On August 19, Bitcoin fell to lows of $20,910, dropping beneath the realized price of $21,700, which represents the average value of the BTC coin supply as of the most recent on-chain transaction. At the time of publication, the price of bitcoin was last down 10.07% at $21,003, according to CoinMarketcap. The second-largest cryptocurrency, Ethereum, was down almost 14% and traded at $1622 at press time.
The latest market sell-off has hit altcoins, which tend to be more volatile than Bitcoin and Ether, especially hard. Solana fell as much as 14% on Friday, the largest drop since June 13, and Cardano tumbled hard. Binance Coin (BNB), XRP (XRP), Shiba Inu (SHIB), Dogecoin (DOGE), and several altcoins have experienced significant pullbacks in the past 24 hours.
Digital assets are getting spooked as investors unwind bets that the Fed might raise interest rates less than initially feared. Optimism about more favorable liquidity conditions led to a 40% rally in Bitcoin since June’s crypto market crash, while Ethereum more than doubled at one point.
About $693 million of crypto positions got liquidated in the last 24 hours, with Bitcoin accounting for $241 million of that, according to data from Coinglass.
Cryptocurrency prices have declined sharply since May when Terra’s implosion set off a wave of liquidations, bankruptcies, and layoffs in the sector. Bitcoin’s price has slightly recovered since dropping to a low of $17,599 on June 18 but remains down 54% in 2022.
According to Onchain analytics firm Santiment, “After an infamously rough first half of 2022 for crypto, market caps enjoyed rebounding from late June until the second week of August.” But altcoin market caps have been retracing again, as inflation & rate hike chats begin to gain steam again’’.
As traders seek to understand the path of Federal Reserve monetary policy, the recovery is appearing shakier. James Bullard and Esther George, two Fed members, sent conflicting signals on Thursday regarding the magnitude of the interest-rate hike in September. Both emphasized the necessity of continuing to raise borrowing prices, though.
Attention now turns to the Fed’s annual symposium in Jackson Hole, Wyoming next week. There’s already speculation that Fed Chair Jerome Powell may lean against a recent loosening in financial conditions that are driven financial markets higher in past weeks.
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