Cryptos, Equities Slide on Central Bank Decisions, Merge Aftermath

The volatility from last week shows no signs of slowing with more market-moving events scheduled for the coming days

article-image

blockworks exclusive art by axel rangel

share

key takeaways

  • Bitcoin and ether extend losses following the Ethererum Merge and Wintermute hack
  • The S&P 500 and tech-heavy Nasdaq were also veering lower during Tuesday’s trading session, down 1% and 0.6%, respectively

Cryptocurrencies and global equities are due for a volatile week amid ongoing turmoil in the digital asset space and ahead of various central banks’ monetary policy decisions. 

Bitcoin briefly rose above $20,000 earlier in the week before falling to under $19,000 Tuesday. Ether lost 1.2%, falling below $1,300 for the first time since mid-July.

“Bitcoin and the crypto market saw a significant bounce Monday, before finding resistance at $19,666 – the 2017 bull market top, a key resistance,” Marcus Sotiriou, analyst at the publicly listed digital asset broker GlobalBlock, wrote in a note Tuesday. “Investors are very cautious ahead of the Federal Reserve decision tomorrow.”

The S&P 500 and tech-heavy Nasdaq were also veering lower during Tuesday’s trading session, down 1% and 0.6%, respectively. 

Ether extended its loss from earlier in the month following the highly anticipated Ethereum Merge, which saw the second largest blockchain switch from proof-of-work to proof-of-stake. The currency has lost more than 7% in the past five days since the Merge’s successful completion early Thursday morning.

“We see a classic example of market psychology. Project quotes grew on expectations of a major event. In this case, many traders bought ETH in advance in order to sell on the increased hype by the principle of ‘buy the rumor, sell the fact,’” said Serhii Zhdanov, CEO crypto exchange EXMO. “Naturally, there were fewer buyers after the completion of the Merge.”

Zhdanov is confident that the price can turn around, especially given that a lower transaction cost means the network will be more accessible to users. 

“This can increase the adoption of dapps working in the Ethereum ecosystem,” he added. 

World braces for potentially bearish news

The volatility from last week shows no signs of slowing, with more market-moving events scheduled for the coming days

On Thursday, the Bank of Japan is slated to release its monetary policy decision, and the Bank of England will reveal its interest rate choice. Initial jobless claims in the US are also expected Thursday. Investors will be watching for indications of labor market strength to gauge the likelihood of a recession. 

On the eve of the Fed’s September rate hike decision, futures markets predicted an 82% chance of a 75 basis point rate hike and an 18% chance of a 100 basis point increase, according to data from CME Group.

Crypto markets were also reeling Tuesday following reports that liquidity provider Wintermute’s DeFi operations had encountered a $160 million breach. The latest incident marks the firm’s second hack this year. In June, 20 million Optimism tokens were stolen by exploiting a failed transaction with Wintermute.

“This is a negative development within the DeFi space, and it will not help with the confidence of TradFi (traditional finance) institutions who are looking to enter the DeFi space,” Sotiriou said. “As Wintermute were one of the biggest liquidity providers in the industry, they may be forced to remove liquidity in order to mitigate further risk from their loss.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Despite ending its points program, Hyperliquid has maintained a dominant market position with 77% of perpetuals DEX volumes, though overall volume has decreased from early 2025. It is the only DEX that has been able to compete with CEX volumes. Hyperliquid's success stems primarily from rapid, relevant token listings and superior UX for users and market makers, particularly its API - which is how market makers interact with the protocol. The controversial oracle price override during the JELLY incident exposed risks in the Hyperliquid Liquidity Pool (HLP), though the team has since implemented risk management adjustments. The HyperEVM is currently underoptimized and lacks necessary precompiles, but represents an important strategic expansion to enable asset issuance and DeFi composability.

article-image

Securitize announced it acquired a crypto-focused fund administration firm

article-image

ETH’s success hinges on the resource of data availability, particularly how much it sells to L2s

article-image

Solayer’s Emerald Card integrates SolanaID so users can build their “onchain reputation.”

article-image

In 2011, bitcoin blew past the one-dollar event horizon and never looked back

article-image

Sponsored

Transferability of WCT brings the onchain economy closer to a more open, permissionless, and community-driven experience

article-image

Taking a look at the biggest stablecoin players and where they stand