Gate.io Blog Market Trend 08/15 - 21/08 | The price of BTC nosedived again, pulling much of the market down

Market Trend 08/15 - 21/08 | The price of BTC nosedived again, pulling much of the market down

22 August 10:45

BTC was a big loser during the week as its price plunged below $22 000, reversing much of the gain it accumulated earlier during the past two weeks. The stability of inflation in July had given bitcoin and other cryptocurrencies much needed upward momentum. However, on Friday the price of BTC decreased by more than 8% thereby trading at around $21,499. The price drop on Friday was a continuation of a downward trend that started earlier during the week. Although BTC started strongly trading at a price slightly below $25 000 by the end of the week it was trading at a price lower than $21 500.

As we know, the price of BTC increased to $25 000 when the market expected the Fed to cut the interest rate later this year or early next year. Nevertheless, the recent price tumble occured hours after the Fed announced that it would continue increasing the interest rate until inflation shows clear signs of stability.

Also, prices of several crypto-related stocks fell on Friday, following BTC’s trend. The reason for the fall in prices of many cryptocurrency, stocks and derivatives is a response to macroeconomic fears, especially the fear of interest hikes in the United States.

The price fall affected many cryptocurrencies including ETH whose price fell by about 10% within 24 hours on Friday to trade at around $1,690. However, at one moment it reached a high of $1,878 within that period. According to the analysis of professional crypto institutions, the values of Ripple's XRP (10%), Cardano’s ADA (11%), Solana’s SOL (8%), and Polkadot’s DOT (10%) dropped by the percentage indicated.

In the traditional market, some derivatives also lost value, although marginally. For example, some NASDAQ listed futures shed off about 1% while the dollar index rose to a high of 107.77, a sign of risk aversion.

According to Coinglass, the sharp fall in prices on Friday resulted in liquidation of many longs and shorts, worth millions of dollars. The graph gives a better view of what happened.

Source: Coinglass

As a fact, bitcoin traders lost over $203 million while ETH traders lost about $140 million.

Reacting to this sudden fall in prices of digital assets, Craig Erlam, a senior markets analyst at Oanda said, “Friday's market lull comes after the strong performance in tech and crypto-linked stocks since mid-July. We've seen a strong recovery in risk assets recently and perhaps we're seeing signs of exhaustion which some may argue is long overdue.”

Author: Mashell C., Gate.io Researcher
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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Market Trend 08/15 - 21/08 | The price of BTC nosedived again, pulling much of the market down

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