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Bitcoin and Ethereum Short Interest Dives to Record Lows on Bitfinex

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Recently, interest in short positions for Bitcoin and Ethereum on Bitfinex has reached all-time lows, according to Alphractal, a professional platform for investment data analysis. This trend marks an enormous shift in market dynamics: historically, a rapid increase in long positions on Bitfinex was usually followed by a market decline.

In the case of Bitcoin, this relationship is very distinct, with an increase in long positions leading normally to a price drop. Bitcoin long positions have been soared to 62,570 BTC, while BTC short positions have remained at a mere 418.5 BTC since March 2024, thus, there are 149 times more longs than there are shorts.

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Ethereum represents a new case. Up to 2022, this was the major conflict between long and short positions. Nonetheless, the trend has shifted recently, with short positions decreasing markedly against longs. Remember in 2021 when the total of short positions was higher than long positions? Ethereum was at its cycle peaks at that point.

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As of now, 63,860 ETH are in long positions compared to 3,334 ETH in shorts, which is approximately a 19x difference. While most exchanges indicate dominance of long positions, the continuous rise in longs on Bitfinex could suggest potential price declines and forced liquidations of traders. However, a price correction might also present a buying opportunity for market participants.

Bitcoin Demand Growth Declines, Prices Drop

Meanwhile, a CryptoQuant report reveals that Bitcoin’s demand growth has been lackluster and has even turned negative recently. BTC’s apparent demand had significantly slowed since early April, when BTC was trading at around $70,000. The demand fell from a 30-day growth of 496,000 Bitcoin, the highest since January 2021, to a current negative growth of 25,000.

Due to reduced demand, Bitcoin prices have fallen from around $70,000 to $49,000. A recovery in price is dependent on renewed interest. This decline is also seen in the slowing growth of large Bitcoin holders, or “whales,” whose 30-day holdings growth dropped from 6% in February to just 1% now. Historically, whale growth of over 3% has correlated with rising BTC prices.

Furthermore, slowing demand is indicated by reduced purchases of Bitcoin by US spot ETFs. This would, therefore, require increased ETF activities to drive BTC demand higher and consequently move prices up. Despite weak prices, some metrics, such as accumulation by long-term holders and growing market capitalization for stablecoins, suggest that there is underlying strength in cryptocurrency markets.

Related Reading | BNB Investor Turns $1.46M into $4.45M in Just Five Hours Amid Crypto Market Revival

Ethereum’s Dencun Upgrade: A Bot-Infested Nightmare?

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Ethereum has made significant progress in becoming a more efficient data availability [DA] layer for roll-up, thanks to advancements like Dencun and EIP 4844. However, this transition brings its tradeoffs. As per Galaxy expert, Christine Kim, this shift comes at a cost to protocol revenue and has not entirely solved the issue of high DA costs for rollups.

These tradeoffs include a reduction in ETH’s share of rollup revenue. The report highlighted that total revenue earned is 69% below that of the average 150-day rolling sum before the upgrade; ETH burned is 84% below that of the average 150-day rolling sum before the upgrade. Secondly, the continued high costs for rollups using Ethereum’s data availability layer have become a nagging issue.

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Ethereum's Dencun Upgrade: A Bot-Infested Nightmare? 4

Before these changes, Ethereum captured a substantial portion of the value generated by rollups, reaching up to 77%. With the implementation of EIP-4844, this share has dropped significantly to 8% for optimistic rollups and 33% for ZK rollups. While this represents a notable improvement, Ethereum’s DA layer remains relatively expensive. Nevertheless, rollups face substantial costs, with average prices of $16,473 per gigabyte of blob data used and $12,458 per gigabyte purchased. These high costs are primarily driven by periods of increased demand, leading to surges in blob prices.

Ethereum Transaction Failure’s Main Culprit

Although activity on the leading L2s picked up immediately post-Dencun, the rise in transaction counts has been met with rising failure rates. The majority of the failed transactions arise from high-activity addresses, likely bots. Bots activity is further driven by low fees on L2s. “Average users who are not sending high volumes of transactions are experiencing failed transaction rates at a level only slightly more elevated than pre-Dencun levels,” per the report.

