Crypto clock: Winter in the market is not over yet, experts claim
The cryptocurrency market cap remained above $1 trillion in the week ending July 29, even as the US Federal Reserve (Fed) raised its key interest rate by 75 basis points on July 27. Bitcoin has risen over 10 percent since Wednesday and Ethereum has jumped over 15 percent. However, experts say that the crisis in the crypto market is not over.
“This should not be considered as crypto winter is over. We are not there yet. Crypto is not immune to global factors or world economies,” Dileep Seinberg, founder and CEO, MuffinPayso.
“This can be considered a relief hike as the worst was priced into the market and things were not as bad as expected. A rate hike of 75 bps is less hawkish than a rate hike of 100 bps,” Seinberg said.
The Fed’s rate hike of 75 basis points came as a relief to many as politicians expected a bigger increase due to high inflation. The US central bank also announced on June 27 that inflation in the country for June was 9.1 percent, much higher than its upper tolerance level of 2 percent.
Fears of recession had weighed on markets around the world for the past two weeks. However, Fed Chairman Jerome Powell said in his statement on Wednesday that the US is not in recession, even though US GDP fell by 0.9 percent in the last quarter. He also added that further policy decisions will be based on future figures.
“The Fed’s evasion of questions about bond market pricing and futures guidelines by saying that future monetary policy decisions will be entirely data-driven was characterized as extremely dovish by the market with speculation that the peak of Fed hawkishness is behind us amid an ease in commodity prices and other key commodities ,” so CoinDCXhis research team.
At 4 p.m. on Friday, Bitcoin, the largest cryptocurrency by market capitalization, was trading at $24,048.36, according to coinmarketcap.com. Ethereum, the second largest cryptocurrency, was at $1,720.56. The total market capitalization of the crypto market was over $1.1 trillion.
Some experts are more optimistic about the crypto market in the coming days.
“The [markets] usually not reacting to what happened or what is happening, but rather to what might happen in say the next 2,4 or 6 months. So, a futuristic view of the market is what helps the Crypto market to be resilient and confirms its bright future,” said Punit Agarwal, Founder and CEO, in CoinX.
“If the bull rally continues with limited selling, we could see BTC reach USD 25,000 soon. A broad accumulating trend could break this level. On the other hand, Ethereum has been in a consolidation phase and is moving to test the US $1,800- level. If bulls can hold Ethereum at its current level today, we could see it test the US$2,000 level in the coming week,” Edul Patel, co-founder and CEO of the crypto investment platform Mudrex told Business Standard.
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