CRYPTO week ahead: August 1 – 7
Last week in the news
Despite FED`s another increase of interest rates by 75bps, markets continued to rally, even on news that the U.S. is on the verge of recession. Both US equities and the crypto market gained during the week. Bitcoin is heading toward
25K resistance; Ether continues to be supported by the “Merge”.
The FED increased interest rates for another 75bps on Wednesday`s FOMC meeting, placing it to the range of 2.25%-2.50%. In an after meeting statement, FED Chair Jerome Powell noted the possibility for FED to slow down its future rate hikes, as the economy needs time to digest current increases. He also noted that he doesn’t think that the economy is in recession, regardless of official statistics, which shows that for the last two quarters of this year, the US economy output is in negative territory. Target inflation of 2% remains FED`s main objective. Analysts are still pointing that the current state of equity markets is a trap, as economic slowdown would certainly have further negative consequences on company earnings in the future period.
Coinbase shares were down by 21% during the week, as negative news hit the company. Namely, there have been reports that SEC is investigating probe trading in this company by its three managers. Another question which again is in the spotlight of the regulators and industry is if crypto coins are securities. The SEC is also investigating whether Coinbase had illegally offered to its clients trading with digital assets without prior registration as securities.
Trading of ETH futures have significantly increased during the previous week as few large hedge funds purchased call options on ETH. Increase in ETH buying orders comes as a speculation on forthcoming ETH`s “Merge” fork in September.
The CEO of MicroStrategy, Michael Saylor, made a public comment on Ethereum, putting in question its technical development. He was referring to comments from Ethereum`s co-founder Vitalik Buterin that Ethereum still have some 36 months to go until the protocol is finally completed. Saylor`s major concern is “technical reliability and security” of Ethereum`s protocol.
Crypto market cap
Crypto market is gaining back its strength for a second consecutive week. It seems that the market digested FED's monetary tightening in which sense, there has not been a negative reaction to its latest increase of interest rates by 75bps. This is generally positive, as obviously, the market perceives that there is still strength in the US economy and that a potential recession might not be as severe as some analysts have predicted. Certainly, considering many known unknowns when the world economic environment is in question, risks levels continue to be high, so current optimism should be taken with investor’s precaution.
During the previous week the total crypto market capitalization has increased by 10%, reaching levels above $1 trillion, and returning to the levels from mid-June this year. Daily trading volumes have been increased to the levels around 130B on a daily basis, which is double the size of daily trading from the week before. Total funds outflow from the beginning of this year has decreased to the level of 1.085B, which is a drop of 50%.
It was a gaining week on the crypto market, where almost all coins managed to increase their market cap. Leader of the market during the last two weeks was certainly Ether, supported by its forthcoming improvement in Ethereum network algorithm called “Merge”. Second week in a road Ether gained additional 13% in market cap, increasing it by additional 25B. Bitcoin also had good week, with surge in market cap by 10% or additional 42B. Binance Coin also gained some of the previous strength, with an increase in cap by 66B or 15% on a weekly basis. During the week altcoins performed well, led by Uniswap, with an increase in market cap of 1.5B or 32%, followed by Polkadot, with a surge in market cap by 20% or 1.4B. Tether finally reverted its downtrend, by increasing its coins in circulation by 0.3% and reaching
66B in market cap.
Crypto futures market
For the second consecutive week, the crypto futures market is gaining its strength back, in line with the crypto spot market. Both BTC and ETH futures closed higher on Friday trading. BTC short term futures were up by some 6%, reaching prices above 24K in line with developments on the spot market. Futures maturing in December this year were up by 3%, while a bit of surprise were maturities in December next year, which dropped by 3% and below 25K.
On the other hand, ETH futures continue to be supported by the forthcoming “Merge” fork. As it has been reported, a few large hedge funds placed significant amounts of call options on ETH. ETH short term futures were up by average 12%, where the price was holding above 1.7K. It is interesting that December this year still did not manage to jump above this level, staying modestly below 1.7K.
