Encryption key points:
- BitcoinPrice Srequest 20%, Ethereum up to 50% Aboss of Hhistorical Event.
- The collective gains push the overall crypto market cap above $1 trillion.
- Bitcoin Short-term outlook remains optimistic, Fed meeting holds key.
Bitcoin, Ethereum, and Alt-Coins: A Brief History of Crypto Winters
It’s been a week filled with hard-hitting headlines allowing volatility to grow, as we’re one week away from the highly anticipated US Federal Reserve See you on the 27the July. Bitcoin and the overall crypto market have seen strong momentum over the past week, pushing Bitcoin (BTC)above its consolidation range peaks at $23,000 creating a new high of $24,200.
Market relief is reflected in rising term premiums. Offshore premiums are in line with early July levels but remain compressed, suggesting cautious sentiment.The fear and greed index has risen from the extreme fear zone after a record 74-day streak of extreme fearin what could be another boost for the struggling crypto space.
Source: Arcane Research
Massive Ethereum Momentum, Is ‘The Merge’ Driving the Rally?
Strong, weekly, earnings were seen by Ethereum (ETH)which has increased by more than 50% since last weekwith a maximum of $1,646. The world’s second most valuable cryptocurrency has been boosted by news that an event known as the ‘Fusion‘ has a tentative release date, the week of September 19.This will see Ethereum go from a proof-of-work system to a proof-of-stake systemreducing network energy consumption by approximately 99.95%.
Cryptocurrency developers describe it as “the most significant upgrade in Ethereum history”showing a commitment to ensuring that it can stand the test of time This is the story that people could buy.
It is important, however, to recognize that “Fusion” event is always a risky trade and that there are long-term regulatory and technological risks that crypto faces. Long-term risks continue to linger around the crypto space, the most notable being regulation and uncertainty surrounding it as well as technical system failures.
Proof of this is the historic new agreement reached by the European Parliament at the end of June to regulate cryptocurrencies. Under the new rules, transfers of bitcoins and other crypto assets will be subject to the same money laundering regulations as traditional bank transfers.
Fed Meeting Holds Key Catalyst for Cryptos in Coming Week
A decision of the Federal Reserve Wednesday on interest rates could hold the key to Bitcoin and global markets.The dCrypto declines are partly due to cracks in the digital asset market, including the collapse of stablecoin Terra and the failure of high-flying hedge fund Three Arrows Capitalwhile a correlation with equities did not help.Having been shown to be highly correlated with other risk-sensitive assets, such as equities, Bitcoin (BTC) and other tokens have trailed the S&P 500 and Nasdaq Composite into bearish territory this year as investors fret over macro pressures.
Faced with the highest inflation in four decades, the Fed has already moved aggressively to raise interest rates in a bid to tame searing prices, but it risks triggering a recession. It would seem how it is built the preparing for a trend reversal, but the market needs a little more insurance that the Fed will moderate the pace of rate hikes in the United States.
BTCUSD daily chart
Source: TradingView, chart prepared by Zain Vawda
Electric car maker Tesla sold $936 million worth of bitcoins, or 75% of its holdings, in the second quarter. The market reaction after the announcement once again showed Bitcoin’s resilience as despite an initial decline, we climbed back above the consolidated range at $22,800. The short-term outlook for Bitcoin remains bullish, if we hold above the $22,800 handle heading into the weekend, we could see a bounce to $25,000 before peaking around $29,000 before the start of trading. Wednesday’s FOMC meeting. One would expect such a bullish move to take altcoins on the journey.
— Written by Zain Vawda for DailyFX.com
Contact and follow Zain on Twitter: @zvawda