Despite yesterday's weak sentiment from the opening of the earnings season on Wall Street, the major indexes showed the relative strength of buyers and erased some of the declines. European indices are also trying to unwind. Along with yesterday's upward movement in the NASDAQ index, cryptocurrencies also moved:
- Bitcoin is trying to climb above $21,000 and attack resistance again from previous local peaks at $22,000. Ethereum is trading above $1,200 per token and confirms another successful test in the transition to the version 2.0 expected by the markets;
- The positive reaction of the indices despite concerns around the economic slowdown may indicate a sell-off on the supply side and herald an imminent improvement in sentiment, which if sustained - could help the recently sinking cryptocurrencies;
- The cost of mining Bitcoin has fallen from nearly $20,000 to $13,000 according to JP Morgan analysts, which could herald rising margins and a dwindling supply of miners. The network is now seeing a decline in the energy required for mining according to the Cambridge Bitcoin Electricity Consumption Index, although the mining difficulty index is very high;
- In the short term, declining costs may mean that miners won't get rid of their Bitcoin and will reduce supply, however, in the long term, the declining cost of production may be viewed negatively by some in the market because it could set the bottom of the major cryptocurrency's price range during a bull market;
- In the face of yesterday's news from the main developers of the Ethereum network about another successful test as part of the transition to version 2.0, the token has gained nearly 12% in the last 24 hours. Ethereum is gearing up for what analysts describe as the major event of the year in the cryptocurrency sector's transition from the 'Proof of Work' mining method to the organic 'Proof of stake'. Investors are expecting the planned so-called "Hardship Bomb" to explode and the associated freeze in the supply of Ethereum tokens, which will then become like Bitcoin a deflationary asset. Activity on decentralized applications on the Ethereum network has increased, with TVL in the DeFi sector also rising by nearly 4%, according to data from DefILama;
- One of the lead developers of the Ethereum network, Marius van der Wijden told the Decrypt portal that the latest successful test brings the network closer to what it aims to become in the future by creating an environment friendly to validators validating transactions and scaling their profits and involvement in the blockchain in a fair way. Ethereum is on target to move to PoS in September. Currently, Ethereum is already ahead of the final test on the Goerli network, which is scheduled for August;
- The transition to the Proof of Stake method is expected, according to Ethereum creator Vitalik Buterin, to eliminate the problem of miners, who are currently able to manipulate the order of transactions in blockchain. The MEV Boost feature, which ended successful testing yesterday, is expected to reduce such activities to zero as part of the network's evolution process;
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