Bitcoin fell 0.26% from July 28 to Aug. 4 to US$29,136 as of 7:00 p.m. Friday in Hong Kong. The world’s largest cryptocurrency by market capitalization has been trading under US$30,000 since July 24, dipping to US$28,799 on Tuesday, its lowest since June 21. Ether lost 1.77% over the week to US$1,833.
Bitcoin’s price falling from multiple key levels suggests a bearish market trend, according to Lucas Kiely, chief investment officer of digital asset platform Yield App.
“Investors may be contemplating whether it is time to cut their losses or ride out this turbulent period due to weak prices despite the positive nature of [exchange-traded fund] applications and the XRP ruling,” Kiely said. “Despite this, sentiment in crypto remains largely down. It seems weekly that the [Securities and Exchange Commission] sues another crypto company, which seems to turn away investors.”
The week started off with following a US$70 million hack in Curve Finance, a stablecoin-focused decentralized exchange, on Sunday.
“Although this [Curve Finance hack] has nothing to do with Bitcoin, it still casts a negative light on the crypto industry,” Marco Johanning, writer of The Summit Post, a newsletter that provides technical analysis on cryptocurrency price movements, told Forkast. “Historically, August has been a weaker month, so I believe a grinding lower at the moment is the most likely scenario.”
In the macroeconomic landscape, credit agency Fitch Ratings downgraded the U.S. long-term credit rating on Tuesday from AAA to AA+, citing “expected fiscal deterioration” in the country, over the next three years.
“The U.S. government has US$32 trillion dollars in debt and trillion dollar interest payments. Meanwhile, the economy is only growing slightly. The Fitch downgrade sent Bitcoin higher, but Bitcoin faced resistance at the US$30,000 level,” Kiely said.
The global crypto market capitalization stood at US$1.16 trillion on Friday at 7:00 p.m. in Hong Kong, down 1.69% from US$1.18 trillion a week ago, according to CoinMarketCap data. With a market cap of US$566 billion, Bitcoin represented 48.7% of the market while Ether, valued at US$220 billion, accounted for 18.9%.
Notable Movers: XDC, BONE
Open-source blockchain protocol XDC Network’s XDC token was the week’s biggest gainer in the top 100, rising 39.23% to US$0.08245. The token started picking up momentum on Tuesday, a day after XDC Foundation announced the integration of the network with Infocomm Media Development Authority Singapore, to digitalize cross-border trading.
Bone, the governance and reward token of the Shiba Inu ecosystem, was this week’s second-biggest gainer, rising 25.11% to US$1.65. The coin started picking up pace last Friday, in anticipation of the launch of Ethereum layer-2 blockchain Shibarium, set to debut at the ETH Toronto conference scheduled for August 15 and 16.
Proof-of-work based blockchain Litecoin completed its third halving event on Wednesday, reducing miner rewards from 12.5 to 6.25 Litecoins per block. The much-awaited halving failed to restore investor confidence, as Litecoin fell 6% within the next 24 hours.
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Next week: Will Bitcoin fall below US$28,000?
If Bitcoin does not return to US$29,800 next week, it may fall to as low as US$28,000, said Johanning.
“The support at US$27,000 is much stronger and coincides with the trendline formed by the lower lows on December 22nd, March 23rd, and June 23rd. Furthermore, there is a large liquidation pool below the US$28,000 resistance. Therefore, US$27,000 appears to be a likely target,” he said.
Investors will look forward to next Thursday’s release of the U.S. core consumer price index, a report on the inflation of goods and services, excluding food and energy.
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