Market: Bitcoin Rally Likely to See Pause, According to Analysts
Bitcoin traded in a lower level on Monday, compared to previous days, as buyers appear to be exhausted ahead of the $50,000 resistance level. BTC was trading at around $46,400 at the time of writing, with 2.34% loss on daily chart.
On Monday, the total crypto market cap visited abobe $2 trillion for the first time since mid-May, according to CoinMarketCap. Ethereum and Cardano are the most notable in the recent crypto rally, with strong rallies month to date, rising 26% and 62% respectively, compared with a 16% rise in bitcoin during the same period. XRP is also up 70% so far this month.
The rapid rise in crypto prices has some analysts expecting a pause. Katie Stockton, managing director of Fairlead Strategies, highlighted signs of upside exhaustion in bitcoin in her Monday newsletter.
Stockton wrote:
“[Upside exhaustion signals could] support a brief period of consolidation as gains are digested and short-term overbought conditions are relieved.”
“Even though the trend has flipped bullish, a pullback is to be expected before continuation. This is because there has been declining volume with an increase in price.”
Increase in Bitcoin Mining Reserves
In the past few weeks, Bitcoin miners have added more of the cryptocurrency to their reserves.
“The reserves are now close to this year’s all-time high of May 9, recovering the outflows in June,” according to Jan Wuestenfeld, an analyst at blockchain analysis firm CryptoQuant.
Wuestenfeld wrote:
“[Miners] appear to be unimpressed by the most recent price moves (likely expecting higher prices). The fact that miners are not under pressure to sell their BTC at these prices is a testament to the health and resilience of the miners and the network.”
Chart shows bitcoin mining reserves with BTC price overlay.
Ethereum Options
According to Skew, the total ether options open interest exceeded $4 billion last week, which reached a two-month high. The options market is bullish on ether after a decisive break above $3,000 last week.
Skew data also shows a decline in ETH options volume over the past few weeks, which coincided with short-term overbought signals. Option traders have assigned a 64% probability of ether remaining above $3,000 this month, which is near technical support.
Chart shows total ether options open interest across exchanges.
Outflows from digital-asset funds
Investors redeemed a net $22.1 million from cryptocurrency funds last week, the sixth consecutive week of outflows, even as bitcoin and many other digital assets rallied, a new report shows.
It’s the longest streak of outflows since January 2018, read the report by the digital-asset manager CoinShares.
Investors have seen an outflow of $22 million from bitcoin, even though the largest cryptocurrency has recently traded up to $48,200 from a low of $29,608 last month.
Weekly net flows to crypto funds.
Exchange Volume
Last week, the volume of Internet Computer (ICP) on Coinbase went up significantly as the price rallied 50%, according to a report by the crypto exchange. Dogecoin’s (DOGE) volume on Coinbase also climbed higher as the price rose as retail investors became engaged again. Volume of FARM, the token of the automatic yield farming protocol Harvest Finance, rose 70%.
Source: Coinbase
Meanwhile, volume in ETH on Coinbase continues to surpass BTC, with Aug. 7 being the most extreme, as the ratio of ETH and BTC volumes was 67:33.
Volumes in ETH (dark purple) continued to overtake Bitcoin (light grey).
Altcoins
Solana, Terra hit all-time highs: Prices for Solana’s SOL and Terra’s LUNA tokens hit all-time highs on Monday, as the total market capitalization of cryptocurrency broke $2 trillion for the first time since May, CoinDesk’s Muyao Shen reports. The price rally for the tokens representing two projects that are built for the decentralized finance (DeFi) sector, shows that investors remain confident about the industry, especially in layer 1 protocols, despite security risks exposed by the biggest DeFi hack ever in monetary value last week.
Figment raises $50M to build up proof-of-stake infrastructure: Blockchain infrastructure provider Figment raised $50 million in a Series B funding round that was led by institutional investors Senator Investment Group and Liberty City Ventures. Anchorage Digital, Galaxy Digital and 10T Ventures also participated in the funding, Figment said Monday. The company plans to use the funding to expand its infrastructure across the proof-of-stake (PoS) industry supporting the services it provides “up and down the Web 3 stack.”
Huobi revenue took a hit in July, token burn suggests: The amount of Huobi token that Huobi Global burned in July indicates the crypto exchange’s revenue probably fell last month. The total value of HT burned dropped 54% from June to $22.3 million, the exchange said. The burn is correlated to revenue, and so a decrease in burned tokens indicates a fall in revenue. Token burning is a process by which crypto coins are taken out of circulation, often aimed at reducing the total supply of the tokens and thus theoretically increasing their value.
Watford F.C. Sports Dogecoin Logo:Watford F.C. players sported the dogecoin logo on their shirt sleeves as the soccer team returned to England’s top-tier Premier League on Saturday. The Shibu Inu meme-inspired crypto’s logo appeared on Watford’s shirts as part of the club’s sponsorship deal with crypto-betting platform Stake.com. The deal is worth about £700,000 ($970,000), according to a report by The Athletic on Saturday.
