Crypto market holds firm above $1 trillion as Bitcoin gains threatened

After rallying in July, the cryptocurrency market gains appear to have stalled in the first days of August, with the crucial $ 1 trillion market capitalisation under threat. Although assets like Bitcoin (BTC) and Ethereum (ETH) have attempted to sustain gains above key levels, the market is not yet out of the woods from the extensive 2022 cryptocurrency winter. 

In particular, Bitcoin appears unable to extend the gains above $20,000, a factor that has resulted in fears the flagship cryptocurrency could retest the level. Elsewhere, second-ranked Ethereum has established a bullish sentiment, especially after announcing the Merge update, an element that appeared to bring hope and confidence to crypto markets. 

Despite the uncertainty in price movement, the global crypto market capitalisation is hovering above $1 trillion. As of August 5, the market cap stood at $1.08 trillion, a slight increase of $10 billion from the $1.07 trillion recorded on July 29, according to CoinMarketCap data. 

The market has managed to stay above $1 trillion despite Bitcoin remaining shaky over the seven days. Notably, Bitcoin’s ability to break free from $20,000 was instrumental in the general market regaining the $1 trillion capitalisation. By press time, Bitcoin was trading at $23,050, dropping almost 3% in the last seven days. 

Meanwhile, Ethereum has recorded minor gains of less than 1% in the last few days. Notably, the second-ranked cryptocurrency is among the biggest gainers in recent weeks as the community anticipates the transition to Proof-of-Stake (PoS) under the Merge upgrade. By press time, the decentralised finance (DeFi) was trading at $1,683. 

Fears of inflation emerge 

Notably, the crypto market continues to trade in a high inflationary environment characterised by increased interest hikes. Initially, Bitcoin and the general market had reacted positively to the interest rate hikes, but the current sideways trading patterns have elicited new fears about skyrocketing inflation.

Analysts have argued that the positive gains are due to the markets’ existing experience of skyrocketing inflation and interest rates. However, the July CPI data and an interest rate hike could extend the bear market. 

Impact of Solana hack 

Besides the inflation concerns creeping in, the market has been hit with another hack affecting the Solana (SOL) network wallets. According to Solana developers, the root cause of the exploit was compromised private keys “created, imported, or used in Slope mobile wallet applications.” 

The hack that affected at least 7,000 wallets recorded a loss of about $4.5 million, leaving the crypto community attempting to determine what happened. Several theories have been fronted on who is responsible for the incident.

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