Fed Chair Jerome Powell spoke last Friday in Wyoming and hinted at the potential for “another unusually large increase” in the federal funds rate for September - just as he had previously signaled in July’s FOMC meeting. Powell, however, didn’t indicate the further “large increase” to be a sure thing but instead stated that it “will depend on the totality of the incoming data and the evolving outlook”.

Following Powell’s hawkish commentary, major stock indexes, cryptocurrencies, and precious metals slid significantly in value. Over $240 billion was erased from the crypto market, and the Crypto Fear and Greed Index continues to slide lower, edging toward “extreme fear.”

After Powell’s statements in Wyoming, the S&P 500, Dow Jones, and Nasdaq Composite were all down more than 3%. This is important as Bitcoin’s correlation with the S&P 500 continues to grind upwards, currently sitting at 0.59 and close to an all-time high.

What you should know

While the market downturn has mostly been blamed on the Fed, there is speculation that the Mt Gox bitcoin stash of 140,000 BTC is soon to be released. Some believe Mt Gox will release the BTC really soon, while others are calling the rumors “fake news.” Despite any veracity of the Mt Gox coin chatter, there are hundreds of tweets discussing the subject on Twitter. Here’s why you should care

Also, regulatory uncertainty continues as no crypto bill is expected to pass before the US midterm elections and markets wait to see the electoral outcome of the House and Senate. Proposed bills such as the bipartisan Lummis-Gillibrand “Responsible Financial Innovation Act” seem to have made their way to the sidelines because of this.

Last week was particularly tough for Bitcoin, which dumped by more than $4,000 in less than seven days to a monthly low of around $21,000. BTC spent most of this past week around that level, trading sideways. This led to more violent consequences, especially after Fed Chair Jerome Powell reiterated the central bank’s stance on fighting inflation.

Things worsened yesterday morning when bitcoin took another dive and dipped below $20,000 for the first time since the middle of July. Since then, it has been unable to recover and its market cap has remained below $400 billion.

This comes on the backdrop of a Forbes report stating that Bitcoin’s trading volume is significantly lower than what is reported, according to a study of 157 exchanges. The report shows that around 51% of all Bitcoin trading activities were fake or non-economic.

Our take

During the weekend, potential Bitcoin buyers already came forward with plans to buy below $20,000, and a consensus seems to favour a deeper downside going forward. Asides from this, the recent continued sell-off in the stock market suggests an imminent bearish move for BTC soon.

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With just over two weeks until The Merge, Ethereum network fees have reduced significantly as the average Ethereum transfer fee dropped to 0.00092 ether or $1.37 per transaction yesterday. Median-sized fees have slid to 0.00036 ether or $0.544 per transfer, and etherscan.io’s gas tracking tool notes a priority fee will cost 11 gwei or $0.34 to get a transaction confirmed in roughly 30 seconds.

On August 16, the Ethereum Foundation updated a previously published blog post to clarify that The Merge would not reduce gas fees and improve throughput. While the Merge is a little more than two weeks away, Ethereum gas fees have been far less expensive than they were before mid-June.

All this didn’t hugely affect Ethereum’s price, which fell 3.47% to $1,446.47 in the last 24 hours. As of the time of writing, ETH’s trading volume was down by 18.62 percent at $13,879,508,944.

In recent days, whales have been moving much more ETH to exchanges. This can be seen as a move to reduce their ETH exposure as Ethereum 2.0 draws closer.

Binance Coin dropped hard yesterday and, after another minor decline, finds itself trading at $280 today. Ripple, Solana, Dogecoin, Shiba Inu, and Avalanche are also slightly in the red on a daily scale, while Cardano, Polkadot, MATIC, and TRON are with insignificant gains.

With most of the lower- and mid-cap Alts sitting in the same boat, the overall crypto market cap has remained well below $1 trillion after losing $80 billion yesterday.

There is $67.44 billion in 24-hour global trade volume across the twenty thousand crypto assets in existence, but tether (USDT) commands $34.07 billion of the aggregate. Centre’s USD coin (USDC) has also recorded $7.75 billion out of the $67.44 billion total. The volume between USDT and USDC represents 62.01% of today’s global trade volume.