Security Token Exchange

Bitcoin remains stuck at $29,000 for two weeks now. As of writing, Bitcoin (BTC) has been trading at $28,983, while Ether (ETH) is changing hands at $1,827.

The crypto market experts expect this stability to remain until a spot bitcoin exchange-traded fund (ETF) is approved. Crypto analytics firm K33 Research’s Vetle Lunde called July’s trading volume “anemic” in a recent note but stated that the market is on a precipice of change.

K33 Research also noted late last week that Bitcoin’s 5-day average volatility dropped lower than Gold, Nasdaq, and S&P500 in the week ending July 30. And according to crypto options trading platform Deribit’s Bitcoin volatility index, which indicates the expected volatility for the largest cryptocurrency over the next 30 days, it hit an all-time low of 34.02% on Monday.

With trading volumes remarkably low, at their lowest level since November 2020, and Bitcoin volatility at five-year lows, this lack of activity could lead to a sudden eruption of volatility, according to Lunde, who points to ongoing legal matters, ETF filings, and structural pressures prompting strategies such as gradual BTC accumulation as potential catalysts.

“A deep crypto sleep tends to be followed by a violent wake-up. The market’s volatility pressure is about to climax, and that an eruption is near,” he said in the note.

Currently, the amount of liquid and highly liquid Bitcoin supply is at its lowest since the 2018 bear market, according to Blockware Intelligence’s recent newsletter. At the same time, illiquid supply is reaching all-time highs, and long-term holders are storing their coins away. The creation of new addresses is also seeing a significant positive momentum, indicating a general increase in on-chain demand, which is similar to trends observed exiting the bear market in 2019.

In major institutional crypto news, MicroStrategy reported a $24 million Bitcoin impairment charge in Q2. In contrast, Block, Jack Dorsey’s Bitcoin-friendly payments company, reported that about half ($2.4 billion) of its total $5.5 billion second-quarter net revenue came from BTC.

Amidst all this, the UK-based fintech firm Revolut announced that starting September 2, it will no longer be able to place buy orders for crypto, and a month later, all access to its crypto platform will be disabled. However, this move will only affect US users, which make up less than 1% of Revolut’s worldwide customer base. The company cited the evolving regulatory environment and the uncertainties around the crypto market in the country as reasons for the same.

Last week, GameStop also announced that it was discontinuing its crypto wallet amid “regulatory uncertainty.”

Best Weekend Performer

The market movement over the weekend has been limited to a very tight range, with no major fluctuations observed during this period. Among the top 100 crypto assets by market cap, some altcoins still recorded gains over the past week, with the likes of RLB (51.5%), CAS (31%), FLEX (24%), XDC (22.2%), and SHIB (10%) being at the top in 7-day gains.

In the past 24 hours, meanwhile, BCH, DASH, and ALGO recorded gains of 5.8%, 5.2%, and 2.6%, respectively. The weekend, however, was good for GALA which went up 13%. ApeCoin also recorded 12.3% gains but only to subsequently go down by 7.5%.

Hedera (HBAR)

The biggest gainer over the weekend was actually HBAR, whose price jumped 14% to a high of $0.060, the 200-day moving average. The 33rd largest cryptocurrency with a market cap of $1.8 billion is currently trading in green at $0.0558 while managing $89.7 mln in 24-hour volume, which saw an increase of 200% from a day ago.

HBAR is up 5.8% in the past week and 18.5% in the past month, and about 55% in 2023 so far. However, HBAR’s price dropped 27.4% over the past year and is still off 90.2% from its peak.

The latest gains for HBAR, the native token of enterprise-grade public network Hedera Hashgraph, came amidst a row of partnership announcements, with the latest one being its strategic collaboration with FreshSupplyCoAu to integrate with the Continuity API that enables seamless connections to banks and the Mastercard Network.

Hashgraph Association (THA), the project developer, has also invested in WISe.ART, a subsidiary of publicly-traded WiseKey International. The funds will be used to accelerate the broad adoption of Hedera as well as advance the integration of trusted NFTs in the WISe.ART platform.

“We look forward to working with THA and Hedera on its plan to issue tokenized shares via ledger-based securities, a process commonly known as ‘tokenization,’” said WiseKey founder Carlos Moreira.

WISe.ART is a platform by Hedera Hashgraph’s technology that enables minting and trading NFTs. Just last week, Hedera announced that the cost of minting 10k bulk NFTs in a collection would jump from $76.80 to $200 while minting a single NFT will drop from $0.05 to $0.02, as the number of active monthly NFT accounts jumped past 19,500 in July.

Last week, two major automakers, Hyundai and Kia, also embraced the blockchain project as they introduced an AI-enabled supply chain carbon emissions tracking solution called Supplier CO2 Emission Monitoring System (SCEMS) on the Hedera network. The solution will manage the carbon emissions of business partners while assuring data integrity and transparency throughout the supply chains.

Meanwhile, late last month, Taiwan’s largest financial institution and South Korea’s oldest bank, Shinhan Bank, successfully conducted an international stablecoin remittances trial on the Hedera Network.

