Top 3 Trending Coins: AVAX Outperforms, Eyes Push Above $20 as ETH & SOL also Surge

Key Points

• Cryptocurrencies are in an upbeat mood on Thursday with Bitcoin eyeing a test of $21,000 ahead of Friday’s US NFP.
• Avalanche is the best performer in the crypto top 20 and Ethereum is the second best.
• Solana is also performing well despite reports that key project developers are being sued for illegally profiting from SOL.

Market Update

Cryptocurrency markets are in an upbeat mood on Thursday amid upside in US equities, with Bitcoin nearing $21,000 and extending its on-the-day gains to around 1.5%. In the last 24 hours, the world’s largest cryptocurrency is trading closer to 4.0% higher.

Behind the market’s upbeat mood is growing anticipation for the Fed to deliver a 50 bps rate hike later this month rather than a second successive 75 bps rate hike, analysts said. Analysts reason that recent developments in the global economy/global markets, such as the recent sharp drop in commodity prices since the last Fed meeting and US PCE inflation data last month showing a slowdown in core price pressures, have lessened the pressure on the bank to tighten so aggressively.

The minutes of the Fed’s hawkish June meeting, where it hiked interest rates by 75 bps, the fastest rate in 28 years, were released on Wednesday. They underscored the bank’s commitment to doing whatever is necessary to get inflation under control, including another 75 bps hike in July.

Analysts caveated by noting that next week’s US Consumer Price Inflation figures for June will likely be the deciding factor as to whether the Fed will go with a 50 or 75 bps rate hike this month. Crypto bulls will thus be hoping for softer than expected figures.

Crypto traders are also awaiting the latest US labor market figures for June, which are set for release on Friday. Ahead of this release, crypto is likely to remain fairly subdued as US jobs reports have a history of triggering significant cryptocurrency market volatility.

That suggests a push in Bitcoin above the $21,000 level may have to wait. But technicians are optimistic that the world’s largest cryptocurrency by market cap will trade with a positive bias in the near future. Bitcoin on Thursday broke to the north of a pennant formation that it had been locked within since mid-June, and also pushed above its 21-Day Moving Average.

A test of late June highs near $22,000 is the next level that short-term Bitcoin bulls will be targetting.

Below is a list of Thursday’s top three trending cryptocurrencies.

Avalanche (AVAX)

The native token to the Avalanche blockchain AVAX is the best performing cryptocurrency in the top 20 by market cap in the last 24 hours according to CoinMarketCap with gains of over 8.0%. Price action on Thursday has been significant, with AVAX/USD breaking to the north of a downtrend that had been compressing the price action since the end of May.

AVAX/USD upside has, for now, stopped short of a retest of the psychologically important $20 level. The pair was last trading near $19.90, with gains of nearly 4.0% on Friday and more than 25% since last week’s lows under $16.

Given that the cryptocurrency has now broken to the north of an important long-term downtrend, the door is open to a run higher towards the 50DMA at $21.50 and then the late June high around $22.0. This level was an important area of supply in late May and June.

All going well on the macro front in the coming weeks (i.e. data pointing the Fed towards a 50 bps rate hike later in the month, or at least easing fears about inflation), AVAX/USD has a shot at returning to the $30 level.

Ethereum

The world’s second-largest cryptocurrency by market cap Ethereum is another strong performer on Thursday, with gains in the last 24 hours of upwards of 7.0% according to CoinMarketCap. ETH/USD was last up around 3.0% on the day around $1,220 on Thursday and around 22% since last week’s sub-$1,000 lows.

ETH/USD bulls have their sights set on a test of the late-June highs just under $1,300. A break above here could potentially catalyze a sharp rally back towards the 50DMA just under $1,500 and then to the significant $1,700 resistance area. From a technical standpoint, beyond $1,300, there is very little by way of significant resistance to stand in the way.

Analysts are citing anticipation ahead of the so-called “Merge” of Ethereum’s current mainnet blockchain, which achieves consensus using Proof-of-Work, to a much less energy-intensive Proof-of-Stake blockchain. Further progress towards the merge this month combined with favorable macro developments could be the bullish cocktail that the Ethereum bulls need to muster an upside break.

Solana

The native token of the Solana blockchain SOL was last up around 7.0% in the last 24 hours according to CoinMarketCap, making it the third best performing cryptocurrency in the top 20 by market cap on Thursday. Recent upside comes despite reports emerging that Solana developer Solana Labs is being sued for illegally profiting from SOL, which the suit claims is an unregistered security.

The suit, filed by a man who allegedly bought SOL last summer called Mark Young, alleges that the way SOL was created and sold meets the criteria of the Howey Test. This is a precedent commonly referred to by the US Supreme Court to assess whether the sale of an asset makes it a security or not.

SOL/USD was last trading just above $38, at weekly highs and up around 23% from last week’s lows around $31. Bulls have their sights set on a test of the late-June highs in the $43.0 area. But before getting here, the cryptocurrency will need to surpass its 50DMA at $39.0 and then the psychologically important $40.0 level.