This Week in Crypto: Bearish Price Action Prevails

by Arthur · August 25, 2022

Table of Contents

Bitcoin consolidates above $21,500

Following last week’s downtrend, bitcoin (BTC-USD) has fallen further below key support levels over the past seven sessions. The flagship cryptocurrency is currently trading just above the $21,500 mark. After the steep drop below the $23,500 support on August 18, performance has since flattened out for bitcoin, with the cryptocurrency largely trending within a horizontal price range in the time since.

With BTC now down nearly 70% from its November 2021 peak, investors are eagerly awaiting the next announcement from US Federal Reserve officials attending the annual conference in Jackson Hole. Market analysts are predicting a possible reversal higher over the weekend as the US dollar comes under pressure following weak US Purchasing Managers Index (PMI) data, helping to provide some positive tailwind for bitcoin.

The carnage continues across the Altcoin market

Echoing the decline in bitcoin, the altcoin market has responded in kind to the increased bearish pressure, resulting in liquidations of nearly $600 million in long positions and marking one of the worst liquidation streaks on record in 2022.

However, the pace of outflows from funds covering cryptocurrencies slowed with Ethereum (ETH-USD) even experiences a nearly $3 million bump in inflows despite bitcoin outflows totaling $15 million over the same period.

Cardano (ADA), Solana (SOL), Dogecoin (DOGE), Polkadot (DOT) and Shiba Inu (SHIB) are among the major altcoins that recorded the biggest losses in the past week. Regardless of the latest slide, Cardano is almost halfway through the Vasil hard fork, which helps improve the outlook for the network’s native ADA token. Solana, on the other hand, is finding it difficult to sidestep ongoing bearish pressure even after reporting strong network growth in the second quarter.

Meanwhile, meme coin DOGE experienced a sharp drop in market capitalization, with Polkadot (DOT) on course to replace it in the top-10 list for the second time this month after surpassing the capitalization of Shiba Inu (SHIB). Still, the value of DOT has fallen by nearly 10% over the past seven sessions, mostly due to the ripple effects of the ongoing liquidations and uncertainty regarding the US dollar.

Among mid- and low-cap altcoins, Avalanche (AVAX) reversed last week’s rally to fall nearly 9.3%, Ethereum Classic (ETC) fell about 8.1%, and Tezos (XTZ) fell about 10% . That said, some of this week’s biggest declines came from Flow (FLOW) and Filecoin (FIL). The value of FLOW fell by 18.7%, higher than the 22% decline in FIL.

EOS Network fends off bears

Amidst the broader market’s dilemma of liquidations, ongoing losses and weak investor sentiment returning to “extreme fear” territory, no impact was felt by the EOS Network. The value of EOS Network’s native EOS token has increased by a staggering 20% over the past seven sessions.

The sudden surge in value comes on the heels of the latest announcement by EOS Foundation CEO Yves La Rose, where he confirmed the EOSIO rebrand and plans for the EOS Network to roll out the v3.1 consensus upgrade via a hard fork. On September 21st, the community-led protocol, Antelope, is expected to go hard together with the EOSIO codebase and EOS blockchain.

Additionally, news of a New York court denying a $27.5 million settlement proposed by former EOS developer Block.one emerged as another catalyst behind the ongoing EOS token buying frenzy.

Crypto exchanges are developing despite the bear market

Crypto exchanges continue to secure licenses and approvals worldwide despite the ongoing bear market. Most recently, Huobi Technology Holdings’ subsidiary Hbit Technologies acquired a Money Service Business (MSB) license from Canada’s Financial Transactions and Reports Analysis Center (FTRAC). This development comes shortly after Hbit’s MSB license acquisition in the US last month.

Mirroring the licensing drive, Binance US has also acquired a money transmitter license from Nevada’s Department of Business and Industry, Financial Institutions Division. Adding to the growing competition for US clients, Japanese crypto derivatives platform Clear Markets has received approval from the US FTC (Commodity Futures Trading Commission) to begin offering its services in the US.

Shifting gears to central bank digital currencies, China has officially rolled out the next stage of its Central Bank Digital Currency (CBDC) test program. Currently, Chinese citizens can use the digital Yuan (e-CNY) on ten different transit routes in Guangzhou and e-CNY to pay for subway rides across 125 stations in Ningbo city.

Finally, joining the list of Asian government bodies embracing the metaverse, the Beijing Municipal Government has announced a new metaverse innovation and development plan spanning from 2022-2024.

Mediation