Logll Tech News — The cryptocurrency market is grappling with yet another day of losses as Bitcoin, the leading cryptocurrency worldwide, slides below the critical mark of $29,000.
- This drop comes just before the US Federal Reserve’s monetary policy decision scheduled for Wednesday. The market turbulence has not spared other major cryptocurrencies either, as Ethereum and XRP also experience declines. In this article, we examine the factors that contributed to this downturn. We also discuss the implications of the upcoming Federal Open Market Committee (FOMC) meeting for the crypto space.
Bitcoin’s Slide Below $29,000
Bitcoin (BTC) witnessed a decline of 2.25%, settling at $29,128 on Tuesday, according to CoinCodex, a prominent crypto data platform. The cryptocurrency has been trading below the $30,000 mark for over a week, experiencing a significant loss of about 6% within the last seven days. This downward trend in Bitcoin’s value has adversely affected the broader crypto market, dragging down other major cryptocurrencies such as Ethereum and XRP.
😑Cryptocurrency market faces losses as bitcoin falls below $29,000.
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Maybe in the golden scenario we will be in touch with the 200 MA and after that the growth will start? pic.twitter.com/0Oa9niXj7S
Ethereum and XRP’s Losses
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, faced a drop of 0.96%, settling at $1,852.75 on Tuesday. Simultaneously, XRP (XRP), the fourth-largest crypto, suffered a substantial plunge of 5.13%, resting at $0.694896.
Total Cryptocurrency Market Capitalization Decreases
The total cryptocurrency market capitalization experienced a 1.75% decline, reaching $1.18 trillion on Tuesday, as reported by CoinCodex.
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Multiple Fronts of Pressure
The crypto market finds itself under pressure from various sources, contributing to the current downturn. Key factors include regulatory uncertainties, environmental concerns surrounding cryptocurrency mining, and the threat of cyberattacks targeting crypto exchanges and platforms.
The Awaited FOMC Meeting
Investors eagerly await the outcome of the Federal Open Market Committee (FOMC) meeting scheduled for this week. This decision by the Federal Reserve could potentially have significant implications for the cryptocurrency space.
The FOMC’s Expected Interest Rate Hike
The FOMC is expected to raise interest rates by 25 basis points during its meeting. Some experts believe this may be the last rate hike by the Federal Reserve in the foreseeable future.
Related: Wall Street Rocked by Regional Bank Trading Halts and Economic Worries
Impact on Bitcoin Volatility
The anticipation of the FOMC meeting has significantly affected Bitcoin’s volatility. The 30-day estimate for BTC volatility has plummeted to a mere 0.74%, marking the lowest level since January 16, 2023, as per CoinDCX Research Team’s note.
Rate Hike’s Effect on Cryptocurrencies
A potential interest rate hike could impact the appeal of cryptocurrencies as an alternative asset class. Higher interest rates tend to make traditional investments more attractive.
Cryptocurrencies as a Hedge
On the contrary, some analysts posit that a rate hike could boost demand for cryptocurrencies as a hedge against inflation and currency devaluation.
Related: XRP Price Surges as Court Rules It Not a Security – Ripple’s Victory
Insights from Market Experts
Vikram Subburaj, CEO of Giottus Crypto Platform, commented on the current market situation. He states that Bitcoin is trading just above $29,000 with a bearish momentum. The possibility of a rate hike by the US Fed this week seems to have contributed to this decline. He believes BTC needs to hold $28,500 in case of further falls to regain lost value, and a rally may be expected once the market adjusts to the rate hike. Additionally, the dominance of Bitcoin continues to be below 50%.
Technical Analysis
Rajagopal Menon, Vice President at WazirX, provided a technical analysis of Bitcoin’s performance. He reveals that the 7-day Bitcoin trend experienced a decline of 2.95%. The Simple Moving Average for 10-days indicates a ‘Sell’ position at 29808, while the 200-day SMA shows a ‘Buy’ position at 26325.
Some Cryptocurrencies Buck the Trend
Despite the overall market downturn, a few cryptocurrencies managed to buck the trend and record gains.
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Pros:
High Growth Potential: Cryptocurrencies offer the potential for significant growth and returns, attracting investors seeking lucrative opportunities.
Decentralization: The decentralized nature of cryptocurrencies provides financial independence, removing the need for intermediaries like banks.
Global Accessibility: Cryptocurrencies enable cross-border transactions without the need for currency conversions or traditional banking systems.
Cons:
Volatility: Cryptocurrencies are highly volatile, leading to price fluctuations that can result in substantial losses for investors.
Lack of Regulation: The lack of comprehensive regulation exposes investors to risks like fraud and market manipulation.
Security Concerns: Cryptocurrency exchanges and wallets are susceptible to hacking and theft, posing security risks for users.
XinFin Network (XDC) Emerges as the Top Gainer
XinFin Network (XDC), a hybrid blockchain platform designed to connect global trade and finance, stood out as the top gainer of the day, surging by an impressive 15.63% to $0.0628 on Tuesday, as reported by CoinCodex.
Worldcoin (WDC) Makes Significant Gains
Worldcoin (WDC), a digital currency that claims to offer greater speed and security than Bitcoin, recorded a notable gain of 9.67%, reaching $0.0014.
Dogecoin (DOGE) Shows Resilience
Dogecoin (DOGE), the meme-inspired cryptocurrency with a loyal fan base and celebrity support, also demonstrated resilience, gaining 8.56% to settle at $0.077409 on Tuesday.
XinFin Network Named “Coin of the Day”
CoinCodex recognized XinFin Network as its “Coin of the Day” on Tuesday, citing its robust performance and potential use cases. The platform is designed to optimize international trade and finance through XinFin’s Hybrid Blockchain architecture, allowing enterprises to deploy real-world applications on their network.
Related: Apple’s Capitalization Falls Below $2 Trillion in 2023
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Conclusion
The cryptocurrency market continues to face challenges, with Bitcoin’s value dipping below $29,000 ahead of the crucial FOMC meeting. The rate hike decision may influence investors’ perceptions of cryptocurrencies, impacting their demand as alternative assets. However, amid the broader market losses, XinFin Network, Worldcoin, and Dogecoin showcased their resilience, recording gains on Tuesday. As the market grapples with uncertainties, investors and enthusiasts remain vigilant, awaiting further developments that could shape the future of the crypto space.
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Bitcoin’s value dropped due to multiple factors, including regulatory uncertainties, environmental concerns related to crypto mining, and the threat of cyberattacks on crypto platforms.
The anticipation of the FOMC meeting has led to a decrease in Bitcoin’s volatility, with the 30-day estimate reaching the lowest level since January 16, 2023.
An interest rate hike could potentially reduce the appeal of cryptocurrencies as alternative assets, as higher interest rates make traditional investments more attractive.
Some analysts argue that a rate hike could increase the demand for cryptocurrencies as a hedge against inflation and currency devaluation.
XinFin Network (XDC), Worldcoin (WDC), and Dogecoin (DOGE) were among the cryptocurrencies that managed to record gains on Tuesday.
CoinCodex recognized XinFin Network for its impressive performance and potential use cases, highlighting its role in optimizing international trade and finance through Hybrid Blockchain architecture.