Ethereum, Bitcoin Slide Further Through The Weekend
bitcoins price. Investors' euphoria over the technological transformation of the Ethereum blockchain last week seemed far-fetched as the Ether price fell to its lowest level since late July on Sunday.
The second-largest cryptocurrency by market capitalization last traded at less than $1,350, a drop of more than 7% in the past 24 hours that continued for the past three days after the merger.
Cryptocurrency slide in 2022
For now, it seems likely that Ether and other cryptocurrencies will continue to weaken for several months in the face of the same macroeconomic forces affecting stocks and other risky assets.
bitcoins last traded at around $19,450, down more than 2.5% from Saturday and its lowest level in 10 days. Earlier this week, the largest cryptocurrency by market capitalization began to fall from a level above $22,000 after the disappointing Consumer Price Index (CPI) indicated that the Federal Reserve So far has work to do to curb inflation.
Investors will be closely watching the Federal Open Market Committee's (FOMC) decision on a new rate hike this week (UTC), although a minimum increase of 75 basis points is widely expected - a continuation of monetary tightening by the Fed.
We can see the comfortable rise in bitcoin that it was really not continuous, it retreated a lot from its gains after the CPI data was higher than expected for its merger became a news selling event," Joe DiPasquale, CEO of crypto fund manager BitBull Capital wrote in an email to CoinDesk.
However, the upcoming FOMC will be a key point for the markets, Participants expect a 75 basis point rate hike, while some expect tighter measures."
Most other major cryptocurrencies spent Sunday in deep red territory, with OP recently down 17% and RVN and YGG both down nearly 15%. KNC, the symbol of the Kyber Network, fell about 25% more than 8 hours after Twitter discussed a possible exploit.
So far the indicator of fear and greed in the fear zone is still there.
The impact of the slip of digital currencies
Equity markets ended a dismal week with the Nasdaq, S & P 500, and tech-heavy Dow Jones Industrial Average (DJIA) all losing a fraction of a percentage point as markets continued to quickly digest last week's disappointing consumer and producer price indexes. A series of physical blows. Those blows included FedEx's announcement Thursday that it would close its offices due to recession fears, the threat of job cuts at Goldman Sachs, and problems in General Electric's supply chain.
FFedEx'sbusiness is often seen as a barometer of overall economic activity and consumption. During the week, the Nasdaq index fell more than 5%, while the S&P and DJIA indexes fell more than 4%.
The World Bank also noted Thursday that interest rate hikes by central banks could push the global economy into recession in 2023.
Aside from the FOMC meeting, investors will look to August housing starts and existing home sales for the latest clues on the housing market, which has now been hit hard. Last week, the mortgage rate on a 30-year loan hit 6% for the first time in nearly 15 years, and housing and construction data have fallen in recent months.
Crypto News
Meanwhile, recent reports from the U.S. The Treasury Department on Friday did not do much to clarify what the Biden administration and regulators will do about digital assets.
As reported by CoinDesk, the federal government is still concerned about the potential risks of cryptocurrencies.
In stark contrast to the near-perfect realization of Ethereum’s merger, technical snapshots and splits of new blockchain “forks” were sabotaged by cryptominers designed to protect the old proof-of-work network.
One of the fork’s strongest defenders, Chandler Joe, told The First Mover Program on CoinDesk TV on Friday that only 10% of miners use PoW to mine ETHPOW (Ethereum Merge Fork Token) or ETC (Ethereum Classic Token). ) will eventually continue. . ETC recently decreased by more than 13%.
BitBull's DiPasquale is optimistic, "Any bearish sign from the FOMC meeting is likely to give the market a strong upward momentum, and if prices fall further in the 75 bps rally, we could see a short-term bottoming out.
He added, “BTC remains attractive below $20,000 and we will continue to build to $17,000 and $15,000.
On the upside, we could see $24,000 as the first major resistance level, followed by $27,000 on a major BTC breakout. "
Is the time for an Ethereum merger over?
In a split second after the merger, everything seemed to be fine. Technically, the process went well, with ether trading steadily over the next few hours.
But the newly approved proof-of-stake ether fell 9% the next day, increasing its losses after bitcoin. Ether fell 7% recently.
The digital asset industry is grappling with a high-yield environment with levels of quantitative tightening at levels we haven’t seen in decades — far higher than in the Ethereum world.
Rates are expected to peak at 4.42% in March 2023 and stay above 4% for the rest of the year, according to Bloomberg traders. Affected by this, the dollar is expected to hit a new all-time high, showing a bearish trend for the "ultrasonic currency".
