It seems that we are close to a new crash in the cryptocurrency market, despite the fact that a couple of days ago it began to regain upward strength, after the inflation data showed that the measures taken by the Federal Reserve had begun to stabilize the economy. However, no significant progress has been made, and the Federal Reserve had announced something that increased uncertainty and pulverized optimism among investors.
For a moment it seemed that the optimism in the crypto asset market was beginning to recover and therefore, we could see upward movements for a couple of days, after the interest rate hikes this year managed to bring inflation down to 8.5% after having reached 9.1% in June, a historical maximum in the last 40 years.
However, no significant progress has been made in controlling inflation and economic stability, so we still find ourselves in a rather complicated and uncertain environment. That is why the United States Federal Reserve will continue to raise reference interest rates, according to extracts from the minutes of its last meeting published this Wednesday. These rate increases will be less aggressive, but recurring, so we would have increasingly higher interest rates for the rest of the year.
This has fallen like a bucket of cold water on high volatility markets, including, of course, cryptocurrencies. Bitcoin is down nearly 5%, dipping back below a critical level near $23,300. The world’s largest market-cap cryptocurrency fell to its lowest level in more than three weeks, dipping below $22,000 amid a sudden cryptocurrency sell-off in early trading especially on the European mainland.
Bitcoin plummeted from $24,305.25 to a weekly low of $20,783.57, a value not seen since July 26 of this year, when it dipped below $20,000.
In other news, the most popular ecommerce platform in Latin America, MercadoLibre, has launched its own cryptocurrency in Brazil, named MercadoCoin. Last Thursday, August 18, 500,000 users of the platform in Brazilian territory have been able to access the cryptocurrency as part of a loyalty and rewards program. It should be noted that it is an ERC-20 token, that is, built on the Ethereum blockchain. In addition, the initial value of the token at its launch has been $0.10, subject to market fluctuations.
Now let’s talk about Ethereum, and it is that the financial derivatives giant in the United States, CME Group (Chicago Mercantile Exchange), has announced that it will launch a new financial product aimed at the most important smart contract platform in the cryptocurrency ecosystem. The new Ethereum futures contracts issued by the CME Group consist of 50 ETH per contract, and are based on the CME CF ETH/USD reference rate, which serves as the reference rate each day of the Ether price in American dollars. It should be noted that this is not the first derivative product with cryptocurrency ecosystem assets offered by the CME, as Bitcoin futures contracts have previously been launched.
Bitcoin is trading above $22,200, in the middle of a fairly strong consolidation zone. Everything seems to indicate that it is a pullback that would seek a new downward movement, so we could see Bitcoin reach the support of $19,400 again.
BTC/USDT 1D (TradingView Chart).
For its part, Ethereum is above $1,580, with a movement quite similar to Bitcoin. We could likewise watch for a pullback to continue the decline to at least $1,400, or even reach the $1,280 support.
ETH/USDT 1D (TradingView Chart).
As we have mentioned in previous weeks, we find ourselves in a fairly complex economic environment, dragging the consequences of various decisions made in the past. However, sharp falls represent opportunities, and if they are invested properly, in assets that have solid projects and that add value to society, their behavior in the short term should not be a concern, since with the necessary foundations they will manage to grow in the long run. Without further ado, we wish you an amazing week.