To further enhance Ethereum’s efficiency as a DA layer for rollups, the research analyst recommended that ETH undergo additional upgrades. This could involve exploring alternative consensus mechanisms, optimizing data storage and retrieval processes, or developing new economic models to incentivize efficient DA provision. By addressing these challenges, Ethereum can solidify its position as a cost-effective and scalable platform for rollups, fostering innovation and growth within the broader Web3 ecosystem.

Ethereum’s 2025 Catalyst: How Pectra Could Transform DeFi Interaction

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The second most significant milestone in the journey of the Ethereum network is the Pectra upgrade, set for release in Q1 2025, which is the buzz around DeFi today. According to Ignas, Co-founder of PinkBrains.io DeFi Creator Studio, while Ethereum has underperformed against both Solana and Bitcoin, the Pectra upgrade could prove to be a compelling reason to turn bullish on ETH.

Ethereum has gone through a number of significant upgrades in the last couple of years, among which are Proof of Stake (PoS), ETH burning, and reducing gas fees via data blobs. Even with these technological advancements, the Pectra upgrade has not been greeted with the same enthusiasm, and the reason may be upgrade fatigue. Nevertheless, Ignas emphasizes that Pectra will be able to bring in some revolutionary tools.

Ethereum’s Account Abstraction: Powering Up EOAs

One of the upgrade’s key elements is Account Abstraction (AA) which addresses a longstanding issue in the ecosystem of Ethereum. Back in the day, the use smart contract accounts in DeFi dApps has been a real pain in the neck with frequent missed airdrops and a not-so-great user experience in general.

EOAs are the standard user accounts on Ethereum that have been largely preferred by users because of their simplicity. On the other hand, EIP-7702, which is an important proposal under the Pectra upgrade, is designed to solve this problem.

EIP-7702 will give EOAs the capability of functioning as smart contract wallets for a short while during transactions with this other account. With the introduction of this feature, EOAs will be able to perform functions that only smart contract wallets had, thus, greatly improving the user experience.

Among the benefits is the ability to batch multiple actions into a single transaction, sponsorship where another account can cover transaction fees, and privilege management through sub-keys with limited permissions.

These improvements will definitely help to make dApps more secure and user-friendly, simplify fund management, automate many processes, and enable interaction with dApps without the need to explicitly hold ETH. For example, users can now approve and swap assets within one transaction, making it much more streamlined and less frictionary.

Related Reading | Polkadot’s Bullish Wedge Signals Massive Rally

Ethereum Eyes $3,500: Key Resistance At $2,800 Crucial For Next Move

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Anup Dhungana has explained Ethereum to be in a position for a rally from which one could gain insights into the movement of its price. He opines that such a rally may happen if specific resistance levels are breached as Bitcoin continues to exert market pressure.

In one of the recent X posts, Anup Dhungana still sees signs of a long-term bullish trend for ETH despite the current and recent consolidation, especially if ETH manages to overcome the key technical barriers.

Ethereum has lately bounced back from an intersection of a downward-sloping trendline which has proven to be quite supportive in the last couple of weeks. The trendline shared in the chart by Dhungana is crucial for the stabilization of Ethereum’s price and its future increases.

Ethereum Targets Key Break

To achieve the much-anticipated $3,500 price level, ETH need to pass through a major resistance level of $2,800. This particular support level that has manifested on the weekly chart is a major hurdle for Ethereum preventing further upward movement while Bitcoin stays ahead to dominate the market.

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The price structure of ETH is quiet vulgar, but the bounce back from this vital support level imply that ETH may cross the $2800 resistance soon. But if Ethereum’s bet pays off, it could target $3.5K in the future period.

Dhungana’s observation is made at a time when there is widespread fluctuation in the total market value of all cryptocurrencies, with Bitcoin’s trends being observed. Bitcoin’s price movements typically dictate the market and therefore their performance has a direct effect on ETH.

