Bitcoin price maintained the upward momentum last week and is back above $20,500 currently! A glance at the daily chart reveals the price repeated previous week’s dynamics: it retreated three out of seven sessions last week and closed higher on the week! Bears were clearly in defense last week as the price continued advancing after the downward momentum was reversed following the successful breach above the resistance! Bulls have the upper hand currently and looks will likely remain in control this week too barring a reversal in investor sentiment after fresh US inflation report on Thursday!
Crypto market rebound continued despite a more hawkish than expected press conference by Federal Reserve chair Powell after Fed raised rates by another 75 basis points last Wednesday. Powell dismissed speculation over a potential pause in interest rate hikes while several Fed officials signaled last week that they supported a smaller rate hike in December. Meanwhile another crypto exchange suffered a wallet hack pausing withdrawals last week while Citi says Ether may be moving toward a deflation after the second largest crypto by market capitalization recorded the biggest weekly gain in 3 months the previous week.
Crypto options and futures exchange Deribit announced it suffered $28 million loss in crypto assets after its wallet was hacked. The exchange stated that hackers had hacked the wallet where the exchange held only 1% of its assets. The exchange’s chief commercial officer Luuk Strijers assured the company “ remains in a financially sound position and ongoing operations will not be impacted."
Ether posted the biggest weekly gain in 3 month a week ago - ETH rose over 16% in the seven days to October 30. On September 15 the smart contract platform Ethereum transitioned to a proof-of-stake (PoS) consensus mechanism from a proof-of-work (PoW) mechanism known as the Merge. The overhaul replaced miners with validators, who explicitly lock capital in the form of ETH on the platform as entities responsible for confirming transactions. Since the switch, ether's supply has increased by 1,300 tokens – compared to the net-supply increase of more than 481,000 had the blockchain continued to use the PoW mechanism.
The banking major CiTi’s report estimates that the switch to PoS has resulted in active ETH supply reduction equal to about $7.7 billion. The Merge has resulted in removal of about 564,000 ETH from circulation in the six weeks since the transition, compared with circulation if PoW issuance was still occurring. Net issuance of ether fell close to zero, Citi said in a research report.