Crypto Market Review, September 5
Aside from Cardano’s breakthrough, the US dollar is also hitting new highs
In one of U.Today’s market reviews, we mentioned how Cardano could be on the verge of a breakout that could become a starting point for a new rally to help cryptocurrency gain a solid foothold at the top of the market. As we expected, an outbreak has occurred.
13% rally and reversal
On the ADA/BTC trading pair, one of the major Ethereum contenders started to rally during the weekend trading session as bulls managed to break the local resistance with less selling pressure compared to normal days of trading.
Unfortunately, after bears woke up, ADA faced an immediate increase in the negative trading volume and lost almost 2% of its previously achieved value. Although the coin has not lost half of what it gained during weekend trading, it should be considered a worrying sign.
With the negativity prevailing in the cryptocurrency market, Bitcoin will most likely continue to face elevated selling pressure, which could push ADA further against BTC and create a false sense of security for investors.
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If we take a look at the ADA/USD pair, it becomes clear that the asset failed to break through the local resistance level of the 50-day moving average. Another failed attempt to break the moving average would be the third time ADA failed to enter recovery mode, which could be a bittersweet pill to swallow for the coin’s supporter in the market.
The US dollar’s enormous pressure
The DXY index, which represents the movement of the US dollar against a bracket of foreign currencies, hit a 20-year high today, showing how far the financial market is from returning to the conditions we’ve seen over the past 12 years.
The tight monetary policy continues to put significant pressure on risk assets, including cryptocurrencies which have already lost around 70% of their value since the all-time high we saw back in November.
With the rising value of the world’s leading currency, institutional investors tend to shift their holdings towards the US dollar or investment vehicles that benefit from the rising value of the currency.
Less than 10 days left before the merger
At the beginning of next week, we will finally see the implementation of the biggest update in the digital asset industry in the last year. Ethereum will no longer use the PoW consensus algorithm.
Miners are still shifting their hash power to alternative options like Ethereum Classic or Ravencoin, which recently won the top spot among the top most profitable cryptocurrencies in the last 24 hours.
As more miners move to networks like Ravencoin and Ethereum Classic, investors believe that these networks will begin to grow exponentially as their fundamental value increases thanks to the power invested in their blockchains.
