Top 3 Trending Coins: MATIC Bulls Eye Return to $1.0, ETH Bulls Still Hoping for Return to $1,700

Key Points

• MATIC is the best-performing top 20 cryptocurrency and eyeing a push back towards $1.0.
• Ethereum is also performing strongly, with bulls still eyeing a rally to $1,700 provided macro events go well this week.
• Ethereum Classic has been surging recently and is testing its 200DMA and eyeing rally to $30.

Polygon (MATIC) Bounces At 21DMA, Eyes Test of Short-term Downtrend

Cryptocurrency sentiment has taken a turn for the better amid a recovery in global equities following solid earnings from the likes of US mega-cap tech giants Microsoft and Alphabet, we well as European luxury behemoth LVMH. This has supported MATIC, the native token to the Polygon blockchain. Polygon is an Ethereum scaling solution.

MATIC was last changing hands just above $0.81 per token, having seen a solid 12% bounce from Tuesday’s lows around $0.72. According to CoinMarketCap, Polygon is the best performing cryptocurrency out of the top 20 by market capitalization in the last 24 hours, having gained around 8.5% during this time period. MATIC bulls will be pleased with how the cryptocurrency responded to support in the form of its 21-Day Moving Average at $0.74 and mid-May highs.

Macro risk is now in focus with Wednesday’s Fed meeting, Thursday’s US Q2 GDP growth figures and Friday’s Core PCE inflation numbers capable of triggering volatility. But all going well on these fronts (i.e. the Fed is not too hawkish, growth is not too weak, and inflation showing further signs of easing), MATIC bulls will be hoping that the cryptocurrency can recover back towards recent highs near $1.0.

On the way back to $1.0, MATIC will face resistance in the form of a downtrend linking recent highs. Perhaps a break above here will provide the cryptocurrency with enough momentum to rally above $1.0 and towards its 200-Day Moving Average just below $1.20.

Polygon Ecosystem Shows Robust Growth

According to a tweet from Polygon’s official Twitter account, its blockchain was home to 5.34 million unique addresses in Q2 2022, a 12% increase versus Q1. Total transaction volume increased to $284 million in Q2, 4% up versus Q1. Average transaction costs, meanwhile, fell to just $0.018.

Meanwhile, Opensea saw 1.2 million new Non-fungible Token (NFT) wallets come online on Polygon in Q2, while new NFT mints jumped by 50% on the quarter to 66.6 million. “But the most bullish signal, and a sign that the Polygon ecosystem is building through the bear (market), comes from developer activity,” Polygon continued. “The network added on average 1,000 new contract creators a day for a total of 90,514, more than triple the pace of growth in the last quarter”.

1/ Ready for some Q2 stats?#Polygon PoS is now home to 5.34M unique addresses, a 12% increase from Q1.

Total Q2 transactions increased 4% to 284M and network revenue was $5.56M.

Average cost per transaction fell 49% to $0.018.

Let’s take a look at #DeFi, #gaming and #NFTs.

— Polygon – MATIC 💜 (@0xPolygon) July 26, 2022

Ethereum (ETH) Also Bounces At 21DMA, Bulls Still Eyeing Test of $1,700 Resistance

Ethereum is the second-best performing cryptocurrency in the top 20 by market cap over the last 24 hours, according to CoinMarketCap. During this time, it has rallied just over 6.0%, in tandem with a broader upside across the crypto space. ETH was last changing hands just below $1,500, having now bounced around 10% from Tuesday’s lows in the $1,350 area, where the cryptocurrency found support from its 21DMA.

Bulls hoping for a slightly deeper pullback to test support in the upper $1,200s, which would have offered a fresh opportunity to reload on longs, will be disappointed. With macro risk in focus, traders now wait to see if ETH can recover back to its recent highs in the mid-$1,600s. Many continue to think that a test of resistance at $1,700 is likely, all going well on the macro front.

Capital Flows Return to Ethereum

A return of institutional inflows into Ethereum-linked investment products has been acting as a tailwind for the cryptocurrency as of late. According to CoinShare’s weekly Digital Asset Fund Flows report that was released on Monday, Ethereum investment products saw $8 million in inflows last week following $120 million in inflows the week before.

Ethereum has still experienced a net outflow of $315.8 million this year, but if the current rate of investment continues, that will quickly turn positive. Investors seem to have warmed to Ethereum in wake of the announcement of a date for its so-called “Merge” from the energy-intensive Proof-of-Work (PoW) consensus mechanism to the much more efficient Proof-of-Stake (PoS) mechanism, which is touted to go ahead in September.

11 August will be the next big date to watch for Ethereum. The last of Ethereum’s public testnets Goerli will run through the merge transition. Success will pave the way for the mainnet merge in September and could further boost ETH sentiment.

Supply Shocks Could Help Ethereum Outperform Bitcoin Once Again, Says Raoul Pal

Macro expert and Real Vision CEO Raoul Pal said in a new video this week that Ethereum is set for a number of supply shocks that could allow its price to significantly outperform Bitcoin. Once the transition to PoS has taken place, Ethereum users will take their coins of the market and stake them for yield, reducing selling pressure, Pal argued.

Meanwhile, Pal said that Ethereum will also benefit from the absence of PoW miners selling as they pay for operational costs, as happens in PoW blockchains (like Bitcoin). Pal added that he thinks the ETH/BTC chart is about the breakout of a multi-year descending channel.

Ethereum Classic (ETC) Eyes Break Above 200DMA, Rally Above $30

Ethereum Classic, the original, non-forked version of the Ethereum blockchain that has played second fiddle to the dominent forked version since the post-DAO hack split in 2016, has been surging in the last few days. ETC is up around 20% versus Tuesday’s lows in the $22s and is once again testing its 200DMA in the $27s.

A break above could open the door to a swift rally above $30. Some analysts think that Ethereum’s transition to PoS in September could boost the investment appeal of Ethereum Classic, which is sticking with PoW. Last week, Ethereum’s co-founder Vitalik Buterin called Ethereum Classic a “totally fine chain” and said that “if you like proof of work, you should use Ethereum Classic”.