Bitcoin’s price fell below $20,000 this week after the Federal Reserve affirmed it would continue to tighten policy to bring down inflation.
“Risky assets are struggling as Powell’s fight against inflation will remain aggressive even as it will trigger an economic slowdown,” says Edward Moya, a senior market analyst at brokerage firm Oanda.
The largest crypto is down nearly 8% over the last week. “The next major move for bitcoin will likely come after the nonfarm payroll report, which could show signs of cooling and prompt a short-term relief rally.”
The largest cryptocurrency by market value was recently trading at about $19,900, up a few ticks of a percentage point over the past 24 hours and about where it ended Friday. BTC has held support at roughly this level for a week as investors eyed employment data that could give them some hint about the U.S. central bank’s next interest rate intentions later this month and wisdom of committing to higher risk assets.
“We continue to see Bitcoin struggling to maintain $20,000 support,” Joe DiPasquale, the CEO of crypto asset manager BitBull Capital, wrote in an email to CoinDesk.
DiPasquale called bitcoin’s current range “good…to begin accumulation,” although he advised “being mindful of further drops” that might occur around Sept. 13, when the Bureau of Labor Statistics releases the August Consumer Price Index (CPI).
Ether maintained a similar level of crypto price stasis with a little more than half the U.S. Labor Day weekend over. The second largest cryptocurrency by market capitalization was recently changing hands just below $1,600, up approximately 1% over the previous day but just about where it ended Friday.
ETH investors now await the Bellatrix upgrade on Tuesday. This enhancement on the Beacon Chain will be responsible for setting the rest of the Merge process in motion. The Merge will shift ether from proof-of-work to a more energy efficient proof-of-stake protocol.
Other altcoins were mostly in the green with ADA, ATOM and SHIB all recently up over 4% over the previous 24 hours. The native token for GMX, a decentralized exchange on Arbitrum, rose more than 9% and has climbed significantly in recent weeks.
Stocks
U.S. equity markets closed down on Friday after the Labor Department’s latest jobs data offered little hope that the Federal Reserve, which has boosted interest rates a hefty 75 basis points at its last two Federal Open Market Committee (FOMC) meetings, would ratchet back its hawkishness. The tech-heavy Nasdaq, S&P 500 and Dow Jones Industrial Average (DJIA) all dropped more than a percentage point and have fallen three consecutive weeks. U.S. markets will be closed on Monday.
The Institute for Supply Management will release its monthly services index on Tuesday with expectations for a slight decline. And the U.S. Census Bureau will publish its wholesale inventories report for July.
Crypto news
On Saturday, MicroStrategy Executive Chairman Michael Saylor told an audience at the Baltic Honeybadger conference in Riga, Latvia that the non-crypto part of the software firm is working on bitcoin-related projects as well. The firm’s developers are working on solutions that would allow the onboarding large numbers of people onto the Lightning network, a payment network on top of bitcoin allowing faster and cheaper transactions.
CoinDesk’s Jocelyn Yang reported, unusual blockchain data appears to show large blocks of bitcoin worth more than $200 million moving for the first time in years, prompting crypto analysts to puzzle over its significance. On Aug. 28, according to a post from crypto data analysis platform CryptoQuant, 5,000 BTC that hadn’t moved for at least seven years was transacted. The next day, LookIntoBitcoin’s data tracker showed another 5,000 BTC was transferred again.
And the saga of troubled crypto lender Celsius Network continued when the company, which is going through bankruptcy proceedings, said in a legal filing Thursday that a freshly found $70 million pile of cash would likely help it continue operating through the end of 2022. According to the document, Celsius expects “approximately $70 million of proceeds from the repayment of USD denominated loans.”
BitBull’s DiPasquale remains wary about predicting any long-term, crypto price movement upward. “If the current macro economic conditions persist, we may see a prolonged consolidation period for crypto and markets in general, as opposed to a sharp upward recovery,” he wrote.
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