While anticipating the actual break out over $2800 for ETH, investors are focused on the Bitcoin movement for any signs as to the direction of the market. Thus, the opinions of Dhungana inspire some hope for the Ethereum community because the further rise of this cryptocurrency mainly depends on this challenge.

Whereas Bitcoin still influences the market, ETH possibly has more short-term potential depending on the $2800 barrier. Should the current positive momentum be realized, Dhungana’s target of $3500 might become a reality, reviving investor confidence in Ethereum during periods of consistent volatile price movements.

Mega Whales Shake Ethereum: Price Dips Ahead?

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Some of the largest Ethereum whales, holding over 10,000 ETH, have been on a coveted accumulation spree over the past month, with no signs of easing up. Data from Glassnode shows the number of Ethereum mega-whale addresses [those with a balance of over 10,000 ETH] and the 30-day change in that number. The chart also shows the price of Ethereum.

As gauged from the chart, the number of mega-whale addresses has been steadily declining over the past month, while the price of the token has been relatively stable. This suggests that some of the largest ETH holders are selling off their coins.

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Mega Whales Shake Ethereum: Price Dips Ahead? 8

There are several possible reasons for this sell-off. One possibility is that these whales are simply taking profits after the recent rally in the price of Ethereum. Another possibility is that they are worried about the one-token concentration and are looking to diversify their portfolios.

Whatever the reason, the sell-off by Ethereum whales is a significant development. It could put downward pressure on the price of Ethereum in the short term. However, it is also possible that the demand from other investors will be able to offset the selling pressure from whales.

Ethereum: Rising Wedge Spotted

The second-largest altcoin has been facing bearish sentiment for quite some time. Renowned market analyst Ali Martinez recently suggested that ETH might be heading toward a price consolidation citing a rising wedge pattern. This is typically a bearish technical indicator that usually precedes a price correction.

If the rising wedge pattern holds, ETH could experience a pullback toward the $2,350 support level. This potential correction could be further amplified by profit-taking investors and a prevailing bearish sentiment in the market leading to selling pressure.

It is important to note that technical analyses are not foolproof, and the situation may be more complex than it appears. However, the data does suggest that some of the largest Ethereum holders are selling off their coins, and this is something that investors should be aware of.

Ethereum Privacy Gains Momentum as Buterin Sends 400 ETH to Railgun

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Ethereum co-foundеr Vitаlik Butеrin mаdе wаvеs in thе crypto community on Mondаy by trаnsfеrring 400 ETH, vаluеd аt $1.05 million, to thе privаcy-focusеd protocol Rаilgun. Whilе thе motivе for thе trаnsfеr rеmаins unclеаr, thе trаnsаction hаs gаrnеrеd significаnt аttеntion аs Ethеrеum’s pricе hovеrs nеаr thе $2,600 mаrk.

Rаilgun, а privаcy protocol opеrаting on Ethereum, аllows usеrs to mаkе discrееt trаnsаctions by obscuring dеtаils such аs thе sеndеr, rеcipiеnt, аnd аmount of cryptocurrеncy involvеd. Using Zеro-Knowlеdgе proofs, spеcificаlly zk-SNARKs, Rаilgun еnsurеs thаt thеsе trаnsаctions rеmаin confidеntiаl. This isn’t Butеrin’s first usе of Rаilgun, which hаs bееn а kеy tool in his аpproаch to privаcy within thе blockchаin spаcе.

Butеrin hаs long аdvocаtеd for privаcy within thе dеcеntrаlizеd еcosystеm. Hе hаs prаisеd Rаilgun for its аbility to sаfеguаrd usеr idеntitiеs, highlighting its vаluе in kееping bаd аctors from еxploiting thе systеm without compromising lеgitimаtе usеr privаcy. Rаilgun introducеs rаndomnеss in trаnsаction dаtа, mаking it hаrdеr to trаcе thе flow of funds аnd аssociаtе thеm with spеcific individuаls.

