The Previous Week Was Definitely Dominated By The Ethereum's Merge, Now Cryptocurrency World Is Likely To Focus On Fed And Macroeconomy| FXMAG.COM

1. Crypto Market Overview

2. Top Altcoin Gainers and Losers

3. News Highlights This Week:

4. Crypto Calendar: Events to Watch This Week

The previous week was optimistic for the crypto market as enthusiasts cheered the Ethereum Merge, marking the transition of the leading smart contract blockchain to a proof of stake consensus. Although, the optimism didn’t translate to the market’s performance, with Bitcoin and altcoins, including Ether, trading in the red through the period as the focus shifted to Fed’s rate hike concerns.

The total cryptocurrency market volume has spiked by 47.73% in the past 24 hours to $70.93 billion, an encouraging sign suggesting high interest in this asset class among investors. The global cryptocurrency market capitalization dropped by 6.53% to $908.72 billion in the past 24 hours, falling under the key $1 trillion mark.

Let’s take a look at some of the biggest news from the crypto market and how they can impact digital currencies in the coming week:

Crypto Market Overview

After rising to a high of $22,673.82 in the past week, Bitcoin (BTC) has fallen under the critical $20,000 level and is going further down following a weekly loss of more than 13%. At press time, the crypto king by market cap trades under the $19,000 level but bounced slightly higher than its weekly low of $18,644.47.

Cryptocurrency Market Heatmap | Source: Coin360

A few days after the Merge successfully saw Ethereum (ETH) transition from a proof of work (PoW) to a proof of stake (PoS) network, ETH/USDT gave back its gains after reaching a high of $1,745.78. Ether is down by 24.71% as the optimism over the ETH Merge event fades, and the bearish sentiment engulfs the second largest crypto.

The only altcoin that traded in the green over the past week was Chiliz (CHZ), strengthening by 11.17% in seven days. The altcoins that fared the worst in the market include Terra (LUNA), which was down by 48.08% for the week, followed by Terra Classic (LUNC) and Gnosis (GNO), which registered weekly losses of 31.90% and 26.81%, respectively.

Top Altcoin Gainers and Losers

Top Altcoin Gainers

Chiliz (CHZ) 11.39%
Dai (DAI) 0.14%
Binance USD (BUSD) 0.07%

Top Altcoin Losers

Terra (LUNA) 48.08%
Terra Classic (LUNC) 31.90%
Gnosis (GNO) 26.81%

News Highlights This Week

After much excitement in the previous week surrounding the landmark Ethereum Merge event, this week’s on the quieter side regarding fundamentals as far as the crypto market is concerned. The focus will remain squarely on factors outside the market, including Fed rate hikes, inflation worries, and the possibility of a global economic recession.

Here are some of the biggest headlines you need to know before trading cryptocurrencies this week:

Crypto Market in Bear Mode - Fed’s Rate Hike and Recession Fears Weigh

Macroeconomic factors continue to dominate the minds of crypto investors as all attention turns to the US Fed Chair Jerome Powell, who could announce a 75bp rate hike this month. Tesla CEO and crypto influencer Elon Musk has already cautioned that a steep hike in interest rates by the Fed and peak Fed hawkishness could bring about deflation in the market, further impacting riskier instruments like digital assets.

Despite the cryptocurrency market enjoying strong fundamentals and increasing adoption, the sentiment continues to experience bearishness due to fears of a recession in the global economy. Rate hikes by the US Federal Reserve and other central banks increase the cautious mood among international investors and send them towards safer instruments and away from riskier instruments like cryptos and equities. This is one of the significant reasons the market exhibits signs of weakness into a new week.

Analysis of Social Trends in Crypto | Source: Santiment

To make matters worse, the risk-averse mood is further boosted by the World Bank’s warnings about a possible global economic recession in 2023. With central banks worldwide set to follow in the Fed’s footsteps with aggressive rate hikes to offset inflation against the backdrop of ongoing geopolitical tensions, a slowdown is inevitable. Will Bitcoin and other digital assets hold up and thrive through their first-ever global downturn?

Crypto Fear & Greed Index Signals Extreme Fear

According to analytics firm Alternative, the Fear & Greed Index signals Extreme Fear among crypto investors. The indicator considers multiple factors to provide sentiment analysis of the crypto market. The index’s score of 21 is lower than last week’s 25 and a sharp drop from yesterday’s 27, signaling a more bearish bias among crypto investors.

Fear & Greed Index | Source: Alternative

Analysis of social trends in the crypto market from Sentiment also includes a bearish mood among crypto traders and investors. The most popular terms associated with BTC/USD include bottom, sell, bear market, rekt, and inflation.

On a somewhat positive note, however, there is considerable chatter on social media over the Ethereum Merge, keeping ETH/USD and the Ethereum ecosystem trending. Another digital asset doing well as far as social dominance in crypto markets is concerned is Cardano, but more on that later.

Institutional Investor Interest in ETH Grows After the Merge

Analysis of ETH futures trading indicates a strong interest in the world’s second-largest cryptocurrency among investors through the week of the Merge. A comparison of the CME futures trading charts of Bitcoin vs. Ethereum shows higher activity in ETH, suggesting growing interest in Ether among institutional investors, thanks to the critical event.

BTC vs. ETH Futures | Source: TradingView

However, now that the Merge has happened and Ethereum has transitioned to PoS consensus, we’ll have to wait and see if the institutional investor interest in the crypto continues to grow and strengthen. The futures trading charts offer the most promising insight into the level of interest institutional investors have in a particular asset.

Cardano Gets Ready for Vasil Hard Fork This Week

Moving beyond the market sentiment, Cardano (ADA) is getting ready for its next major network upgrade on Sep 18, 2022. The Vasil hard fork event was initiated on Sunday, 18 September, and will go live per schedule.

The Vasil era is the most ambitious upgrade to the Cardano blockchain and will usher in significant improvements in its scalability. Plutus V2 scripts will also improve the smart contract capability of the network, making the blockchain an even more attractive platform for decentralized applications (dApps) in the future.

ADA/USDT H4 Price Chart | Source: KuCoin TradingView

Ahead of the hard fork, Cardano’s social activity is on the uptick. This has also translated into higher buying activity in the ADA/USDT crypto pair in the near-term. Santiment’s Social Dominance chart analysis shows a higher volume of social traffic around Cardano even as the enthusiasm over Ethereum Merge fades online.

Will SEC vs. Ripple Case Close Soon?

There may soon be light at the end of the tunnel for Ripple (XRP) holders in the lawsuit. Ripple Labs and the US SEC have filed motions for summary judgment in the Southern District of New York, asking the judge to pass a ruling on the case with the information presented.

The move could expedite a ruling, ending the prolonged uncertainty Ripple’s XRP has faced about its status as an unregistered security. Irrespective of whether the judge rules in favor of Ripple Labs, the end of the lawsuit could bring significant relief to holders of the XRP cryptocurrency, which has suffered immensely due to the uncertainty and delays in the case.

Norway’s Central Bank Plans CBDC on Ethereum

More potential good news for the crypto market is the Norwegian Central Bank’s decision to explore the nation’s digital currency based on the Ethereum blockchain. Earlier this month, Norges Bank - the central bank of Norway, announced on Twitter that the Nordic nation’s CBDC (central bank digital currency) would be based on Ethereum.

Ethereum will provide the core infrastructure to manage the issuance, distribution, and destruction of Norway’s CBDC. As of July 2022, nearly 100 countries worldwide are in various stages of experimenting and adopting CBDCs as the future of money, with Nigeria and The Bahamas leading the way by fully launching their projects to date.