After a strong couple of days for Bitcoin, the leading cryptocurrency seems to have slowed down. Bitcoin, which had earlier in the week soared to as high as $8,300, seems to have found support just above the $8,000, mark and settled just above the $8,100 position. In the last couple of hours, there has been a change in trend.
The change is significant and could signal the return of the altseason. Though Bitcoin has slowed down and is recording marginal changes at the time of press, altcoins are recording huge gains. Leading them is ETH and XRP which are recording gains in double figures.
At the time of press, ETH is up by around 17% while XRP is up by around 8%. Although they are the two biggest altcoins by market cap, and the best performing among the top coins, their performance has been reciprocated across the market.
Litecoin, Stellar, Binance coin, Cardano, Tron and a couple of more are also recording double-digit gains. At the time of press, Stellar is the highest gainer in the top 20 cryptocurrencies, surging by around 24%. The respective moves have seen the total market cap climb above $250 billion with all eyes now on hitting $300 billion.
XRP Extends Its Bullish Trend
For XRP, the bullish move is an extension on what was a spectacular move on Tuesday. The third largest altcoin by market cap on Tuesday surged by over 25%, seeing it climb from a little over $0.31 to hit $0.42. With the latest gains, the coin has managed to climb above $0.45 and is now looking set to test the $0.50 position soon.
Ethereum, on the other hand, has through the recent move strengthened its position above $250. The coin hopes to cross above $300 and possibly find support above it.
Bitcoin vs Altcoins?
With the latest move by altcoins, we will begin to see Bitcoin’s dominance drop with investors beginning to take positions with altcoins. This could see Bitcoin’s recent bullish run come to a halt but with the leader already holding a high and strong support position, this is not expected to be an issue for prices.
For altcoins, this move is essential and should see most break key resistance positions and help them keep up with Bitcoin which has in recent weeks been making leaps and bounds.
Ethereum (ETH) Might Retest $280 But Long Term Outlook Remains Bearish
Although quite unlikely, it is possible that ETH/USD might test the $280 level again and even rally towards $300 before beginning its next decline. That being said, it is not a good idea to take that trade as the risk/reward is definitely not worth it. The 4H chart for ETH/USD shows that the price is trading within a descending channel and an ascending triangle at the same time. The perfect scenario for the whales if they can pull it off would be to pump the price above the ascending triangle first to trap in retail bulls and hunt the bears. Then they would pull it back into the descending channel to trap the bulls. At every trading setup, the market maker is looking for ways to take advantage of retail traders especially around turning points.
This is why most traders believe in going with the flow although going with the flow in this market could mean being a dead fish at certain times. The ideal play here would be to wait for a break out and see if price enters the descending channel. There is no doubt whatsoever that ETH/USD is long overdue for a sharp retracement and at some point that will happen. However that move is more likely to come at a point when both the bulls and the bears least expect it just like the recent rally. A lot of bulls feel very euphoric at the moment but most of them did not see the current rally coming. A lot of people on both sides were taken by surprise when Ethereum (ETH) pumped in that manner. Now, instead of being worried, most of them just got onboard and forget about their opinions before that pump. Some ‘reputed’ traders even took a 180 degrees turn like nothing had happened.
Ethereum (ETH) shorts are still struggling as retail bears fear a rally to $300. Considering what they have seen in the past few weeks, it is reasonable to see that most of them are too scared to take a trade at this point even if the risk/reward is worth it. ETHUSDShorts has been struggling to break past the 50 day moving average but it has yet to succeed. The number of margined shorts could rise towards the top of the channel as early as next month as sell pressure on ETH/USD mounts. The market is not short of catalysts that could trigger Ethereum (ETH)’s next decline at this point.
As mentioned in our last analysis on ETH/USD, there is a strong bearish divergence on the weekly time frame that points to massive downside ahead. One thing to note here is that traders that are patient always see the price coming to them instead of them chasing the price. When BTC/USD fell to $6,000 a lot of people FOMO’ed into the market thinking this was it, but that was not it. Not as many people FOMO’ed in the $3,000s but they did soon afterwards. Either way, this is not the bottom. When ETH/USD bottoms, we will see more of “Ethereum (ETH) is a scam” and “Ethereum is going to zero”. At that point most of these overly excited retail bulls would want nothing to do with Ethereum (ETH) or any other cryptocurrencies.
Ethereum Foundation announces how its spending $30 mln to develop network
The Ethereum Foundation announced in a recent blogpost on May 21, their plan for spending $30 million to develop the Ethereum network further over the next year.
The $30 million being spent is going to be allocated for three different categories. $19 million is set to be spent on future projects, $8 million is set to be spent on current projects, and $3 million is set to be spent on developer support.
The bulk of the $30 million, which is set to be spent on future projects, is set to include various projects to scale the network. These projects have been dubbed Ethereum 2.0 projects and include client teams, research, documentation and communication, and layer 2 projects like Plasma.
Plasma is set to enable “the blockchain to be able to represent a significant amount of decentralized financial applications worldwide,“ according to the blogpost. The first mention of Plasma was proposed by Vitalik Buterin and Joseph Poon in 2017.
The blogpost also laid out the main reason to scale the platform over the next year in the blogpost:
“Ethereum is used in production today to secure billions of dollars of assets and as a base layer for many hundreds of live applications. We believe that it is vital to continue supporting these efforts to ensure that “Ethereum 1.0” continues to be the world’s dominant smart-contract platform.”
Ethereum transactions have risen 44% in just 3 months
It is being reported by LongHash that transactions on the Ethereum network have been on the rise lately, and have recently seen a new high that is 44% above where it was only 3 months ago.
When looking at a chart outlining network transactions from February 19th to May 19th we can see that, although there was a slight dip after, the total reached a new high of 735,400 tx/day. Seeing as that number was only 512,460 three months prior, this constitutes a 44% rise in the daily number of transactions using Ethereum.
In addition, the total amount of Gas being used to power the network every day has risen from 31 billion to 48 billion in the same timeframe.
Reasons for this almost certainly include an influx of users, but also an ongoing evolution of smart contracts. Since complex smart contracts can consume more Gas and perform more transactions, hypothetically, then it is likely that what is being seen here is generally more users interracting with increasingly complex dApps.
All of this is rather bullish for Ethereum in the long run. If these numbers can continue to grow, then perhaps soon Ethereum can become the global computer it has been positioning itself to be for years now. Stick with Chepicap for all Ethereum updates!