Market Wrap: Bitcoin Retraces Gains as Investors Await Inflation Announcement
By Jimmy He
BTC declined for the fourth consecutive day, erasing Friday’s push above $22,000.
Bitcoin (BTC) continued to retrace last week’s gains, declining for the fourth straight day toward the psychologically critical price of $20,000.
The largest cryptocurrency by market capitalization was down 1.8% over the past 24 hours, around $20,500.
Although bitcoin surged above $22,000 last week, the cryptocurrency has consistently failed to break out. Still, some analysts are getting more optimistic about a market recovery.
“BTC has never previously fallen below such marks, so it is now getting support from buyers confident in the first cryptocurrency’s long-term growth,” FxPro senior market analyst Alex Kuptsikevich said. “Another supportive factor was the rebound in financial markets, where the new half-year was met with increased buying.”
Wednesday’s expected release of June’s Consumer Price Index (CPI), the most widely regarded measure of U.S. inflation, may show whether the Federal Reserve’s hawkish monetary policy has succeeded in slowing the pace of rising prices. If the increase exceeds investor expectations, traditional and crypto markets may both see another wave of selling that could push bitcoin lower.
EToro market analyst Simon Peters said that eyes are also “firmly on ether” as the second-largest cryptocurrency by market capitalization moves towards its Merge and transitions from proof-of-work to proof-of-stake.
“While it’s impossible to know what effect the move to a proof-of-stake network will have on the crypto-asset price, theoretically it is deflationary as it encourages holders to stake rather than sell their tokens,” Peters said.
Ether (ETH) was down 2.7% over the past 24 hours. Most altcoins were trading in the red today with UNI as the biggest loser, down 8.4%.
●Bitcoin (BTC): $20,495 −1.8%
●Ether (ETH): $1,141 −2.7%
●S&P 500 daily close: 3,854.47 −1.2%
●Gold: $1,730 per troy ounce −0.6%
●Ten-year Treasury yield daily close: 2.99% −0.1
Ether, Short-Bitcoin Inflows Continue: CoinShares Report
Crypto funds saw minor inflows in the seven days through June 8. (CoinShares)
Crypto fund inflows totaled $15 million in the seven days through July 8, according to a CoinShares report.
Over half of that, some $7.6 million, was attributed to ether-focused funds, for the third consecutive week of inflows. A cold streak for ether funds earlier this year had pushed cumulative outflows to $460 million.
“The inflows suggest a modest turn-around in sentiment, having endured 11 consecutive weeks of outflows,” according to the report.
CoinShares suggested in the report that an improvement in Ethereum network sentiment may be due to the approaching Merge, where the blockchain network moves from proof-of-work to proof-of-stake.
Last week, Ethereum successfully transitioned its Sepolia test environment network (test-net) to proof-of-stake, moving the second-largest cryptocurrency by market capitalization one step closer to its own Merge.
Short-bitcoin investment products – those betting on a price decline in the largest cryptocurrency – saw inflows totaling $6.3 million, a sweeping decline from the $51 million of inflows seen last week. Short-bitcoin outperformed traditional bitcoin investment products, which saw outflows totaling $1.7 million.
Altcoin funds were stagnant, with minor outflows totaling $300,000.
Regionally, North America accounted for the majority of inflows, with U.S. inflows totaling $8.2 million and Canadian inflows totaling $7.1 million.
Terra projects being moving to Polygon: Almost two months after the Terra network collapsed following the implosion of terraUSD (UST), more than 48 projects previously on the Terra network have begun migrating to Polygon. Over $20 million had been earmarked to help projects that are migrating.
Celsius Reclaims $172M Collateral: The liquidity-strapped crypto lender paid down $95 million of its debt to the Aave and Compound decentralized finance (DeFi) platforms, freeing up $172 million of collateral that had been locked in the platforms. Last week, Celsius Network paid its remaining $41 million debt to Maker, freeing up $440 million of collateral.
Saudi Arabia-Themed NFT Collection is the Latest Free-to-Mint Hit: The collection, called The Saudis, consists of 5,555 non-fungible tokens (NFT) and topped the charts for volume in its debut weekend with $7.7 million in sales. The project continued the trend of popular free mint, theatrically driven projects.
|Cosmos||ATOM||+1.6%||Smart Contract Platform|
|Polygon||MATIC||+0.7%||Smart Contract Platform|
|Solana||SOL||−5.2%||Smart Contract Platform|
|Avalanche||AVAX||−4.8%||Smart Contract Platform|