Bitcoin’s protracted sideways slide
|Bitcoin has lost 1.9% in the past 24 hours, trading near $20.8K on Tuesday morning. Ethereum lost 2.3% to $1190, while other leading altcoins fell from 1.4% (BNB) to 6.5% (Dogecoin).
Total cryptocurrency market capitalisation, according to CoinMarketCap, sank 1.8% overnight to $933bn. The cryptocurrency Fear and Greed Index was down 2 points to 10 by Tuesday and remains in “extreme fear” mode.
Bitcoin was down on Monday, echoing the behaviour of the US stock indices. However, the stock market, particularly the Nasdaq, showed a much sharper rebound last week.
The BTCUSD remains under its simple 200-week moving average. It needs a meaningful fundamental driver, which is not yet easy to find and overcome.
The inability to find a point for a quick recovery makes the current cycle like the previous two in 2014 and 2018, when the decline lasted a year, after which we saw about a year of sluggish momentum with a slight noticeable upward bias. If we do see a repeat of this pattern, the pressure on the first cryptocurrency and following it, the whole market could continue until the end of the year, and there is no point in rushing to buy right now in the hope of a V-shaped rebound.
Bitcoin is experiencing the worst bearish trend in its history, Glassnode believes, and most investors are selling the coin at a loss.
According to Bloomberg, the collapse of BTC put mining companies’ loans worth $4 billion at risk of default. BTC miners are now selling it and bucking the bearish trend: they have sold 20% of their volumes in the past two months. Their selling may continue in the third quarter if market conditions don’t improve, JPMorgan believes.
Galaxy Digital CEO Mike Novogratz believes the recession in the crypto market will last 18 months. Adverse market conditions will test crypto exchanges, and some may go bust, Kaiko admits.
A growing number of cryptocurrency hedge funds are selling the US dollar-linked stablecoin Tether (USDT) amid the gloomy outlook for the crypto market. According to CoinGecko, Tether’s market capitalisation has fallen by more than $20 billion since mid-May.
The Bank for International Settlements published a report on several central banks’ experiments with digital currencies and concluded that the future of cross-border payments lies with state-owned Stablecoins.
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