the moving averages. The bears will then try to pull the price to $0.59 and then to $0.50. Such a move will indicate that the range-bound action may continue for a few more days.

DOGE/USDT

The bears have been defending the $0.21 resistance for the past few days but a minor positive is that bulls have not given up much ground. This suggests that buyers are not closing their positions as they anticipate Dogecoin (DOGE) to move up.

DOGE/USDT daily chart. Source: TradingView

The flat 20-day EMA ($0.20) and the RSI above 45 suggest a balance between supply and demand. This balance will tilt in favor of the bulls if they can push and sustain the price above the 50-day SMA ($0.23). That may clear the path for a rally to $0.28 and then $0.33.

Conversely, if the price turns down from the current level and breaks below $0.18, the DOGE/USDT pair may drop to $0.15. This is an important level for the bulls to defend because if it gives way, the pair may witness panic selling and drop to $0.10.

DOT/USDT

The bulls pushed Polkadot (DOT) above the 20-day EMA ($14.15) on July 27 but they have not been able to clear the hurdle at the 50-day SMA ($16.05). This suggests that demand dries up at higher levels.

DOT/USDT daily chart. Source: TradingView

The price has turned down from the 50-day SMA today and the bears will now try to sink the DOT/USDT pair below the 20-day EMA. If they manage to do that, the pair could drop to $13. A break below this support could sink the pair to $10.37.

Contrary to this assumption, if the price rebounds off the 20-day EMA, the bulls will again attempt to push the price above the overhead resistance at $16.93. If that happens, it will suggest a change in the short-term trend. The pair could then start its journey to $20 and later to $26.50.

UNI/USDT

The bulls are attempting to push Uniswap (UNI) above the downtrend line but the long wick on the day’s candlestick suggests that bears have other plans.

UNI/USDT daily chart. Source: TradingView

If the price turns down from the current level but stays above the 20-day EMA ($18.50), it will indicate that bulls are buying on dips. That will improve the likelihood of a break above the downtrend line, invalidating the descending triangle pattern.

The UNI/USDT pair could then rise to $24 and if this level is crossed, the up-move may reach $30. Conversely, if bears pull the price below the moving averages, the pair may decline to $17.24 and then to the critical support at $13.

Related: Who takes gold in the crypto and blockchain Olympics?

BCH/USDT

Bitcoin Cash (BCH) is facing stiff resistance at $546.83. This suggests that bears are attempting to defend the resistance of the range and extend the consolidation for a few more days.

BCH/USDT daily chart. Source: TradingView

If bears pull the price below the moving averages, the BCH/USDT pair could witness further selling and drop to $441.17. A break below this level will open the doors for a further slide to the critical support at $383.53.

On the other hand, if bulls do not allow the price to drop below the moving averages, it will enhance the prospects of a break above $546.83. If that happens, the double bottom pattern will complete and the BCH/USDT pair could start its journey toward the target objective at $710.13.

LTC/USDT

Although bulls pushed Litecoin (LTC) above the 50-day SMA ($137) on July 28, they could not clear the hurdle at the overhead resistance at $146.54. This indicates that bears have not yet given up.

LTC/USDT daily chart. Source: TradingView

If sellers pull the price below the 20-day EMA ($130), the LTC/USDT pair could start its downward journey to the critical support at $103.83. Such a move will indicate that the pair may remain range-bound for a few more days.

Alternatively, if the price rebounds off the 20-day EMA, the bulls will make one more attempt to push the price above $146.54. If they succeed, the pair will complete a double bottom pattern, which has a target objective at $189.25.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

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Bitcoin price drop to $37K has analysts wary of calling a ‘trend change’

Bitcoin price sold off below $37,000 shortly after topping $40,500, leading analysts to caution that bears still have a few tricks up their sleeves.

Bull market optimism returned to the cryptocurrency market on July 26 after Bitcoin (BTC) price rallied above the $40,000 level for the first time in over six weeks.

