Crypto weekly wrap: Bitcoin to rise once it reaches $20,400, say experts

The crypto market has been highly volatile since the Jackson Hole speech by US Federal Reserve chair Jerome Powell on August 26. The total market cap on cryptocurrencies fell below $1 trillion for the first time in over a month.

“The Fed chairman's comment on tightening the economy further led to fall in crypto markets, which were aligned with drops in Nasdaq and S&P 500,” the CoinDCX research team told Business Standard.

Nasdaq composite index was down over 6 per cent, and S&P500 fell 5.5 per cent in the last week, market data showed.

On the other hand, Bitcoin, the largest cryptocurrency by m-cap, was down 6 per cent from August 26, according to data from coinmarketcap.com. Ethereum, the second largest cryptocurrency, was down nearly 3 per cent.

“BTC seems to be consolidating near $20,000, a focus area of many investors. ETH has shown more volatile movements than BTC,” CoinDCX added.

Bitcoin has fallen below $20,000 several times in the last seven days, but its graph did not show any significant movements. Ethereum's chart fluctuated with more volatility between $1,400 and $1,600 throughout the week.

What can we expect?

However, in the last week, Bitcoin stayed above $19,000. “Despite the decline, BTC has not gone below the 19,000 level so that we might see sideways trading for a few more days,” said Edul Patel, CEO and co-founder of crypto platform Mudrex.

As of 5 PM (IST), Bitcoin was trading at $20,024.

“We can expect BTC to rise when it returns to the $20,400 level,” he added.

On Friday, Ethereum was trading at $1,584.

“Ethereum has been outperforming BTC for quite some time now due to its recent network activity and the upcoming Merge. ETH may likely break out of the $2,000 level before the Merge,” Patel said.

With Merge, Ethereum will move from a proof-of-work consensus mechanism to a proof-of-stake blockchain. It is scheduled for September 6, and the upgrade will be completed between September 10 and 20.

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