Crypto Market Review, September 21
Prominent cryptocurrencies gain 20% thanks to success in court against the SEC
The 20% rally XRP showed us in recent days was a logical reaction to Ripple’s success in court despite the token’s lack of relationship with the prominent financial company. However, the massive increase in trading volume and improved price performance is only the beginning.
250% to recover
Unfortunately, the 20% run is next to nothing for XRP, as the cryptocurrency lost more than 75% of its value in the past few months. To reach values near an all-time high, XRP would need a massive 250% rally that would put it back to the $1.38 price level.
Unfortunately, the current net flow of funds in and out of XRP shows that a jump to the previous all-time high will not be possible without a major shift in the market. Despite the positive price performance of most assets today, the total market capitalization is still below the important $1 trillion level.
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Merger sale in final phase
The Merge update was fuel for most assets in the market a few weeks ago and one of the main sources of selling pressure after the upgrade went live. The main reason behind such a tendency was the “sell the news” rule used by most investors, especially in cryptocurrency markets.
The same market participants who bought ETH back in July or August actively sold the asset after a successful transition to PoS, which explains why the profitability of the second largest asset on the network plunged so much after the upgrade.
However, Ethereum developers are already working on the next Shanghai update by releasing updates to the previously existing EIP. The updated proposal will provide a way for validator withdrawals made on the Beacon chain to be transferred to the EVM. The withdrawal will need to be processed in the execution layer as soon as they are “dequeued” from the consensus layer.
Bitcoin does not recover
Unfortunately, the short-term 2% recovery we saw today is not helping the first cryptocurrency, as BTC is gradually moving lower, having already lost 21% of its value in the last two weeks.
The high chance of an interest rate hike and unexpectedly high inflation are driving up investor fears, putting even more pressure on high-risk assets, including Bitcoin and other cryptocurrencies.
The results of the FOMC meeting will be published later today. While most of the market expects a 75bp rise, cryptocurrencies are moving in the green due to the high possibility of a relief rally happening after the previously expected decision by the Fed.
At press time, BTC is trading at $19,284 and is up around 2.5% in value over the past 24 hours; However, the turnover shows that the price increase is purely technical and investors are still out of the market.
