A Worldcoin storm blew up in the cryptocurrency world this week. Not a day has passed without news. On the other hand, the Federal Reserve raised interest rates to the highest level in 22 years. Also, the crypto market had a sluggish week. The launch of the Worldcoin Protocol and the native cryptocurrency WLD was eventful. It disappointed many as it raised questions about privacy, accessibility, centralization and security. Founded by Open AI CEO Sam Altman, Worldcoin aims to bank the unbanked using biometric data. However, Ethereum creator Vitalik Buterin and the UK Information Commissioner’s Office have expressed doubts about its viability and potential problems. Let’s take a look at the hot topics this week.
Bitcoin and Ethereum underperformed
Market leaders Bitcoin and Ethereum spent their fifth consecutive week with poor price performance. Bitcoin lost 1.7% to trade at $29,291. Ethereum dropped 0.9% to $1,872. The Federal Reserve’s recent rate hikes did not have an immediate impact on the prices of major coins.
Following the latest growth spurt backed by a courtroom victory over the SEC, the price of XRP has dropped 7.7% over the week. On the other hand, it was traded at $0.70786. Toncoin (TON) also experienced a notable price drop. It’s down about 15% over the week and is trading at $1.24 at the time of writing.
Cryptocurrency policies: Russia, Korea and the USA
Russia has given legal currency status to a digital ruble, which will be overseen by the country’s central bank. South Korea has established an interagency investigation unit to combat crypto crimes and protect investors.
In the US, Democrats and Republicans clashed over the Financial Innovation and Technology (FIT) Act, with differing views on the crypto industry and its impact on consumer protection. Also, a stablecoin bill called “Clarity for Payment and Stablecoins Act 2023” has faced controversy over regulatory clarity for US dollar-pegged stablecoins. The cryptocurrency market continues to evolve, with various projects and regulatory developments shaping its trajectory.
Troubled process continues in cryptocurrency Cardano ADA
Despite rising in 2023, ADA/USD has fallen below 2022 lows. There is a double bottom formation. However, a break above $0.55 would confirm a reversal pattern. This week, three central banks announced their interest rate decisions. The Federal Reserve was one of them. For those who trade cryptocurrencies in US dollars, the Fed’s decision has been one of the highlights of the summer.
After its decision to “skip” the rate hike in June, the Fed signaled that it would raise interest rates in July, despite significant improvements in the fight against inflation. Accordingly, the market priced in the rate hike. The Fed also raised interest rates. Therefore, all the attention was on what the Fed would signal going forward. More tightening or the fact that it’s reaching the final rate? Every detail was important for the US dollar, as its volatility directly affected cryptocurrency investors.
Has the current cycle ended?
As a result, the Fed increased the interest rate by another 25 basis points. Accordingly, it did not signal the end of the current cycle. Therefore, the outcome of the Fed meeting could be seen as a hawk for the US dollar.
On the other hand, it is not surprising that the cryptocurrency market continued its consolidation and experienced less volatility after the Fed meeting compared to the traditional currency market.
Looking at cryptokoin.com, Cardano (ADA) rose in 2022 as Bitcoin and other major cryptocurrencies bounced from their 2023 lows. In doing so, the market faced little or no resistance up to the $0.4 zone. This is an area where ADA/USD has found support in the past and now support has turned into resistance. For several months, ADA/USD has been unable to break the resistance every time sellers appear. Also, when he broke it, he couldn’t hold on to it. The selling pressure was so heavy that the market even fell below 2022 lows.
Naturally, this week’s Fed decision was significant. Because ADA/USD may have created a double bottom with its last bottom attempt. The Fed’s decision has not triggered a lower dollar. However, the bias for ADA/USD remains somewhat bullish due to the possible double bottom. Therefore, if ADA/USD rises above $0.4, more buyers could step in to trade the restrained move of the pattern seen in orange above. This figure points to $0.55. On the other hand, it seems that the downward trend will finally be left behind in such a market movement.
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