ETH L2 Tokens Surge on Dencun Clarity, ETHBTC Showing Signs of Technical Progress

Dec 22, 2023

Risk assets received another shot in the arm today, with core PCE data registering at just 0.06%, well below the 0.20% consensus estimate. This has led to a continuation of the downward trend in the DXY. Both the SPX and QQQ are up on the day, and gold is edging closer to new YTD highs. In crypto markets, there’s been a significant rotation into ETH L2s this morning, especially OP -2.75%  and ARB -0.10% , spurred by the emergence of a detailed timeline for the Dencun upgrade (more on this below). Despite the widespread rally in equities and crypto, BTC has yet to exceed the $44k mark. ETH has finally surged higher, now back above $2300. SOL -1.47% , following its recent upswing, encountered resistance around the $100 level last evening. Crypto equities are also witnessing a rise, possibly influenced by a recent SEC memo indicating further meetings with BTC ETF applicants, likely regarding cash creations and redemptions. It appears that equity investors, who may not have been monitoring the situation as closely as we have, are starting to recognize the high likelihood of an ETF approval in early January.

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CRYPTO MARKET UPDATE Crypto prices have rebounded slightly following yesterday's sharp selloff, with BTC 2.64% climbing back above $61,000 and SOL 3.07% moving above $145, while ETH 1.33% is lagging, trading around $2,400. Among today's outperformers is SUI 7.13% , which appears resilient despite a $115 million token unlock yesterday. Oil is partially retracing its early rally, gold is lower on the day, and yields are moving higher, suggesting at least a temporary reversal of...

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