Bitcoin Lingers Nearly $20,000; Ether extends drop before ‘consolidation’
Cryptocurrencies were mixed a day after posting heavy losses due to growing expectations of restrictive US monetary policy.
Cryptocurrencies mixed a day after posting sharp losses triggered by tough expectations of a cap WE monetary policy.
Bitcoin dropped less than 1% to $20,140 at 10:27 a.m. in New York after a nearly 10% drop on Tuesday. Ether, Ethereum’s native token, fell for the third day, dropping about 1% to $1,590. Stocks, bonds and digital tokens fell sharply on Tuesday after rising US inflation data suggested the Federal Reserve will raise interest rates further.
The Fed has no choice but to “pump the brakes, tighten financial conditions, push real yields higher and that will increase risk assets,” said Charlie McElligott, macro strategist cross-asset scale at Nomura Securities International Inc., said. Bloomberg Television.
Such macroeconomic factors are currently overshadowing the Ethereum reshuffle, known as Consolidation. But the upgrade to cut blockchain’s energy usage will arrive late Wednesday or Thursday and will be back in focus.
A wide range of financial services are built on top of Ethereum, making it an important crypto highway, so any flaws in the software transition from so-called proof-of-work to proof-of-stake models are all possible on digital assets.
“There has been a lot of testing that shows the Merge itself is more likely to go very smoothly,” said Joseph Lubin, co-founder of Ethereum, said on Bloomberg Television, compared to an overnight iPhone update. Mainstream Ethereum-based services are ready to upgrade but some smaller services may need to do more work, he added.
An Ether rally since mid-June, fueled in part by rumors surrounding Consolidation, has cooled of late. Both Ether and Bitcoin have more than halved in 2022.
Mark Newton, head of technical strategy at Fundstrat, wrote in a note on Tuesday that Bitcoin could drop below $18,000 before the price bottoms out in October.