Macro Overview
This week saw crypto markets rising nearly 3% reaching $1.19 trillion after trading sideways followed by major announcements coming from the US Consumer Price Index (CPI), US Core CPI, US Initial Jobless claims, and US Producers Price Index (PPI).
- U.S. CPI print showed inflation rose to 3.2% annually in July, compared to the expected 3.3% but still significantly higher than the Federal Reserve’s desired 2%. Though, the CPI has risen from the previous month’s data of 3% (June) (YoY).
US Consumer Price Index (CPI) (YoY)
- US Core CPI inflation, which excludes volatile food and energy prices, came in lower at 4.7% in July from 4.8% in June, this is good for crypto space.
- US Producers Price Index (PPI) that measures the change in the price of goods sold by manufacturers came at 0.3% for July (MoM), higher than the estimate of 0.2% signaling inflation issue still persist
- 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 248K,more than the estimation of 230K. This is also seen as an encouraging sign for crypto, since the dollar is inversely correlated to crypto.
Next week major callouts include the UK CPI (YoY) (Jul), US FOMC Minutes, Eurozone CPI (YoY) (Jul) and US Initial Jobless claims.
Crypto Markets Overview
- This week, crypto markets are up by 1% totaling to 1.17 trillion with BTC and ETH up by 1.3% and 1.1% respectively. Bitcoin dominance stands at 50.4% with Ethereum at 19.6%.
- First half of 2023, the classic buy and hold strategy for Bitcoin (BTC) outperformed most crypto funds by an impressive 68.8%. According to data from 21e6 Capital AG, crypto funds, on average, generated returns of 15.2% during the same period, while BTC saw gains of around 84%.
- Bitcoin (BTC) holdings of long-term investors hit an all-time high, amassing a record 14.59 million coins, equating to 75% of the circulating supply. This signifies a resilient belief in Bitcoin’s enduring value, as seasoned holders continue to stake their confidence in its potential.
- Global online payments giant PayPal has announced the launch of its own crypto stablecoin, PayPal USD (PYUSD). The newly launched stablecoin is backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents.
- Layer 1 Blockchain Aptos (APT) to team Up with Microsoft for Digital Payments and Tokenization offering an easy entry point into the complex world of blockchain technology.
- Digital asset investment products saw outflows totaling $107 million in the past week, with Bitcoin seeing $111 million in outflows, Ethereum also saw outflows of $6 million. Sentiment around altcoins was significantly better with Solana investment products seeing inflows of $9.5 million, XRP and Litecoin also saw inflows of $0.5 million and $0.46 million respectively.
- The total ETH locked on the Ethereum chain clocked a fresh all-time high of 27.03 million, representing a 40% jump since Shapella. The total amount staked equated to 21% of ETH’s circulating supply.
- XRP number of daily transactions has crossed 1 million since the start of August on the back of Ripple’s partial win over the United States Securities and Exchange Commission (SEC), ahead of leading blockchains such as Ethereum (ETH) and Bitcoin (BTC).
- PancakeSwap (CAKE), the second-largest decentralized exchange, expands to Ethereum Layer 2 Arbitrum One, making it available on six blockchains. Arbitrum One will help users with lower gas fees and faster transactions
Bitcoin Technical Analysis
Source: TradingView
Summary:
– Bitcoin (BTC) displayed a neutral to bullish trend throughout the week.
– Attempted to breach the resistance at $29,900 but was unsuccessful.
– Price remained within a range of 3-4%.
– Market sentiment advises a cautious “wait and watch” approach due to unconfirmed reversal signs and mixed signals.
– Some signals indicate bearish tendencies while others lean towards bullish sentiment.
– In the daily timeframe, BTC’s price is positioned above the 50 and 200 EMA (Exponential Moving Average).
– Key support levels include the monthly low at $28,800, followed by supports at approximately $28,450 and $28,000.
– Immediate resistance levels consist of the upper band of the sideways range at $29,720, and further resistances at $30,100 and $30,450
Ethereum Technical Analysis
Source: TradingView
Summary:
– Ethereum (ETH) mirrored Bitcoin’s movement during this week.
– After rebounding from just below the support level of around $1800, ETH has managed to maintain its position.
– Presently, ETH is undergoing consolidation within shorter timeframes, displaying a potential bullish pattern.
– However, the weak trading volume raises concerns.
– In higher timeframes, Ethereum remains bearish unless a compelling reversal signal emerges.
– ETH’s current position lies between the 50-day EMA and the 200-day EMA.
– The support levels remain consistent with the previous week’s report: $1794 and $1711.73.
– Noteworthy resistance stands at $1887, a key level being retested.
– Beyond that, a higher resistance level is situated at $2023.
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