Cryptocurrencies were mostly higher on Monday as the bullish sentiment continues into August. Bitcoin has underperformed other major cryptocurrencies and has fallen by around 3% in the past 24 hours, compared to a 2% increase in ether over the same period.
Buyers remain active despite ongoing regulatory crackdowns in China. On Sunday, the People’s Bank of China (PBoC) said it would continue to exert high regulatory pressure on crypto trading, mainly due to concerns about financial risk.
Traders are also digesting the 58-page Digital Asset Market Structure and Investor Protection Act, proposed by Representative Don Beyer (D-Va.), Seeking to create a comprehensive regulatory regime for digital assets. The US Senate is also proposing a $ 1,000 billion infrastructure bill with a crypto-tax provision, which could be a source of anxiety for the market.
For now, a breakdown of the intraday charts “suggests that bitcoin could fall back to the middle of the range to around $ 36,000, or less, before the rally continues,” wrote Marcus Sotiriou, trader at the brokerage. UK-based digital assets GlobalBlock, in an email to CoinDesk
- Bitcoin (BTC) $ 39,164.5, -5.06%
- Ether (ETH) $ 2,604.8, -2.05%
- S&P 500: 4,387.15, -0.18%
- Gold: $ 1,812.9, + 1.44%
- The 10-year Treasury yield closed at 1.173%, down from 1.236% on Friday.
Same stock rotation
Over the past month, popular “memes stocks” have sold off as bitcoin has rallied. This reverse relationship was noted in The Daily Shot newsletter a few months ago and indicates a pattern of buying and selling in traditional and high yield crypto markets.
It is possible that traders will flock to stocks even if bitcoin pulls out of overbought levels.
Buying Bitcoin Calls
The bitcoin options market has been heavily tilted towards call buying over the past month, which could signal a return to bullish sentiment.
“Now that the massive sell-off in spot prices has already occurred in May, there aren’t as many gains to protect through buy-sell,” wrote Grégoire Magadini, co-founder and CEO of Genesis Volatility. , in a Telegram conversation.
“Combine lower spot prices with persistent high implied volatility, and bitcoin options start to look very unattractive,” Magadini wrote. “It makes more sense to buy the dip with buy structures than to position with puts.”
The chart below shows the bitcoin put-to-call ratio at the lowest level since January, which preceded a brief 25% drop in bitcoin’s spot price.
Crypto cash outflows continue
Digital asset investing products experienced their fourth straight week of net outflows, even as cryptocurrency markets registered their biggest rally since the start of this year.
Net outflows of all digital asset funds totaled $ 19.5 million, according to a report released Monday by CoinShares.
Bitcoin-focused funds saw outflows totaling $ 19.7 million, partially offset by net inflows in funds focused on other categories, including multi-asset funds, wrote Lyllah Ledesma of CoinDesk.
The return of crypto in July
Cryptocurrencies rebounded in July after sluggish May and June. AAVE, an open source, non-custodial protocol that runs on the Ethereum blockchain, outperformed major crypto currencies with a 33% gain in July. Bitcoin was not far behind with a 20% gain compared to a 12% gain in ether.
Ether is looking to extend its streak of record daily wins in the run-up to a planned Ethereum blockchain upgrade that could significantly reduce the growth in the cryptocurrency supply.
Aside from recovering the price of bitcoin from $ 30,000, Ether may have received a boost from Ethereum’s next backward compatible upgrade, or hard fork, which is expected to occur on August 4. , reports CoinDesk’s Omkar Godbole.
The London hard fork contains four Ethereum Improvement Proposals (EIP), of which EIP-1559 will activate a mechanism that would burn off part of the fees paid to miners. Once it goes into effect, increased use of the network will cause more ETH to burn, thus limiting the growth of the cryptocurrency supply over time.
Meanwhile, 27 out of 40, or 68%, of crypto experts surveyed by Finder believe ether will one day overtake bitcoin as the largest cryptocurrency by market cap; 58% of the panelists believe that the “flipping” could occur in the next five years.
The price of ether is expected to hit $ 4,596 per ETH by the end of this year, according to the average forecast from 27 experts on the Finder panel who gave their price predictions.
Most digital assets on CoinDesk 20 ended lower on Monday.
Notable 9:00 p.m. UTC (4:00 p.m. ET) winners: