Crypto Weekly Review: Sell-Offs and Potential ETF Approvals

London: 10 July 2024 (TraderMade): In a tumultuous week for the cryptocurrency market, significant developments have shaken investor sentiment. The German government continued its Bitcoin sell-off while Mt. Gox began repaying creditors, adding to market volatility.

Amidst these events, the potential approval of spot Ethereum ETFs and TRON's gas-free stablecoin initiative emerged as key highlights.

Key Takeaways

• German Sell-Off & Mt. Gox Repayments: Significant sell-offs from the German government and Mt. Gox repayments have increased market volatility.
• Justin Sun's Offer: TRON founder Justin Sun offers to buy Germany's Bitcoin off-market to prevent further market instability.
• Ethereum ETF Prospects: Anticipated approval of spot Ethereum ETFs could positively impact market sentiment and Ethereum's price.
• NFT Sales Decline: NFT sales dropped by 44% in Q2 2024, indicating reduced interest and potential market saturation.
• TRON's Innovation: TRON is developing a gas-free stablecoin solution for Ethereum and TRON chains, aiming to reduce transaction costs and improve efficiency.

German Government's Bitcoin Sell-Off

The German government continued its aggressive Bitcoin sell-off, transferring an additional $75 million worth of BTC to exchanges. This move has caused significant market disruption, prompting local lawmakers to call for a strategic overhaul.

Critics argue that the government is likely unaware of over-the-counter (OTC) solutions that could mitigate market instability.

Justin Sun's Offer to Germany

TRON founder Justin Sun has offered to buy all of Germany's Bitcoin off-market. This proposal aims to prevent further market instability caused by large-scale public sell-offs.

Gox Repayments Begin

In a significant development, Mt. Gox has moved $2.7 billion in Bitcoin to a wallet address, signaling the beginning of repayments to creditors. This move has added to the selling pressure on Bitcoin, contributing to its recent price decline.

Spot Ethereum ETFs Approaching Approval

The head of asset management at Galaxy has stated that spot Ethereum ETFs are in the "window dressing stage" for potential U.S. approval in July. If approved, this could be a major milestone for Ethereum and the broader crypto market.

NFT Sales Plummet

NFT sales saw a sharp decline of 44% during the second quarter of 2024, reflecting waning interest and possibly market saturation.

TRON's Gas-Free Stablecoin Development

TRON has started developing a gas-free stablecoin solution for the Ethereum and TRON chains, aiming to reduce transaction costs and improve efficiency.

Political Changes in the UK

Keir Starmer of the Labour Party has become the new UK Prime Minister, ending the Conservative Party's 14-year reign. This political shift could have broad implications for the UK’s economic and crypto policies.

FOMC Minutes and Fed Chair Powell's Stance

The FOMC minutes revealed a divided Federal Reserve, with no immediate plans for rate cuts until inflation reaches the 2% goal. Fed Chair Jerome Powell reiterated this stance at the ECB Forum, providing no timeline for rate cuts.

US Economic Data

The U.S. job openings unexpectedly rose to 8.14 million in May, and the non-farm payroll data showed a higher-than-expected spike, indicating a strong labor market despite economic uncertainties.

Technicals & Macro

BTCUSD Analysis

Bitcoin experienced significant downward pressure this week, primarily due to the Mt. Gox disbursements and the German government's sell-off. BTC broke below the crucial $60,000 support level, continuing its descent through key support levels.

The 53,000 level has been a focal point, closing the gap in order flow since the post-spot BTC ETF launch months. BTC hit a low of $53,550, forming a double false break of the ascending trendline from October last year.

The release of the FOMC minutes on Wednesday did not help sentiment, with officials noting a cooling U.S. economy and a divided outlook on rate cuts. Despite this, equities like the S&P and Nasdaq showed gains, reflecting market optimism about a dovish Fed and strong quarterly earnings.

Key BTC Levels: 49,000 / 53,000 / 59,000 / 66,000 / 72,000 / 73,130 (ATH!)

ETHUSD Analysis

The S-1 forms for the spot Ethereum ETF launch are due for amendment submission on July 8, potentially leading to SEC approval and trading by July 15. While this could boost Ethereum, its performance will largely follow Bitcoin's sentiment, driven by current order flow dynamics.

Key ETH Levels: 2,700 / 3,350 / 3,600 / 4,000

Spot Desk Insights

Bitcoin's dip below the $60,000 level saw investors taking the opportunity to add to their holdings, particularly in the low 50s range. USDT began trading above parity for the first time since early June, indicating improved market sentiment.

Despite the overall market decline, there was a bullish bias towards major cryptocurrencies and altcoins, with clients predominantly buying Bitcoin at a 10:1 ratio compared to selling. Altcoins like MATIC, SOL, TON, FTM, and TIA also saw significant interest at current levels.

Derivatives Desk

Perpetual funding rates have entered negative territory, creating opportunities for cross-arbitrage between centralized exchanges (CEXes) and decentralized exchanges (DEXes). HyperLiquid (DEX) has shown wild negative spikes in funding, while Binance remains relatively stable.

A strategy involving selling BTC perps on Binance and buying them on HyperLiquid can capitalize on these funding disparities, though careful margin management is crucial.

What to Watch

• Fed Chair Powell's Testimony: Semi-annual monetary policy report on Tuesday.
• UK GDP and US CPI Reports: Monthly and yearly data on Thursday.
• US PPI Reports and Consumer Sentiment: Preliminary data on Friday.

Market Recap

Last week, Bitcoin's price dropped to a four-month low due to increasing selling pressure from Mt. Gox distributions and the German government's crypto sales. Bitcoin's price fell by 8.5% to $54,092.3, marking an 11% decline over the past seven days.

Market sentiment remains cautious amidst geopolitical uncertainties and upcoming economic reports. Despite the overall market downturn, some investors see current levels as a buying opportunity, anticipating potential positive developments like the Ethereum ETF approval.

Conclusion

Despite the week's challenges, including significant sell-offs and market volatility, opportunities for strategic accumulation have emerged.

Investors remain cautiously optimistic, especially with potential Ethereum ETF approvals and innovative developments like TRON's gas-free stablecoin solution on the horizon.

As the crypto market navigates these turbulent times, staying informed and adaptable will be crucial for capitalizing on upcoming opportunities.