Despite FED`s another increase of interest rates by 75bps, markets continued to rally, even on news that the U.S. is on the verge of recession. Both US equities and the crypto market gained during the week. Bitcoin is heading toward
25K resistance; Ether continues to be supported by the “Merge”.The FED increased interest rates for another 75bps on Wednesday`s FOMC meeting, placing it to the range of 2.25%-2.50%. In an after meeting statement, FED Chair Jerome Powell noted the possibility for FED to slow down its future rate hikes, as the economy needs time to digest current increases. He also noted that he doesn’t think that the economy is in recession, regardless of official statistics, which shows that for the last two quarters of this year, the US economy output is in negative territory. Target inflation of 2% remains FED`s main objective. Analysts are still pointing that the current state of equity markets is a trap, as economic slowdown would certainly have further negative consequences on company earnings in the future period.
Coinbase shares were down by 21% during the week, as negative news hit the company. Namely, there have been reports that SEC is investigating probe trading in this company by its three managers. Another question which again is in the spotlight of the regulators and industry is if crypto coins are securities. The SEC is also investigating whether Coinbase had illegally offered to its clients trading with digital assets without prior registration as securities.
Trading of ETH futures have significantly increased during the previous week as few large hedge funds purchased call options on ETH. Increase in ETH buying orders comes as a speculation on forthcoming ETH`s “Merge” fork in September.
The CEO of MicroStrategy, Michael Saylor, made a public comment on Ethereum, putting in question its technical development. He was referring to comments from Ethereum`s co-founder Vitalik Buterin that Ethereum still have some 36 months to go until the protocol is finally completed. Saylor`s major concern is “technical reliability and security” of Ethereum`s protocol.
Crypto market cap
Crypto market is gaining back its strength for a second consecutive week. It seems that the market digested FED's monetary tightening in which sense, there has not been a negative reaction to its latest increase of interest rates by 75bps. This is generally positive, as obviously, the market perceives that there is still strength in the US economy and that a potential recession might not be as severe as some analysts have predicted. Certainly, considering many known unknowns when the world economic environment is in question, risks levels continue to be high, so current optimism should be taken with investor’s precaution.
During the previous week the total crypto market capitalization has increased by 10%, reaching levels above $1 trillion, and returning to the levels from mid-June this year. Daily trading volumes have been increased to the levels around 130B on a daily basis, which is double the size of daily trading from the week before. Total funds outflow from the beginning of this year has decreased to the level of 1.085B, which is a drop of 50%.
It was a gaining week on the crypto market, where almost all coins managed to increase their market cap. Leader of the market during the last two weeks was certainly Ether, supported by its forthcoming improvement in Ethereum network algorithm called “Merge”. Second week in a road Ether gained additional 13% in market cap, increasing it by additional 25B. Bitcoin also had good week, with surge in market cap by 10% or additional 42B. Binance Coin also gained some of the previous strength, with an increase in cap by 66B or 15% on a weekly basis. During the week altcoins performed well, led by Uniswap, with an increase in market cap of 1.5B or 32%, followed by Polkadot, with a surge in market cap by 20% or 1.4B. Tether finally reverted its downtrend, by increasing its coins in circulation by 0.3% and reaching
66B in market cap.Crypto futures market
For the second consecutive week, the crypto futures market is gaining its strength back, in line with the crypto spot market. Both BTC and ETH futures closed higher on Friday trading. BTC short term futures were up by some 6%, reaching prices above 24K in line with developments on the spot market. Futures maturing in December this year were up by 3%, while a bit of surprise were maturities in December next year, which dropped by 3% and below 25K.
On the other hand, ETH futures continue to be supported by the forthcoming “Merge” fork. As it has been reported, a few large hedge funds placed significant amounts of call options on ETH. ETH short term futures were up by average 12%, where the price was holding above 1.7K. It is interesting that December this year still did not manage to jump above this level, staying modestly below 1.7K.
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