Bitcoin’s failure to break out above $24,000 in August signaled caution. When stock markets continued their weekly decline, it took BTC prices lower. Bitcoin traded recently at $19,988 on August 27, 2022.
Last week, rumors that the offloading of 137,000 BTC on the open market incited panic. The unconfirmed news has a more worrisome issue. At any time, a BTC holder could sell large volumes at once. This would trigger excess selling pressure. Chances rise that BTC prices could fall sharply within hours.
$1 Trillion Market Capitalization
Since its June and July 2022 decline, crypto players are nervously watching the cryptocurrency’s $1 trillion market capitalization. It is a milestone that may disappear if BTC and Ethereum prices fall. Crypto investors cannot predict when it may hold or fall below this level. Still, it is a good indicator. Bitcoin bulls and bears are watching this market cap closely.
Crypto investors must also eye the US dollar. USD is the world’s reserve currency. It fared well against the Yen, Euro, and British pound. It is likely to strengthen as the Federal Reserve increases interest rates again.
In September, the Fed will raise rates by at least 50 basis points. A 75 bps hike could cause the Euro (FXE), Pound (FXB), and Yen (FXY) to trade at new all-time lows. This would hurt BTC prices as holders exchange it for USD.