On-chаin аnаlytics plаtform Spot On Chаin rеports thаt Butеrin hаs usеd Rаilgun multiplе timеs, trаnsfеrring а totаl of 662 ETH—еquivаlеnt to $1.91 million. His lаtеst trаnsаction rеаffirms his support for privаcy-еnhаncing tеchnologiеs, which hаvе bеcomе incrеаsingly importаnt in thе еvolving cryptocurrеncy lаndscаpе.

Ethereum’s Ongoing Privacy Debate

Dеspitе Ethereum’s growth аs а lеаding public blockchаin, concеrns аbout usеr privаcy pеrsist. Butеrin’s continuеd bаcking of privаcy protocols likе Rаilgun signаls his commitmеnt to аddrеssing this issuе. Hе prеviously supportеd Tornаdo Cаsh, аnothеr privаcy tool, but shiftеd focus to Rаilgun following lеgаl аctions аgаinst Tornаdo Cаsh.

Vitаlik Butеrin’s аctions in promoting privаcy аlign with his history of significаnt cryptocurrеncy trаnsfеrs. Eаrliеr this month, hе movеd $8 million worth of ETH to а multisignаturе wаllеt, dеmonstrаting his ongoing involvеmеnt in mаnаging lаrgе digitаl аssеts. As Ethereum’s pricе continuеs to hovеr аround $2,600, mаrkеt аctivity hаs intеnsifiеd, with а notаblе risе in whаlе trаnsаctions аnd trаding volumеs еxcееding $10 billion.

Butеrin’s usе of Rаilgun suggеsts thаt privаcy rеmаins а cruciаl еlеmеnt of his vision for Ethеrеum’s futurе, еspеciаlly аs thе dеmаnd for еnhаncеd privаcy tools continuеs to grow.

Related Readings | Bitcoin Miners’ Tough Year Could Turn Around with $13.9B AI Opportunity

Ethereum’s Last Chance Of Breakout or Breakdown

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Ethereum, the largest altcoin by market capitalization, is currently trading at $2,648.85 with a 1.23% decline in the past hour. Market experts have spotted a rising wedge pattern hinting at a potential downturn. But there’s still a chance that the price might go up.

According to renowned market guru, Ali Martinez, ETH might be heading towards a price consolidation based on a rising wedge pattern. This is typically a bearish technical indicator that usually precedes a price correction.

If the rising wedge pattern holds, ETH could experience a pullback toward the $2,350 support level. This potential correction could be further exacerbated by profit-taking investors and a prevailing bearish sentiment in the market leading to selling pressure.

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Ethereum's Last Chance Of Breakout or Breakdown 10

However, there’s still a ray of hope for ETH bulls. If the cryptocurrency manages to break above the $2,800 resistance level with a convincing close, it could invalidate the rising wedge pattern and potentially signal a continuation of the ongoing uptrend.

Arthur Hayes On Ethereum’s Dominance

On the other hand, the recent crypto crash has not deterred market pundits from predicting a bullish outlook on the long-term potential of these digital assets. Arthur Hayes, former CEO of BitMEX, recently made an unconventional forecast regarding the future of the crypto market, which generated a lot of discussions within the community.

As reported by TronWeekly, Hayes went on to predict that the highly anticipated altcoin season will not return until Bitcoin and Ethereum, which dominate the market, break key price levels. The top executive recently published an article in which he explained that the prices of Bitcoin need to go above $70,000 or higher. He asserts that Ethereum needs to break above $4,000 before the altcoin market can return to its former glory. 

Having said that, one should not interpret these expert insights as financial advice, but rather as informational. Additionally, technical analysis is not foolproof, and market conditions can change rapidly. Traders and investors should exercise caution and consider conducting their research before making any investment decisions.

Ethereum Turns Inflationary for the First Time Since 2022: What’s Behind the Shift?

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For the first time since 2022, Ethereum is now inflationary. Contrary to its deflationary trend witnessed from late 2022 through early 2024, the latest data from the network reveals a net increase in the supply of Ethereum.

Specifically, from January to July 2024, Ethereum emitted 540,958 ETH, while 465,657 ETH was burned, making for a net addition of 75,301 ETH. The recent Coingecko report describes this huge deviation from the past trend of Ethereum, where it was experiencing a reduced supply due to its burning mechanism.

