Bitcoin (BTC) Prices, Charts, and Analysis:
- Cryptocurrency market capitalization loses $60 billion in minutes.
- Ethereum ETF, Grayscale ruling, Jackson Hole Symposium.
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After weeks of listless trade and low turnover, volatility returned to the cryptocurrency market with a bang Thursday when the market slumped in minutes with little in the way of support seen to stem the fall. Bitcoin went into freefall and hit a multi-month low of $25,166 before making a minor recovery, while Ethereum slumped to $1,543 from a daily high print of $1,807. The market is awash with reasons behind the sharp selloff. Chinese property giant Evergrande filed for bankruptcy protection in New York yesterday, highlighting ongoing fears in China’s property market, while this week’s hawkish FOMC outtake sent longer-dated US bond yields back to multi-month and multi-year highs.
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The daily chart shows that Bitcoin is in extremely oversold territory and is below all three moving averages. BTC/USD has recovered some of yesterday’s damage but will need a period of consolidation before attempting to push any higher. Whether yesterday’s $25,166 print marks a short-term low is difficult to qualify after the latest burst of volatility.
Bitcoin (BTC/USD) Daily Price Chart – August 18, 2023
The ETH/USD chart is very similar to the BTC/USD chart – heavily oversold but negative while still below all three simple moving averages.
Ethereum (ETH/USD) Daily Price Chart – August 18, 2023
Looking ahead, continued volatility remains likely with news expected shortly over whether the SEC will approve the first Ethereum futures-based ETF. Any news, positive or negative, from the SEC, will further stoke short-term volatility in the second-largest cryptocurrency by market capitalization. The SEC is also under the spotlight after Grayscale took the regulators to court last June over the SEC’s refusal to allow the Grayscale Bitcoin Trust to change into a cash Bitcoin ETF. The Grayscale Bitcoin Trust trades at a heavy discount to the Bitcoin they hold and the company is looking to close this gap. A ruling is imminent and again is likely to shift the market.
Next week sees the yearly central banker annual meet up at Jackson Hole Symposium. The three-day event titled ‘Structural Shifts in the Global Economy’ features a raft of central bank heads and policymakers, and Fed chair Jerome Powell is expected to make a keynote speech. The latest FOMC minutes had a distinctly hawkish overtone and chair Powell may use next week’s platform to reiterate the Fed’s fight against inflation is not close to being over.
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