Today’s rally to $40,581 was a continuation of the July 25 breakout which saw BTC price rocket to $48,110 at Binance af a short squeeze resulted in nearly $500 million in shorts being liquidated in just two minutes. 

Data from Cointelegraph Markets Pro and TradingView shows that BTC spiked to an intraday high at $40,581 on Monday before pulling back to $37,500 as bulls look to flip this resistance zone back to support in preparation for a further move higher.

BTC/USDT 4-hour chart. Source: TradingView

While the move higher has the mark of a trend change and has prompted some analysts to proclaim the bull market is back on track, on-chain data and the perpetual funding rates do not fully concur with this point of view. Especially when one considers that the current breakout may have only been the result of a massive short squeeze.

Factors that could reignite the bull market

According to Élie Le Rest, partner at digital asset management firm ExoAlpha, the recently denied rumor that Amazon would accept cryptocurrency payments have the potential to have a similar effect as the 2020 revelation from PayPal that it would integrate cryptocurrencies. Le Rest said that if the Amazon news turns out to be true, this “could be the catalyst to ignite a bull run in H2 of 2021.”

As Bitcoin price pushed above the $35,000 level on July 25, “more than a billion dollars of shorts got liquidated in the past 24 hours, with the bulk of the liquidation occurring in less than 1 hour” according to Le Rest, who also said, “the current market move could be sustained during the week by volumes coming from players having waited for a more directional trend on Bitcoin since the end of May.”

Le Rest said:

“To validate this directional trend, Bitcoin has to break out of the $30,000-$40,000 range it has been stuck into for 2 months. Maintaining Bitcoin over the $40,000 level would signal that the “bear market” is over and the bull-run may resume.”

If Bitcoin is able to maintain its current momentum, Le Rest said “as many expect, Bitcoin could get back on track with the Stock to Flow model and reach the $100,000 mark by year-end.”

On-chain data is not so bullish

Caution is warranted against being overly bullish and data from Glassnode suggests that several bearish threats remain valid. 

When analyzing the directional bias of the futures markets, Glassnode found that “perpetual funding rates have continued to trade negative,” which “indicates the net bias remains short Bitcoin.”

Bitcoin futures perpetual funding rate for all exchanges. Source: Glassnode

Glassnode said:

“This metric in particular helps us identify that Monday’s price rally is likely associated with an overall short squeeze, with funding rates continuing to trade at even more negative levels despite price rallying +30%.”

Glassnode also pointed to Bitcoin on-chain activity and highlighted that “in direct contrast to the volatility in spot and derivatives markets, the transaction volume and on-chain activity remains extremely quiet.”

Bitcoin entity-adjusted total transfer volume. Source: Glassnode

Overall, how on-chain transfer volume responds to the recent price action in Bitcoin will provide better insight into where the market is headed, but as noted by Glassnode, “it remains to be seen whether on-chain volumes start to pick up in response to recent volatile price-action.”

Related: DeFi tokens book double-digit gains after Bitcoin rallies above $39,000

Altcoins follow Bitcoin’s lead

Daily cryptocurrency market performance. Source: Coin360

Bitcoin’s recovery above $40,000 also helped spark strong rallies in most altcoins.

Ether (ETH) gained of 11% to hit a daily high at $2,433, while Dogecoin (DOGE) posted a 7% gain and trades at $0.208.

Other notable gainers include a 64% gain for Strike (STRK), a 55% rally in Venus (XVS) and a 20% breakout in VeChain Thor (VTHO) and Ankr (ANKR).

The overall cryptocurrency market cap now stands at $1.46 trillion and Bitcoin’s dominance rate is 47.4%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Powered by the people: 3 altcoins whose tweet volume spiked before a strong rally

In some cases, unusually high tweet volume can signal that an asset is about to soar, but traders should mind the context.

On Crypto Twitter, a surge of attention directed at a coin often comes in response to dramatic price action. Quite naturally, rallying assets attract the attention of traders and take over Twitter conversations, which can also create positive feedback loops that further prop up the momentum.

