Crypto Market Update August 21st, 2022

The cryptocurrency market seems to have stabilized at a market valuation of $1.07 trillion after a strong sell-off that started a few days ago. Bitcoin (BTC), the leading cryptocurrency lost 12.4% of its value in the last 7 days, and Ethereum (ETH), fell by almost 19% during the same period. But will the crypto market stabilize around these prices?

Bitcoin Stabilizes Above $21,000

Bitcoin has stabilized above $21,000 after falling below this important support level a few hours ago. Despite briefly sliding below that price, the market fastly recovered and the largest cryptocurrency in the market surged by almost 1% in the last 24 hours. 

At the time of writing this article, Bitcoin is being traded at close to $21,400 and it leads the market with a valuation of $409 billion. 

Ethereum Finds Support At $1,600

While Bitcoin was able to stay above $21,000, Ethereum buyers helped ETH stay above $1,600, which is a key psychological level for the second-largest virtual currency in the market. However, this comes after a week that saw Ethereum lose almost 19% of its value. This is the worst performance among the top 10 digital currencies after Solana (SOL), which lost 23.3% of its value during the same period of time. 

Therefore, $1,600 is now the critical level that should help ETH enter a consolidation period. Otherwise, we could see new lows in the next few weeks. At the time of writing, Ethereum is traded for close to $1,615 per coin. 

Shiba Inu (SHIB) The Main Gainer

Shiba Inu (SHIB), the second-most popular meme coin in the crypto industry posted 4.2% gains in the last seven days. This allowed this virtual currency to become one of the top 5 best performers among the top 100 largest cryptocurrencies in the market. 

It is worth pointing out that Shiba Inu’s price increase was not shared by other meme coins such as Dogecoin (DOGE), SHIB’s main competitor. Indeed, Dogecoin lost 4.9% of its value over the last week. Despite the lack of growth during this period, Dogecoin registered smaller losses than most digital assets in the crypto industry. 

Other Altcoins And Possible Future Trends

Among the top ten, Binance Coin (BNB) lost 8.2% of its value, XRP 8.8%, Cardano (ADA) 17.6%, Solana (SOL) 23.3%, and Polkadot (DOT) 20.8%. This shows that this was a very difficult week for crypto investors, that ended up following the general trend of financial markets. 

It is worth pointing out that the current sell-off in the crypto market is highly correlated to traditional financial markets. Central banks all over the world have noticed that despite the increase in interest rates, inflation might not have peaked yet, which could mean that the cycle of higher interest rates might not be over. 

Indeed, depending on inflation data from developed countries (especially the United States), we could see central banks tightening the monetary market even further. Otherwise, they risk having higher inflation and stronger pressure to raise interest rates even higher in the future.