Bitcoin sinks below US$23K, South Korea’s bumpy Crypto path forward

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By James Rubin, Coin Desk

19th August 2022 – (New York) Cryptos spent most of Thursday on the upswing before sinking late in the day.

Bitcoin was recently trading at about $22,800, down about 2.5% over the past 24 hours. The largest cryptocurrency by market capitalization which has spiraled downward after reaching a two-month high above $25,000 last weekend. Late Wednesday, BTC fell below a bullish trendline after the release of minutes from the last Federal Open Market Committee (FOMC) meeting showed U.S. central bankers unlikely to lighten their current monetary hawkishness.

The Fed Reserve has raised interest rates a hefty 75 basis points at each of its last two meetings as it aims to suppress high inflation.

Ether, the second largest crypto by market value behind BTC, was recently changing hands just above $1,800, also down more than 2% from yesterday and far removed from the $2,000 level perch it was still flirting with late Sunday. Merge excitement has tapered off in recent days.

“Bitcoin is range bound at the moment,” said Nauman Sheikh, managing director at investment advisors Wave Financial, told CoinDesk TV’s First Mover program. “It’s hit a $25,000, sort of resistance level. So has Ethereum hit a 2000 resistance level. We’re in a mode where the macro environment is supportive of the market, and we’ll retest those resistance levels and hopefully break.”

Major altcoins that spent much of Thursday in promising territory also dove downward late in the day with YGG and OP recently plunging more than 14% and 13%. Popular meme coins DOGE and SHIB continued their retreat from early-week euphoria that sent their prices up double-digits with each recently sinking more than 10%.

Major equity traded sideways with the tech-focused Nasdaq and S&P 500 each rising a fraction of a percentage point as investors continued to weigh economic indicators and earnings that has often pointed in conflicting directions. On Thursday, the National Association of Realtors reported a sixth consecutive monthly decline in housing starts adding evidence of an economy cooling from the sting of Fed rate cuts. But initial jobless claims for the week ending August 13 fell short of expectations as did the four-week average, underscoring the economy’s stubborn strength.

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The HUSD stablecoin, which is issued by Stable Universal, fell to 92 cents, an 8% drop from its planned $1 peg, according to CoinMarketCap prices early Thursday. And South Korea’s anti-money laundering authority has started scrutinizing 16 foreign crypto firms it says have been operating in the country without proper regulatory approval, the agency said in a statement.

Despite the price drop over the past few days, Wave Financial’s Sheikh noted optimistically that crypto “speculation” has recently returned. “The crypto anatomy narratives are strong at this point,” he said, adding: “Speculation is going on. It’s not all about Bitcoin and Ethereum. But the narrative is spreading and people are beginning to take more risk.”

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