After another nosedive, this time from over $23,600, Bitcoin held firmly above $20,000 until the weekend. On Sunday, June 19, the price fell to the 7-day low of $17,760.77. Monday, June 20, brought a cautious uptick.
The dip on Wednesday, June 15, coincided with the Fed’s decision to raise interest rates by 75 basis points. The Fear & Greed Index collapsed to 7 for the first time since August 2019. In total, BTC lost almost as much as a week prior.
Currently, BTC is trading at $20,137.97, with a 24-hour drop of -0.4% and a 7-day loss of -24.8%.
After crashing from over $1,400 on Monday, June 13, ETH stayed above $1,000 through Friday, June 17. The weekend brought a breathtaking collapse to $897.49 (Sunday, June 19). The next day, ETH sprang back over $1,000.
In addition to macroeconomic woes, ETH faced downside pressure due to the liquidity troubles in DeFi. So far, its recovery rally has been inhibited, and some experts claim ETH is yet to bottom out.
As of now, ETH is trading at $1,113.74, with a 24-hour rise of +0.7% and a 7-day plunge of -23.4%.
XRP saw a milder downslide – compared to the previous week, its losses halved. The rapid descent from over $0.356 on Monday, June 13, was followed by a surge on Thursday, June 16. Sunday’s drop to $0.295591 (June 19) was momentary.
The price retraced less than most of the peers due to favorable developments in the SEC vs. Ripple case. In a letter to Judge Torres, the defendants stated they had no objection to sealing off some exhibits mentioned in the SEC’s motion, but noted that the plaintiff had not satisfied “the standards in sealing off the documents.”
As of now, XRP is trading at $0.321522, with a 24-hour dip of -0.5% and a 7-day slide of -7.4%.
Growing bearish sentiment: key things to know
The crypto market cap is struggling to recover. As of this writing, it is still below $1 trillion (roughly $967 billion), at a level comparable to January 2021. Interestingly, when the market fell off a cliff from June 10 to June 13, both BTC and ETH saw bigger losses, possibly due to $154 billion worth of stablecoins.
On June 16, The Fear & Greed Index hit 7/100, its lowest low since August 2019, and slid further to 6/100 over the weekend. Crypto investors had a lot to digest:
- On June 15, the Fed raised interest rates by 75 basis points. The largest hike in nearly three decades addresses high inflation and a tight job market. The Federal Open Market Committee (FOMC) aims to return inflation to the target value of 2%, while the last Consumer Price Index report places it at 8.6%.
- The U.S. central bank initiated a balance sheet cut, which concerns “its holdings of Treasury securities and agency debt and agency mortgage-backed securities.”
- After Three Arrows Capital’s reported failure to meet margin calls from lenders, its heavy exposure to Grayscale Bitcoin Trust (GBTC) and Lido’s Staked ETH (stETH) triggered a wave of liquidations. Due to similar issues, Celsius halted withdrawals on June 13.
Amidst the negativity, Asian traders were reluctant to exit all markets to fiat deposits. Instead, they moved their positions to USDT. The OKX Tether (USDT) premium, an indicator of crypto demand in Asian P2P markets, reflected buying pressure between June 12 and June 17.
Late Sunday, June 19, BTC reclaimed its perch above the $20,000 threshold. If the bulls manage to hold ground at this level, BTC will maintain its 13-year-old pattern – it has never broken below the all-time high of the previous four-year cycle. On Monday, June 20, ETH jumped above $1,100, and most other major assets were in the green.
Overall, the crypto market is still plagued by fears of growing inflation, geopolitical escalation, and global recession. According to Anton Gulin, regional director at AAX, “inflation is breaking records with the macroeconomic factor remaining heavy [...] Uncertainty prevails in the market, and relief rallies do not significantly change this picture.”
Ethereum is about to get an important upgrade
On Wednesday, June 29, the Ethereum network may undergo another upgrade called Gray Glacier. It is tied to block 15,050,000, but the date is speculative due to variable block times. Like other glacier upgrades, the change will only affect the difficulty bomb – execution of a specific code ingrained in the protocol since 2015.
Thanks to Gray Glacier, the difficulty bomb will happen 700,000 blocks or around 100 days later than planned. The detonation will ramp up the computing difficulty of mining ETH, eventually making it impossible. The bomb is designed to go off shortly before the Merge — the official transition from Proof-of-Work to Proof-of-Stake.
Similar reschedulings accompanied five preceding upgrades: Byzantium, Constantinople, Muir Glacier, London, and Arrow Glacier. Gray Glacier will only affect the mainnet as the Ropsten testnet has already transitioned to Proof-of-Stake. The upgrade “literally merges into another glacier, just like how Ethereum’s execution layer will soon be merged with the Beacon Chain!”
Ethereum developer Tim Beiko hopes it will become the last fork to push back the difficulty bomb. Previously, Vitalik Buterin said the Merge could occur in September or October at the latest, but the delay means it might take longer.
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