With a small move up in markets, Bitcoin and other majors are gaining a little ground. However, some slight moves don’t change the fact that bears remain strong.
The Labor Department reported that job growth remained robust despite growing concerns about the economic recession as a result of the interest rate increases. There was an addition of 315,000 jobs in August, according to data revealed on Friday.
Bitcoin Looks Like it Trades With Other Risk Assets
Following the latest U.S. labor report, Bitcoin and Ethereum, the two leading cryptocurrencies, experienced some minor gains.
Shortly after the data release, Bitcoin moved up 2% while Ethereum increased by 5%. However, both coins quickly bounced back to previous marks and the overall market is still in the red.
Bitcoin bled for last week as buyers lost momentum. After approaching the $25,000 resistance level in August, sellers gained control and pulled Bitcoin below $20,000.
Bitcoin maintained its decline from the previous week, falling to a low of $19,800 as purchasers failed to overcome bearish selling pressure.
Bitcoin is currently trading at $19,900 at the time of writing. Bitcoin is testing the $20,000 level, but with so many variables going downward, it is unclear how long Bitcoin will hold.
Liquidity is Drying Up
Data from The Block Research also showed that Bitcoin futures trading volume in August 2022 reached $941.5 billion on exchanges. This was the lowest index since December 2020, when the swing threshold was at $970.1 billion, which was explained by the recent performance of Bitcoin.
The continuation of the plummet without any significant recovery signal is an obvious reason. Apart from that, there was the wave of FUDs such as the Avalanche (AVAX) scandal and the rumor that Mt. Gox was about to release 142,000 BTC. The market itself coupled with macro conditions has spread the negative scenario of the upcoming market.
At a conference in Jackson Hole last Friday, Jerome Powell pledged to lower inflation that is still running near its highest level in more than four decades. the Fed chairman stressed that higher interest rate hikes will be preferred during the next period in great attempts to tame inflation.
As for Ethereum, the second largest cryptocurrency also remains in a bearish posture. At the press time, Ethereum is trading around $1,500. The $1,430 support level is being tested but if it failed, the next expected mark would be $1,000.
The price is stuck at the resistance level. However, unlike Bitcoin, a short-term surge could be on Ethereum’s side since the major upgrade is underway.
The big Ethereum update – The Merge – promises to bring different innovations to the world of cryptocurrency. This transition is widely expected to be powerful enough to turn the cryptocurrency market greener. This is indeed one of the promises of the future Ethereum merger.
The Ethereum Merger, or more specifically, its transition into Proof-of-Stake, is only a few days away at this point. The 15th of September has been decided upon as the date, and the crypto community is showing signs of being a rocket of diverse viewpoints.
Even while it is difficult to predict what will happen to investors’ ETH holdings in the future, the impact that ETH is having on blockchain technology and all the projects that are being developed in its orbit is enough to rekindle investors’ hope for a brighter future.
Regarding the ecosystem specifically, as well as cryptocurrencies in general.
The Merge of the Ethereum (ETH) network is undoubtedly one of the most anticipated events by the crypto community. The Merge is expected to reduce 99.95% of energy consumption when the Ethereum blockchain switches from PoW to PoS.
Many started to talk about the end of bullish summer for altcoins after the Merge. Despite this, the trend for cryptocurrencies is still bearish, and Bitcoin is struggling to break out of the area of around $20,000 in price.
If the price of Bitcoin plunges significantly and reaches a new all-time low, it will drag the value of altcoins down with it.