Crypto: Uncertainty Returns, Bitcoin Falls
Uncertainty is back in the cryptocurrency market after more than three weeks of calm characterized by the rise in prices.
Bitcoin, the king of cryptocurrencies, even managed on August 15 to once again reach the symbolic threshold of $25,000. It was the first time the biggest digital currency traded around $25,000 since June before falling back.
But since then, the $25,000 now looks like a feat, as bitcoin suffers again. The king of cryptocurrencies is down 10% in the last seven days. But the most worrying thing for investors is that the drop is more than 8% in the last 24 hours. Bitcoin is currently trading at $21,527.39, according to data firm CoinGecko.
Altcoins, or coins other than bitcoin, are also down, starting with ether, the original currency of the very promising Ethereum platform. Ether is down more than 7% to $1,722.81 in the last 24 hours.
The second cryptocurrency, had risen sharply in recent days because we are approaching the long-awaited update of the Ethereum software that would make transactions more fluid, lower transaction fees and significantly lower energy consumption related to validating operations. This update, known as the merge, is scheduled for September 15.
Crypto has lost over $170 billion in the last 24 hours
Coins related to widely followed decentralized finance (DeFi) platforms, which allow developers to work on projects related to financial services and others, were in very sharp decline: solana (-12%), cardano (-13.9%), polkadot (-11 .5%). %).
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The meme coins dogecoin (-14.1%) and shiba Inu (-12.4%) coins were not spared.
Overall, the crypto market has lost more than 8% in the last 24 hours, or just over $170 billion. It is currently worth $1.08 trillion compared to just over $3 trillion during cryptomania last November.
This drop in cryptocurrency prices looks more like a correction after several weeks of decline than an actual panic. It is in line with the retreat from the stock markets as investors’ attention turns to Jackson Hole, Wyoming, where the traditional annual Federal Reserve symposium is held next week.
Investors are in the dark about the central bank’s intentions in relation to monetary policy. Will the Fed maintain its aggressive pace of rate hikes, or will it slow down somewhat? Members of the Fed (James Bullard and Esther George) have been sending divergent signals in recent days.
An aggressive rate hike is likely to lead to a hard landing in the economy, some experts fear. This scenario is particularly devastating for risky assets like cryptocurrencies.
Investors are therefore hanging on to comments from the Fed. Meanwhile, the nervousness seems to be back as it was in May and June.
