Cryptocurrency

Bullish Sentiments Amidst Bearish Trends: Analyzing Current Crypto Market Conditions

Bullish Sentiments Amidst Bearish Trends

Bitcoin prices continue to trade sideways as we enter the 2nd month of summer. We officially entered July after ending Q2 of 2024 at a negative performance of 11.92%, according to CoinGlass. As of writing, BTC/USD has been trading under $63K. 

Compared to Bitcoin, ETH’s price only went down by 5.74%, as it now trades at $3,470. The second-largest cryptocurrency, however, has yet to make a new all-time high (ATH). 

The total crypto market capitalization, meanwhile, is at $2.44 trillion, still stuck under the $2.89 trillion high from mid-March, when BTC hit its $73,740 peak. Much like the ETH price, the total market cap has yet to surpass its 2021 ATH, which exceeded $3 trillion. 

June has been a rough month in terms of price as the market recorded double-digit declines in prices. While some coins did record gains, the month predominantly saw unfavorable market conditions. Now, moving forward in this new quarter, market participants are likely to witness continued turbulence.

This is due to several factors, including the defunct Bitcoin exchange Mt. Gox, which is meant to repay more than 140,000 Bitcoins. Then there’s the German government, which has started selling its Bitcoin with 46,359 BTC still left to be sold. The US government is further adding to this pressure, having sent 3,940 BTC to exchanges for selling. So, there are clearly tough times ahead, though it’s all in the near term.

“The crypto market is currently going through a turbulent time, but it’s all within a bull market, so good things are ahead. While prices aren’t green right now, they have started to look attractive and present a good opportunity to get in before things take a turn for the better,” said Sarun Vichayabhai, CEO of Playbux. “So, instead of getting chopped during the slow months of summer, this time should be utilized to build a position for the upcoming bull times and delve deeper into all the development happening in the crypto space, and there’s a lot going on.”

This is evident from the crypto startup funding data which showed a surge of 40.3% to $2.4 bln in Q1. The focus of funding going forward is expected to be focused on real-world applications of blockchain. As for the trends, tokenization of real-world assets (RWA), the intersection of AI and crypto, staking, and meme coins are leading the market.

“Crypto, along with AI, in particular, will play a critical role in the future as we march toward the hyper-financialization of everything. This shift has already begun with features like Play to Earn, Shop to Earn, Walk to Earn, Contribute to Earn, and much more,” noted Sarun.

“Through these features, users can earn rewards while performing their regular tasks, achieving financial independence, and being encouraged to lead healthier, more fulfilling lives. Moreover, as digital and physical realms merge rapidly, we need to make the metaverse easy for people to engage with and have fun to drive this space forward.”

What’s on the Horizon? Bulls or Bears

While there is considerable debate among market participants about which stage of the bull cycle we are in, there is a broad consensus that it is not over yet. Accordingly, the ongoing drawdown and lack of price action can be viewed as summer doldrums before the market returns to exuberance.

This time is already being utilized by tech giants, with Sony planning to restart the crypto exchange Whalefin soon with a new app. In a notice on Monday, Whalefin said that parent company Amber Japan (rebranded from deCurret after being taken over by crypto lender Amber Finance in 2022) was rebranding to S.BLOX and that it was bought by a Sony unit, Quetta Web, last year in August.

Meanwhile, Japanese investment giant Nomura and its crypto subsidiary Laser Digital reported that more than 54% of managers are planning to invest in cryptocurrency over the next three years. The survey of 547 managers stated that 62% of managers see crypto as a diversification opportunity and could allocate between 2% and 5% of their AUM to it. The debt load of Japan and the local currency’s exchange-rate volatility, in particular, are concerning the managers, with 80% of them planning to invest in crypto over a year.

Besides all this, according to Sarun, the primary bullish event on the horizon is the debut of the Ethereum Spot ETF. “When these products finally start trading, excitement and investment will flow back into the sector,” said Vichayabhai. 

The US SEC actually returned S-1 forms of prospective ETF issuers last week with light comments that need to be addressed before they can be refilled by July 8. So, there needs to be yet another round of filing before ETFs could eventually start trading. 

While the market was previously expecting the ETF to go live this week, now only once the agency gives a deadline for the final filings that we’ll have a date. SEC Chairman Gary Gensler had also said last month that Ethereum Spot ETF approvals can come “sometime over the course of this summer.”

Sarun further pointed to crypto “gaining the spotlight in the US Presidential election with Trump going full pro-crypto, declaring himself the ‘crypto president,’” as bullish things. “As election day approaches, crypto will see a lot of attention,” he added.

For now, a mix of apprehension and optimism should be leading the market, with the upcoming Bitcoin sale presenting the biggest challenge for the prices.

Overall, “greater interest from institutions, regulatory clarity in the US, rising monetary policy rate cut expectations, the excitement of meme coins, and the popularity of AI will act as positive catalysts for crypto adoption and prices,” said Sarun.


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