Anticipating a crowded macroeconomic calendar, the crypto market has taken a slight dip — failing to maintain key resistance levels and resembling a trend from a bygone era.
Major blue-chip assets bitcoin (BTC) and ether (ETH), slid under their respective $30,000 and $2,000 thresholds on Monday, marking a 2.9% drop in total crypto market capitalization which now stands at $1.2 trillion, data shows.
BTC and ETH were little changed over the last 24 hours, both down 0.3% to around $29,200 and $1,850. Both assets fell 3% and 2% respectively earlier in the week, their steepest losses in the last 10 days, data shows.
The current market mood resembles that of 2019, with the industry buzzing over potential developments while the broader markets gift the industry little attention, crypto prime brokerage FalconX wrote in its weekly newsletter.
Trading volumes of BTC and ETH are also now at near-yearly lows, it said.
Some smaller cap assets buck trend
Despite the general pullback, other cryptos are showing promise, potentially linked to increased interest following the recent Ripple vs. SEC ruling and Blackrock’s refreshed spot bitcoin ETF.
Chainlink (LINK) has enjoyed double-digit returns on the month due to the successful deployment of its Cross-Chain Interoperability Protocol, enabling token and message exchanges across multiple chains.
The asset was up 0.8% on the day to $7.49, and up about 8.5% on the week. It’s still down more than 85% from its all-time high witnessed in May 2021 of $54.40.
Dogecoin (DOGE), the popular memecoin, has also outperformed other assets, with its market cap rising to a three-month-high above $11 billion on Monday.
The crypto, up 15% on the week, has been particularly sensitive to speculation swirling around potential payment integrations on Twitter, now rebranded as X. While up a further 2% on the day, DOGE remains more than 90% down from its all-time high of $0.76, established in May 2021 and currently trades at $0.08.
While there have been some outsized gains for certain assets, the general sentiment is calm, analysts say.
“The question this week is whether the macro calendar that will heat up starting tomorrow will be able to stir up crypto’s calmness,” FalconX wrote.
Market observers now anticipate the upcoming macroeconomic events could disrupt the complacency of the crypto market.
The Federal Open Market Committee (FOMC) decision could lead to a widely expected 25 basis point hike — seen as a means of moving the needle in a given direction for digital assets depending on the Fed’s hawkish or dovish stance at the time.
Macro lens
Other macroeconomic factors include the impact of major oil price increases, upcoming Q2 GDP figures from the US and the expected interest rate hike from the European Central Bank.
While the correlation between digital assets and the wider markets has dwindled in recent months, analysts still believe developments globally and their impact are not to be ignored.
Crypto volatility continues to decrease, both in realized and implied terms, potentially presenting a buying opportunity for investors wanting to shield themselves from the broader market on possible spikes tied to the busy macro week, FalconX noted.
Jason Pagoulatos, markets associate at Delphi Digital told Blockworks due to overexuberance over June/July’s bullish fundamentals, the unwinding of capital wasn’t to be ruled out.
“Given how equities are extended here and how BTC has performed with some very good news at its back, seems to me the path of least resistance is likely continuation to the downside,” he said.
The analyst pointed to a target range of around $28,000 to $27,000 as an “attractive level for buyers.”
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Source: https://blockworks.co/news/bitcoin-ether-resembling-2019