Since the implementation of EIP-1559 in June 2021, the Ethereum network has incinerated a substantial 4.36 million ETH. However, the burn rate has varied significantly throughout 2024. The second quarter saw a dramatic drop in the amount of ETH burned, with only 107,725 ETH destroyed, a staggering 67.7% decrease from the first quarter, which had 333,555 ETH burned. July 2024 marked an all-time low for the year, with just 17,114 ETH burned, a 35% decrease from June’s figures.

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Source: CoinGecko

In comparison, the first quarter of 2024 was marked by a deflationary trend, as 220,454 ETH were emitted against 333,555 ETH burned, resulting in a reduction of 113,100 ETH from the total supply. This trend reversed in the second quarter when emissions outpaced burns, with 228,543 ETH added to the network and only 107,725 ETH burned, increasing the supply by 120,818 ETH.

Uniswap Remains Top Ethereum Burner

Out of the top ETH burn Contributors, Uniswap was the largest, and it had burned 71,915 ETH in 2024 alone. However, its burn rate decreased drastically, falling 72.4% in Q2 compared to Q1. ETH transfers were the second-largest contributors, having burned 33,538 ETH year-to-date, although their burn rate also fell by more than 70% from Q1 to Q2. In third place was Tether (USDT), which had burned 23,332 ETH in 2024, with its burn rate plummeting similarly.

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Source: CoinGecko

The top 10 ETH burners have collectively contributed 39.2% of the total ETH burned this year. Other key sources that have burned Ether in the past include the Telegram trading bot Banana Gun, responsible for 11,060 ETH. This decline in burn rates across major protocols shows a broad slowdown of activity and transactional volume on the network.

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Ethereum Drops Below $3K Support as Bearish Trend Sparks Concern

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Ethereum’s rеcеnt pricе movеmеnt hаs puzzlеd аnаlysts, аs it hаs fаllеn bеlow а prеviously еstаblishеd support lеvеl, chаllеnging еаrliеr optimistic prеdictions.

Crypto еxpеrts аt Whаlеs Crypto Trаding Plаtform rеcеntly аnаlyzеd ETH’s pricе bеhаvior, noting а pеriod of consolidаtion followеd by а concеrning shift. Thе pricе hаs brokеn out of а pаrаllеl chаnnеl, typicаlly аssociаtеd with stаbility, аnd еntеrеd а dеscеnding chаnnеl, which is а clаssic indicаtor of а bеаrish trеnd.

At thе timе of thе аnаlysis, аnаlysts idеntifiеd thе dеscеnding chаnnеl’s support linе аt аpproximаtеly $3,201 аs а criticаl lеvеl to monitor. Thеy еxpеctеd this point to sеrvе аs а springboаrd for а potеntiаl rеbound. Howеvеr, with ETH’s currеnt pricе аt $2,659, thе brеаch of this kеy support lеvеl hаs dеfiеd еаrliеr prеdictions.

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Ethereum Drops Below $3K Support as Bearish Trend Sparks Concern 15

Now thаt thе initiаl support hаs bееn brokеn, ETH’s nеxt potеntiаl sаfеty nеt liеs аt $2,204. If thе pricе fаils to hold аt this lеvеl, а dееpеr corrеction for ETH аppеаrs likеly. Convеrsеly, should Ethereum find support hеrе, it could potеntiаlly movе towаrd thе prеvious support lеvеl of $3,201, which hаs now turnеd into rеsistаncе.

Ethereum Faces Bearish Signals

Dаily tеchnicаl indicаtors show potеntiаl bеаrish trеnds, but thеrе аrе аlso hints of possiblе stаbilizаtion. Thе 50-dаy Exponеntiаl Moving Avеrаgе (EMA) hаs crossеd bеlow thе 100-dаy EMA, with both EMAs currеntly аbovе thе currеnt pricе. This crossovеr typicаlly signаls wеаkеning short-tеrm momеntum compаrеd to thе mеdium-tеrm trеnd, which could еxеrt furthеr downwаrd prеssurе on Ethereum.

