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FX.co ★ Bitcoin is at a crossroads. What's next: a drop to $18,000 or a rise to $28,000?

Bitcoin is at a crossroads. What's next: a drop to $18,000 or a rise to $28,000?

Bitcoin began Tuesday morning with a correction, by the time of writing the material, its value is balancing at around $23,823.

According to the website for tracking the price of virtual assets CoinMarketCap, over the past day, the lowest value of bitcoin reached $23,279, and the highest – $24,203.

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Bitcoin is at a crossroads. What's next: a drop to $18,000 or a rise to $28,000?

BTC rose by 4.5% on Monday and closed the trading session at $24,100. At the moment, the value of the coin jumped to $24,200, updating the highs since July 31.

The key reason for the strengthening of the main digital asset was the positive dynamics of the leading US stock indices in the first half of the day.

By the way, since the beginning of 2022, analysts have increasingly begun to emphasize the high level of correlation between the US securities market and virtual assets amid intense expectation by both of the consequences of the geopolitical conflict in eastern Europe and the next steps of the US Federal Reserve.

Earlier, the experts of the investment company Arcane Research have already stated that the correlation of BTC and technology securities has peaked since July 2020.

Altcoin Market

Ethereum, bitcoin's main competitor, also started Tuesday's trading session with a correction and is balancing at $1,770 by the time of writing. On Monday, altcoin quotes rose by 5.9% and broke through the $1,800 level.

Recall that last July turned out to be a month of permanent growth for the second largest cryptocurrency by capitalization, when its price rose by more than 56% – to the highest levels since mid-June - above $1,700.

The main catalyst for the July rise in the ETH price was a message from one of the project developers that the Ethereum blockchain could move to a new Proof-of-Stake algorithm that does not require the participation of miners, as early as mid-September.

Yesterday, Ethereum co-founder Vitalik Buterin said that the planned transition of the network to PoS in the first month of autumn could increase the popularity of digital assets for everyday payments by reducing the commission to 2 cents. According to the Canadian-Russian programmer, the popularity of crypto payments fell after 2018 amid high transaction fees.

As for cryptocurrencies from the top 10 by capitalization, according to the results of the past day, the highest results were shown here by the digital asset Polkadot (+4.57%), and the lowest – Binance Coin (-0.87%).

During the past week, all cryptocurrencies from the top ten, except for a number of stablecoins, grew in price. At the same time, the best results were recorded for the Polkadot coin (+14.15%).

According to CoinGecko, the world's largest aggregator of data on virtual assets, over the past day, among the top 100 most capitalized digital assets, the Celsius Network coin topped the list of leaders (+31.0%), and Tenset took the first place in the drop list (-4.7%).

According to the results of the past week, the Flow coin (+50.2%) showed the best results among the hundreds of the strongest cryptocurrencies, and the worst – DeFiChain (-13.5%).

According to the CoinGecko portal, on Monday, the total capitalization of the cryptocurrency market exceeded the $1.1 trillion milestone, which it could not overcome during the last 10 trading sessions.

Crypto experts call the return of investors' interest in risky assets the main catalysts for a breakthrough above the important psychological mark of this indicator. On Monday, market participants actively bought bitcoin and altcoins in the face of positive external and internal news. The increased demand for crypto assets provided a revival of the Chinese economy and increased investors' hopes for a weakening of inflation in America. Recall that the release of fresh data on inflation in the United States is scheduled for Wednesday.

According to preliminary scenarios of economists, this indicator fell to 8.7% in July from June 9.1% (the highest since 1981).

Experts also call its internal indicators an additional upward factor for the virtual coin market. Thus, the cryptocurrency industry has already fully recovered from the negative consequences associated with the collapse of Luna/UST, and the subsequent series of bankruptcies of digital platforms.

At the same time, the steady permanent growth of bitcoin and altcoins is still hampered by many large-scale negative factors: record inflation in America, high macroeconomic uncertainty around the world and the upcoming tightening of regulation of crypto exchanges in America.

Today, the cryptocurrency market remains under strong pressure from the tight monetary policy of the Fed. The US central bank has not yet won a final victory over inflation.

The strong August report on the labor market, in the absence of a noticeable slowdown in inflation, increased the probability of an interest rate hike in September by 0.75% at once.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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