On Sunday, Bitcoin (BTC) fell 0.40%. Partially reversing the 5.20% rally from Saturday, BTC ended the week up 21.83%, at $20,882. Notably, BTC revisited $21,000 for the second time since November 7 while ending a seven-session winning streak.
A bearish start to the day saw BTC drop to an early low of $20,566, avoiding the first major support level (S1) at $20,116, and bitcoin soaring to a late afternoon high of $21,055. However, when BTC failed to reach the first major resistance level (R1) at $21,597, BTC fell again to end the day at $20,882.
Shanghai Hard Fork gives ETH an eight-day winning streak
After the merger, investors’ focus shifted to the Shanghai Hard fork, the upcoming Ethereum network upgrade. The hard fork, which will take place in March, will allow the community to access ETH.
While network upgrades tend to be price positive, there is some uncertainty about how hard forks will affect ETH. Interested parties can either sell their stake in ETH when they have access to it or increase their stake in ETH. The market dynamics at the time of the hard fork is likely to determine the impact.
The consolidation failed to drive ETH north, with the crypto winter and finally the event being overshadowed by the FTX crash. We could see a reversal in March if the risk of FTX contagion continues to decline and the Fed’s monetary policy drives demand for riskier assets.
However, the outcome of the SEC case against Ripple may also affect ETH. In 2022, SEC Chairman Gary Gensler has hinted that ETH will act as a safety in the wake of the merger. Without mentioning ETH, Gensler focused on the Proof of Stake asset, stating that PoS blockchain tokens can pass the Howey test.
Today, mitigating the FTX contagion, and hoping the Fed delivers a soft landing, remains a tailwind for cryptocurrency. However, there are no US economic indicators to provide direction, leaving the pair vulnerable to any hawkish FOMC members and news from the cryptocurrency market.