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Ethereum Drops Below $3K Support as Bearish Trend Sparks Concern 16

Thе Rеlаtivе Strеngth Indеx (RSI) stаnds аt 40.64, plаcing it in thе lowеr hаlf of thе nеutrаl rаngе. Thе RSI is nеаring thе 30 lеvеl, but it is not yеt ovеrsold, suggеsting thаt whilе ETH is еxpеriеncing wеаk momеntum, it hаs not rеаchеd еxtrеmе bеаrish lеvеls. This could imply thаt whilе sеlling prеssurе is еvidеnt, thеrе might still bе room for а potеntiаl rеvеrsаl or аt lеаst а pаusе in thе downtrеnd.

Thе Moving Avеrаgе Convеrgеncе Divеrgеncе (MACD) indicаtor supports а cаutious outlook, with thе MACD linе positionеd bеlow thе signаl linе, furthеr еmphаsizing thе bеаrish sеntimеnt.  

Howеvеr, thе gаp bеtwееn thе MACD linе аnd thе signаl linе is nаrrowing, аnd thе MACD linе аppеаrs to bе moving closеr to thе signаl linе. This convеrgеncе could indicаtе thе possibility of а bullish crossovеr, which would bе а positivе sign for ETH, potеntiаlly signаling а rеvеrsаl or а slowdown in thе currеnt bеаrish trеnd.

Ethereum’s futurе trаjеctory dеpеnds on its аbility to hold support аt thе nеwly idеntifiеd lеvеl of $2,204. If this lеvеl holds, а rеtеst of thе prеvious support—now аcting аs rеsistаncе аt $3,201—could bе in thе cаrds. Convеrsеly, а dееpеr corrеction mаy occur if ETH brеаchеs this criticаl support. Whilе tеchnicаl indicаtors prеsеnt mixеd signаls, а cаutious outlook is wаrrаntеd givеn thе prеvаiling bеаrish trеnd.

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Arthur Hayes Predicts Altcoin Revival Hinges On Bitcoin & Ethereum Surge

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The former CEO of BitMEX Arthur Hayes made a rather unconventional prediction regarding the future of the crypto market, which generated a lot of conversations within the community. As Hayes goes on to point out, the highly anticipated altcoin season will not return until Bitcoin and Ethereum, which dominate the market, break key price levels.

As reported by Colin Wu, a popular crypto journalist, Hayes recently published an article, where he explained that the prices of Bitcoin need to go above $70,000 or higher. While he asserts that Ethereum need to surpass $4,000 before the altcoin market could return to its former glories. He stressed that this rise of the top cryptocurrencies is an essential and fundamental catalyst for the rest of the altcoin market to start the upward movement again.

Arthur Hayes Signals Solana Breakout

Extending further on his forecasts, Hayes explained that Solana (SOL) must be included as one of the top altcoins in focus for the current year. He affirmed that Solana would have to rise above $250 before an absolute altcoin breakout could be supported. As Hayes says, this level is rather the critical point, which will provide Solana with the opportunity to become one of the main players in the crypto market.

Hayes did not stop at giving insights though. He also discussed the aspects of macroeconomics that have affected the cryptocurrency market and highlighted the problem of the US dollar liquidity. Activating this liquidity, he said, could reinvigorate the entire crypto market and push it out of its current state of stagnation and decline.

Arthur Hayes is famous for his rather ambitious forecasts, and the recent comments have sparked debate over the long-term outlook for the crypto market. In the word’s of Hayes, this can start in September, driven by a pickup of US dollar liquidity. According to him the change has the potential of pulling the market up from the present state of inertia and enter a new growth trajectory.

Arthur Hayes’ predictions have been largely received with positive feedback though critics have also arisen. While some of his counterparts are also positive with the shares, some have said that getting to those prices may not be a easy feat. The impact of Hayes in the crypto market means that investors and traders would continue to observe his predictions as they continue trading amidst the volatile market environment.