On Wednesday morning, the price of bitcoin dropped below $19,000, briefly reaching its lowest level since June as a result of a decline in stock markets around the world and the U.S. dollar’s continued strength.
Due to a sell-off in all digital coins, the market value for all cryptocurrencies also decreased below $1 trillion.
Late Thursday, Bitcoin managed to climb back above $19,000 again. According to crypto analysts, it was last trading less than 1% higher at $19,044.30. Ether, which has increased in value significantly more recently than bitcoin, was trading at $1,690.20 as of this writing.
With tighter monetary policy, central banks around the world are battling rogue inflation. The US Federal Reserve has raised interest rates a total of 2.25 percentage points in a series of moves. Markets anticipate continued interest rate increases.
The Fed’s tightening of monetary policy has made the dollar stronger, which has upset risky assets. The yield on the 10-year US Treasury has also increased.
Since stocks and bitcoin have historically traded in tandem, if stocks decline, bitcoin generally does too.
Since its peak in November, nearly $2 trillion of the value of the cryptocurrency market has been lost. Bitcoin has fallen by about 60% from its November record high of $68,990.90.
A challenging environment for risk assets as well as problems unique to the cryptocurrency sector, such as failed projects and widespread bankruptcies, have contributed to the sell-off.
Ether and other so-called altcoins, or alternative coins, have managed to rise above bitcoin during this time. Since both cryptocurrencies hit a low in June, ether has outpaced bitcoin.
The native cryptocurrency Ethereum is known as ether. This month, Ethereum will undergo a significant upgrade known as “the merge” which its supporters claim will increase network efficiency, attract new investors, and result in higher returns.
In anticipation of the merger, Ethereum prices against the bitcoin pair reached annual highs. As a result, while Bitcoin consolidates, there has been much more interest and activity in the Altcoin space.
When To Expect Movement Above $20,000?
Today’s slight increase for WBTC (up 1.76% so far) and the overall positive outlook for the market right now (up 2.66% for the day) mean that we could be seeing Wrapped Bitcoin push above $20,000 by tomorrow. Going into the weekend and then after the weekend, the market frequently experiences significant movement.
However, the movement might also go the other way, driving the price of WBTC below $18,000 over the coming days. In either case, we don’t currently anticipate this coin to move significantly.
Keep in mind that the upcoming Ethereum Merge may have an impact on both Wrapped Bitcoin and Bitcoin, as well. Watch for significant market movements around the time of this Merge, which is around September 15th.
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