As the prices of Bitcoin (BTC), Ethereum(ETH) and Binance Coins (BNB), start to trade in the red, the crypto market is losing its momentum. As macroeconomic factors continue to have a negative impact on asset risk, the largest cryptocurrency market caps could experience more losses.
The crypto market cap is now at $1.09 Trillion after it was rejected by the $1.2 Trillion mark. This has led to minor losses for Bitcoin (2.2%), and Binance Coin (7%), only Ethereum has been able to preserve some of its last week’s gains.
Justin Bennett is a crypto analyst who believes the market’s impact on the U.S. Dollar uptrend has been negative. On its monthly chart, the currency experienced a significant push up to the upside in 2022 and appears to be trying to recover 2022 levels over longer time frames.
These could result in greater risk-on asset losses, including equities or cryptocurrencies. There will also be more economic uncertainty because inflation tends higher over time. Also, there may not be as much liquidity available on the global financial market. Bennett stated the following during sharingBelow is the table:
The US dollar has been doing well, but #stocks and cryptocurrency are expected to suffer. On its way to 107.40, the $DXY took out 107. I believe we still see 112-113. Be careful out there (…). The trend is your friend…unless it’s the $DXY. 112-113 in the first month, 120 likely over the coming months. USD higher means that risk assets are down
Bitcoin, the largest cryptocurrency by market capital, experienced a low of $17,600 in yearly trading. As NewsBTC reported, Fidelity’s Director of Macro Jurrien Timmer believes this level is on par with the cryptocurrency’s previous bottoms and expects that price point to operate as critical support.
Is Crypto’s Critical Support Being Dismantled by Macro Economic Factors?
Using BTC’s Supply and Demand models, Timmer compared $17,600 with $3,100 and $200, two major support zones for Bitcoin even in persistent downside trends. The expert said the following on BTC’s capacity to see more appreciation in the long term, bullish momentum that will surely push the entire crypto market upwards:
Bitcoin’s price-to-network ratio (my proxy for a valuation multiple) is back to 2014 levels. The network’s growth is roughly on par with the power regression curve.
In contrast, Bennett expects more losses for BTC’s price and the crypto market. Market cap for the first crypto could fall to $9,500 to $13,500.
Based on current U.S. Federal Reserve (Fed), monetary policy, the expert bearish thesis was developed. Bennett thinks that the financial institution will keep inflation at bay and increase interest rates to accomplish this goal.
Even without charts, bear market rallies can be easily identified. All it comes down to is one question.
Are the Fed tightening or easing?
➡️Dips can be used to buy easing
➡️Raisings can be short-lived if tightening occursThe fed just began tightening and isn’t likely to stop anytime soon.
— Justin Bennett (@JustinBennettFX) August 17, 2022