Top 3 Trending Coins: ETH Struggles Below $1,700, APE Pushes Towards $7.50, AAVE Dips Under $100

Key Points

• Ethereum is struggling to get above $1,700 resistance. A clean upside break could trigger a swift move to $2,000.
• ApeCoin is bucking the trend of subdued/softening crypto prices and is the best top 50 performer.
• Aave is back under $100, but still trading within a bullish upwards trend channel.

Ethereum (ETH)

ETH, the native token of the Ethereum blockchain and the second most valuable cryptocurrency by market capitalization was last trading flat on Monday in the $1,680s, with profit-taking ahead of a busy week for macro risk events preventing the cryptocurrency from challenging last week’s highs near $1,800 per token.

Technicians have pointed out that Ethereum is currently struggling to get above a key long-term area of resistance just above $1,700. If the cryptocurrency cannot push above these levels, it could be in for a nasty retracement lower, some of them argued. Equally, if ETH can push convincingly back above last week’s highs near $1,800, then it is in with a solid shot of testing late-May highs in the $2,000 per token area.

Ether Flips Bitcoin in Options Market for the First Time

In a bullish sign for ETH, the total dollar value of all Ether options contracts currently open on the world’s largest crypto derivatives exchange Deribit recently surpassed the total dollar value of all Bitcoin options. As of Monday, the so-called “open interest” (i.e. dollar value of open options contracts) of Ethereum options was $5.7 billion compared to $4.3 billion for Bitcoin.

Analysts called the development “historic”, with Ethereum having never before seen an open interest higher than Bitcoin. Some claimed it could represent a build-up of bullish bets on the cryptocurrency with its “Merge” to Ethereum 2.0 (where it transitions from Proof-of-Work to Proof-of-State) in September.

BofA Warn That Ethereum Needs Scalability Improvements to Succeed

Without scalability improvements, Ethereum is going to have a difficult time retaining its position as the dominant smart contract-enabled blockchain, Bank of America argued in a research report last week. The bank noted that newer blockchains that already utilize a Proof-of-Stake consensus mechanism and have greater scalability have taken market share from Ethereum as of late. They cite Binance Smart Chain, Avalanche and Solana as examples.

However, the bank noted that Ethereum’s switch from Proof-of-Work to Proof-of-Stake seems imminent, which will be the first of a series of major upgrades for the blockchain, including the so-called “Surge”, which aims to improve Ethereum’s throughput (i.e. transaction processing speed) exponentially. At present, Ethereum can only manage about 15 transactions per second (TPS), but the aim is to lift this to about 100,000.

ApeCoin (APE)

Apecoin is bucking the trend on Monday that has seen most other major cryptocurrencies move lower amid profit-taking, with its APE token last up a little over 5.5% on the day and higher by a little over 3.0% in the past 24 hours, as per CoinMarketCap. APE/USD was last changing hands just above $7.10 per token, just below Sunday’s multi-week highs in the $7.30 area.

Technicians are targetting a near-term test of the $7.50 area, which was an area of support-turned resistance back in late May. A break above here could open the door to a swift rally back to mid-May highs near $10.

Aave (AAVE)

AAVE, the native token that powers Decentralized Finance (DeFi) protocol Aave crypto borrowing/lending/liquidity platform, is one of the worst performing cryptocurrencies in the top 50 by market cap. According to CoinMarketCap, AAVE was down close to 6.0% in the last 24 hours, with AAVE/USD last changing hands in the $98s per token, having slipped back from multi-week highs printed over the weekend above $100.

AAVE/USD has been moving higher in recent weeks within the confines of an upwards trend channel and, as a result, some technicians are targetting a test of the $115-$125 resistance area within the next few weeks. Above that, there is the 200-Day Moving Average just below $130 per token.

Aave to Create New Algorithmic Stablecoin GHO

Aave’s decentralized autonomous organization (DAO) just passed a proposal to create a new algorithmic stablecoin GHO. 99.99% of the 501,000 AAVE tokens that voted on the proposal voted in favor. In order to get GHO (the equivalent to borrowing), Aave protocol users will need to post collateral at a pre-specified ratio.

Once they pay back their GHO or get liquidated because of a drop in the value of their collateral, Aave will burn the GHO. Given Terra’s UST stablecoin’s failure in May, many within the crypto space are skeptical about whether GHO can succeed. According to Aave’s proposal, however, GHO will be over-collateralized. GHO will initially be available on the Ethereum mainnet.