Crypto Market Turbulence: Key Events and Market Movements

London: 24 July 2024 (TraderMade): This week has been monumental in both the political and financial worlds, with significant impacts on the cryptocurrency market. Here's a look at the key events and their influence on digital assets.

Key Takeaways

• President Biden drops out of the race and endorses Kamala Harris, causing significant market shifts.
• A CrowdStrike software bug causes global IT outages, highlighting digital vulnerabilities.
• Bitcoin and Ethereum see record $17.8 billion inflows into digital asset investment products.
• Bitcoin holding addresses decline by 672,510, indicating a shift in market behavior.
• BlackRock CEO Larry Fink endorses Bitcoin, boosting investor confidence.

Major News Highlights

Biden Bows Out, Harris Steps Up: President Joe Biden has dropped out of the presidential race, endorsing Vice President Kamala Harris as his replacement. This unexpected turn adds a new layer of complexity to the upcoming election and has already started to influence market sentiments.

Global IT Chaos from CrowdStrike Bug: A bug in CrowdStrike's software has led to widespread IT outages, disrupting travel, banking, and business operations globally. This incident has highlighted the vulnerabilities in our digital infrastructure, causing significant concern among investors and businesses alike.

Record Inflows into Digital Asset Investment Products: According to CoinShares data, Bitcoin and Ethereum have led to a record $17.8 billion in year-to-date inflows into digital asset investment products. This surge demonstrates growing institutional interest and confidence in these leading cryptocurrencies.

Bitcoin Holding Addresses Decline: Bitcoin holding addresses have fallen by 672,510 over the past month, indicating a possible shift in market dynamics and investor behavior.

BlackRock CEO's Endorsement: Larry Fink, CEO of BlackRock, has declared Bitcoin a legitimate financial instrument and expressed his strong belief in its potential. This endorsement from a major financial leader has bolstered confidence in the asset.

ETH ETFs on the Horizon: The Chicago Board Options Exchange is set to launch trading for five spot ETH ETFs on 23rd July. The SEC has given preliminary approval to at least three ETH ETF issuers, signaling a major step forward for Ethereum in the financial markets.

FTX and CFTC Settlement: FTX and the CFTC have agreed to a $12.7 billion settlement after months of negotiations. This resolution is expected to bring some stability back to the market.

Mt. Gox Creditor Payments: Mt. Gox has confirmed payments to over 13,000 creditors, with most opting to hold the asset. The bankrupt exchange also moved $9 billion in BTC to undisclosed wallets, adding another layer of intrigue to the market.

Trump's Treasury Secretary Pick: Former President Donald Trump is reportedly considering JPMorgan CEO and crypto critic Jamie Dimon for Treasury Secretary. This potential appointment has sparked debate about the future regulatory landscape for cryptocurrencies.

Economic Indicators: Fed Chair Jerome Powell has expressed some confidence that inflation is retreating to key levels. Meanwhile, the British pound hit a one-year high against the US dollar as inflation held steady.

Technical Analysis & Market Sentiment

Bitcoin (BTC/USD)

Bitcoin has shown bullish momentum, rising towards its all-time high territory. The possibility of a pro-crypto government under Trump has fueled optimism. Key resistance levels are 66,000 and 72,000, with a potential target of 73,800. The Mt. Gox creditor disbursements remain a downside risk, but the overall trend appears positive.

Ethereum (ETH/USD)

Ethereum is trading efficiently within its range, with the anticipation of the ETH ETF launch. Key levels to watch are 2,700, 3,350, 3,600, and 4,000. The market is closely monitoring the ETF launch, which could significantly impact prices.

Spot Market Trends

BTC recorded a 12.71% gain, setting a bullish trend. Solana (SOL) was the standout performer, closing up 25.79%. USDT traded above parity, indicating investors are moving into other crypto assets. The desk noticed balanced flows for BTC and ETH, with increased activity in altcoins like SOL, XRP, AERO, TRX, OM, and FIL.

Derivatives Market

The BTC options market saw increased volatility, with a notable rise in 3-month ATM volatility. The ETH/BTC ATM IV spread has compressed, signaling anticipation for the ETH ETF launch.

Top Gainers

Several cryptocurrencies have shown impressive strength against Bitcoin (BTC) this week. Solana (SOL) topped the list, gaining 1.56% to reach a price of 0.0026284 BTC. Ethereum Classic (ETC) followed with a 1.40% increase, now priced at 0.000361 BTC. Litecoin (LTC) also showed modest gains, rising by 0.37% to 0.001094 BTC.

Top Losers

On the flip side, Curve DAO Token (CRV) has been the most significant loser this week, dropping by 10.13% against the US dollar (USD) to a price of 0.26340 USD. Algorand (ALGO) also faced a sharp decline, falling 9.79% to 0.14290 USD.

Numeraire (NMR) decreased by 9.48%, now standing at 14.03000 USD. ALGO's BTC pair also saw a significant drop, losing 8.05% to 0.00000217 BTC. The Graph (GRT) rounded out the top losers, decreasing by 7.67% to 0.19750 USD.

Most Volatile Cryptocurrencies

Volatility remains a key characteristic of the cryptocurrency market. Internet Computer (ICP) has been the most volatile cryptocurrency this week, with a fluctuation of 15.66%.

Ankr (ANKR) followed closely with a volatility of 15.60%, while Numeraire (NMR) and The Graph (GRT) had volatility rates of 14.58% and 14.57%, respectively. Dogecoin (DOGE) also experienced high volatility, fluctuating by 14.36%.

Least Volatile Cryptocurrencies

In contrast, Ethereum to Bitcoin (ETH/BTC) was the least volatile pair this week, with a modest fluctuation of 4.36%. Bitcoin to USD (BTC/USD) followed with 4.66% volatility, and Ethereum to USD (ETH/USD) saw a 5.10% fluctuation.

Litecoin to Bitcoin (LTC/BTC) and Decentraland to Ethereum (MANA/ETH) also remained relatively stable, with volatility rates of 5.52% and 5.97%, respectively.

What to Watch Next Week

• French, German, UK, and US flash manufacturing and services PMIs.
• Bank of Canada monetary policy and press conference.
• US advance quarter GDP and unemployment claims.
• US PCE price index.

Final Thoughts

The cryptocurrency market is navigating a landscape of political upheaval, technological vulnerabilities, and significant financial endorsements. With key economic indicators and potential regulatory shifts on the horizon, the coming weeks became crucial for both Bitcoin and Ethereum.