Fed Policy and Collapsing Market Sentiment Could Send Total Crypto Market Cap Below $1,000,000
Data shows investors are moving back into fiat and a lack of bullish leverage in the crypto market suggests that a another correction is in progress.
Market analysis
Total crypto market cap surpassed $1 trillion on July 18 after an agonizing thirty-five-day stay below the key psychological level. Over the next seven days, Bitcoin (BTC) traded near $22,400 and Ether (ETH) corrected 0.5% to $1,560.
Total crypto market capacity, in billions of dollars. Source: TradingViewTotal crypto market capitalization closed July 24 at $1.030 billion, a modest seven-day negative move of 0.5%. The apparent stability is skewed towards the stable performance of BTC and Ether and the $150 billion worth of stablecoins. The larger data hides the fact that seven of the top 80 coins fell 9% or more over the period.
Even though the chart shows support at the $1 trillion level, it will take some time before investors regain confidence in investing in cryptocurrencies and US Federal Reserve stocks may have the greater impact on the evolution of prices.
Furthermore, the sit-and-wait mentality could be a reflection of important macro events predicted for the week ahead. Generally speaking, worse-than-expected data tends to raise investor expectations for expansionary moves, which are beneficial for riskier assets like cryptocurrency.
The Federal Reserve's policy meeting is scheduled for July 26-27, and investors expect the U.S. central bank to raise interest rates by 75 basis points. Additionally, the second quarter of U.S. gross domestic product (GDP) - the broadest measure of economic activity - will be released on July 27.
$1 trillion is not enough to inspire confidenceInvestor sentiment has improved since July 18, as evidenced by the Fear and Greed Index, a data-driven sentiment indicator. The index...
Data shows investors are moving back into fiat and a lack of bullish leverage in the crypto market suggests that a another correction is in progress.
Market analysis
Total crypto market cap surpassed $1 trillion on July 18 after an agonizing thirty-five-day stay below the key psychological level. Over the next seven days, Bitcoin (BTC) traded near $22,400 and Ether (ETH) corrected 0.5% to $1,560.
Total crypto market capacity, in billions of dollars. Source: TradingViewTotal crypto market capitalization closed July 24 at $1.030 billion, a modest seven-day negative move of 0.5%. The apparent stability is skewed towards the stable performance of BTC and Ether and the $150 billion worth of stablecoins. The larger data hides the fact that seven of the top 80 coins fell 9% or more over the period.
Even though the chart shows support at the $1 trillion level, it will take some time before investors regain confidence in investing in cryptocurrencies and US Federal Reserve stocks may have the greater impact on the evolution of prices.
Furthermore, the sit-and-wait mentality could be a reflection of important macro events predicted for the week ahead. Generally speaking, worse-than-expected data tends to raise investor expectations for expansionary moves, which are beneficial for riskier assets like cryptocurrency.
The Federal Reserve's policy meeting is scheduled for July 26-27, and investors expect the U.S. central bank to raise interest rates by 75 basis points. Additionally, the second quarter of U.S. gross domestic product (GDP) - the broadest measure of economic activity - will be released on July 27.
$1 trillion is not enough to inspire confidenceInvestor sentiment has improved since July 18, as evidenced by the Fear and Greed Index, a data-driven sentiment indicator. The index...
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