Crypto Market Review, August 19

As we have mentioned several times in our recent reviews of the crypto market, the positivity in the market we saw in the last few weeks was nothing more than a correction within the long-term downtrend the market entered back in December, and Bitcoin’s price performance confirms this hypothesis.

Bitcoin breaks important support

The rising wedge on Bitcoin is a common pattern that acts as a “cooling off” pattern ahead of the major volatility spike. Sometimes assets break out to the upside and enter long-term rallies, leaving the downtrend behind.

With Bitcoin, the first cryptocurrency has deliberately tested the upper limit of the consolidation range. However, due to the lack of inflows into the market and the anemic trading volume, the short-term rally did not accelerate further and faded relatively quickly.

With at least two support levels broken, BTC is now looking for other reasons to stand. Unfortunately, the only significant support level we see on the chart right now is the previous local low, at the $19,000 price level.

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Since the market was largely surprised by such a sharp increase in Bitcoin’s volatility, liquidation volume has reached a local high of around $650 million in the last 24 hours.

Macro pressure on Bitcoin and crypto

One of the main fundamentals behind BTC’s recent plunge is the USD rally reflected in the DXY index, which measures the performance of the USD against a bracket of foreign currencies.

After reaching the 50-day moving average, the US dollar bounced off the support level and is now moving towards the local high of 108.7. The continuation of the rally in the US dollar will mean a further increase in pressure on risk assets, including cryptocurrencies and technology stocks.

Despite slowing inflation, the market is still pricing in the upcoming cycles of interest rate hikes, which won’t end until the end of this year or the beginning of next. Financial experts predict a 75 bps hike at the upcoming FOMC meeting.

Altcoins are bleeding

In addition to the disastrous performance of the largest cryptocurrency on the market, alternative digital assets have faced a number of technical problems that led to the recent rally.

As we’ve covered previously, Cardano’s market reversal was fueled by technical issues that surfaced on the test nest with the new version of the node installed. The bug could damage the Vasil hard fork implementation, which is the last thing the network needs.

🧵 (1/n) It is important to point out today that #Cardano #Testnet is **catastrophically** broken due to a bug in Cardano Node v 1.35.2. This was the version that we had previously been told was “Tested and Ready” for Vasil Hardfork. This error was only detected…

— Adam Dean (@adamKDean) 18 August 2022

Ethereum was also targeted by bears, losing more than 7.3% of its value against the USD in the last 24 hours, which is the market average at this time.

The majority of altcoins have reached their local support levels, which means we may see a mild rally this weekend due to low trading volume in the crypto market and the inactivity of large institutional investors.

At press time, Bitcoin is changing hands at $21,505, Ethereum is consolidating to a 50-day EMA at $1,700 and ADA is moving to $0.46.