Crypto Market Review, August 5
Second largest cryptocurrency leading market as Bitcoin braces for interesting moves next week
By the end of the week, the cryptocurrency market returned to green values, and the prices of the largest assets on the market have shown positive dynamics with even greater potential next week.
Ethereum leads the market’s top 10
Following the publication of Arthur Hayes’ Medium article, in which the creator of the Bitmex derivatives trading platform predicted that Ethereum would reach $5,000, the price of the second largest cryptocurrency in the market reached the local high of $1,724 with around 10% price increase in the last 24 hours.
Hayes offered different scenarios in which the price of Ether could reach new highs. The main reasons behind the new rally are the successful implementation of the Merge update and the reversal of the Fed’s hawkishness.
The aforementioned reasons will most likely lead to a rally for any type of digital currency, considering the risky and volatile nature of this type of asset. The Fed’s actions have directly affected the digital asset market. It took a huge hit after institutional investors started leaving the industry en masse due to reduced demand for risk exposure.
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Bitcoin looks promising
This week’s market was the real test for Bitcoin as the first cryptocurrency faced a seven-day streak of losses and returned below the $23,000 price barrier, which could have been a sign of an upcoming fall. Fortunately, Bitcoin bulls held through the top in the selling pressure and left BTC in a local uptrend.
This week, Coinbase announced a partnership with Blackrock and struck a deal to provide access to crypto for the fund’s clients, which is sure to attract millions if not billions of trading volume to the digital asset market.
Following the release of the news, Coinbase’s stock value skyrocketed by nearly 70%, prompting a trading halt due to abnormal volatility. Bitcoin and the cryptocurrency market also benefited from the news, with the market seeing increased trading volume and purchasing power for Bitcoin and other cryptocurrencies.
Potential risk factor for the market
The only risk factor we can see now is the rise of the US dollar against the foreign currency bracket as the DXY index reached the local support level of the 50-day moving average.
The US dollar surge would not be good for assets like Bitcoin or gold, as investors invest more in safer options instead of going with USD-denominated assets when the US currency shows strength in the market.
At press time, DXY is hovering around 106.6, while Bitcoin is changing hands at the $23,000 level.
