Crypto Market Review, September 20

The cryptocurrency market is still in a heavy knockout after the massive correction that began after the successful Merge update. The merger sent most digital assets to their local lows seen back in June. Fortunately, some assets, such as Cardano, are showing a lot of strength against Bitcoin, which is a mandatory requirement for a reversal against the USD.

Cardano is rallying upwards

In September, ADA broke through the upper boundary of the ascending triangle against Bitcoin, which reportedly led to a volatile and fluid rally against the first cryptocurrency. Unfortunately, the fundamental factors we mentioned earlier outweigh speculative interest, which is why a reversal did not occur.

Additionally, Bitcoin’s strengthening is a bearish signal for altcoins despite increased inflows into the industry overall. Earlier, we mentioned that the first cryptocurrency will most likely start to move upwards as the dominance of the market reaches the lower limit of the range.

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Ethereum’s weakness

Despite the recent prediction made by prominent analyst and creator of one of the largest derivatives trading platforms on the market, Arthur Hayes, Ethereum is rapidly losing most of its value after the successful transition to the PoS consensus algorithm.

The main reason is the unexpected influx of regulatory pressure considering the fundamental shift in Ethereum’s structure that makes it look like a security. In all fairness, Ethereum’s validator acts as a shareholder, and a potential 51% attack is in itself the same as being a majority shareholder.

However, the short-term picture is mostly driven by the lack of inflows into the market and tight monetary policy has nothing to do with Ethereum’s future potential as the merger changes the way the network works in general.

Long-term predictions from various financial institutions and experts such as Hayes remain positive, as Ethereum’s staking options may actually become a blockchain-based alternative to bank deposits in the future.

Bitcoin’s future remains uncertain

Despite the rally from $18,200 back above $19,000, Bitcoin’s position in the market remains problematic as the digital gold faces immense macro pressure that could worsen tomorrow if the Fed goes ahead with a 100bp rate hike following unexpectedly high inflation numbers.

Unfortunately, the Ethereum merger didn’t bring tons of inflows to the cryptocurrency market, so the lack of momentum is easily expected after the strongest US monetary tightening in 20 years.

The movement of the US dollar is another confirmation of this thesis as the currency is showing strong performance against foreign currencies, which is another factor pushing the price of the first cryptocurrency down today.

At press time, Bitcoin is trading at $19,000 and is actively testing the psychological support level which, if breached, could be the start of another correction below June’s levels.