Weekly Crypto Analysis: Crypto Market Cap Cross Above $1 Trillion, Top 8 Things to Know Today

2022/07/25 13:08:32

After a brief effort to emerge from bear markets during the previous week, the cryptocurrency market began the current week with a few hiccups. As a result, the leading cryptocurrencies such as Bitcoin, Ether, Solana, and Ripple plummeted at the start of the week. As a result, the market capitalization of all cryptocurrencies decreased by 3.06% to $1.01 trillion.

Let's delve deeper and take a quick look at the latest crypto market news and Bitcoin's technical outlook.

Crypto Market Overview

Bitcoin's dominance has remained mostly unchanged at 41.58%; however, BTC plunged 3.07% on Monday to trade below $22,000. The leading cryptocurrency pair, BTC/USD, is trading at $21,964, while Ethereum, the second-largest cryptocurrency by market capitalization, has dropped to $1,536.39, down 3.98% in the last 24 hours.

Synthetix (SNX), ApeCoin (APE), and Fantom (FTM) remained the top performers from the previous week. SNX increased by more than 20.13% to trade at $3.35, while FTM increased by 14.66% in the last seven days, holding at $0.3243. Finally, the ApeCoin (APE) increased by 11.83% to trade at $6.34.

Cryptocurrency Market Heatmap | Source: Coin360

On the flip side, Arweave (AR), TerraClassicUSD (USTC), and Internet Computer (ICP) remained the worst performers of the week. AR lost 23.94% to trade at $12.98, and USTC lost 19.60% in the last seven days; at the same time, ICP fell 15.96% to trade at $6.30.

The overall trading sentiment in the cryptocurrency market remains positive, and a slight downturn can be viewed as a correction. So let's delve deeper to determine what's causing market volatility.

Top Altcoin Gainers and Losers

Top Altcoin Gainers:

Synthetix (SNX) ➠ 20.13%

Fantom (FTM) ➠ 14.66%

ApeCoin (APE) ➠ 0.13%

Top Altcoin Losers:

Arweave (AR) ➠ 23.94%

TerraClassicUSD (USTC) ➠ 19.60%

Internet Computer (ICP) ➠ 15.96%

News Highlights

Here are some of the events that made the previous week's crypto news section stand out:

Tesla Converted 75% of Bitcoin Holdings

Tesla, the electric vehicle (EV) manufacturing powerhouse headed by billionaire Elon Musk, reported that in the second quarter of 2022, the business sold 75 percent of its bitcoin stockpile at approximately $936 million.

In its earnings report on Wednesday, Tesla revealed the bitcoin sale (July 20, 2022). The following is an excerpt from the document:

"As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet."

Following the conversion, the company had $218 million in digital assets on its balance sheet as of June 30, down from $1.26 billion at the end of the first quarter on March 31.

Meanwhile, Tesla CEO Elon Musk detailed why the company liquidated most of its Bitcoin holdings during an earnings call. Musk stated:

"We sold a bunch of our bitcoin holdings because we were uncertain when the Covid lockdowns in China would alleviate. So it was important for us to maximize our cash position."

However, the billionaire stated that the electric vehicle maker is open to making more bitcoin acquisitions in the future and that the sale should not be interpreted as the company's stance on BTC. Musk said that Tesla did not sell any of its Dogecoin holdings. Instead, Musk's remarks focused on Bitcoin, which fueled a bearish sentiment in the overall crypto market.

ETH Breaks $1,500 as the Merge to Boost Throughput by Over 5000X

The global crypto market remains upbeat, and one of the reasons is the Ethereum 2.0 Merge, which is set to launch on September 19, 2022. At the Ethereum Community Conference (EthCC) in Paris, France, Vitalik said that the ultimate Ethereum 2.0 version, driven by a proof of stake consensus mechanism, will be significantly more scalable than the present proof-of-work network. Once the development team completes the four-stage post-merge roadmap, the network will eventually execute 100K transactions per second.

At the moment, Ethereum can only handle 20 transactions per second, creating a bottleneck and driving miners to raise processing fees. However, this remains the case despite the activation of EIP-1559, , which saw Ethereum restructure its fee mechanism to tame crypto miners who prioritized processing transactions made by users ready to pay more. The Merge will connect the mainnet's proof of work with the Beacon Chain, a proof of stake blockchain running in parallel with the energy-intensive layer.

