Bitcoin, Ethereum, The Merge, FTX – Talking Points
- Bitcoin jumps 10% on Friday, benefitting from broad risk-on sentiment
- Ethereum continues to charge higher as “Merge” takes shape
- FTX continues to bailout struggling crypto firms and funds
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Bitcoin & Ethereum Outlook: Bullish
Bitcoin and Ethereum both posted constructive gains this past week, benefitting from a relief rally across risk assets. So called “risk on” currencies outperformed on Friday as the US Dollar cooled its recent advance. Bitcoin surged back above the key psychological $20,000 level, while Ethereum broke back through $1700.
Crypto has been hit hard this year as the macro backdrop has deteriorated significantly. The Federal Reserve’s tightening regime has weighed heavily on risk assets, with stocks and crypto getting pummeled while the US Dollar has soared. September has not been kind for risk historically, so it remains to be seen if this week’s relief rally will be short-lived.
FTX, the major crypto exchange run by Sam Bankman-Fried, announced it is taking a 30% stake in Anthony Scaramucci’s SkyBridge Capital via its venture arm. SkyBridge has been investing heavily in crypto of late, but dismal YTD returns have heaped pressure on the hedge fund. According to the statement that was released, the money will be used to buy $40 million of various cryptocurrencies as “a balance sheet investment.” SkyBridge has notable exposure to digital tokens, with digital tokens representing nearly $800 million of the $2.5 billion the firm has under management.
Bitcoin put in a red-hot session on Friday, jumping more than 10% in the largest single-day gain since February. Whether a short squeeze or just fresh buyers stepping in following the recent decline, BTCUSD looks perky headed into the weekend. Throughout June, July and now September, the support zone between $18000 and $19000 has held up against sustained selling. This area also coincides with the 0.236 fib retracement of the advance off of the Covid lows to all-time highs. Price is now entering a key zone, as the 50-day moving average as well as sticky resistance from August come into view. This could make the area around $22000 tough to trade, and bulls may find it difficult to advance price beyond this threshold.
Bitcoin Daily Chart
Chart created with TradingView
Ethereum posted gains on Friday of more than 5% as traders eagerly await “the merge,” which is due between September 10th and 20th. Experts in the space say that the major upgrade to the Ethereum network will make the blockchain more efficient. There has been a significant runup in price into “the merge,” reinforcing the idea that this may simply be a “buy the rumor, sell the news” event.
The gains in Ethereum on Friday took the crypto above the 50-day moving average, a key scalp for bulls as they look to push ETHUSD even higher. After finding support around $1400, price has been in a sustained uptrend since the beginning of the month. If the merge proves to be a selling event, price may gravitate to the August lows around $1400. Upside may be limited if ETHUSD cannot break beyond fib resistance at $1821, which is the 0.236 retracement of the November 2021 to June 2022 decline.
Ethereum Daily Chart
Chart created with TradingView
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— Written by Brendan Fagan
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