BTC Soars after Federal Reserve Raises Federal Funds Rate
Bitcoin (BTC-USD) prices are sharply higher over the past 24 hours following the U.S. Federal Reserve’s decision to raise interest rates by 75 basis points. The largest cryptocurrency by market capitalization has been lingering in the $20,000 to $23,000 range for more than ten days and is now consolidating around $23,000.
In its latest report, Glassnode highlights that BTC accumulation by shrimp accounts (wallets that hold less than 1 BTC) has increased substantially. Initially triggered by the Terra implosion, the accumulation now equates to roughly 156,000 BTC. Another report from CryptoQuant indicates that the number of BTC whale accounts (wallets holding more than 1,000 BTC) has also risen in recent weeks.
However, institutional interest in BTC is on a continuous decline. Recent data from Arcane Research shows that institutional investors have sold off significant portions of their BTC holdings. The report shows that institutional investors have sold off 236,237 BTC over the past two months, accounting for nearly 1% of the total circulating supply.
Ethereum Leads the Altcoin Rally
Largely driven by the upcoming “merge,” the value of ETH (ETH-USD) has jumped by more than 7% over the past seven sessions. ETH has registered an impressive comeback this month and is currently trading above $1,600.
Despite its strong performance, data from Santiment underlined a sudden spike in ETH liquidations, amounting to more than $150 million in the past week alone. Another worrisome indicator for the Ethereum community is DeFi. Data from Glassnode suggests that the dominance of Ethereum-based DeFi applications and protocols has dropped from 27.5% to 15.1%.
That said, this week’s biggest gainer is Ethereum Classic (ETC), which has maintained its previous week’s upward momentum after gaining 43% this week. The value of ETC has more than doubled this month following ongoing advances towards Ethereum’s highly-anticipated “merge.” Additionally, news of a $10 million capital injection by AntPool to boost the layer-1 blockchain’s ecosystem has contributed to the upward momentum.
In the DeFi realm, the value of Uniswap (UNI) surged by nearly 20% this week, while the 24-hour trading volume is up by more than 102%. This sudden value appreciation amid a free-falling market comes courtesy of UNI whales. Since the second week of July, users holding between 10,000 and 100,000 UNI tokens have collectively added nearly 10.75 million additional UNI tokens to their wallets, amounting to more than $74.6 million in two weeks.
Avalanche and Algorand in Turmoil
Avalanche, despite its potential, is having a rough month amid an exodus of validators. The network is currently working with 1,240 validators – a fall of nearly 26% since April. The May-June crypto crash further decreased the network’s delegators, negatively impacting investor sentiment. Over the past seven sessions, the value of AVAX has dropped by almost 4%, as the token faces strong resistance at the $23 mark.
Meanwhile, Algorand (ALGO) has lost its shine after a promising rally earlier this month. ALGO is down by roughly 5% this week, primarily due to the “management” changes in the platform. Algorand CEO Steven Kokinos announced his resignation as he wishes to “pursue other interests.”
Solana (SOL), too, had its fair share of downward movement this week, registering around 4% losses over the past seven sessions. Meme coins DOGE and SHIB also met a similar fate this week, sliding between 3% and 5%.
Stressful Week for Coinbase
As regulators around the ground grapple with crypto, crypto exchange Coinbase has found itself on the wrong side of the SEC once more. The U.S. government is ready to prosecute its first-ever crypto insider trading case involving a former Coinbase employee and two investors that were allegedly tipped off.
Since the news dropped, Cathie Wood’s ARK Investment Management has dumped 1.4 million of its Coinbase (COIN) shares. ARK Investment was formerly the third-largest Coinbase shareholder, with more than 9 million shares at the end of June 2022.
Finally, metaverse organizations, including Animoca Brands, Dapper Labs, Alien Worlds, Space, The Sandbox, Voxels, MetaMetaverse, Superworld, and many more, have joined hands to form the first-ever “The Open Metaverse Alliance” for Web3. This alliance is designed to ensure that extended reality (XR) experiences in metaverse environments are easily compatible (interoperable) across different networks.
