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The crypto market has been highly volatile since the Jackson Hole speech by US Federal Reserve chair Jerome Powell on August 26. The total market cap on cryptocurrencies fell below $1 trillion for the first time in over a month.
"The Fed chairman's comment on tightening the economy further led to fall in crypto markets, which were aligned with drops in Nasdaq and S&P 500," the CoinDCX research team told Business Standard.
Nasdaq composite index was down over 6 per cent, and S&P500 fell 5.5 per cent in the last week, market data showed.
On the other hand, Bitcoin, the largest cryptocurrency by m-cap, was down 6 per cent from August 26, according to data from coinmarketcap.com. Ethereum, the second largest cryptocurrency, was down nearly 3 per cent.
"BTC seems to be consolidating near $20,000, a focus area of many investors. ETH has shown more volatile movements than BTC," CoinDCX added.
Bitcoin has fallen below $20,000 several times in the last seven days, but its graph did not show any significant movements. Ethereum's chart fluctuated with more volatility between $1,400 and $1,600 throughout the week.
What can we expect?
However, in the last week, Bitcoin stayed above $19,000. "Despite the decline, BTC has not gone below the 19,000 level so that we might see sideways trading for a few more days," said Edul Patel, CEO and co-founder of crypto investing platform Mudrex.
"We can expect BTC to rise when it returns to the $20,400 level," he added.
On Friday, Ethereum was trading at $1,584.
"Ethereum has been outperforming BTC for quite some time now due to its recent network activity and the upcoming Merge. ETH may likely break out of the $2,000 level before the Merge," Patel said.
With Merge, Ethereum will move from a proof-of-work consensus mechanism to a proof-of-stake blockchain. It is scheduled for September 6, and the upgrade will be completed between September 10 and 20.
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First Published: Fri, September 02 2022. 19:33 IST