Bitcoin back down to US$26,000 as investors await US Fed chair speech

Bitcoin back down to US$26,000 as investors await US Fed chair speech

Time Stamp: August 24, 2023 9:37 PM
Source Node: 2842799

Bitcoin dropped to around the US$26,000 level Friday morning in Asia, giving up much of the previous day’s gains. Ahead of the U.S Federal Reserve Chair Jerome Powell’s Friday speech at Jackson Hole, investors are looking for signs of an end to the rate hike cycle, with repercussions for the crypto market. Ether moved lower to near the US$1,600 support level, while most other top 10 non-stablecoin cryptocurrencies logged losses. Solana led the losers after its own day of gains Thursday. The Forkast 500 NFT index gained slightly as the Solana blockchain’s new partnership with e-commerce platform Shopify points to better times ahead for NFTs. U.S. stock futures posted marginal gains after Wall Street closed lower on Thursday, with all three major U.S. indexes logging losses of over 1%.

Bitcoin gives up gains as cautionary mood prevails

Bitcoin dropped 1.40% in the last 24 hours to US$26,081.21 as of 07:20 a.m. in Hong Kong and traded 2.90% lower for the week, according to CoinMarketCap data. The world’s leading cryptocurrency reached a low of US$25,914.93 on early Friday, a 2.9% decline from its high daily high of US$26,688.48 on Thursday.

According to Samer Hasn, market analyst at Australia-based global multi-asset broker XS.com, the current caution in the crypto market is due to increased regulatory scrutiny in the U.S. 

The U.S. Securities and Exchange Commission (SEC) has brought lawsuits against a number of digital asset firms, including Ripple Labs, Binance.US and Coinbase. Luxembourg-based cryptocurrency exchange Bitstamp said Thursday it will stop Ether staking services for U.S. customers from Sep. 25 in light of recent regulatory developments.

Hasn said the “negative sentiment may continue to put pressure on the cryptocurrency market in the coming weeks or months until a regulatory and legislative environment that regulates the cryptocurrency market becomes clear.”

He pointed to data from blockchain intelligence firm Santiment that shows Bitcoin whales moving large amounts of the token to their wallets as a further sign of a decline in market sentiment.

“The relatively huge movements in cryptocurrency wallets, led by Bitcoin, may continue to weaken the confidence of participants and fuel a state of caution about what may happen in the future in the market and lead to collapses or wide fluctuations,” Hasn added.

Greta Yuan, head of research at Hong Kong-based digital asset exchange VDX, said that investors have to recognize that “the bear market is not over yet.” With trading volume across the market still weak, Bitcoin’s price could remain in the range of US$25,000-27,000 for some time, she added.

Alongside Bitcoin’s losses, Ether also dipped 1.40% to US$1,652.77 and was down 3.27% over the past seven days.

Most other top 10 non-stablecoin cryptocurrencies traded lower over the past 24 hours. The exception was Binance’s BNB token, which edged up 0.58% to US$217.48 but still logged a weekly loss of 1.87%. 

Mastercard said it will end four crypto card programs in Argentina, Brazil, Colombia and Bahrain by September 22. The global payment giant was partnered with Binance on the four programs. No reason was provided for the cancellations, first reported by Reuters on Thursday.

Solana’s SOL token led the losers, falling 3.09% to US$20.90 for a weekly loss of 4.98%.

SOL reached a four-day high of US$21.99 on Thursday as it announced that Solana Pay — a free-to-use payment protocol built on the Solana blockchain — has partnered with Canada-based e-commerce platform Shopify to allow USDC stablecoin payments for online shopping without intermediary fees.

The total crypto market capitalization dropped 1.23% to US$1.05 trillion. Trading volume fell 22.52% to US$27.41 billion.

Signs of life for NFTs?

The indexes are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.

The main Forkast 500 NFT index edged up 0.20% over the past 24 hours to 2,274.13 as of 10:00 a.m. in Hong Kong, but was still down 7.36% for the week. Forkast’s Ethereum and Cardano NFT indexes dropped, while the Solana and Polygon indexes moved up.

“Global sales are up to over US$15m in the past 24 hours and the Forkast 500 has been flashing green over this period. I wouldn’t expect this to last though,” said Yehudah Petscher, NFT strategist at Forkast Labs, via a note.

Total NFT trading volume rose 24.48% in the past 24 hours to US$15.20 million. Volumes on the Ethereum, Solana, Polygon and Cardano blockchains all logged increases, while the Bitcoin network’s volume dropped, according to data from CryptoSlam. 

Solana spearheaded the increase in NFT trading volumes, surging over 125% in the past 24 hours to US$2.24 million and second place in CryptoSlam’s volumes ranking.

“A majority of these sales are behind a new profile-picture (PFP) collection called Meegos that was created by Blocksmith Labs. In just a few hours the collection has 10x the sales as the second ranked Solana collection, totaling over US$1 million in sales today,” Petscher said.

Meanwhile, Solana’s recently-announced partnership with e-commerce platform Shopify has provided a much-needed boost to the NFT market.

“Most NFTs you have to pay for with crypto, and we need crypto adoption,” Petscher said in a video posted to YouTube Thursday. 

“This is just an inevitable step to bring people into Web3, like what we’re seeing with Paypal and their introduction of a stablecoin, so mass adoption is happening,” he added.

Ethereum-based Bored Ape Yacht Club (BAYC) continued to top the 24-hour sales volume for NFT collections. It rose 6.64% in the past 24 hours to US$1.28 million. Solana-based Meegos and Mythos Chain-based DMarket placed second and third in the ranking.

Meanwhile, art NFTs — especially generative art — remain a big seller, despite the bear market.

Momentum, a generative art collection by Dutch artist Rik Oostenbroek, was released on Thursday as part of Velocity — an NFT series launched by crypto exchange Bybit and Formula One racing team Oracle Red Bull Racing. It sold out within the day.

Elsewhere, Eric Calderon, founder of generative art platform Art Blocks, released his “heart + craft” NFT collection on the Arbitrum blockchain on Friday. Each of the NFTs in the collection contain a generative art piece and a 3D printable model that can be used to generate physical replicas of the artwork.

(Updates with NFT section.)

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