The cryptocurrency market seems to have halted in the opening days of August, putting the critical $1 trillion market capitalization at risk after a July rise.
Notably, Bitcoin cannot prolong its gains over $20,000, resulting in concerns that the leading cryptocurrency may retest the level. Elsewhere, the second-ranked cryptocurrency Ethereum has developed a strong feeling, particularly after unveiling the Merge upgrade, which inspired optimism and trust in the cryptocurrency markets.
Despite the unpredictability of price movements, the market capitalization of cryptocurrencies is now over $1 trillion. According to CoinMarketCap statistics, the market capitalization was $1.08 trillion on August 5, a slight rise of $10 billion from $1.07 trillion on July 29.
The market has managed to maintain over $1 trillion despite Bitcoin’s volatility throughout the last week. Notably, Bitcoin’s ability to surpass $20,000 was essential in the overall market reclaiming $1 trillion in market capitalization. At the time of publication, Bitcoin was trading at $23,050, a decrease of about 3 percent over the previous week.
Over the last three days, Ethereum has registered modest increases of less than 1 percent. At the time of publication, the price of decentralised finance (DeFi) was $1,683.
Concerns about inflation development
Notably, the crypto market remains characterised by a stable inflationary environment and rising interest rates. Bitcoin and the market responded favourably to the interest rate rises, but the recent sideways trading patterns have sparked fresh worries about soaring inflation.
According to analysts, the favourable results are attributed to the markets’ prior exposure to soaring prices and interest rates. However, the CPI report for July and a rate rise might prolong the bear market.