ETH Leads The Charge, Post FOMC Market Update

🚨 In Case You Missed It

Tiffany & Co. announces NFTiff, an exclusive NFT collection of 250 digital passes. CryptoPunks NFT holders can redeem these passes for a customized IRL pendant.
Aave DAO approves governance proposal on Snapshot to develop and release the stablecoin GHO.
Ethereum developers announce Aug 6th as start date for the Merge on Goerli testnet, last step before the final Merge on Ethereum mainnet.
Tether CTO signals support for ETH2 ahead of the Merge, states that stablecoins “should act responsibly and avoid disruption for users.”

📊 Saylor In Disbelief As…

Since legacy markets bottomed on June 16th, ETH has significantly outperformed BTC and other major asset classes. While BTC has gained 14%, ETH has bounced nearly 60% as developers announced a definite timeline for the Merge.
It’s not just ETH that’s outperforming the king of crypto, but even altcoins are racing past BTC. The total crypto market cap (excluding BTC and ETH) is up by 20% in the same time period. In comparison, even the Nasdaq has managed a more sizable recovery by gaining 16%.
So what’s going on? Well, it appears that the speculatooors may be stealing some thunder away from BTC as they buy into the hype cycle created by the Merge. For the first time in history, aggregated open interest in ETH-based options has surpassed that of BTC-based options.
The Merge is one of the most anticipated events in all of crypto’s history. It will be interesting to see if ETH can keep control of the narrative and continue decoupling from BTC after it goes live. Currently, developers are forecasting a tentative date of Sept 19th for the final Merge.
For more on ETH’s recent price action, Delphi members can read our latest Markets Insights report here.

⚡ Not-So-Bad News is Good News

On Wednesday, the FOMC raised interest rates another 75 bps, as expected. Markets rallied almost immediately after the FOMC statement was released, and maintained those gains throughout much of Powell’s press conference.
This is perhaps indicative of shifting sentiment as not-as-bad news is actually received as goods news; we tend to see this type of market behavior towards the latter stages of a bear market.
Risk assets seem to be moving between large macro events like the latest CPI print or FOMC meeting. Interestingly, the economic calendar is a bit bare for the remainder of the summer, most notably that we don’t have another official FOMC meeting until September.
With the macro calendar relatively sparse, risk assets may be able to take advantage, targeting the upside. The August CPI print holds extra weight because it’ll inform us as to whether inflation has truly peaked.

Like the equity markets, BTC has continued to grind higher this week, shaking off a turbulent weekly macroeconomic calendar. BTC now finds itself trading at the top end of its consolidated price range from the last 2 months, and nearly 25% off of the range lows.
High time frame resistance levels will likely come into play around the $28K-$30K price region. This area played a significant role of support throughout the 2021 bull market, and will likely act as resistance when the price revisits this area.
High time frame support remains the same at previous cycle all-time highs/current range lows. This area is roughly $19K-$20K.
For more information, Delphi members can read the full Delphi Insights report here.

🐣 Notable Tweets

Why Crypto Markets Are Rallying

Powell hikes 75 basis point and yet Nasdaq & Bitcoin are going to the moon.

What the heck?

While I disagree with the unfolding market narrative here, let me try to explain why we are witnessing such a rally.

A Fed thread.

1/

— Alf (@MacroAlf) July 27, 2022

A Look Into Quantitative Tightening

QT will probably end in early 2023, and not because of recession.

It will stop because the Fed can’t shrink its balance sheet past $8trn ($8.9trn now) without introducing problems for the system.

The math is below.

1/

(Fed total assets)

— Count Draghula (@countdraghula) July 28, 2022

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