The most traded cryptocurrencies once again marked a month to forget, as a result of the tightening of the monetary policy of the Federal Reserve that motivated a risk aversion among investors. In addition, The Merger date is approaching in the crypto ecosystem.
Uncertainty seems to be the word chosen to describe what will happen to cryptocurrencies in the short term. In August there was, on the one hand, a setback in equity risk assets that included international stock markets and the crypto world and that was the result of the rise in interest rates by the main central banks to control to inflation. And, on the other, intrinsic changes in the crypto world itself.
“August was an intense month in the crypto ecosystem because the date of the merge is approaching, a change in the consensus method that is used to validate transactions in the Ethereum Blockchain. A lot of tests, a lot of debates, a lot of preparation for one of the events largest in the history of the Ethereum Blockchain”, Santiago Di Paolo, Lemon’s Head of Community Growth & Research, explained.
On what can happen in September, Di Paolo further stated that, “some think that everything will happen correctly given that the tests on the test network were successful, others remain a little more skeptical and take a position that when the date arrives we will see that It happens. The reality is that the ecosystem as a whole is waiting for this big step and the market seems to behave like this, with uncertainty.”
Cryptocurrencies in August
Last month found Bitcoin trading below $20,000. This is the first time that the cryptocurrency with the highest market volume has traded below that support since last July 14. It is precise that the performance of Bitcoin deflated at the end of the month. Thus, it rose to $25,000 in the first week of the month and then began a fall that has accelerated in recent days. Something similar happened with Ethereum which, in a matter of weeks, fell from $2,000 to $1,490.
During August, among the first 20 with the largest market capitalization, the one that fell the most was Uniswap, belonging to the network, Ethereum, with 23.7%. Subsequently followed: Solana (-23.1%), Polkadot (-13.3%), Bitcoin (-12.7%), Ripple (-12.3%), Cardano (-10.1%), Dogecoin ( -8.7%), Polygon Matic (-8.4%), and Ethereum (-5.02%).
Among the increases, which were few and very slight, Unes Sed Leo stood out with 14.7%. It is a utility token that is part of the iFinex ecosystem that also includes BitFinex, EthFinex, and Tether. It is a cryptocurrency used by users to obtain economic advantages on these platforms. Shiba Inu (+2.4%), and Binance Coin (+0.4%) also rose.
The fall in cryptocurrencies is framed in a decline that occurred in August in equity risk assets, which included international stock markets, and was due, among other things, to the statements of Fed Chairman Jerome Powell, according to which it will continue with its aggressive policy of raising interest rates to contain inflation, a similar event that is replicated in other major central banks in the world.
Other Scenarios
Notably, Ether has been rallying in recent weeks ahead of a much-anticipated upgrade in which Ethereum is set to ease the switch from the current miner-using system to a more energy-efficient one that uses staked coins.
“It’s important to keep last September and the one before that in mind when thinking about what’s going on here,” Leah Wald, CEO of digital asset fund manager Valkyrie Investments, said in an interview. “But I also believe that each market environment needs to be considered individually, especially based on your trading style and time horizon.”
Amid Ether’s rally, Bitcoin’s market dominance has vanished. In August, Bitcoin’s assets under management fell more than 7% to $17 billion and its market share fell to about 68% of total assets under management, down from 77% in July, according to a CryptoCompare report.
By Audy Castaneda
