Bitcoin price has come under pressure in 2022 following the collapse of algorithmic stablecoin terraUSD and subsequent bankruptcy filings from lending firm Celsius and hedge fund Three Arrows Capital.
Nicolas Economou | Nurphoto | beautiful pictures
The world’s largest cryptocurrency was trading at $20,741.55 at around 6 a.m. ET, after fell to the lowest level since mid-June early week.
Other higher cryptocurrencies include ether increased by about 4%. The total crypto market value is back above $1 trillion.
Bitcoin’s latest rally was triggered by a slight weakening of the US dollar witnessed a great rally this year. The US dollar index, which measures the greenback against a basket of other currencies, was down about 1% on Friday morning.
US stock indexes closed higher on Thursday and Futures are higher on Friday. Bitcoin has a strong correlation with the US market which usually rises when stock indexes rise. Bitcoin also tends to rise when the dollar weakens.
Bitcoin has been trading in a range of about $18,000 to $24,000 since June and has been unable to break that pattern.
Vijay Ayyar, vice president of international and corporate development for crypto exchange Luno, said that Friday’s rally could be a “bearish retest” of the $22,500 to $23,000 price range. la.
“Therefore, unless it breaks that level convincingly and closes above, I would still think this is a bearish rally that could see more volatility and downside,” Ayyar said.
Bitcoin has been battered this year and is down more than 60% from record highs seen in November when the Federal Reserve ramped up interest rates on the shine of risky assets like money. electronic.
The cryptocurrency market is also affected by failed projects and famous bankruptcies has spread throughout the industry.
The crypto market has predicted a major network upgrade to Ethereum called consolidationwhich proponents say will make blockchain more efficient.
The consolidation is expected to be completed by mid-September.
During the event period, the price of ether, Ethereum’s native token, has outstripped bitcoin.
Financial markets are also looking for signs of cooling off inflation when the US Consumer Price Index is released next week. And investors are also keeping an eye out for signals on the Fed’s path to rate hikes.
On Thursday, Fed Chairman Jerome Powell said he “strong commitment” to fight inflationsuggests that interest rate hikes are likely to come.
If inflation cools and in anticipation of Ethereum consolidation, Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank, said bitcoin could test $22,000, but also gives a warning.
“Given what some Fed members, including Chairman Powell, said this week, being too optimistic can be dangerous,” Hasegawa said in a Friday note.