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The broader crypto market tumbled alongside the U.S. stock market on Tuesday after the latest inflation data dashed hopes that surging prices would turn about after months of increasingly hawkish countermeasures. The prospect of at least a 75 bps hike seems to have become a certainty as investors start to bet on the probability of a 100 bps hike in September in view of inflation readings that exceeded expectations. Most major cryptocurrencies tanked, with BTC penetrating its new-found support levels near $22k and $21k, and ETH revisiting the $1,600 handle. As of the time of writing, the largest cryptocurrency by market cap is consolidating losses above the $20k support after shedding 9% of its market value in the last 24 hours. On the upside, BTC is facing an immediate resistance near the $20.6k to $20.8k zone. Failure to rise above this resistance zone would likely trigger further declines, pushing the price below the $20k threshold. The bullish sentiment build-up in the derivatives market over the past weeks was instantly washed away. Implied volatility is rising as investors are trying to price in future fluctuations as quickly as possible.
Meanwhile, the Bitcoin network’s hash rate has recently reached an all-time high, indicating that more rigs are coming online to compete for block production. Over the past seven days, miners have been churning out blocks at a rate of 6.28 blocks per hour, which is significantly higher than the target rate of 6. The network has increased mining difficulty by 3.45%, the fourth upward adjustment in a row. These consecutive adjustments are exerting pressure on profit margins, rendering BTC miners increasingly vulnerable to large drops in spot prices.
Similarly, ETH is currently changing hands below the 100-hour moving average after posting a 6.2% decline in the same period. The second-largest cryptocurrency by market cap is eyeing to break out a key resistance zone between $1,620 and $1,670 to rekindle further upside momentum. Most major altcoins have flipped red, with several L1 tokens leading the downward correction on double-digit percentage losses over a similar period.
Doodles, an NFT profile picture project, has become the latest hit in the NFT space. Following the recent announcement of a $54 million funding round led by Reddit co-founder’s VC firm, the Ethereum NFT collection has generated $2.1 million worth of sales within a single day, causing its sales volume to skyrocket by more than 1,200%. Meanwhile, its floor price jumped by 19% over the same period.