Even though Ethereum is the second largest cryptocurrency by market cap, ETH continues to outperform BTC in price appreciation.
Bitcoin is struggling to maintain support at $21,000 while Ethereum has managed to rebound from the $1,300 level, which is currently trading at $1,484. While Bitcoin is up 2% in the last 24 hours, the price of Ethereum has risen substantially by 8% today, even with the uncertainty looming over the global and cryptocurrency markets.
Cryptocurrency market update
After the market cap fell below $1 trillion on Monday, the global cryptocurrency market is trying to recover and is currently worth $990 billion. One of the big players today is Ethereum, which has shown an impressive rebound from the $1,300 level that 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 move – a rebound – has not been confirmed.
The reason for the volatile market conditions is the Fed’s upcoming 75 basis point interest rate hike in its latest aggressive attempt to curb inflation.
After the CPI data released on July 13 showed that inflation continues to rise, the Fed prepared to raise interest rates to help the economy. While there were initially rumors of a 100 basis point rate hike, today the Fed will instead raise interest rates by 75 basis points.
Opinions vary as to whether the Fed’s interest rate hike will have a significant impact on the cryptocurrency markets, with some saying that the interest rate hike shouldn’t have much of an impact on the price of bitcoin. On the other hand, the stock market is likely to increase its volatility which could spill over into the cryptocurrency markets as bitcoin seems to be following the stock market price action.
However, since Ethereum has dominated the market over the past few weeks, we may not see much movement from Bitcoin even after the interest rate hike.
The price of bitcoin is likely to fall to the $20,000 level.
While Bitcoin holds the current $21,000 support relatively well thanks to Ethereum’s bullish price action, the crypto asset is likely to test the waters of the $20,000 zone later in the day, especially with the Fed’s upcoming actions.
Also, the news of the SEC investigation into cryptocurrency exchange Coinbase is not helping the cryptocurrency markets as the government agency’s latest actions highlight the wild and unregulated nature of cryptocurrency exchanges. Many attackers try to defraud investors and take advantage of insider information due to the anonymous nature of cryptocurrencies.
While the regulation of the cryptocurrency markets can curb the unfair practices of sensible white-collar workers, there will always be plenty of outright attackers looking to get their piece of the pie. No regulation or oversight will stop them from running scams, hacking wallets, and illegally obtaining cryptocurrencies.
Will Ethereum Overtake Bitcoin in Market Cap in 2022?
The question on everyone’s mind is whether Ethereum can surpass Bitcoin in terms of market capitalization by the end of 2022. Due to the planned merger of the Ethereum network in September, the cryptocurrency may see a significant increase in its price at the end of the third and fourth quarters. this year.
As the market capitalization of Ethereum approaches 50% of Bitcoin, the price of Ethereum still needs to more than double to overtake Bitcoin. The best chance for ETH to overtake BTC is that the cryptocurrency will gradually outperform 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 to ETH surpassing BTC in terms of market cap is to regularly trade more than 50% of bitcoin’s market cap. Once this move is made, the bulls can enter the Ethereum arena and continue the rise of ETHUSD.
Ethereum is likely to see significant price increases following the successful September network merger and network upgrade that will allow ETH to process several orders of magnitude more transactions per second than it currently is. Until the Ethereum network proves itself in the wider crypto market, ETH is unlikely to outperform BTC.
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