Relevance up to 09:00 2022-08-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
With each passing week, Ethereum is getting closer and closer to the key mark of $2000. Despite a certain decrease in buying activity and the realization of most of the bullish potential, Ethereum continues to maintain leadership among the major cryptocurrencies. Over the past 24 hours, the asset has risen in price by 2%, and the weekly increase was 11%. At the same time, the ether approached the lower border of the $1800–$2100 resistance area. The asset will have a serious trade in this range, which will certainly lead to increased volatility and wandering between support and resistance zones.
The main catalyst for the upward movement of the altcoin is the institutional audience, actively fed by the representatives of the project with rosy promises. Ethereum co-founder Vitalik Buterin said that after the transition of the ether to the PoS algorithm, the popularity of crypto payments can grow significantly. The entrepreneur attributes this to the improvement in transaction per second throughput since the final Ethereum upgrade. Buterin is sure that the main altcoin can process more than 100,000 transactions per second. This was big news, which strengthened the position of Ethereum in the eyes of institutional players.
The current position of Bitcoin is also one of the reasons for the increased interest in Ethereum. The main cryptocurrency is stuck near the $24k level and cannot overcome it, also due to low trading volumes. Institutions are also well aware of the dependence of BTC on inflation and stock indices. The combination of these factors makes Bitcoin less attractive to big capital, as the asset does not have the fundamental support for a meaningful bullish rally. The transition to PoS is the very ETH argument that allows the asset to win the competition in terms of attractiveness from Bitcoin at the current stage.
The Ethereum update also provokes far-reaching and positive forecasts from the main representatives of the crypto industry. Former BitMEX CEO Arthur Hayes believes that by the end of the first quarter of 2023, ETH/USD will reach $5000. In addition to switching to PoS, Hayes highlights the Fed's monetary easing as the main benefit of the altcoin. The entrepreneur is confident that after the PoS update, Ethereum will temporarily take the place of Bitcoin in terms of investment attractiveness. Hence, the conclusion that easing monetary policy will have a better effect on ETH, not BTC.
To develop Hayes' idea, it is worth adding two important theses that allow us to argue that Ethereum will go up in the fall. The first factor concerns the US elections in November. The government will probably try to create an appropriate economic climate. The technical recession of the economy due to the hawkish policy of the Fed clearly does not apply here. The second factor is based on Fed Chairman Jerome Powell's statement that the rate will reach a neutral level by the end of 2022. Given these two factors, it is likely that following the final migration of the network and the transition of dApps to PoS algorithms, Ethereum will receive investment fuel from the US government.
In technical terms, the asset took a break after an unsuccessful assault on $1800. The bears defended the level and pushed the buyers to the nearest support at $1750. The RSI index and the stochastic oscillator are becoming flat, which indicates the need for local consolidation. There is also pressure coming from Bitcoin, which failed its $24k assault. The combination of these factors indicates that the next stage of strong growth will begin after the publication of the CPI report. Until then, the asset is likely to continue consolidating.