This is exactly what happened with some of the coins that saw a greater increase in average daily tweet volume this month, compared with the last. KuCoin Shares (KCS), which went up from $7.40 on July 4 to $14.20 on July 14, generated a staggering increase in average tweet volume, totaling more than 1,100% month-to-month.

Another big winner in terms of price, Axie Infinity (AXS), added 456% in tweet volume over the same period. In both cases, tweets mirrored the rallies’ dynamics, with the tweet volume curve closely following the price chart.

In other cases, however, the relationship can be reversed. Sometimes, the Twitter crowd picks up the news or emerging narratives that the wider market has yet to absorb, producing tweet volume spikes that come before price increases. Is there a way for traders to spot these dynamics early enough to gain an edge over the rest of the pack?

Data intelligence for early birds

Tweet volume is one of several metrics used to calculate the VORTECS™ score, an algorithmic indicator that compares complex patterns of market and social activity of an individual digital asset to years’ worth of historical data.

Exclusively available to Cointelegraph Markets Pro (CTMP) subscribers, the algorithm assesses parameters such as the market outlook, price movement, social sentiment and trading activity to generate a score that shows how suitable conditions of the observed combinations are for any coin at any given time.

On top of that, there is a dedicated space on the Markets Pro dashboard featuring assets that see abnormal tweet volume in real-time. Once they are alerted that something is brewing around a coin on Twitter, traders can be incentivized to take a closer look at the asset and make a judgment as to whether its price is likely to go up soon.

Here are three examples from the last thirty days where Twitter activity foreshadowed price action.

Crypto.com Coin

CRO’s Price vs VORTECS™ chart. Source: Cointelegraph Markets Pro

In the case of Crypto.com Coin (CRO), the source of Twitter users’ excitement is crystal clear: A few hours before the coin flashed on Markets Pro’s Unusual Twitter Volume box (red circle in the chart), it emerged that CRO became the first digital asset platform to partner with the Ultimate Fighting Championship, or UFC. The announcement was also delivered to Markets Pro users seconds after the original source published it, thanks to the platform’s instantaneous NewsQuakes™ functionality.

Unsurprisingly, the big news triggered a sprawling Twitter conversation. If traders had not been convinced by NewsQuake™ and coin’s rising VORTECS™ score, the skyrocketing tweet volume could be the final argument in favor of opening a CRO position. The coin had been valued at $0.113 when tweet volume peaked on July 8, and it kept climbing in the next four days, eventually hitting $0.132 before the price began to decline.

Quantstamp

QSP’s Price vs VORTECS™ chart. Source: Cointelegraph Markets Pro

Establishing what had triggered the surge of tweets referencing Quantstamp (QSP) around June 1 is less straightforward. One potential reason could be the launch of oneFIL, a stablecoin for the Filecoin community, around that time.

The protocol behind oneFIL is audited by Quantstamp. While QSP generates just a handful of Twitter mentions per day, on July 1 it got over 150 tweets, immediately putting it on the Markets Pro radar (red circle in the graph). While the peak tweet volume corresponded to the QSP price of $0.030, the coin pulled off a strong performance in the following days, reaching $0.034 on July 4, continuing to push further.

Flow Dapper Labs

FLOW’s Price vs VORTECS™ chart. Source: Cointelegraph Markets Pro

Flow Dapper Lab’s (FLOW’s) peak tweet volume came late on July 10 (red circle in the graph) in response to a highly successful week that the asset had, more than doubling its price from $9 to over $18.

A high VORTECS™ score that FLOW received some 50 hours earlier indicated that in the past, such rallies unfolded in several rounds and that historical precedent suggested a possibility of the second leg. Sure enough, the price kept climbing even after the wave of tweets began to recede, eventually hitting $21.20

These examples demonstrate that, while an onslaught of tweets alone is not always a harbinger of an impending rally, spotting abnormal Twitter activity early on can lead to a profitable trade. It can be especially useful when combined with other metrics and a robust understanding of the coin-specific context.

Disclaimer. Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions. Full terms and conditions.

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