Crypto Market Rises by 2%: Reduced Selling Pressure and Positive Outlook Fuels Surge
Summary:
The cryptocurrency market saw a positive surge on July 1, with total market capitalization up by approximately 2%. This increase is boosted by gains from Bitcoin and Ether, with several factors contributing to the upward trend including a shift in macroeconomic policy, reduced selling pressure, and a strengthened market structure. The overall sentiment indicates investors are likely to retain their assets, suggesting a more positive outlook as seller exhaustion sets in.
July 1 saw a positive surge in the crypto market, with a roughly 2% increase in total market capitalization, hitting $2.32 trillion within 24 hours - a rise boosted by gains from Bitcoin (BTC) and Ether (ETH) respectively surging by around 2.5% and 2.2%. Factors contributing to today's upward crypto market trend encompass a shift in the macro environment, a decrease in selling pressure and a fortified market structure.
A detailed look at recent crypto performance indicates a strengthening trend initiated following the Federal Open Market Committee (FOMC) meeting on June 12. Largely fulfilling the hopes of investors, the FOMC gathering kept the Fed Funds Target Range (FFTR) stagnant at 5.25%-5.50%. Combined with below-forecast U.S. inflation reflected in the consumer price index (CPI), an unexpected rise in the Real Gross Domestic Product (RSI) to 1.4% improved market sentiment.
Further improving sentiment, the U.S. labor market slowdown and the Personal Consumption Expenditures (PCE) report released June 28 hint at the potentiality of two central bank interest rate cuts for this year, possibly in September and December. CME Group's FedWatch Tool latest data indicates a 58.2% and a 43.3% possibility of rate reductions at the FOMC meetups on September 18 and December 18.
Recent crypto market shifts have been marked by heightened volatility, with many corrections and consolidations. However, market momentum isn't continuously upward and variations in supply-demand dynamics contribute to local and global price correction instances. By analyzing the flow of stablecoins into and out of exchanges, the supply-demand balance becomes clearer. CryptoQuant's data indicates a reduction in outflows, suggesting that fewer large-scale selling pressures on exchanges.
This fall in outflows indicates that investors are more likely to retain their assets than withdraw their cash from the market - a potential sign of good news for the market as sellers become depleted.
Simultaneously, Bitcoin's spot price has dipped below the realized price of short-term holders (STHs), presently standing at $62,600. Now, STHs have a slightly negative profitability average, a historical marker for periods of seller depletion.
The day's gains in the crypto market, from a technical standpoint, are part of a rebound which started from a support confluence, a major $2.182 trillion support and a descending parallel channel's mid-boundary. Today's total market cap, now $2.276 trillion, exceeded the channel's upper boundary during July 1's recovery, showing a downtrend breakout. This means that the crypto market could move toward the $2.52 trillion region, hovering around the declining channel's upper tip.
However, before this happens, the total market cap has to bypass congestion between $2.30 trillion and $2.358 trillion, where most major moving averages lie. This report does not involve investment recommendations or advice. Any investment or commercial activity entails risk; thus, it is suggested that readers exercise personal diligence in decision making.
Published At
7/2/2024 1:07:34 AM
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