Initial coins rallied in anticipation of Ethereum’s upcoming upgrade. However, there are still signs of ongoing liquidity problems in the industry.
Despite the ongoing crypto bear market, many top cryptocurrencies were able to post double-digit percentage gains throughout the week.
Bitcoin was not so lucky. Bitcoin is up just 5.5% over the past seven days and is currently trading at $24,760, according to CoinMarketCap.
Ethereum gained much more. The second most important cryptocurrency and leading blockchain for smart contracts is up 16% in the past week to $1,984 after a peak of $2,012 late Friday night.
The excitement surrounding ETH is about the upcoming merger. Ethereum will transition to a more energy efficient Proof of Stake (PoS) blockchain. Goerli, the third and final testnet of Ethereum, successfully migrated on Wednesday evening.
On Monday, Glassnode data showed that Ethereum derivatives traders are “extremely bullish” in September, the month of the merger – but expect a bear market in October.
In Coinbase’s recent earnings announcement, the company reiterated its emphasis on transaction as part of its pre-merger business model. Following is a recent letter to shareholders:
“In early August, we made Ethereum staking available to institutional clients for the first time. We will continue to add more assets for use by our retail and institutional clients in the future.”
Bitcoin and Ethereum prices responded positively to Wednesday’s US Consumer Price Index (CPI) inflation numbers. Inflation was unchanged at 8.5% from the previous month – a clear sign that the Federal Reserve’s historic rate hikes this year are keeping prices under control.
How Altcoins Performed
Several so-called “Ethereum killers”, also known as layer 1 blockchains with highly functional smart contracts, have seen huge price increases: Avalanche (AVAX) has seen a massive 55% increase during the week. The coin then gave back much of its Friday night gains as ETH rose.
Much of the momentum was due to the strong growth of NFTs on the blockchain. As of Saturday morning, AVAX is down 15% over the past 7 days and is trading at $29.53.
Other Ethereum Competitors Up in Last 7 Days: Solana (SOL) is up 14% to $46.32. NEAR Protocol is up 18% to $5.89 – and FLOW is up 11% to $2.92.
In addition, Chainlink (LINK) increased 15.4% to $9.16. Ethereum Classic (ETC), which hit a four-month high this week, rose 16% to $44.25.
There were no major losses among the front runners.
When will the bear market end?
The crypto winter has shown little sign of abating this week. On Monday, Singaporean exchange Hodlnaut joined fellow lenders Vauld and Celsius, as well as Singaporean exchange Zipmex, on the list of crypto companies that have suspended customer withdrawals due to “recent market circumstances”.
Earlier this year, Hodlnaut received approval in principle (IPA) from the Monetary Authority of Singapore (MAS) to offer digital payment tokens (DPT) as a major payment institution.” The lender has now informed the Monetary Authority of Singapore (MAS ) is withdrawing its license application and as a result is no longer offering its token exchange facility.
On Tuesday, German crypto bank Nuri filed for bankruptcy, saying the move was “necessary to ensure the safest path for all our customers.” Despite the events, Nuri said customers still have “guaranteed access” to their euro accounts and crypto wallets.
The bank emphasizes that the measures are due to “significant macroeconomic headwinds”. In particular, the Pandemic and Russia’s war on Ukraine, as well as “various negative developments” in the industry, “including the large sale of cryptocurrency, the eruption of the Luna/Terra protocol, the bankruptcy of Celsius and other large crypto funds.”
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