The United States equities markets rallied sharply last week, ending a three-week losing streak. The S&P 500 rose by 3.65% last week while the Nasdaq Composite soared by 4.14%. In correlation with the equities markets, the overall crypto market cap stands at around US$1.11 trillion - up about 0.2% since yesterday!

The bullish momentum in the stock and cryptocurrency markets are showing signs of a bottoming formation but it may be too early to predict the start of a new sustained bull run.

What you need to know

Ethereum’s highly anticipated merge and Cardano’s Vasil hard fork are scheduled in the next few days and could heighten volatility in several cryptocurrencies.

Tomorrow, the US Bureau of Labour Statistics will release the Consumer Price Index (CPI) report for August. This will be a crucial one, which will have a significant bearing on US Federal Reserve boss Jerome Powell’s inflation-combatting movements, and the stock markets’ and crypto market’s activity.

According to Forbes, the CPI report is unlikely to deter the Fed from hiking interest rates in September by around 50 to 75bps at its next FOMC meeting. If the CPI is lower than that of July (8.5%), it’ll be reasonable to imagine a continued stock and crypto rally in the short term this week.

Bitcoin made a recovery from last week’s blues to burst past the US$22,000 mark this morning!

The no. 1 cryptocurrency reacted well to news that MicroStrategy intends to allocate another $500 million for BTC purchases by selling some of its stocks. The rally could also be traced to its long standing correlation with US equities’ and last week’s signals that the U.S. central bank will reverse course from monetary tightening to monetary easing in 2023, even though it’s unlikely in the short term.

Key Takeaway

Bitcoin struggled to maintain the bullish momentum in recent weeks after the price was rejected from the $25,000 area. If BTC consistently breaks above the current $22,000 level, we might see a more bullish sentiment, causing BTC to claim the zone between US$24,000 and $25,000 soon. However, if it fails to hold this price, we could see it retest the $20,700 area.

As pointed out by an analyst, the taker buy sell ratio is now at its highest value in 636 days. If this is anything to go by, then BTC may see a bullish outcome soon.

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The second-largest cryptocurrency is close to touching $1,800 as the Merge is approaching fast!

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Ethereum (ETH) price has jumped nearly 15% in a week as support for PoS transition continues to grow. DeFi platforms including Aave, Uniswap, MakerDAO, and others have expressed support for PoS. The platforms have also turned down support for any Ethereum PoW fork.

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What you should know 

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Readiness for the Ethereum Merge is now at 99.66% as Ethereum clients and developers push for its successful implementation. The network hash rate has also dropped to 875 TH/s, after rising to 900 TH/s recently.

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According to on-chain data, the dominant behaviour across the Ethereum network is to HODL. We are now seeing 7-year holders of Ethereum start to increase. From July 28, the first 7-year holders began to show and now hold over 2% of the supply.

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In what was described as a "fun little surprise", Google has launched an Ethereum Merge Countdown Timer that appears whenever you search for any keywords related to the event - eg “ethereum merge”

During the last week, BNB jumped by 6.05%, ADA swelled by 2.67%, AVAX gained 8.15%, and ETC increased by 19.34%.

The biggest smart contract token gainers this week include liquidapps (DAPP), up 124.05%, aergo (AERGO), up 118.57%, and enecuum (ENQ), which gained 112.86%. The week’s biggest losers in terms of smart contract coin losses during the past week include salt (SALT), down 35.82%, edgeware (EDG), down 13.28%, and aurora (AOA), down 10% this week.

Terra continues its impressive comeback rally, after the collapse of its native token Terra (LUNA) and stablecoin TerraUSD (UST) in May. LUNA’s performance in September has been spectacular, given it has rallied by more than 300% month-to-date after a long period of sideways consolidation.

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