Crypto Market Review, September 21

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Arman Shirinyan

Promi­nent cryp­tocur­ren­cy gains 20% thanks to suc­cess in court against SEC

The 20% ral­ly XRP showed us in the last few days was a log­i­cal reac­tion to Rip­ple’s suc­cess in court despite the token’s lack of rela­tions with the promi­nent finan­cial com­pa­ny. How­ev­er, the mas­sive spike in trad­ing vol­ume and improv­ing price per­for­mance is just the beginning.

250% to recover

Unfor­tu­nate­ly, the 20% run is close to noth­ing for XRP as the cryp­tocur­ren­cy lost more than 75% of its val­ue in the last few months. In order to reach val­ues close to an all-time high, XRP would need a mas­sive 250% ral­ly that would put it back at the $1.38 price level.

Unfor­tu­nate­ly, the cur­rent net­flow of funds into and out of XRP shows that a jump toward the pre­vi­ous all-time high will not be pos­si­ble with­out a major shift on the mar­ket. Despite the pos­i­tive price per­for­mance of most assets today, the total mar­ket cap­i­tal­iza­tion still remains below the impor­tant $1 tril­lion level.

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The Merge sale in its final stages

The Merge update was fuel for most assets on the mar­ket a few weeks ago and one of the main sources of sell­ing pres­sure after the upgrade went live. The main rea­son behind such a ten­den­cy was the “sell the news” rule used by most investors, espe­cial­ly on cryp­tocur­ren­cy markets.

Ethereum Chart
Source: Trad­ingView

The same mar­ket par­tic­i­pants that pur­chased ETH back in July or August were active­ly sell­ing the asset after a suc­cess­ful switch to PoS, which explains why the prof­itabil­i­ty of the sec­ond biggest asset on the net­work plunged so much fol­low­ing the upgrade.

How­ev­er, Ethereum devel­op­ers are already work­ing on the next Shang­hai update by releas­ing updates to the pre­vi­ous­ly exist­ing EIP. The updat­ed pro­pos­al will pro­vide a way for val­ida­tor with­drawals made on the Bea­con chain to get trans­ferred into the EVM. The with­draw­al will have to be processed in the exe­cu­tion lay­er as soon as they are “dequeued” from the con­sen­sus layer.

Bitcoin isn’t recovering

Unfor­tu­nate­ly, the short-term 2% recov­ery we saw today is not help­ing the first cryp­tocur­ren­cy, as the BTC is grad­u­al­ly mov­ing down, already los­ing 21% of its val­ue in the last two weeks.

The high chance of a rate hike and the unex­pect­ed­ly high infla­tion is drag­ging fears of investors upwards, pro­vid­ing even more pres­sure to the high-risk assets, includ­ing Bit­coin and oth­er cryptocurrencies.

The results of the FOMC meet­ing will be released lat­er today. While most of the mar­ket expects a 75 bp hike, cryp­tocur­ren­cies are mov­ing in the green due to the high pos­si­bil­i­ty of a relief ral­ly that hap­pens after the pre­vi­ous­ly expect­ed deci­sion is made by the Fed.

At press time, BTC is trad­ing at $19,284 and gain­ing around 2.5% to its val­ue in the last 24 hours; how­ev­er, the trad­ing vol­ume shows that the price increase is pure­ly tech­ni­cal and investors are still out of the market.

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