Macro Overview
This week brought back the volatility with one of the most important announcements eagerly awaited by traders, the US Interest rate decision followed with the US Initial jobless claims, US Core Personal Consumption Expenditure (PCE) and European Central Bank (ECB) Interest rate decision.
- The US Federal Reserve raised its key interest rate by 0.25% to a 22-year high of between 5.25% and 5.5%. The US Fed chair said they won’t be cutting rates this year, don’t see inflation back at 2% until about 2025 and is even prepared for further tightening if it’s appropriate.
US Fed Interest Rate
- US Core Personal Consumption Expenditure (PCE) Price Index (YoY) June came at 4.1% against the expected 4.2%. This is positive for crypto assets. It measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. It is a key way to measure changes in purchasing trends and inflation.
- US Initial jobless claims that measures the number of individuals who filed for unemployment insurance for the first time during the past week came at 221K, lower than the estimate of 235K. This is also seen as an encouraging sign for crypto, since the dollar is inversely correlated to crypto.
- European Central Bank (ECB) also raised Interest rates by 25bps taking to 4.25% (YoY) (Jul)
Next week includes the US Non-farm payrolls (Jul), US Unemployment rate (Jul), UK Interest rate decision (Aug) and Euro Consumer Price Index (CPI) (Jul).
Crypto Markets Overview
- This week, crypto markets are down by 2.5% totaling to 1.17 trillion with BTC and ETH both down by 3.6% and 1.9% respectively. Bitcoin dominance stands at 49.7% with Ethereum at 19.6%.
- Bitcoin (BTC) volatility dipped to its lowest level in a year with the 30-day estimate for BTC volatility falling to just 0.74%, which is the lowest level since January 16, 2023
- BTC continues to stay within a narrow range between $29,000 and $31,500 for over a month with over 3.4 Mn Bitcoin addresses buying the dip below $30,000.
- Ethereum, the second largest crypto continued to increase in the number of validators on the ETH network. A total of 11.3 million ETH had been staked in the ETH 2.0 contract, worth over $52 billion, a new all time high.
- XRP has emerged as the most traded altcoin of 2023 so far, with a record-breaking $150 billion trading volume with the no of whale wallets holding over 100 million XRP tokens reaching an 11-week high.
- Dogecoin reached a 3-Month High following Elon Musks rebranding twitter to X and adding “Д to his Twitter Profile and Hopes Twitter’s X Rebrand Will Introduce A DOGE Payment Option. At one time, Dogecoin overtook Cardano as the seventh-largest crypto.
- Shiba Inu continues to play a prominent role among the top Ethereum whales. It now accounts for almost 12% of the top 100 ETH whales with the meme coin currently the third-largest token holdings for these top holders with USDC and USDT sitting at 15.67% and 14.03%, respectively.
- Crypto Investment products focused on Stellar (XLM), Ripple (XRP), and Solana (SOL) saw significant Inflows. XLM saw a surge of 62.7% to reach $17.3 million in assets under management (AUM) with XRP seeing a 33.2% increase, taking its AUM to $65.7 million, while SOL-based products jumped 55.7% to reach $87.8 million in AUM.
- The stablecoin market cap has hit its lowest level since August 2021 following a decline in the market capitalization of USD Coin (USDC) and Binance USD (BUSD). Tether (USDT) is the only stablecoin that saw its market capitalization increase, reaching an all-time high of $83.8 billion.
Bitcoin Technical Analysis
Source: TradingView
Summary:
- Weekly Performance
– BTC experienced a bearish week, recording a fall of over 3%
. – Sideways consolidation was broken down, indicating a bearish trend.
- Current Situation
– BTC retraced to the lower band of the sideways zone, approximately at $29,500.
– Expectations point to the continuation of bearishness.
– Both weekly and daily candles display weak and bearish signals.
- Support Levels
– Immediate support at $28,800 (local demand level).
– Further support at $28,450.
- 4H Timeframe Analysis
– In the 4-hour timeframe, BTC’s price is currently below both the 50 and 200 EMA (Exponential Moving Averages).
– This indicates a bearish sentiment in the short term.
Ethereum Technical Analysis
Source: TradingView
Summary:
- ETH’s Performance Relative to BTC
– ETH has been following BTC’s bearish trend this week.
– However, the decline in ETH’s price was less severe compared to BTC.
- Daily Timeframe Analysis
– In the daily timeframe, ETH was finding support from the 50 EMA (Exponential Moving Average).
– However, it has now moved below the 50 EMA, indicating a bearish signal for the short term.
– This suggests a potential shift in market sentiment.
- Support Levels
– Immediate support at $1,794.
– Further support at $1,711.73.
- 4H Timeframe Analysis
– In the 4-hour timeframe, ETH’s price was consolidating within an upward-expanding channel.
– The price broke down from the channel, signaling a shift in the market’s momentum.
– Currently, ETH is retesting the broken channel as a resistance level.
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