The cryptocurrency industry braced for a momentous week, and it delivered.
A Volatile Start Fueled by Inflation Data
The week’s drama began precisely seven days prior, with the release of US Consumer Price Index (CPI) data. The figures confirmed persistent inflation, providing the US Federal Reserve with the final pieces of its monetary policy puzzle. Experts widely predicted a rate hike on September 16.
Bitcoin experienced extreme volatility immediately following the CPI announcement. It surged from $77,000 to $76,000, then dramatically spiked to $79,800 before facing a sharp rejection that sent it plummeting back to its starting point. This whirlwind of activity occurred within approximately an hour. Following this intense price action, the market stabilized over the weekend, with Bitcoin trading sideways around the $77,000 mark.
CLARITY Act Setback and FOMC Meeting Impact
On Monday, Bitcoin dipped to $76,400 before bulls intervened, driving the price up to $79,600 in anticipation of a key vote on the CLARITY Act the following day. However, by the time the Senate officially rejected cloture to advance the bill, Bitcoin had already retreated to $77,000, subsequently plunging to a three-week low of $75,000.
While bulls managed to defend this level, the next day was poised to be equally significant with the conclusion of the Federal Open Market Committee (FOMC) meeting. The Fed did indeed implement a rate hike, the first in over three years. Bitcoin’s reaction, however, was surprisingly muted. The asset initially slipped back to $75,000 but then rapidly climbed to over $76,000 within minutes.
Gradual Climb and Global Rate Hikes
The upward trend continued gradually on Thursday and accelerated on Friday. Despite the Bank of Japan (BOJ) also raising rates by 25 basis points to a 31-year high, Bitcoin reclaimed the $78,000 level during the morning trading session. It held this position for a period before initiating another upward move as US trading hours commenced, reaching a two-week peak of $81,000, where it encountered resistance, at least for the time being.
Remarkably, Bitcoin finished the week in positive territory despite a confluence of major events that, on paper, seemed unfavorable. Elsewhere, Zcash (ZEC) continued its significant rally, while NEAR Protocol surged by 35%. Uniswap (UNI) also saw gains of over 30%, with HYPE, Bitcoin Cash (BCH), and a few other altcoins following suit. Conversely, RAIN experienced a notable decline of 22%.
Cryptocurrency Market Overview Weekly, September 18
Source: QuantifyCrypto
Market Cap: $2.770T | 24H Vol: $96B | BTC Dominance: 58.6%
BTC: $80,600 (+0.9%) | ETH: $2,570 (-3%) | XRP: $1.37 (-4%)
Investment Strategies and Analyst Insights
The week began with a familiar refrain from Strategy, which reiterated its stance of remaining on the sidelines and prioritizing the rebuilding of its USD reserves. In contrast, Strive continued its aggressive accumulation of Bitcoin, adding another 469 units to its holdings.
JPMorgan analysts suggested that Bitcoin could receive more price support than gold as demand for ETF hedging eases. They pointed to BlackRock’s iShares Bitcoin Trust exhibiting high short interest as a potential indicator.
On-chain analysis revealed a significant drop in the percentage of Bitcoin addresses holding at a loss. One analyst interpreted these large-scale address movements as historically signaling the end of bear markets rather than mere short-term bounces, suggesting a potential cycle shift.
Regulatory Developments and Exchange Closures
The Securities and Exchange Commission (SEC) introduced an “Innovation Exemption,” signaling a potential opening for the secondary trading of tokenized stocks on blockchain platforms. This move aims to reduce regulatory hurdles for Tokenized Securities Venues.
Despite the setback in the Senate, seven Democratic lawmakers pledged to continue bipartisan efforts to achieve regulatory clarity for the cryptocurrency sector, refusing to abandon the CLARITY Act.
In a significant development, CoinEx announced its decision to cease operations by the end of the year, citing nearly nine years in business. The exchange attributed its closure to prevailing market conditions and mounting regulatory pressures, joining other prominent platforms like BitMart and BitMEX that have faltered during the recent bear market.
This week’s analysis also includes a chart review of Ethereum, Ripple, Cardano, Binance Coin, and Hyperliquid.