The next big rate hike will come after the next Federal Open Market Committee (FOMC) meeting scheduled for Wednesday and Thursday. There is growing speculation that the central bank may raise official U.S. interest rates by a percentage point for the first time since the early 1990s.
Analysts predict that the crypto market will face strong headwinds.
The problem with the crypto market
- Ethereum has other headwinds that are not tied to macroeconomic policy.
- The U.S. Securities and Exchange Commission (SEC) is very concerned about proof-of-stake tokens. To quote Chairman Gary Gensler — but not specifically for Ethereum — the nature of PoS could make it an investment contract, subjecting it to securities regulation.
- But there is one factor that supports Ethereum: exchange streams.
- Data from Glassnode on Friday showed strong initial inflows starting to reverse.
- While there is still some inflow, the $1.2 billion deposited by traders has now disappeared, and a net $395 million has left the exchange.
- This is usually seen as a bullish signal. Let's see if it stays that way as interest rates rise.
Common errors in investing in cryptocurrencies
As investment in cryptocurrencies escalates globally, many errors may ultimately end investors' financial liquidity. Cryptocurrencies fluctuate sharply for most of the reasons known, while there are unknown reasons for the absence of any known formal pillars on which they are based, thereby making investors vulnerable to lose.
I've gathered a range of tips from global cryptocurrency platforms, on safe investment and minimal losses in these currencies, or coming up with the least losses in a fast-fluctuating world like cryptocurrencies.
Cryptocurrency trading provides an enormous opportunity for cryptocurrency enthusiasts, but also faces significant threats; While many cryptocurrencies are available online, traders may benefit from avoiding this unpredictable new trade path.
- Do not distract you
Traders should protect themselves from falling into the excitement trap from the beginning; The cryptocurrency industry has a significant influence on the opinion of traders; Investors should realize that entering with everything they own without planning may lose everything they have.
For example, public interest in bitcoin investors was high all the time between December 17 and 23, 2017, with a price hike for historical levels, but the search shifted to other currencies as its price collapsed in January 2018, everyone wanted to jump from bitcoin to other currencies, which is not sound.
Therefore, investors should use a comprehensive review of future sales to ensure that the decision depends on facts rather than hype; And then build a plan and commit to it instead of being inspired by emotions.
- Do not listen to critics
Fear, uncertainty, and uncertainty are the words of a wide swath of critics of investing in cryptocurrencies; While they may implicitly endorse cryptocurrencies, for example, many prominent financial analysts have questioned bitcoin.
- Do not use hazardous trade
Hazardous trade is, inter alia, the non-investment of all funds in digital currencies, as covid may be shattering investors' savings over the past years, for example, prompting them to borrow to buy digital currency.
It is also important to know the history of the cryptocurrency to be invested in, previously a platform that trades in bitcoin has been hacked, while dozens of other currencies have not so far seen any successful attempts to hack it, due to the rigidity of its security wall.
- Don't fall prey to whales
There is a very unpredictable demand for digital currency; So trading activities around these digital characteristics may be very limited, making big market changes easier for big players or "whales"
As demand for cryptocurrencies declines, top players will carry out thoughtful campaigns suggesting the feasibility of investing in that currency, prompting them to halt any sales during a period, which will increase their demand later, and when their prices rise, whales foreshadow large sell-offs and fall prices again.
- Do not follow emotionally
Based on a pre-prepared plan, a digital currency investor must know when to buy, and when to sell and not change their plans because many other investors in this currency have graduated.
Cryptocurrency markets are volatile from their launch to date, and the biggest bitcoin guide has lost its market value of $ 18 thousand in three weeks, so those investing in them must control their emotions.
- No to the "Buy High - Sell Low" policy
The first mistake that beginners often make is to buy at a high price and sell at a low price; It is in fact the opposite of what you should do; The investor needs to buy at a low price and sell at a high price.
It is common for novice investors to look at the chart and watch the cryptocurrency rate rise madly and believe it is time to buy; But the next day the price declines, generating fears for the investor and forcing him to sell at a low price.
Basically, train yourself to think the opposite, i.e. whenever you see a high rise like this, it's usually not the right time to buy; It is true that you are required to wait until prices subside before you jump or retreat.
- No buying cheap coins
The second common mistake made by beginners is to buy cryptocurrency because it is cheap; Logic usually goes on something like that, i.e. buying a Litecoin coin for example because it's much cheaper than bitcoin, but the price of bitcoin has risen more than ever, you'll probably become a millionaire.
A big problem is that the investor looks at the unit price of the cryptocurrency, and doesn't think about its market value of it.
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