Bitcoin came back to life last week after some weeks of underperformance, but the rest of the crypto market is catching up now. The market capitalization of the entire ecosystem is above $2 trillion and while Bitcoin and Ethereum have a large market share among them, other coins are growing.
Cardano, with its ADA token, rallied more than 50% when news of its smart contracts came out. The Ethereum competitor is taking a big step forward with these contracts in its development and as a fan-favorite coin it is seeing a lot of positive sentiment. on the market.
XRP is the other big winner. The token from Ripple has rallied nearly 80% on the week, rallying from under $0.80 to highs of $1.35 thanks to the positivity surrounding its SEC lawsuit as well as increased developer activity.
The bullish impulse from the crypto market comes after a brief fall back following its parabolic rally earlier this year. However, after moving above the $2 trillion market cap, things seem to be back on track for a bullish press as the second half of the year gets underway. Bitcoin is still leading the pack and hitting its own milestones of being more comfortably above $45,000. While it is still some time away from its all-time high of more than $60,000, its bounce back has been reliable and steady so far.
Add in the technological advancements from Etherum and its London hard fork, and Cardano smart contracts, it looks like throttling and consolidation is a thing of the past and accumulation is back on the table.
From other markets
In traditional markets, the week begins with the US Senate passing the much-controversial $1 trillion bipartisan infrastructure package. The Senate also passed another $3.5 trillion budget resolution, the market was buoyant, top stocks rallied higher from the start.
The moderate CPI figures released in the middle of the week helped calm traders, easing fears of rising inflation prompting the FED to adjust soon. The CPI rose 0.5% in a row in July, down from the 0.9% registered in June and the smallest monthly gain since March. This data is consistent with the Fed’s narrative that the increase in consumer prices is temporary.
For the week, the Dow rose 0.8 percent, the S&P gained 0.7 percent to close at ATH and the Nasdaq remained largely flat, ending the week down just 13 points.
With markets convinced that inflation would not be an issue, the dollar fell, sending the DXY down 0.5% for the week to 92.50. As a result, gold and silver both rallied, with both metals recovering well from the big sell-off earlier in the week, leaving Gold briefly hitting $1,670 and Silver almost hitting $22 before recovering back into the mix. again. Gold was trading back near $1,800 at $1,780 while Silver was back around $23.80.
The state of Oil remains uncertain, with the black gold bouncing between $65 and $68, unable to make a decisive move as Oil’s outlook remains uncertain with supply issues and China tensions.
East drives prices in different directions.
Next week features a number of key central bank events and notable economic releases. On Tuesday, the RBA will release the minutes of the meeting. US retail sales will also be released on Tuesday. Then, Fed Chair Powell will speak for the first time since the better-than-expected jobs report. On Wednesday, the RBNZ is expected to raise rates by 25 basis points, while the minutes of the Fed meeting will also be released on Wednesday.
Excitement continues to be seen in the crypto space once again, with crypto trading taking center stage, drawing trading activity and volume away from traditional asset classes.
Altcoins have been buoyant with action, with the likes of XRP and ADA posting gains of more than 50% as the King of Cryptocurrencies consolidated above $45,000. With the increase in trading volume and price, the crypto market capitalization surpassed $2 trillion, reaching nearly $300 billion in a week.
Nothing can stop this crypto revolution
The Senate has passed a $1 trillion infrastructure bill that does not include any amendments to the proposed crypto tax law. It will now be moved to the House of Representatives, which is expected to address the issue of cryptocurrency legislation in the fall following their summer break. The crypto clause also faced a lot of bipartisan opposition there, with several Representatives all expressing interest in modifying the language.
Therefore, even though the bill was passed by the Senate, it did not cause any negative impact on cryptocurrency prices. When the bill was passed on Tuesday, the cryptocurrency price didn’t even budge. It shows the confidence level of crypto investors, a strong signal of the fundamental strength of this current bull market.
There was some notable adoption news announced last week. These include AMC revealing that it will accept BTC as payment for movie tickets later this year and the President of Argentina saying he is willing to put BTC in legal tender in his country, citing BTC can neutralize the effects of inflation.
Furthermore, soccer star Lionel Messi’s move to PSG caused fan token prices to fluctuate wildly after it was reported that Messi would be paid a large portion of his fees from fan tokens. tomb. This is a major milestone in the adoption of utility tokens, which will further strengthen the growing position of crypto assets in the world.
Currently, cryptocurrency trading volumes have surged, at a rate exceeding $16 trillion this year, an increase of more than eight times from last year. From a perspective, the trading volume of FAANG shares is only 12 trillion USD. Cryptocurrency trading volume has essentially declined relative to the most popular tech stocks compared, in a strong sign that money is flowing into the crypto space, reinforcing the position of it’s in the investment world.
Old hands don’t sell and whale buying spikes
Despite a strong rally above $45,000, the BTC market still hasn’t seen a significant increase in older coins in over 1 year in use.
This is very different from the 2018 bear market rally, where ex-hands took liquidity out and sold on most relief rallies. With the old hands failing to break out at current levels, that could imply that this rally in BTC is not a bear market rally, but a possible rally. origin.
Whale accumulation on Coinbase Pro has also spiked to a high not seen since January 2021 last week. In January, whale buying spiked before the price of BTC doubled afterward. Will this spike give us a similar result?
Coinbase whales are not the only accumulators. Other whale activity is also starting to pick up after falling over the past 3 months, with the dominance of BTC transactions larger than $1 million increasing from 30% in 2020, to over 65% now.
This reflects a growing proportion of high net worth organizations and interests coming to and participating in value movement across the network.
These could be OTC BTC transactions or even an indication that more and more people are using BTC in purchasing large dollar value items like real estate. Overall, it signals an increase in BTC adoption among the affluent.
Foreign exchange flows are also continuing to accelerate in August at a rate of 75,000 to 100,000 units per month.
The magnitude of this outflow is similar to the period from 2020 to Q1 2021, where a large accumulation occurred.
ETH-based DeFi is back on the green track
After a major rally posted the success of the London Hard Fork, ETH price consolidated after hitting a high of $3,335. However, ETH burning hasn’t slowed down, with over 50,500 ETH worth around $165 million burned since then.
Miners were also observed to be hoarding ETH after EIP-1559, which burned off a portion of the transaction fees that should have been paid to miners prior to the London Hard Fork.
ETH balances in miners’ wallets have increased significantly since the beginning of August, indicating that miners are holding onto their ETH, which has become more valuable. This action of miners will only intensify the supply crunch that ETH will face as miners are hoarding simultaneously as an increasing amount of ETH is burned.
Altcoins take center stage as the two biggest consolidations
As BTC and ETH consolidated higher levels, altcoins came to prominence last week, with XRP surging 78%, rising from under $0.80 to highs of $1.35 on optimism. concerns surrounding its lawsuit, as well as strong developer activity and increased ODL-product demand.
ADA also rallied 60% from $1.40 to a high of $2.25 as the Cardano team finally delivered on its promise, on Friday night the date announcement for the Alonzo Hard Fork was postponed several times. The big day will happen on or around September 12. Expect the hype to continue around ADA, bidding below its price in the lead up to the big event.
Most of the other altcoins have also had good gains, with an average gain of 10 – 30% for most other tokens.
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