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This Week in Crypto: Crypto Slides after Federal Reserve Meeting Minutes

Story Highlights

Market loses momentum as troublesome clouds of inflation and a possible recession loom over the horizon. The crypto market capitalization has dropped significantly this week, so has Bitcoin’s market dominance as bears continue fending off bulls.

Bitcoin Slips Back below $23,500

After reaching its highest point since June, Bitcoin (BTC-USD) reversed lower yet again to weekly lows as the Federal Reserve released excerpts from its July meeting suggesting that interest rate hikes may spark a recession in the United States. With the Federal Open Market Committee’s July 26-27 meeting minutes revealing policymakers’ concern about hiking interest rates too aggressively, the value of BTC, which was already range bound, slid by nearly 4% to the $23,500 mark.

Adding to the pressure on Bitcoin, the latest data from CoinShares underlined that institutional outflows are on the rise. While a significant capital inflow was reported during July, the trend has rapidly changed direction this month. Last week, the total BTC outflow stood at $21 million – the highest amount month-to-date.

Meanwhile, a report from Arcane Crypto shows that BTC miners dumped roughly 14,600 BTC in June and an additional 6,200 in July, contributing to BTC’s struggle to sustain its latest trend higher.

Altcoin Momentum Decelerates

Following the lead of Bitcoin, the altcoin market displayed a lackluster performance over the last seven sessions, with most pulling back after gaining ground over the prior few weeks. Ethereum’s (ETH-USD) rally came to a halt this week, with ETH dropping by 2%, primarily in response to the FOMC’s minutes.

That said, ETH jumped past BTC in terms of option open interest for the first time ever, marking a significant milestone as the community prepares for the Merge.

Among the top-ten altcoins, Solana (SOL) dropped by approximately 6.7%, echoed by Binance’s (BNB) near 6.4% decline. Additionally, Polkadot (DOT) lost its top-ten spot in the rankings by market capitalization after slumping 9.80%. The sudden drop unfolded after the Acala Dollar (aUSD) algorithmic stablecoin lost its peg. After news broke that hackers minted 1.28 billion aUSD tokens on the Acala Network – the DeFi hub of Polkadot – DOT’s price registered a sharp drop. 

Other prominent altcoins like Avalanche (AVAX), Near Protocol (NEAR), ApeCoin (APE), and Elrond (EGLD) also registered double-digit drops this week.

Memecoins Lead This Week’s Rally

Despite the pullback impacting the broader market, memecoins DOGE and SHIB outperformed peers, with DOGE reclaiming its position as the tenth-largest cryptocurrency by market capitalization. The values of DOGE and SHIB pumped by approximately 13.00% and 19.00%, respectively, over the last seven sessions. 

The Dogecoin community launched a new layer-2 solution, Dogechain, enabling users to bridge their DOGE and use it for DeFi, NFTs, and other activities. This new development was the main catalyst behind the sudden momentum higher. 

By comparison, a steady increase in whale accumulation and the number of SHIB holders has played a key role in the ongoing value appreciation of SHIB. According to the latest data from Finbold, the number of SHIB holders has now reached 1.208 million, with more than $1.5 billion added to the memecoin’s market cap over the past week.

However, the biggest gainers of this week were lesser-known altcoins Chiliz (CHZ) and Ankr (ANKR). CHZ roared higher by nearly 45.3% this week as news of the launch of the Scoville testnet for Chiliz Chain 2.0 gained traction. This week’s impressive 32% gain in ANKR came after the introduction of ANKR token staking rewards and Binance Labs’ $500 million investment to expand Ankr’s multichain infrastructure.

Celsius Bounces Back, Crypto.com Secures UK License, & More

With investors still clamoring for funds that can’t be withdrawn, a new bankruptcy report filed by Celsius on August 14 shows that the troubled crypto platform’s actual debt stands close to $2.85 billion, in contrast to the firm’s previous claims of a $1.2 billion deficit. However, in less than 24 hours, the bankruptcy judge approved Celsius’ latest request to start BTC mining and selling. Once the news broke, Celsius’ native token, CEL, immediately surged, climbing by nearly 15.9% this week.

In the meantime, Crypto.com finally secured the license for “certain crypto asset activities in the UK” from the country’s Financial Conduct Authority (FCA) earlier this week. The license was acquired under Crypto.com’s UK trading name FORIS DAX UK LIMITED, granting the platform more privileges to operate within the country’s borders. 

Finally, in emerging market adoption momentum, Brazil’s leading brokerage firm XP Inc launched its new crypto trading platform, XTAGE, helping its 3.6 million-plus Brazilian clients gain access to the crypto market. Initially, XTAGE users will only be able to trade BTC and ETH, with the platform planning to add support for other cryptocurrencies in the coming months.

Disclosure 

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