Crypto Key Points:
- BitcoinPrice Sdemands 20%, ether increased by 50% Ahead of Hhistorical Event.
- Collective gains push the total crypto market cap back above $1 trillion.
- Bitcoin Short-term outlook remains bullish, Fed meeting holds key.
Bitcoin, Ethereum & Alt-Coins: A Brief History of Crypto Winters
It’s been a week of impactful headlines, allowing for an increase in volatility as we are a week away from much awaited events US Federal Reserve Meeting on the 27thth July. Bitcoin and the overall crypto market have seen strong momentum and pressure over the past week Bitcoin (BTC)Above its consolidation range highs of $23,000 It made a new high of $24,200.
The relief in the market is reflected in rising futures premiums. Offshore premia are in line with early July levels but remain compressed, suggesting cautious sentiment.The Fear and Greed Index has risen from the extreme fear zone after a record 74-day bout of extreme fearwhich could be another boost to sentiment for the ailing crypto space.
Source: Arcane Research
Massive Ethereum Momentum, ‘The Merge’ Fueling the Rally?
strong, weekly, Gains were seen by Ethereum (ETH)which is up more than 50 percent since last weekwith a high of $1,646. The world’s second most valuable cryptocurrency was boosted by news that an event known as ‘The Fusion‘ has a tentative date to go live, the week of September 19th.This will switch Ethereum from a Proof-of-Work system to a Proof-of-Stake systemwhich reduces network energy consumption by approximately 99.95 percent.
Cryptocurrency developers are describing it as “the most significant upgrade in Ethereum history.”committed to ensuring that it can stand the test of time That’s the story people could believe.
Basic Risks
However, it is important to acknowledge this ‘The Fusion’ Event is still a risky business and that there are long-term regulatory and technological risks facing crypto. Long-term risks remain in the crypto space, the most notable being regulation and the uncertainty it brings, as well as technical failures of the system.
Proof of this lies in the new landmark agreement reached by the European Parliament at the end of June to regulate cryptocurrencies. Under the new rules, transfers of bitcoin and other crypto assets will be subject to the same anti-money laundering regulations as traditional bank transfers.
The Fed meeting will hold key catalysts for cryptos in the coming week
A decision of federal reserve on Wednesday on interest could be the key for bitcoin and the global markets.The DEclines in cryptos are due in part to cracks in the digital asset market, including the meltdown of stablecoin Terra and the failure of high-flying hedge fund Three Arrows Capitalwhile correlation to stocks didn’t help.Having been shown to be broadly correlated with other risk-sensitive assets such as equities, Bitcoin (BTC) and other tokens have followed the S&P 500 and Nasdaq Composite into the bear market this year as investors fret over macroeconomic pressures.
With inflation at its highest in four decades, the Fed has already aggressively hiked rates to tame red-hot prices, but this carries the risk of a recession. It seems how it builds the Fundamentals for a reversal, but the market needs some reassurance that the Fed will slow the pace of US interest rate hikes.
BTCUSD daily chart
Source: trading view, diagram prepared by Zain Vawda
Final Thoughts
Electric car maker Tesla sold $936 million worth of Bitcoin, or 75% of its holdings, in the second quarter. The market reaction following the announcement once again demonstrated Bitcoin’s resilience as we rallied higher above the consolidated range at $22,800 despite an initial drop. Bitcoin near-term outlook remains bullish, if we hold above $22,800 by the weekend we could see a jump to $25,000 before peaking around the $29,000 area before the start of Wednesday’s FOMC meeting . The expectation would be that such a bullish move would sweep altcoins with it.
— Written by Zain Vawda for DailyFX.com
Contact and follow Zain on Twitter: @zvawda
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