Market update

Markets fell this week after Federal Reserve chair Jerome Powell indicated the Fed will continue its aggressive approach to curb inflation despite the “unfortunate costs.” “A failure to restore price stability would mean far greater pain,” he said. Bitcoin plunged below the US$20K mark (A$29K), the S&P 500 fell 3.4% on Friday while A$46B was wiped from the Australian sharemarket on Monday. The local market is also bracing for another half a percentage point interest rate rise next Tuesday. Bitcoin is currently down 8% for the week to trade around A$29,300 (US$20.2K) while Ethereum has fallen 9% to trade around A$2,240 (US$1,540). Most other coins fell including XRP (-6%), Cardano (-6%), Solana (-12%) and Polkadot (-6%). Synthetix climbed 17.8% on the back off news it can now survive on actual revenue. The Crypto Fear and Greed Index is at 24 or Extreme Fear.

The bear market rally ran out of puff on Friday with Bitcoin falling below the 200-week moving average. It’s currently down 14% for the week and trading around A$30,970 (US$21.3K). Ethereum fell 17% to trade around A$2,350 (US$1,620), possibly related to fears over decentralisation and transaction censorship in the fallout from the Tornado Cash sanctions. Traditional markets are in the red too due to macro factors including comments by the Federal Reserve Bank of St. Louis President James Bullard who said he favoured a 75-basis point hike in interest rates next month. The last hike of that magnitude saw crypto market turmoil. Everything else was down on the week, with XRP falling 12%, Cardano (-20%) and Polkadot (-19%). The Crypto Fear and Greed Index is at 29 or Fear, down from 45 last week.

Ethereum reclaimed the US$2,000 (A$2,850) mark briefly on the weekend for the first time since May following news the Merge is just one month away. It’s currently trading around US$1,900 (A$2,720) marking a 7.7% gain for the week. Bitcoin is also up 1.1% on seven days ago to trade around US$24K (A$34.3K). Cardano increased 3.1%, with co-founder Charles Hoskinson insisting that testing on the delayed Vasil hard fork is going well. XRP lost 1.1%, Solana increased 3.8% and Dogecoin was up 10.4%. The Crypto Fear and Greed Index hit Neutral this week for the first time since April but is currently at 45 (Fear). Interestingly, the Bank of America’s Bull and Bear Indicator for traditional markets has been stuck at 0 or ‘extreme bearish’ for nine weeks in a row. Analyst Jack Dorman argued this week that while Bitcoin is still correlated with the Nasdaq, other digital assets including blue chip DeFi coins and Ethereum decoupled months ago.

In the week just past, BTC has been range-bound – stuck in a channel 4% wide. Last night there was an attempt to break out to the upside, but as most of this has been given back, we resume the “crab” market. Bitcoin is currently up 3.2% to trade around A$34k (US$23.7k), Ethereum continues its merge exuberance and is trading 10% up – currently A$2,526 (US$ 1,765). XRP is flat, Cardano is up 5%, Solana (2.4%), Dogecoin (3.5%). The Crypto Fear and Greed Index is at 42, and while technically “Fear”, this is on equal footing with high on the 30th July, and the highest it’s been since April.

Brace yourself for a potentially bumpy week with the US Federal Reserve expected to hike interest rates by 75 basis points, and the release of the Q2 US Gross Domestic Product figures potentially showing a recession (two quarters of negative growth). Australia’s inflation rate figures also come out and are expected to be awful, and a bunch of big tech company earnings reports are coming out too. Perhaps in expectation of possible bad news, everything has fallen considerably in the past 24 hours. Bitcoin finished the week flat at just over A$31,000 (US$21.5K), while Ethereum was down 1.1% to around A$2,120 (US$1.5K). The imminent Vasil hard fork saw Cardano gain a modest 1.8% while Ripple fell 4%, and Dogecoin lost 3.1%. After a record 73 days at Extreme Fear, the Crypto Fear and Greed Index returned to simply Fear this week, and it’s currently at 30 (Fear).

Crypto markets turned around this week, thanks to a bullish narrative that the Ethereum Merge will actually happen in September, and perhaps guarded optimism from some in traditional markets that inflation may have peaked in the US at 9.1% due to falling commodity prices and supply chains clearing up (plenty of others think that idea is totally wrong, however.) The overall crypto market cap has returned above the US$1 trillion mark (A$1.47T), leading to loose talk about a new bull market. It’s worth noting that the market is still down US$2T (A$2.93T) from November’s peak, and Glassnode points out that the average time Bitcoin normally trades below the realised price during a bear market is 197 days. The current bear has just 35 days on the clock. Still green is good, and Bitcoin finishes the week up 9% at A$32,070 (US$21.7K), while Ethereum has shot up 40% to A$2,200 (US$1,500). Ripple (XRP) was up 13%, Solana jumped 28%, and Dogecoin increased 6.6%. The Crypto Fear and Greed Index is at 20 – that’s still Extreme Fear but a lot higher than one month ago when it was 6.