Market Overview
The crypto market capitalisation rose by 3.5% to $2.22T, reaching a three-week high, following the release on Tuesday of weak US inflation data, which showed inflation slowing at its fastest rate in the last six years, thereby reducing the likelihood of a Fed rate hike. The market has risen above its 50-day moving average, signalling one of the first indications of a shift towards a medium-term bullish trend. Among the most popular coins, the top performers over the last 24 hours were Zcash (+8.8%), Chainlink (+5.2%) and Ethereum (+4.9%). Meanwhile, among the laggards, there was also a very moderate pullback, with losses for IOTA (-1.7%), Internet Computer (-0.8%) and Theta Network (-0.4%).
Bitcoin is trading near $65K following an impressive surge on Tuesday, which helped it close above the 50-day moving average and the upper boundary of the downward channel in place since early June. This is a strong signal of a potential trend reversal, further supported by fundamental data: lower inflation figures. Provided the leading cryptocurrency does not face obstacles in the form of deteriorating geopolitical conditions, the next significant resistance level may not be reached until $73–74K. This is where the downward momentum originated in early June, and it is also where the 200-day moving average is located.
News Background
Current levels of network activity point to waning interest in Bitcoin. Trading volumes in US spot ETFs have fallen by 78% from this year’s peak levels. Recent price movements lack the reliable support of organic demand that typically accompanies sustained growth, according to Glassnode.
According to The Block, the number of posts mentioning Bitcoin and Ethereum on social media platform X has fallen to annual lows. Comparable levels were also recorded in 2020, while institutional participation has since increased.
A survey by the cryptocurrency exchange Coinbase has shown that most investors doubt the decline in the leading cryptocurrency has come to an end. Meanwhile, Bitcoin has fallen to levels corresponding to the estimated cost of mining. Historically, such a range has always marked a trend reversal, notes analyst Quentin Francos.
According to Arkham Intelligence, the US authorities have transferred Bitcoin and Ethereum with a combined value of around $300 million to the Coinbase Prime crypto exchange. The movement of crypto assets does not necessarily imply an imminent sale; nevertheless, transferring them to such a platform is seen as preparation for a sale or exchange.
US banks have called on the Senate to explicitly include a ban on yields on stablecoins in the CLARITY Act, a key piece of legislation regulating the crypto market. The current wording of the bill leaves room for payments that are economically similar to interest on deposits.
The FxPro Analyst Team
