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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Ethereum Ecosystem Bolsters Bulls’ Power? What Brought Back Retail Investors

Reynaldo Marquez
Reynaldo Marquez
3 years ago
2 mins read
Ethereum ETH ETHUSD

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Ethereum is back leading the crypto market rally as most of the coins in the top 10 by the market move sideways in lower timeframes. ETH’s price trades at $3,247 with a 3.1% and 28.8% profit in the daily and weekly chart.

Ethereum ETH ETHUSD
ETH trends to the upside in the daily chart. Source: ETHUSD Tradingview

The second cryptocurrency by market cap has been trending to the upside on the back of a major upgrade, EIP-1559 implemented with Hard Fork “London”. Investment firm QCP Capital records an 85% price increase for ETH from its low at $1,718 during July.

The rally has been mainly spot-driven as the upgrade received a lot of attention from mainstream media. Ethereum has been promoted as “Ultra-Sound money”, due to the deflationary nature of EIP-1559, by several players within and outside the space. Thus, the crypto market has been experiencing a renewed interest.

This has brought back retail investors and speculators, QCP Capital noted, and more buying pressure. In addition, speculators are taking an interest in Non-Fungible Tokens (NFTs) alongside their Ethereum, Bitcoin, and other cryptocurrencies margin trading.

The firm claims that NFTs’ trading volume has been on the rise surpassing that of DeFi protocols and other Ethereum based assets. In total, NFT related transactions have accounted for 21,291 ETH burn after EIP-1559 was introduced.

The amount of burn ETH due to OpenSea, an NFT marketplace, sits above Uniswap v2, one of the most popular dApps and decentralized exchanges (DEX) on the ecosystem. As seen below, OpenSea has even burned more ETH than Tether, Uniswap v3, MetaMask, and others.

Ethereum ETH ETHUSD
Source: QCP Capital via Twitter

The increase in ETH’s burning rate, QCP Capital added, has led to more appreciation, more interest from retail investors, and ultimately more speculation. Thus, creating what they refer to as a bullish self-reinforcing cycle.

Ethereum Brought The Market Up, Can It Take It Down?

However, the firm remains cautious due to possible downside risks in the short term. In a previous report, QCP Capital claimed the following:

(…) we expect a dampened trading environment from here to Aug (short vol), followed by a rally possibly on the back of the EIP-1559 mainnet implementation (long spot, long calls), & then the larger Q4 Wave 5 selloff on the Fed’s taper (sell spot, buy downside risk reversals).

The U.S. Federal Reserve and its monetary policy continue to play an important role across the markets. QCP Capital warned about a potential move to the downside if the Consumer Price Index (CPI) data suggest less risk of inflation. Thus, increasing the possibility of tapering from the FED.

The recent crash in commodities and precious metals adds another variable. Bitcoin and the crypto market have shown a strong correlation with Gold, a 62% positive correlation in the past according to the firm’s estimates. The precious metal recently loss critical support and could experience a leg down.

Bitcoin, Ethereum, and other cryptocurrencies have recently been inversely moving in accordance with Gold’s performance. However, many experts believe that the two markets could return to a positive correlation in the future. QCP Capital added:

So we remain long delta but we have been buying downside gamma for protection. In options, the frenzied buying of calls in both BTC and ETH across the curve has resulted in a short squeeze (in both spot and vols).

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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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