Crypto High Off CPI

The CPI data released this morning has given all risk-on markets a strong injection of happiness. Bitcoin ($BTC.X) recaptured the $24k level, Ethereum ($ETH.X) went beyond $1,800, and the Total Market Cap hit $1.127 trillion. As long as the crypto market stays around the 1.15 trillion level, it will be the highest close in 60 days. 

Technical analysts are likely paying special attention Total Crypto Market Cap daily candlestick chart. When writing this article, the daily Total Market Cap chart shows a Bullish Engulfing candlestick pattern. But that can change very quickly, especially near the end of the day. 

Few of the 230+ Japanese candlestick patterns are as bullish and sought after as the bullish engulfing candlestick. The TL;DR definition of this candlestick pattern is the body of the candlestick ‘engulfs’ the prior candlestick. 

In other words, the current open is below the previous close, and the current close is above the previous open (slight variations are allowed in markets like crypto and forex).

Analysts are looking very closely at where Bitcoin is at, especially with how thin the Volume Profile is between the $24,000 and $29,000 value areas. 

Don’t be surprised to see some major whipsaws in price action for the remainder of the week!

With the upcoming ‘Merge’ update slated for September, Ethereum ($ETH.X) is taking up a good chunk of the cryptocurrency news space. Here’s what’s been happening with Ethereum:

The Merge Update

In case you missed it or are out of the loop, the ‘Merge’ for Ethereum is a transition from Ethereum being a Proof-of-Work (PoW) blockchain to a Proof-of-Stake (PoS) blockchain. The main purpose of the ‘Merge’ is to increase scalability, reliability, efficiency, and accessibility. 

Another Ethereum Hard Fork?

Not everyone in the Ethereum community wants to see the Merge occur. A PoW hard fork of Ethereum exists but isn’t getting much traction. Tron ($TRX.X) founder Justin Sun supports the Ethereum PoW fork, but it’s not getting a ton of momentum.

Is there any interest in an Ethereum PoW hard fork pair? It’s mixed. 

Only a few exchanges have committed to hosting the new ETHPoW pair, the most notable are: MEXC, DigiFinex, Gate.io, and Poloniex. 

Chainlink ($LINK.X) is sticking with the PoS Merge. The CEO of crypto exchange OKX took to Twitter to confirm support of the Merge, and that ‘potential’ hard forks could be looked at. 

At @OKX, we actively monitor and will support the #Ethereum Merge.

Potential Ethereum hard forks may emerge when the network's upgrade takes effect.

We will evaluate and list the newly forked coins if there is sufficient demand.

— jay_star.okx ⚛️ OKX CEO (@star_okx) August 8, 2022

Another exchange, Huobi, put out a presser detailing what criteria must be met for any hard forks to be listed. Finally, Binance said it was monitoring the Merge, and would ‘evaluate’ any hard forked tokens.

Two of the biggest stablecoin issuers, Tether ($USDT.X) and Circle ($USD.X) support the Merge.

And the big ETH man himself, Vitalik Buterin, believes any PoW hard fork is just an attempt by others to make a quick buck. 🥸

Ok, so why is Ethereum Classic pumping?

First, let’s get some context on the difference between Ethereum Classic ($ETC.X) and Ethereum. Ethereum Classic is the original Ethereum blockchain. The Ethereum you know today is a hard-fork of the original Ethereum blockchain. 

Why was there a fork? Because of the DAO hack in 2016, there was a sort of civil war in the ETH community. One group wanted to reverse the hack and do a hard fork; the other group felt that blockchains are immutable. 

As a result, the original Ethereum blockchain’s ticker changed to ETC, while the new hard-fork of Ethereum kept the ETH ticker. 

So why is Ethereum Classic spiking? The simple answer is it’s probably just following the rest of the market. However, a relatively unknown reason for its outperformance is likely due to what happens to the miners. 

Currently, Ethereum and Ethereum Classic are PoW, requiring a crazy amount of energy to mine. Proof of stake is more efficient. Quite literally, the energy needed for PoW can match the entire energy output of several countries, whereas PoS requires the same amount of energy to power a standard home in the US. 

So what happens to the Ethereum miners after the Merge? Since mining won’t work on Ethereum anymore, the next best thing is probably switching to mining Ethereum Classic. Ethereum Classic will still be PoW. 

We’ll keep you updated as this story develops. 🤑

We had a nice break from the constant Celsius/Three Arrows Capital/Voyager misery, but sometimes you just have to return to it. Adding to the suck going on for Celsius ($CEL.X), California’s Department of Financial Protection and Innovation issued a Desist and Refrain Order – basically telling Celsius, ‘You’re done here.’

On a positive note, though, Celsius’s token CEL has had a nice ride higher, following the rest of the market in a nice little pamp. So far this week, CEL is up over 30% and closed last week higher by 32%. CEL is up over +136% over the past four weeks. 

On a negative note for Celsius CEO Mashinksy, the Committee of Unsecured Creditors filed a statement with the court, highlighting their desire to investigate the CEO over alleged false claims that “their funds were safe, that Celsius had adequate capital reserves and robust risk management protocols and that users could withdraw their coins at any time.”

And something that might not show Mashinsky in a good light is a report from blockchain intelligence firm Nansen and Arkham Intelligence, which alleges CEL wallets linked to the Celsius CEO recently converted CEL into Ethereum ($ETH.X) during the recent spike. 

And small piece of ‘maybe’ positive news is Reuters report that Ripple (XRP.X) may be looking at acquiring Celsius’ assets.

As always, the Litepaper will update you as this drama continues to unfold. But thank God the bad news is (fingers crossed) at least slowing down. 

In the wake of Terra’s Luna ($LUNA.X) and TerraUSD ($UST.X) collapse, one of the most well-known crypto-centric hedge funds, Three Arrows Capital (3AC), likewise crumbled. But it didn’t stop there.

Collateral damage (pun intended) from 3AC’s downfall saw some of the biggest names in the crypto lending business rupture and shatter: Celsius ($CEL.X), Voyager ($VGX.X), Genesis, BlockFi ($BLOCKFI.P), and a myriad of other companies and crypto exchanges.

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