The cryptocurrency market had a bullish week fueled by optimism among investors after inflation data showed that measures taken by the Federal Reserve have worked to start stabilizing the economy. In addition, quite innovative and disruptive crypto projects continue to emerge, which we will tell you about below,
Last Wednesday, the inflation report in the United States of America was published again, which released a lot of stress from the financial markets and gave cryptocurrencies a break after months full of uncertainty. According to the Consumer Price Index (CPI), annual inflation in the July period decreased to 8.5%, after having reached a maximum in the last 40 years last June. The cause is mainly a reduction in gasoline prices, which likewise reached its maximum price last June, after various factors, such as the reduction in demand due to its high cost and a suspension of taxes in some states in the North American country, which led to the price of a gallon of gasoline below $4.
The financial markets, especially the stock market and the cryptocurrency market, have had a fairly important rally based especially on the progress that has been generated in the fight against inflation, and even large financial companies, such as BlackRock, have decided to join the environment of the cryptocurrencies. However, deep down there is still that feeling of concern or uncertainty among investors, since despite the fact that a great advance was generated, inflation levels are still through the roof, and it will be a fairly long process and complicated to be able to return to the levels we had a couple of months ago.
In addition, it should be noted that the US Senate has approved the Inflation Reduction Act, which despite having generated controversy by showing discontent on the part of the conservative group, represented a political victory for Biden and the Democratic party, and is focused on climate change, health and tax reforms.
In other news, the electronic commerce company, Mercado Libre, has announced that users will be able to buy and sell crypto assets throughout Latin America, directly from Mercado Pago’s digital wallet, which users have previously used to protect their fiat money and make purchases on the platform. This will be possible thanks to the Paxos blockchain platform.
After the great success that the company had when implementing in Brazil at the beginning of December 2021, Mercadolibre plans to expand this option to the rest of the region, with which users will be able to buy and sell Bitcoin, Ethereum and the Paxos stablecoin, USDP.
It wasn’t all positive this week, as shares of Coinbase, one of the largest cryptocurrency exchanges, fell in extended trading on Tuesday after the exchange reported a loss of more than $1 billion in the second quarter and did not will meet analysts’ revenue estimates.
Coinbase reported a net loss of $1.1 billion, compared to $1.5 billion in net income in the same quarter last year, according to a report sent to shareholders. Coinbase’s own cryptocurrency assets at the end of June were worth $428 million, well below the $1 trillion they were worth at the end of March. Notably, 40% of cryptocurrency assets were in BTC.
Bitcoin is above $24,100. After having breached quite strongly a resistance zone that marked a consolidation zone, in which it remained for a long period of time, it seems to have generated some stability near $24,000, and if it consolidates above this zone, this resistance could turn into support and look for $28,000. Should it drop below this zone again, we could see a longer crash of the world’s largest digital asset.
BTC/USDT 1D (TradingView Chart).
Ethereum, meanwhile, is currently trading above $2,000. Unlike Bitcoin, it has managed to increase its value by more than 100%, and it seems to be in a very interesting retracement zone. Should it breach that $2,000 resistance, it could go as high as $2,300 soon. However, it seems more likely that it will pull back to $1,700 first.
ETH/USDT 1D (TradingView Chart).
There is no doubt that great progress has been shown in this very complicated fight against inflation, which has devastated the financial markets so far in 2022, and great optimism has been seen for the first time that for some points to a market recovery. However, there is still a long way to go, so several people and analysts have decided to proceed with caution, given the numbers that we still have today. Without further ado, we wish you an amazing week.
