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Market overview 8/30: Crypto market is in a downtrend

The crypto market is going down for the second consecutive week. The reason for the recent crash is the Fed chairman Jerome Powell, whose speech on Friday spooked investors. Bitcoin’s market dominance is also falling, which means altcoins continue to outperform Bitcoin. There have been no significant incidents in the DeFi sector.

Jerome Powell is to blame for the market crash

Bitcoin’s price is $20,500 at the time of writing this article. The price was almost a thousand dollars higher a week ago, which means we’ve seen a significant drop. Most of this downfall took place on Friday. Bitcoin crashed by over six percent on that day and many altcoins by over ten percent.

The graph below shows Bitcoin’s price development in recent months on daily candles.


As you can see, the price of Bitcoin has fallen out of a trend channel. This is not surprising. It’s actually very likely that the price will exit a bearish flag pattern downwards.

Bitcoin’s uptrend started from the June lows and continued until mid-August. Investors have been speculating daily whether this has been the beginning of the new bull market or just a bear market rally. We already saw one of those in February and March this year.

Fridays have been brutal for the markets lately. Bitcoin crashed 10.2% on the 19th of August and 6.1% more last Friday. The latest drop was caused by Fed chairman Jerome Powell. His comments caused investors to panic.

Powell was a guest speaker at the annual Jackson Hole conference. His rhetoric changed a lot when it came to Fed’s war on inflation. Powell stated that the Fed is going to fight inflation even if it’d cause pain to the market participants, businesses, and households.

This topic was covered in detail in the latest news overview.

Powell’s message was blunt, and it left no room for speculation. It was clearly a nasty surprise for investors. The U.S. stock market alone lost more than 1,2 trillion dollars on Friday.

About 60 to 70 billion dollars also melted from the crypto market with many cryptocurrencies printing over 10% losses. The downfall of the crypto market continued during the weekend. We have seen some recovery take place on Monday and Tuesday.

The crypto market is still highly correlated with the stock market. This is the reason why Jerome Powell’s peach had such an impact on cryptos as well. It seems that Fed’s tightening monetary policy will continue longer than expected. It might be that we don’t see the next bull run start until around Q2-Q3 of 2023.

We have warned investors in the past few months not to get carried away with the uptrend. It seems more and more likely that Bitcoin is going to test the June bottom soon. You should be at least mentally prepared for it.

Altcoins have outperformed Bitcoin

Let’s look at the altcoin market. As the title suggests, it’s done better than Bitcoin in the past seven days. This development is also seen in Bitcoin’s dominance graph. The market share of Bitcoin has fallen steadily since early June.


There are no major moves visible in the top 15 list. Not one coin has fallen more than 3% vs. Bitcoin, and the biggest gains are 7.3% from Polygon.

Some readers might have noticed that one major smart contract platform has fallen out of the top 15 rankings. That is Avalanche, which holds the 16th place at the moment. The reason for the recent drop is a whistleblower story.

A website called Crypto Leaks recently published a report, where it claims that Ava Labs, the company behind Avalanche, used a law firm to attack its rivals. This company allegedly received a large payment in AVAX tokens.

The law firm and Ava Labs have both denied these accusations. Avalanche founder Emier Gun Sirer called it a conspiracy theory. Even if this story didn’t cause massive damage for AVAX, there are just two coins that have done worse this week in the top 100 list.

The biggest mover of the top 100 list is eCash. It has received a major boost from tech-related news.

eCash has developed a consensus algorithm called Avalanche for more than a year. This update is finally being deployed on the eCash MainNet on the 14th of September. You can read more about the subject at Note, that this update has nothing to do with the previously mentioned Avalanche cryptocurrency.

eCash is the only coin in the top 100 list with over 15% gains vs. Bitcoin. Most coins are green against Bitcoin, but the market has been overly pretty quiet. We haven’t seen any major moves on either direction.

No significant changes in the DeFi market

The DeFi market liquidity (TVL) has gone down about 1.5 billion dollars from seven days ago. It currently stands at 60.19 billion dollars. The DeFi market hasn’t been in a proper bull market lately like the rest of the market. The TVL of the DeFi sector has been hovering between 55 and 65 billion dollars since late June.


Barely anything has happened at the protocol level. The only change has taken place at the midtable, where Uniswap and Curve have switched positions. The gap between the protocol remains marginal.

MakerDAO is still holding the pole position strongly. It looked like a couple of weeks ago that Lido was seriously threatening Maker, but now the gap between these popular protocols has widened to one billion dollars.


There are no changes at the top 5 positions of the blockchain rankings. Tron is, surprisingly, still holding second place. This is despite the fact that its native token TRX is only ranked 15th.

A Polkadot ecosystem DEX, Acala, held the 6th position in our previous market overview. It has now crashed to 37th place and lost all but 43 million dollars of its TVL.


Ethereum’s Layer-2 solution Arbitrum has moved up three places. It has held its liquidity pretty much unchanged while Optimism and Cronos have suffered losses. The previously mentioned Acala has also dropped out.


We are the AboutBitcoin team, a group of experienced crypto specialists with a deep focus on the cryptocurrency market since 2017. Our team delivers weekly fresh insights from the dynamic world of crypto. Join us on an exciting journey of exploration as we navigate the rapidly evolving landscape of cryptocurrencies!