The transition date is September 19, 2022, and Ethereum will be more resilient and decentralized. As a result, traders anticipate a surge in the second most valuable cryptocurrency, Ether, which may drive an uptrend in the overall crypto market.

KuCoin Secures $10 Million from SIG for Products Upgrade and Metaverse Push

During the previous week, KuCoin announced the acquisition of a $10 million strategic investment from Susquehanna International Group (SIG) and the establishment of a metaverse office. The financing will help the development of KuCoin’s platform infrastructure and enhance its product lines, consequently aiding its global expansion, which also includes a recruiting plan.

The collaboration will also contribute to establishing the ecosystem for KuCoin Token(KCS) and KuCoin Community Chain (KCC) by sponsoring promising crypto companies. This support, which will focus mostly on initiatives on the KCC blockchain, will be delivered in the form of consulting, financing, and incubation, the team claims. Perhaps, that’s one of the reasons why the KCS coin jumped 2.18% in seven days to trade at $9.79.

Bitcoin Funding Rate Remains Positive

On-chain data shows the Bitcoin funding rate is still at a pretty high positive value, suggesting a bullish sentiment in the market. Since there is a cost to going long or short, funding rates tend to indicate market sentiment.

Positive financing rates indicate that individuals are prepared to pay to be long, which is a bullish signal. However, when funding rates are negative, it indicates a bearish attitude since investors are now paying to be short.

However, if funding rates remain positive for an extended period, it becomes too expensive for Bitcoin buyers to pay. As shown in the graph above, anytime the Bitcoin financing rate has achieved a relatively high positive number in the last several months, the cryptocurrency's price has often declined not long after.

BTC Funding Rates History | Source: Coinglass

Similarly, negative funding rate spikes have resulted in a rise in the value of BTC; thus, the current financing rate indicates a potential for a downtrend.

Fear and Greed Index Signals “Fear,” Crypto Market on Hold

Traders have begun to enter the cryptocurrency market as risk-on sentiment has increased. The crypto fear and greed index shows a slight improvement, as the indicator has shifted from "extreme fear" to "fear." This crypto fear and greed index shift indicates a bullish reversal in the cryptocurrency market.

Fear & Greed Index | Source: Alternative

US Federal Funds Rate Decision in Highlights This Week

The FOMC minutes from the June meeting revealed that Fed officials continued to anticipate that further increases in the fed funds rate would be reasonable and supported a 50 or 75 basis point increase in July.

Officials also emphasized that the US economic outlook merited adopting a conservative policy stance. However, they acknowledged that an even more stringent posture might be necessary if persistently elevated inflation pressures persist.

At the same time, they acknowledged that policy tightening could temporarily hinder economic development, but they viewed the return of inflation to 2% as crucial to achieving sustained full employment.

At its June 2022 meeting, the Federal Reserve lifted the federal funds rate by 75 basis points, from 1.5% to 1.75 %, instead of the 50 basis points initially anticipated. Federal Reserve is due to rerelease the policy rate this Wednesday, and economists expect a substantial rise from 1.75% to 2.50%. Typically, a rate hike drives a bearish trend in Bitcoin and altcoins, so it's worth keeping an eye on the rate decision.

Crypto Calendar: Events to Watch This Week

25/07/2022 - FLUX - AVAX Distribution

25/07/2022 - FLUX - Huobi Global Listing

28/07/2022 - Quarterly Testnet Release

31/07/2022 - Vasil Hardfork

31/07/2022 - Planned Obsolescence

31/07/2022 - Permissionless OnFlow

Bitcoin (BTC/USDT) Analysis on KuCoin Chart

Bitcoin is currently trading at $22,050 after being rejected at the $24,000 level. BTC has already completed a 38.2% Fibonacci retracement, now acting as a resistance at $23,050. Bitcoin's trading bias shifted from bearish to bullish after it bounced off the $18,700 triple bottom support level.

The BTC/USDT has formed an ascending channel on the 4-hour timeframe, which may provide support at $19,750.

BTC/USDT Chart on the Daily Timeframe | Source: KuCoin

Typically, upward channels drive a bullish market trend. As a result, we must keep an eye out for any positive fundamentals in the market.

The immediate resistance levels for Bitcoin remain at 23,350 and $24,700. At the same time, the support levels are around $21,074 and $18,960, respectively.

Did you know that KuCoin offers premium TradingView charts to all its clients? With this, you can step up your Bitcoin technical analysis and easily identify various crypto chart patterns.


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