When will the shock of Bitcoin and Ethereum end?

Editor's Note: This article comes fromChain reference (ID: lianneican), Author: Internal Reference Jun, reprinted by Odaily with authorization.

Editor's Note: This article comes from

Chain reference (ID: lianneican)

Chain reference (ID: lianneican)

, Author: Internal Reference Jun, reprinted by Odaily with authorization.

The price of Bitcoin has been lower in a bullish trend over the past seven days, with BTC losing 1.63% on a weekly basis. ETH also started to rise this week and then fell, with a weekly decline of 2.68%. It was another week of volatility in the digital currency market.

BTC entered an uptrend last week, surging to a high of $9,470 on July 8. Resistance at $9,470 has denied Bitcoin any further gains despite increased demand. This rejection sparked a correction in recent days, with BTC falling. By July 16 BTC was trading as low as $9,051.

ETH is also about the same. Last week, the smart contract giant was able to overcome the lackluster price action seen in early July. In fact, ETH generated a weekly return of 6.68%.

Much speculation about an upcoming network upgrade known as ETH 2.0 appears to have investors amassing large sums of money on the long-awaited bet. This behavior was reflected in the price of ETH, which opened Monday, July 6, at $227.61 and quickly rose to a high of $249 on July 8.

The sudden 9.40% rise last week surprised many market participants, while others saw it as an opportunity to exit some long positions. Rising selling pressure brought Ethereum down to a weekly low of $231 on July 16.

In the long-term, the most critical support and resistance levels for Bitcoin are $8,900 and $10,000, respectively. Meanwhile, Ethereum must close below $220 or above $250 to provide a clear roadmap of its trend direction. Once these barriers are breached, investors will have the opportunity to enter a definitive short or long position.

While some low-end cryptocurrencies are soaring, bitcoin and ethereum have failed to enjoy such price volatility. But a breakthrough may be in the works. So, when will this shock come to an end?

This situation may be related to the largest cyber attack in history on Twitter that occurred on July 16. The accounts of dozens of well-known political and business figures were stolen, and hackers posted tweets on their accounts to defraud Bitcoin. Hackers have defrauded bitcoins worth at least $120,000, more than half of which have been transferred to other accounts, according to a bitcoin tracking firm.

Those behind the scam hacked into the Twitter accounts of some corporate executives, including Amazon CEO Jeff Bezos and Tesla founder Elon Musk, and posted messages on them demanding Twitter users transfer bitcoins directly to one of three accounts. The hackers also promised to double the amount of bitcoin they remitted. Of the $120,000 sent to the account, about $65,000 has been transferred to other Bitcoin account addresses, one of which has remained active in the past and is registered with a U.S. exchange. About half of the funds obtained by hackers in the scam came from the United States, a quarter from Europe and the rest from Asia.

But various key on-chain indicators suggest a Bitcoin bull run may be imminent. As the price of Bitcoin increases and more and more individuals enter the space, more and more Bitcoins are kept in exchange addresses. This trend may be a by-product of the participation of less technically inclined investors and the rise of altcoins. The data shows that the total amount of Bitcoin on exchanges has begun to decline rapidly. This bodes well for the market, as the reduction in exchange balances suggests that selling pressure has also eased.

Bitcoin balances on several major exchanges (Coinbase, Kraken, Bitfinex, etc.) have dropped from 2.85 million BTC in February to 2.6 million today, according to data from blockchain analytics firm Glassnode. The last time this indicator saw such a strong decline (percentage) was in 2016. Then came the 2017 bull run, which took Bitcoin from $1,000 to $20,000.

Crypto Quant CEO Ki-Young Ju also echoed the bullishness that the foreign exchange balance movement will bring to Bitcoin. According to Ki Young Ju, whenever foreign exchange reserves are like they are now, Bitcoin has performed well in the ensuing months. This is mainly due to the decrease in the number of BTC held on the exchanges leading to the bullishness of Bitcoin due to the supply and demand of the market. Assuming steady demand, fewer bitcoins deposited into exchange wallets would mean less supply, leading to higher BTC prices.

Coupled with the halving of BTC's block rewards in May, the supply is further reduced, and the price of Bitcoin is about to rise.

A top economist predicts that Bitcoin will be inflationary 12-18 months from now, with Bitcoin expected to see a massive rally.

Demand for TIPS in the U.S. has soared earlier, suggesting investors expect higher consumer prices ahead. The narrative that Bitcoin has shown higher usage in countries with higher inflation has prompted some to see Bitcoin as an alternative to fiat money. Fears of inflation from the endless printing of money by central banks may eventually drive up its price.

Those in the bitcoin and gold industries have been outspoken on this issue, pointing to the Federal Reserve's (Fed) decision to inject $2.6 trillion to help the ailing U.S. economy, which will lead to massive inflation in the coming years. A young asset like Bitcoin protects people from the depreciation of fiat currencies.

Yassine Elmandjra, an analyst at investment management company ARK InVestment, believes that Bitcoin may become the world's first global currency in the next few years. Elmandela said that while bitcoin is scarce and durable, it is also divisible, verifiable, portable and transferable. These monetary characteristics have superior utility to foster demand and growth, and can be considered suitable for the role of a global digital currency.

According to Coinmap data, about 15,000 merchants around the world accept bitcoin payments, most of which are located in developed countries and regions, such as North America and the European Union. Bitcoin is being accepted as a store of value, and the arrival of the Bitcoin payment era has greatly increased its liquidity, which further highlights the value of Bitcoin.

It has been two months since Bitcoin completed its third "production halving", and this period of adaptation has provided opportunities for the outbreak of hot spots such as DeFi and Filecoin. However, ETH did not follow the surge, but unexpectedly The surprise of many.

According to a Decrypt report on July 18, users of the Ethereum blockchain once again experienced an unprecedented network peak, and Ethereum is facing a technical limit test.

DeFi and the tokens associated with it are becoming hot in the market, and the number of daily transactions on Ethereum is approaching a record high, having increased to the highest level since 2018.