This Week in Crypto: Hawkish Fed Adds Pressure to Prevailing DowntrendThis Week in Crypto: Hawkish Fed Adds Pressure to Prevailing DowntrendThis Week in Crypto: Hawkish Fed Adds Pressure to Prevailing Downtrend
Bitcoin Clings Onto $20,000
Following a rather gloomy month, Bitcoin (BTC-USD) is trending within a few dollars of $20,000. As the last month of the third quarter commences, the value of the leading crypto token has dropped by 1.30% within the past 24 hours, taking Bitcoin’s 7-day loss close to 8.10%.
In the past 30 days, Bitcoin has lost nearly 13.00% of its value, primarily due to the uncertainty surrounding the Federal Reserve’s efforts to “tame inflation.” The medium-term downtrend resumed after Federal Reserve Chairman Jerome Powell delivered a hawkish message indicating that “interest rates might stay at a level that restrains growth.” The U.S. stock market responded by tumbling, bringing down Bitcoin and other cryptocurrencies.
Amid the latest losing streak, Bitcoin’s market dominance (Bitcoin’s share of the total crypto market relative to other tokens and coins) has also taken a sharp dip and is currently hovering around 40%. This drop in dominance was echoed by a recent Arcane Research report highlighting altcoins’ outperformance versus Bitcoin throughout August.
Alts Face the Wrath of Bears
The last week of August didn’t favor most altcoins. Ethereum (ETH-USD), the largest altcoin by market capitalization, dropped by nearly 9.40% over the past seven sessions as the hype surrounding “The Merge” continues to fade.
Among the other large-cap altcoins, Solana (SOL) and Avalanche (AVAX) were the biggest losers over the last week. The value of SOL slid by nearly 14.40% during the period, taking its monthly losses to around 23.15%. The decline comes after Solana-based DeFi project OptiFi “accidentally” closed the OptiFi mainnet program during a routine upgrade, leading to a loss of around $661,000.
Avalanche (AVAX) was one of the steepest underperformers after dropping by around 19.80% this week due to the fresh allegations raised by CryptoLeaks. An unverified video shows Ava Labs legal representative Kyle Roche claiming to “sue Solana on behalf of AVA Labs.” The value of AVAX continued to slide after the whistleblower website released a full report alongside another unverified video featuring Kyle Roche.
Memecoins DOGE and SHIB continued their downward slide this week, pushing SHIB to the 14th rank in the list of top cryptocurrencies by market capitalization. DeFi tokens and other low-cap altcoins also delivered outsized losses in the double-digits, further contributing to the declining aggregate crypto market capitalization.
eCash Sparks New Rally
While the broader market is facing an uphill battle, lesser-known altcoin eCash (XEC) registered promising gains this week. XEC has outperformed every token over the past seven sessions, increasing roughly 20.10%. The upward trend has also sparked investor interest as the token’s 24-hour trading volume jumped by nearly 50%.
A fork of the Bitcoin blockchain, eCash has experienced an increase in on-chain development, with the team recently releasing the Bitcoin ABC 0.25.13 upgrade, implementing several minor bug fixes and improvements, sparking a fresh rally in the XEC token’s value. Overall, August has been an eventful month for the eCash community. The platform unveiled several updates, including the Avalanche Post-Consensus upgrade, new wallets and functionalities, and a $100 million XEC Contribution Rewards Program.
Georgia Aims to Become a Global Crypto Hub, and More
Seeking to establish itself as one of the most crypto-friendly destinations in the world, Georgia has revealed its plan to synchronize its existing crypto regulations with the new rules implemented across the European Union (EU). Per a statement from Vice Prime Minister and Minister of Economy Levan Davitashvil, a draft bill has already been forwarded to the parliament.
In gaming news, although investment continues to pour into the blockchain gaming industry, a new report suggests that every Web3 game has an average of 40% bots compared to active users. If true, the report raises serious concerns surrounding fake community engagement and token liquidity.
Meanwhile, Compound, the third largest DeFi lending platform, is currently dealing with a significant code bug linked to the recent governance proposal to update its price feeds. This problem has halted the Compound Ether (cETH) market.
Finally, amid Binance’s continued efforts to expand its presence across the Middle East, raise adoption, and spread awareness, UAE business Virtuzone has started accepting cryptocurrencies by integrating Binance Pay. Virtuzone joins the growing list of mainstream UAE-based businesses like JA Resorts and Hotels, Majid Al Futtaim, and others participating in this strategic partnership with Binance.