Market update

Crypto spring has returned with 11 straight days of inflows into the Bitcoin ETFs, this week’s scheduled launch of the Ethereum ETFs, and the appearance by pro-crypto Presidential candidate Donald Trump at Bitcoin 2024. The developments have temporarily outweighed concerns about a possible A$13.5B (US$9B) Mt Gox creditor dump. (An unscientific Reddit poll of creditors suggests 56% plan to HODL their recovered Bitcoin anyway). Adding to the fun Elon Musk has just changed his profile pic to laser eyes, but no one is quite sure if it’s a crack at Joe Biden withdrawing from the race, or a hint the X owner will be making a Bitcoin announcement at Bitcoin 2024 as well. Bitcoin dipped briefly after Biden’s withdrawal announcement came through (as it makes Trump’s election less likely) but the price quickly recovered and Bitcoin is up 6.3% on the same time last week to trade around A$101,879 (US$68K). While the price is up, demand from retail investors (sub US$10K/A$15K traders) is at a three year low according to CryptoQuant. ARK invest analyst David Puell also says on chain indicators suggest Bitcoin is currently oversold and in the “deep value” zone. Ethereum barely managed to recover earlier losses to trade around A$5,183 (US$3,425) suggesting uncertainty over the ETF inflows. Solana surged 15% as various rumours fly around about potential ETFs, XRP gained 11% on news it may soon settle litigation with the SEC, Dogecoin was up 12%. Cardano lost 3% and Shiba Inu declined 13%. Crypto Fear and Greed Index is at 70, or Greed.

Bearish sentiment caused by the great German Bitcoin selloff and Mt Gox repayments has abated. The catalyst appears to be the attempted assassination of Donald Trump boosting the pro-crypto candidate’s chances of getting elected up to 71% on Polymarket. Bitcoin surged 8.2% from A$86K (US$58,340) to its current A$96,124 (US$65,310) in the aftermath of the assassination attempt and is up 14% for the week. Many analysts now believe we have bounced off a local bottom and the Crypto Fear and Greed Index surged almost 20 points in a day to its current 52, or neutral. Wildly speculative, unsourced rumours that China may be reconsidering overturning its crypto ban may also be playing a part. The ASX hit a record high of 8,000 points, and in the US the market is now pricing in a 95% chance of an interest rate cut in September. Ethereum gained 15% this week to trade at A$5,162 (US$3,471), Solana gained 16%, XRP surged 25%, Dogecoin (15.7%), Cardano (22%) and Shiba Inu (16.9%).

The bull market appears to have been temporarily suspended due to the prospect of large amounts of Bitcoin flowing on to the markets from Mt Gox, and the German government. Bitcoin finished the week down 11% at A$83,793 (US$56,242), while Ethereum was hit even harder and pulled back 14% to A$4,471 (US$2,999). Everything else was in the red including Solana (-8%), XRP (-12%), Dogecoin (-11.6%), Cardano (-10%) and Shiba Inu (-3.5%). On the upside, Santiment says that the MVRV scores for Dogecoin, Uniswap, Ethereum, Link, XRP and Cardano indicate a potential buy the dip opportunity. Wall Street traders are also pricing in a 72% chance the Federal Reserve will cut interest rates in September which should make macro conditions more favourable. The Crypto Fear and Greed Index is at the lowest point since January 2023 at 28, or Fear.

After dropping below A$89K (US$59K) in the wake of the Mt Gox repayments news, Bitcoin has recently staged a recovery and the price jumped 4% a day or so ago. BTC is currently trading at A$94,354 (US$63.1K) which puts it 4% up on the same time last week. Ethereum is trading around A$5,160 (US$3,451) which is 3% up on the same time last week. Solana led the altcoin gains with an 11% rise thanks to speculation over a potential ETF, XRP gained 0.15%, Dogecoin (3.5%), Cardano (7%) and Shiba Inu (7%). The US Bitcoin ETFs ended June in the black, with a net A$1.03 billion (US$688 million) of inflows. However, the final week of June saw around A$56M (US$37.3M) in outflows. Historically July is a positive month for crypto markets with an average gain of 7.42%. The Crypto Fear and Greed Index is at 53, or Neutral.

Bitcoin spent most of the week trading slowly down from A$100.6K (US$66.3) to A$97K (US$64K) before taking the elevator down A$7K (US$4K) yesterday as news emerged that Mount Gox would finally start to repay $9.4B in Bitcoin and Bitcoin Cash to creditors from next month. The dump calls into question the efficient market hypothesis in relation to crypto given the repayments have been known about for a very long time and have caused a number of drops in the past year. But even prior to the latest news things were looking downbeat though with Bitcoin whale activity dropping 40%, futures traders turning bearish, and Santiment’s weighted sentiment index negative for a month straight. At the time of writing Bitcoin was down 8% on the same time last week at A$90,462 (US$60.3K) while Ethereum was down 3% to A$5,030 (US$3,356). Solana was down 2%, XRP (-3%), Dogecoin (-8.8%), and Shiba Inu (-5%) while Cardano was flat (-0%). The Crypto Fear and Greed Index is at 51 or neutral.

Despite Bitcoin’s 30 days volatility hitting historic lows, a wave of volatility overnight saw around A$438M (US$290 million) in liquidations across the market. The US Fed took a hawkish tone and kept interest rates on hold at 5.5%, so the combined effects of inflation, high interest rates and Bitcoin miners capitulating, has been weighing on prices. Bitcoin finishes the week down 4% to trade at A$100,940 (US$66.6K) while Ethereum also lost 4% and is trading around A$5332 (US$3520). Solana was down 9.8%, but XRP actually gained 2.1% after its nemesis, SEC crypto unit boss David Hirsch resigned (no, he didn’t join  Pump.fun, that was a gag.) Dogecoin lost 10%, Cardano fell 8.1% and Shiba Inu was down 7%. The Crypto Fear and Greed Index is at 71 or Greed.