Bitcoin Price Back Below $20,000 After Fed-Driven Decline, ETH, XRP, Aug 29

BTC under pressure with inflation risks and Mt Gox fears. ETH whales move to exchanges before Merge. XRP pumps and dumps on whale movements.

BTC

Bitcoin retested the $20,000 level over the weekend as Federal Reserve policy expectations weighed on risk assets.

The world’s largest cryptocurrency by market capitalization suffered after comments from central bank chief Jerome Powell.

Restoring price stability will take some time and requires vigorous use of our tools to bring demand and supply into better balance. Reducing inflation is likely to require a prolonged period of below-trend growth.

“Furthermore, there will very likely be some softening of labor market conditions. While higher interest rates, lower growth and softer labor market conditions will bring down inflation, they will also cause some pain for households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”

The comments added pressure on equity markets as the central banker telegraphed a longer period of higher rates. BTC fell in thin weekend trading, exacerbated by fears over the release of coins from Mt. Gox fund exchange test.

The demands varied, with some suggesting that a sum of up to 137,000 BTC was set for release in one go. Others said funds would be sent in parts, but agreed it should start this week.

Mt. Gox collapsed with hundreds of thousands of bitcoins nearly ten years ago. After a protracted legal battle, the appointed rehabilitation administrator, Nobuaki Kobayashi, announced on July 6 that he was “preparing to pay back” the creditors.

“After discussions with the court and in accordance with the rehabilitation plan, the rehabilitation administrator plans to determine the assignment etc. Limitation reference period from approx. end of August this year until all or part of the repayments made as first installments are completed for safe and secure repayments,” it read in part.

In other data from chain analytics firm Glassnode, the percentage of the total BTC supply in profit hit a one-month low just above the 55% level.

BTC was trading below the $20,000 level and the recent activity has some analysts worried about a Black Swan event in September.

ETH

The Ethereum blockchain is moving closer to its planned September 15th merger as it transitions from its current proof-of-work mining consensus to proof-of-stake (PoS).

Despite the improvements in the chain, bullish enthusiasm in terms of token price and market sentiment seems to be waning as the merger approaches. There has been a sharp decline in the holdings of many ETH whales.

Data from crypto analytics firm Santiment has shown that the gap between Ethereum’s top 10 largest non-exchange and exchange addresses is closing. Over the past three months, major whale addresses have sent a significant amount of ETH to exchanges. Non-exchange addresses have decreased by 11%, while exchange-based addresses have increased by 78%.

The flow of crypto back into exchanges generally reflects bearish sentiment and is done by traders looking to cash out by selling their tokens. It is also a sign that whale investors are predicting lower prices in the near future.

Many market analysts also believe that the merger will be a “buy the rumor, sell the news”. They expect the ETH price to accumulate in the Merge event, but sell once it has completed the upgrade.

The merger will mark the completion of the second of three phases in Ethereum’s transition to PoS. The process started in December 2020 with the launch of the Beacon Chain.

The current phase was scheduled for completion in mid-2021; however, the project was marred by delays. These delays hurt the price of Ethereum and caused it to lose more of its value on a percentage basis than Bitcoin in the last bear market decline.

The move to PoS solves some key issues for Ethereum, such as scalability, cost and energy consumption.

The price of ETH traded at $1,450 on Monday, with the recent low around $886.

XRP

The Ripple XRP price saw a rise and fall last week with a 6% jump disappearing.

The move to $0.37 was a two-week high and occurred hours after the network processed three massive transfers worth $51 million involving crypto exchanges Bitso and FTX, as highlighted by Whale Alert.

There has still been no resolution to the ongoing SEC lawsuit that claims XRP is a security and continues to weigh on the token. Meanwhile, the project announced the flagship event, “Ripple Swell Global”, to be held in London in November 2022.

Recently, Ripple CEO Brad Garlinghouse also said that the project is willing to explore another path if they lose the SEC lawsuit. He also said the company is willing to explore moving to another jurisdiction in the event of an adverse court ruling against the SEC.

XRP was trading at the $0.32 level, but the coin looks bearish and could be in line for a retest of the $0.2865 low from June. That will happen this week if stocks and crypto remain under pressure.