In the second half of July, the crypto project also announced that it would integrate the software wallet MetaMask through the HIP-583. This will make Hedera Hashgraph — which aims to develop a secure and trusted online world that allows users to play, work, trade, explore, and socially engage with others in the online world while maintaining their privacy and safety – more accessible to a wider range of users. Amidst all this, the Hedera mainnet achieved the milestone of 16 billion transactions.

Click here to learn all about investing in Hedera Hashgraph (HBAR). 

Worst Weekend Performer

Several big altcoins posted notable losses last week, including COMP (-26%), LTC (-11.5%), THETA (-11%), PEPE (-10.5%), XLM (-10%), UNI (-9%). These coins are still recording losses, marking a red start to the new week.

In the past 24 hours, meanwhile, FLEX is the biggest loser, whose price dropped by 10.8%. Other losers from this period include SHIB (4.8%), APE (4%), MKR (3%), FXS (3%), and CSPR (2.4%). This has the total crypto market cap dipping by 0.2% to $1.205 trillion.

XRP

Among the top 100 cryptocurrencies, XRP was hit hardest during the weekend, suffering the greatest fall at 7.8%.

XRP is the 5th largest crypto by market cap of $32.55 billion, and it has lost more than 12% of its value in the past week. The coin, however, is still green by 81.5% year-to-date (YTD), 32% in the past month, and 65.6% over the past year as it trades at $0.617.

The cryptocurrency recently gained market momentum owing to Ripple’s partial but big win against the US Securities and Exchange Commission (SEC). The ruling was hailed as a huge step forward for the crypto sector, which led to significant developments to boost XRP’s price.

For instance, Bitstamp unveiled an XRP lending service offering along with relisting the crypto asset for trading, a move also made by several major exchanges, such as Coinbase, Kraken, and Crypto.com. It was at that time XRP briefly even surpassed BNB as the fourth-largest crypto.

But after posting double-digit gains for quite some time now, the bears seem to be making a reappearance. XRP is down 33% since hitting a yearly high above $0.92 in mid-July. If this downtrend continues, XRP can very well see $0.55 next.

The downside action is the result of the threat of a successful SEC appeal. Recently, Judge Jed Rakoff of the SDNY district court raised market bets on an SEC appeal when he rejected Judge Analisa Torres’ analysis, where she ruled that the company’s XRP sale to retail investors did not violate the Securities Act.

While investors are now concerned over both the short and long-term prospects of XRP as the SEC appears set to appeal Torres’ ruling, some of the largest XRP holders have dumped over 100 million tokens, which also put major selling pressure on its price. As per on-chain data, the overall supply in addresses holding between 100k and 1 million coins has decreased from 6.85 billion to 6.75 billion since late July. On the positive side, Bitcoin ATM operator CoinFlip now supports XRP.

Click here to learn all about investing in Ripple (XRP). 

What’s Ahead?

In the sixth consecutive week of underwhelming price performance, market leader Bitcoin fell 1.4% over the last seven days and Ether 2.1% during the same period. Amidst this, the largest stablecoin, Tether’s dollar-pegged USDT, is also missing its mark, trading at $0.99786 despite the company’s recent quarterly report showing Q2 profits of $850 million and total excess reserves of $3.3 billion.

“It’s just a few bps outside the 10bps corridor. Most of time USDt trades few bps above 1$, sometimes below. This is an artificial pressuring down as explained in my tweet but it will resolve as all the other times. If it increases a bit more market makers will step in and arbitrage with primary market,” Bitfinex and Tether CTO Paolo Ardoino tweeted the explanation for the same.

As we enter into this new week, technically, prices are likely to stay flattish for the foreseeable future. Both Bitcoin and Ether’s relative strength index (RSI) are below neutral 50, having readings of 46 and 45, respectively, and hovering near their respective 20-day moving averages. The Crypto Greed and Fear Index is also painting a similar picture as it continues to be in the neutral zone with a reading of 49.

On the macro front, the end of law week saw the US July jobs report come softer than economist forecasts though they had little effect on bitcoin’s price. The US economy added 187,000 payrolls in July, with hourly average wages logging a higher-than-expected increase of 4.4%.

While the US labor market is cooling, wage inflation is still double the target level of the Federal Reserve, which will be meeting on September 19 to make its next move on interest rates, which are currently in the 5.25% and 5.50% range — the highest in the past 22 years.

Now, this week will bring inflation data for July, which could have an impact on market direction. The July inflation data (CPI) is scheduled for release on Thursday, August 10. Both the headline and core July consumer price index are forecast to rise by 0.2%, with the headline year-over-year rate expected to rise to 3.3% from 3% and the yearly core rate to dip from 4.8% to 4.7%.

Concluding Thoughts

Last week was a slow one, and the weekend didn’t see much action either. While this week can also be expected to be a boring one, the macro developments could create some volatility in crypto. Besides all this, it needs to be seen what this week will have in store for the cryptocurrency market. This, however, is just short-term noise, or lack of it, with Bitcoin preparing for its biggest cyclical event in April 2024, which could very well start another bull run as it has all the last three times. But to experience that euphoria, we have to weather the current times first!