Even though Ethereum is the second largest cryptocurrency by market capitalization, ETH continues to outperform BTC in price growth.
Bitcoin is struggling to maintain support at $21k, while Ethereum has managed a rebound from the $1,300 level, currently trading at $1,484. While Bitcoin is up 2% in the past 24 hours, the price of Ethereum saw a substantial 8% increase today, even with the uncertainty hanging over the global and crypto markets.
Cryptocurrency Market Update
After plunging below $1 trillion in market capitalization on Monday, the global cryptocurrency market is trying to rebound and is currently at $990 billion. One of the big movers today is Ethereum which has seen an impressive rebound from the $1300 level which was unexpected by most traders.
While the 24-hour charts may look promising, the sharp decline in trading volume over the past 24 hours for Bitcoin and Ethereum suggests that the current market action – the rebound – is unconfirmed.
The reason for the unstable market conditions is the upcoming 75 basis point interest rate hike by the Fed in its latest aggressive efforts to rein in inflation.
After CPI figures released on July 13 signaled that inflation continues to rise, the Fed prepared to raise interest rates to help the economy. While the initial rumor announced a hike of 100 basis points, the Fed will instead increase the interest rate by 75 basis points today.
Views on whether or not the Fed’s interest rate hike is affecting the crypto markets significantly, with some saying that bitcoin price shouldn’t be affected much by the interest rate hike. On the other hand, the stock market is likely to increase its avoidance, which could spill over to cryptocurrency markets as bitcoin appears to follow the price action of the stock market.
However, as Ethereum has dominated the market for the past few weeks, we cannot see much movement from Bitcoin even after the interest rate hike.
The bitcoin price is likely to fall to the $20,000 level.
While bitcoin has managed to hold the current $21,000 support relatively well thanks to the bullish Ethereum price action, the crypto asset is likely to test the waters of the $20,000 zone later in the day. the week, especially with the Fed’s upcoming action.
Additionally, news of an SEC investigation into cryptocurrency exchange Coinbase is not helping crypto markets, as the government agency’s latest action underscores the wild and unregulated nature of cryptocurrency exchanges. cryptocurrencies. Many bad actors try to scam investors and take advantage of insider knowledge due to the anonymous nature of cryptocurrencies.
While regulation of cryptocurrency markets can curb the unfair actions of reasonable white-collar individuals, there will always be plenty of downright malicious actors out there looking to get their piece of the pie. There is no regulation or supervision preventing them from organizing scams, hacking wallets and obtaining cryptocurrency illegally.
Will Ethereum overtake Bitcoin in terms of market capitalization in 2022?
The question on everyone’s mind is whether Ethereum could overtake Bitcoin in terms of market capitalization by the end of 2022. With the Ethereum network merger scheduled for September, the cryptocurrency could show substantial growth. of its price at the end of the third and fourth quarters of this year.
As Ethereum’s market cap approaches 50% of Bitcoin’s, Ethereum’s price still needs to more than double to overtake Bitcoin. The best chance for ETH to overtake BTC is for the cryptocurrency to slowly overtake Bitcoin on a daily basis.
As the cryptocurrency market recovers and the Ethereum network transitions from proof-of-work to proof-of-stake, we may see additional bullish momentum for ETH that could push it higher. . The first step for ETH to overtake BTC in terms of market capitalization is to regularly trade at more than 50% of the market capitalization of Bitcoin. Once this step is taken, the bulls could enter the Ethereum arena and continue pushing ETHUSD higher.
Ethereum is more likely to show substantial price growth following the successful network merger in September and a network upgrade that will allow ETH to process orders of magnitude higher transactions per second than it does. currently cannot. Until Ethereum’s network proves itself in the broader crypto market, ETH is unlikely to overtake BTC.
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