Weekly Cryptocurrency Update (Jan 01 – 07): Coins to watch – BTC, ETH, LTC, XRP & DOGE
Arslan Butt • 6 min read
Weekly Cryptocurrency Summary – Bitcoin (BTC/USD)
The BTC/USD coin failed to stop its previous day’s bearish rally and remained depressed around the $42,000 mark, testing multi-month lows as investor appetite for riskier assets dwindled after minutes from the Federal Reserve’s most recent meeting revealed the central bank was moving toward more aggressive policy action. Bitcoin’s price began a significant slide after failing to break through the $43,500 barrier zone. BTC has dropped sharply below $45,000 and $43,000. The bears even managed to get the price below $43,500.
A low has been formed, and the price is now consolidating losses. It’s currently trading at around $41,261.1. Bitcoin may continue to fall if it fails to recover over $44,800 in value. The $43,000 level is immediate solid support. Near $42,500 is the first significant support. If the price falls below $42,500 on the downside, it could fall even further.
In this scenario, the price might drop to $41,000 in the coming days. However, near the $40,000 level, the next significant support exists. The BTC/USD coin is trading at the 41,297.1 level and consolidating in the range between 42,615.8 and 43,772.3.
The reason for the ongoing declines in BTC, however, could be linked to the Federal Reserve’s most recent meeting, which showed the central bank’s leaning toward more aggressive policy action, sapping investor appetite for riskier assets. It is also worth mentioning that the Nasdaq fell more than 3% overnight, the most in a single day since February after Fed minutes revealed that policymakers discussed shrinking the bank’s balance sheet during their December meeting when they also chose to speed up the end of their bond-buying program. This was also seen as one of the most critical factors putting downward pressure on BTC prices.
Mining and hash rates for Bitcoin (BTC) are again in the news. Rising fuel prices and the environmental impact of mining are becoming primary concerns. During an ongoing energy crisis, news of the Kosovo government prohibiting crypto mining hit the headlines on Tuesday. Late last year, the government declared a 60-day emergency to divert finances to energy imports. The restriction may not have been significant worldwide, given that Kosovo does not have a large Bitcoin (BTC) mining industry. Kazakhstan experienced internet disruptions over the course of the night on Wednesday. Rising fuel costs have sparked public unrest following the government’s decision to eliminate a price restriction on fuel. Anti-government protestors reportedly seized government offices in the country’s capital. Protests have been reported in other parts of the country as well. As a result, Kazakhstan’s president, Nursultan Nazarbayev, enforced a communications blackout.
Kazakhstan has recently grown in popularity among Bitcoin (BTC) miners. According to the University of Cambridge, Kazakhstan contributed 18.1 percent of the total hash rate in August 2021. The total hashrate was 8.2 percent in April, down from 1.4 percent in September 2019, when China accounted for 75.5 percent of the global hashrate. Thus, the internet outage this week and a drop in Bitcoin (BTC) mining appear to have had no influence on Bitcoin (BTC). The blackout occurs when Bitcoin (BTC) and the larger crypto market are on the decline.
Furthermore, Kevin O’Leary, a multimillionaire investor, and crypto enthusiast, believes that the nonfungible token (NFT) industry will be valued more than Bitcoin (BTC) in the future. Mr. Wonderful, as O’Leary is known, said on CNBC’s Capital Connection on Wednesday that NFTs had a greater potential to attract capital than Bitcoin because they could tokenize and authenticate actual commodities like automobiles, watches, and real estate. This news may have a bearish impact on the BTC/USD price.
Weekly Cryptocurrency Summary – Ethereum (ETH/USD)
Furthermore, the selling bias surrounding Ethereum, the world’s second-largest cryptocurrency, could be linked to the risk-off mood in the crypto market. The fall of Bitcoin has brought this to light. On Thursday, Bitcoin plummeted below $43,000, touching multi-month lows, after minutes from the Federal Reserve’s most recent meeting indicated the central bank was leaning toward more aggressive policy action, dampening investor appetite for riskier assets. The recent greenback selling bias, on the other hand, is assisting the ETH/USD currencies in limiting their losses. The broad-based dollar was lower in Asia on Friday morning, but the Japanese yen was expected to climb for the sixth week in a row. The surge could be extended if the latest US jobs report justifies early Federal Reserve interest rate hikes.
Furthermore, Vitalik Buterin, one of Ethereum’s co-founders, has begun to consider altering the network’s current fee structure. Buterin outlined the concept, entitled “Multidimensional EIP-1559,” in a blog post published on Jan. 5, noting that different Ethereum Virtual Machine (EVM) resources have differing gas utilization demands. He continued, citing block data storage, witness data storage, and block state size changes as instances of short-term “burst” vs. “continuous” capacity limits within the EVM. As a result, this news did not affect the price of ETH.
Weekly Cryptocurrency Summary – Litecoin (LTC/USD)
Weekly Cryptocurrency Summary – Ripple (XRP/USD)
In the meantime, the risk-off mood in the crypto sector tends to have a further negative impact on the XRP/USD coin. After losing temporary support at around $0.75, the price of Ripple (XRP) has been under heavy selling pressure. Even as anxiety sweeps the entire market, the XRP price prediction is firmly on the downside. The Crypto Fear and Greed Index is at 18/100, indicating extreme fear, which indicates that investors are too concerned.
As the SEC vs. Ripple Labs case moves forward into 2022, many in the XRP community expect the next court update to be around Jan. 19. However, crypto observers were taken aback when they read the SEC’s recent filing, which strikes at one of the founding pillars of Ripple’s case.