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Bitcoin climbs to highest price in a month as it approaches $24,000

July 20, 2022, 2:18 PM UTC
Bitcoin
The Bitcoin price has been climbing a bit of late.
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A rally in crypto markets over the past couple weeks has suddenly built into something substantial, with Bitcoin (BTC) climbing to its highest price in a month, now approaching $24,000. The cryptocurrency has traded higher on seven of the past eight days.

Analysts attribute the recent gains to speculation that the Federal Reserve won’t be as aggressive in tightening monetary conditions as feared just a couple weeks ago, Shaurya Malwa reports. For most of this year, the Fed has been raising interest rates to tamp down inflation running at its fastest pace in four decades, and the expectation of higher borrowing costs have been pushing down valuations for risky assets from stocks to cryptocurrencies.

Coindesk’s economics reporter, Helene Braun, published a fascinating story showing how the Fed hasn’t been this far behind the curve on fighting inflation for decades, and some top economists say the situation is looking precarious. Braun dug through transcripts of Federal Reserve meetings during the 1980s—the last major inflation flare-up—to illustrate just how worried members of the Paul Volcker-led central bank were at that time. Such urgency appears missing from the current Jerome Powell-led Fed, at least for now.

With that as the backdrop, there’s always the possibility that the Fed might be forced to address the growing risk that the soaring inflation turns into a real emergency.

Crypto analysts remain cautious despite the recent vigor creeping into the market.

“If the upside momentum stalls, as it did in February and March this year, we should be prepared for a sharp increase in selling,” Alex Kuptsikevich, FxPro senior market analyst, wrote in an email.

Despite the rally, the Bitcoin price is still just one-third of its all-time high price of $69,000 reached in late 2021, and the crypto industry continues to suffer. Wednesday brought fresh news of another player suffering from the market downturn, with the exchange Zipmex suspending withdrawals, as reported by Omkar Godbole.

Elsewhere in digital-asset markets, dogecoin’s DOGE surged 11%, leading gains among major cryptocurrencies in the past 24 hours. No technical catalysts for the move seemed to exist, but developers for the network polled community members for their opinions on a Dogecoin-centric hackathon event in November – which may suggest future technical development.

Prices of Cardano’s ADA and XRP rose as much as 8%. BNB added 2.7%, while Solana’s SOL traded flat after a nearly 30% rally over the past week. Total crypto market capitalization increased 4%, rising above $1.1 trillion.

Outside of majors, ApeCoin’s APE surged 8% as buying momentum from last week’s metaverse game demo continued. Shiba Inu’s SHIB jumped 10% despite the lack of a technical catalyst.

In traditional markets, U.S. equity futures were wavering. Traders were awaiting a report on U.S. home sales, and European officials rolled out a plan to ration supplies of natural gas amid warnings of disruptions of Russian supplies.

Market Moves

Active wallets on the Solana network grew 58% this year, outpacing some other blockchains despite a market-wide price decline.

Figures for “New Daily Addresses” on Solana consistently grew its user base throughout the bear market, research by CoinMarketCap that cited data from Glassnode and The Block showed.

New Daily Addresses refer to first-time wallet users on any blockchain network, which can signal growth and adoption. On Solana, new users peaked at over 400,000 in May before gradually declining to 240,000 users this week. These figures are a jump from December 2021’s levels of 150,000 to 170,000 new users each day.

Daily active wallets have similarly climbed this year, with over 32 million active users in June and 37 million in May. This rose from an average of 20 million active users in the first four months of 2022.

However, data suggests the activity did not amount to inflows. Total value locked (TVL) on decentralized finance (DeFi) applications running on Solana dropped to $2.9 billion this week from May’s $6 billion figure. Solana TVL peaked at $14 billion in December 2021.

Solana’s native SOL tokens have grown amid rising wallet usage. The tokens added nearly 34% over the past week and are up 30% in the past month, despite market-wide declines and volatility. In comparison, Bitcoin (BTC) has risen by 14% in the past month.

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