FX.co ★ BTC opened the week with a spectacular takeoff

On Monday morning, digital gold started with a sharp jump up. By writing the material, its value is balanced at around $22,157.

According to the website for tracking the price of virtual assets, CoinMarketCap, over the past day, the minimum value of Bitcoin reached $21,406, and the maximum – was $22,206.

Following the past week's results, the bitcoin price soared by 9.4%. At the same time, the past seven days turned out to be extremely volatile for the cryptocurrency. At the beginning of the week, Bitcoin sharply declined and collapsed to a peak low of $18,644 – the lowest level for the current year. The spectacular price drop provoked a large-scale market liquidation: its volume exceeded $355 million daily.

However, by the end of the week, the BTC launched a counterattack, and market analysts started talking about the beginning of a bullish reversal.

The main reason for the steady growth of the first cryptocurrency on Thursday–Friday, experts call the resumption of the rise of key US stock indices after three weeks of permanent decline, as well as a record increase in the interest rate during the meeting of the European Central Bank on monetary policy.

So, on Thursday, the regulator increased the base rate on loans to 1.25% per annum, the deposit rate to 0.75%, and the rate on margin loans to 1.5%. At the same time, an increase in the discount rate immediately by 0.75 percentage points took place for the first time in history.

In addition, members of the central bank noted that the regulator intends to continue raising the rate during the upcoming meetings. Thus, ECB President Christine Lagarde said that the further pace of interest rate increases would depend on incoming statistical data.

Another factor supporting the BTC was the strong results of the US stock market's last two trading sessions of the week. So, on Thursday, The Dow Jones Industrial Average rose by 0.61%, the S&P 500 rose by 0.66%, and the NASDAQ Composite – by 0.60%. On Friday, the DJIA increased by 1.19%, the S&P 500 – by 1.53%, and the NASDAQ Composite – by 2.11%.

By the way, since the beginning of 2022, analysts have increasingly begun to emphasize the high level of correlation between the US securities market and virtual assets against the background of intense expectations of both the consequences of the geopolitical conflict in eastern Europe and the next steps of the US Federal Reserve.

Altcoin Market

Ethereum, Bitcoin's main competitor, also started Monday's trading session with a steady rise, and by the time of writing, the material had reached $1,723. Over the past day, altcoin quotes have decreased by 2.2%; over the past week, they have soared by 13.9%.

Crypto experts explain the rollercoaster of Ethereum prices in recent days with a restless expectation of the approaching migration of ETH from energy-intensive PoW to a more environmentally friendly Proof-of-Stake algorithm. The long-awaited event is scheduled presumably for September 15.

Ethereum co-founder Vitalik Buterin claims that the network's transition to Proof-of-Stake will increase the popularity of digital assets for everyday payments by reducing the commission to 2 cents. According to the Canadian-Russian programmer, the popularity of crypto payments fell after 2018 amid high transaction fees.

At the same time, many members of the crypto community fear that technical problems associated with the migration of Ethereum to PoS may provoke a loud drop in the second largest virtual asset by capitalization. In turn, the collapse of ETN can put serious pressure on the global cryptocurrency market.

Despite investors' concern, the number of Ethereum wallets containing more than 1,000 ETH soared to a 15-month high last week.

As for cryptocurrencies from the top 10 by capitalization, almost all coins showed spectacular positive dynamics during the past week. At the same time, the best results were recorded for Ethereum (+13.9%).

According to CoinGecko, the world's largest aggregator of data on virtual assets, over the past day, Solana (+10.4%) and ApeCoin (+6.34%) coins topped the list of leaders among the top 100 most capitalized digital assets, while Terra (-21.11%) took the first place in the drop list.

According to the results of the past week, as part of the first hundred strongest digital assets, all coins, except for the USD Coin (USDC), Tether (USDT), and Binance USD (BUSD), were traded in the green zone. Terra coin showed the best results (+184.81%), and Nexo (-8.86%) showed the worst results.

According to CoinGecko, at the time of writing, the total market capitalization of cryptocurrencies is $1.1 trillion.

Since November last year, when this figure exceeded the $3 trillion mark, it has almost tripled.

Forecasts of Crypto Experts

The unpredictable behavior of the digital coin market forces analysts to make the most unexpected predictions about its future. The day before, a popular crypto expert from social networks with the nickname Filbfilb said that in the near future digital gold could collapse to $10,000 – $11,000 against the background of a high correlation with the NASDAQ Composite stock indicator.

The key indicator of the US stock exchange, in turn, is under strong pressure from the permanent tightening of monetary policy by the Federal Reserve. As for the trader's forecasts for bitcoin for 2023, he is sure that the rally of the first cryptocurrency is "obvious."

Another popular cryptanalyst – the co-founder of the BitMEX exchange, Arthur Hayes - suggested that the price of Ethereum will soar to $3,000 after its transition from energy-intensive PoW to a more environmentally friendly Proof-of-Stake algorithm.

According to Hayes, the decrease in the number of ETH will be a powerful impulse to increase quotes. The analyst called the development of the DeFi segment an additional factor in the growth of demand for Ethereum.