By Shelly Melancon (Switzerland)
The broader cryptocurrency market is in for another rough patch. Prices of crypto assets have tanked a bit as the industry’s market capitalization sinks again.
Similarly, Bitcoin’s flagship digital asset has reached its lowest price in a week. Bitcoin currently trades at roughly $21,000.
Bitcoin Begins Another Market Slump
The world’s leading digital token currently finds itself under selling pressure. The BTC is struggling to break even as it failed to make a weekly close above the 200 weekly moving average (WMA).
As a result, Bitcoin cannot make the price resistance count as it seeks another support level. However, the recent setback has created another possible challenge to Bitcoin’s price rebound.
After a brief period of price uptrend, the price of BTC is at the risk of slumping below the $20,000 price level.
Meanwhile, the past few weeks have relieved the crypto market and the Bitcoin community. The positive price action has created a feeling of stability, returning to the most popular digital currency.
Many people were confident that the bitcoin price surge had come to stay. Alas, not many were convinced by the sudden turn of events.
The Global Economy May Impact Market Direction
The world’s attention is now focused on global macroeconomics and the upcoming interest rate hike by the Fed.
Also read:The Federal Reserve has revealed that it intends to spike the interest rate again in the next few days. According to industry analysts, the proposed hike will likely be up to 70 basis points.
However, the inflation data for last month was high enough to make the Fed ramp up the next rate by 100 basis points. The entire crypto ecosystem will be significantly hit if the Fed pulls another hike.
Furthermore, the previous interest rate hike impacted the crypto market correction. The mainstreaming of the digital asset industry exposed it to the regulator’s policy. With this, the crypto space is mainly assessed alongside other markets like stocks and equity.
Cryptoassets are already part of the global transaction system, with billions of tokens transferred.
U.S. SEC’s Increased Surveillance on Crypto Firms
The crypto space in the United States is under immense scrutiny from regulators. Thus, the SEC tried to steady the ship following the broader market crash.
In addition, bankruptcy claims filed by some of the largest crypto exchanges have come as a shock to the commission. Accordingly, the agency is investigating the most prominent crypto firm in the U.S., Coinbase.
The SEC alleged that Coinbase had listed security tokens on its platform without approval.
Meanwhile, the current market situation is a somewhat gloomy scenario. And the market is expected to stay volatile in the coming months.
The past week was indeed an encouraging period for the industry regarding price performance. A temporary pullback is set to test the resistance level of most altcoins. The following support zone will likely come up for the tokens.
Meanwhile, experts believe that $20,000 is a critical support level for Bitcoin.
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