Author: Coinposters

According to CoinMarketCap, Bitcoin (BTC) resumed its downward trend on Friday night and dropped below the critical $20,000 threshold to $19,907. It’s a monthly low for August and the first time since July 14 that Bitcoin has fallen below $20,000 USD.

Since Federal Reserve Chair Jerome Powell’s speech in Jackson Hole about hiking interest rates further to combat rising inflation, Bitcoin has been on a free slide.

Bitcoin’s market value fell from $1.27 trillion in November 2021 to less than $383 billion now. Bitcoin has lost 6.4% during the previous week.

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has performed even worse in the preceding twenty-four hours, falling 10% to $1,468 at the time of writing.

With a market capitalization of less than $180 billion, ETH has dropped roughly 69% of its value since reaching its all-time high of $4891.70 in November 2021, according to CoinMarketCap statistics.

According to statistics from Coinglass, more than $250 million has been liquidated by 87,144 dealers on the cryptocurrency market during the previous 24 hours amid adverse price activity.

Ethereum leads in liquidations at $108.60 million, followed by Bitcoin with $65 million. The majority of liquidations for the top two cryptocurrencies were caused by blown-out long positions.

According to CoinMarketCap, several cryptocurrencies, like Binance Coin (BSC, down 2.91%), Solana (SOL, down 6.34%), and Avalanche (AVAX, down 8.06%), have also suffered significant losses during the previous 24 hours.

The market’s negative behavior is attributable to Chairman of the Federal Reserve Jerome Powell’s recent statements at the Fed’s annual economic conference.

The stock and cryptocurrency markets responded violently to his words, with the Dow, Nasdaq, and S&P 500 all closing down more than 3% on Friday. According to Insider, a 75-basis-point increase is anticipated when the Fed meets the following month.

According to research by Coinshares, digital asset fund volumes were likewise on the lower end of the spectrum last week.

According to DefiLlama statistics, the total value locked (TVL) across all blockchains has decreased by more than 5.45% over the previous 24 hours, showing a decline in user enthusiasm for DeFi.

Popular DeFi platforms such as Lido, MakerDAO (the inventor of DAI), Curve, Uniswap, and Compound have all seen double-digit TVL declines over the last month.

After Federal Reserve Chair Jerome Powell said that the United States Central Bank might very possibly continue to raise interest rates, the price of Bitcoin took a knock this morning, plummeting to within a few hundred dollars of $20,000.

According to statistics provided by CoinGecko, Bitcoin (BTC), the largest cryptocurrency in terms of market value was trading for around $20,600 at the time this article was written. This represents a 24-hour decline of 3.7%.

This year, Bitcoin has taken a significant beating as a result of a significant market sell-off. This asset is now trading at a price that is 70% lower than its all-time high of $69,044.77, which it reached in November 2021.

Following Powell’s remarks, the remainder of the cryptocurrency market was also trading in the negative. Ethereum, the second most valuable digital currency, is now trading at roughly $1,600, a 6% decrease from the previous day’s trading price.

According to statistics provided by CoinGecko, the total cryptocurrency market value was sitting at $1.05 trillion after a drop of 3.8% over the last 24 hours.

At the Federal Reserve’s annual economic conference in Jackson Hole, Chairman Jerome Powell said, “These are the terrible consequences of decreasing inflation.” He went on to say that failure to restore price stability would result in “more suffering” for people in the United States.

This year, the Federal Reserve has been increasing interest rates in an effort to curb inflation, which is presently at its highest level in the United States in the last four decades.

This has resulted in a strong dollar, while other markets, like as U.S. shares, have suffered losses as investors flee risk assets in the face of economic unpredictability.

As a direct result of Powell’s remarks earlier today, the Dow Jones sank by 1.6%, the S&P 500 fell by 1.9%, and the Nasdaq 100 plunged by 2.5%.

Since investors who own digital assets have more recently starting trading them like tech stocks, the cryptocurrency market as a whole, including Bitcoin, has been closely following the stock market.

Between August 15 and August 19, the Bitcoin market witnessed a 16.5% correction as it attempted the $20,800 support. In actuality, a $4,050 price difference is quite modest, particularly when Bitcoin’s 72% yearly volatility is taken into consideration.

Currently, the S&P 500’s volatility is at 31%, which is much lower, yet between June 8 and June 13, the index traded down 9.1%. So, according to the historical risk measure, the index of significant U.S.-listed corporations had a more sudden change.

The attitude of crypto investors deteriorated at the start of this week after China’s central bank lowered its prime rate for five-year loans on August 21 in response to deteriorating circumstances in the Chinese real estate market. In addition, a strategist at Goldman Sachs investment bank claimed that inflationary pressure will push the U.S. Federal Reserve to tighten the economy more, which would have a negative effect on the S&P 500.

Regardless of the present 80/100 connection between equities and Bitcoin, investors often seek refuge in the U.S. dollar and inflation-protected bonds when they anticipate a crisis or market catastrophe. This phenomenon is known as a “flight to quality” and has the tendency to increase selling pressure on all risk markets, including cryptocurrency.

Bitcoin has been unable to break through the $20,800 support despite the bears’ best attempts. This trend explains why the expiration of monthly options on Bitcoin worth $1 billion on August 26 might favor bulls despite the recent 16.5% decline in five days.

Bitcoin bulls must drive the price over $22,000 on August 26 in order to prevent a probable loss of $140 million. However, Bitcoin bulls liquidated $210 million worth of leveraged long futures options on August 18, so they are less likely to drive the price higher in the near future.

Consequently, the most likely scenario for August 26 is a price range between $22,000 and $24,000 which provides a balanced conclusion between bulls and bears.

If bears exhibit power and BTC falls below the crucial $20,800 support level, the $140 million loss in the monthly expiration would be the least of their worries. In addition, the move would invalidate the previous bottom of $20,800 on July 26, so halting a seven-week-long upward trend.

Late on Saturday night, the price of bitcoin broke beyond the $25k barrier for the first time since June 13. At the time of this writing on Sunday morning, it has lost pace and fell back to $24,510 on CoinMarketCap.

This is an indication that Bitcoin’s $25k threshold is likely to continue to serve as a significant resistance level for the biggest cryptocurrency for the foreseeable future.

The price of Bitcoin has increased by just 5.85 percent over the previous week, while the price of Ethereum, which is ranked second, has increased by 16 percent over the same period of time due to anticipation of the network’s impending merging to a proof-of-stake model.

The important economic indicator stayed constant last month as the Federal Reserve’s interest rate rises looked to be counteracting growing prices. As a result, Bitcoin’s spike may be at least partially attributable to cooling in inflation.

The price of Bitcoin and the rest of the cryptocurrency market, in addition to other assets such as equities and bonds, have taken significant hits during the whole summer as a result of growing inflation and the possibility of an approaching global recession.

The Federal Reserve in response hiked interest rates, which resulted in the creation of a risk-off atmosphere. As a result of this climate, investors sold cryptocurrencies and risky tech companies in order to cling to dollars.

It was previously believed that bitcoin served as a buffer against inflation; however, its reputation as an anti-inflationary “digital gold” has been put to the test this year, as it has instead closely linked with IT stocks.

Despite recent indications of a resurgence, Bitcoin’s value is currently 64% lower than it was when it reached an all-time high of $69,044.77 in November 2021.