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Optimism may be returning to crypto market – Kraken

After two months of consolidation, is the bull market about to resume?
MicroStrategy says it plans to sell up to $1bn (R14.3bn) in stock to buy even more bitcoin. Image: Chris Ratcliffe/Bloomberg

Optimism may be gradually returning to the crypto markets after May’s frightful drop from all-time highs, according to the latest Kraken Intelligence report.

June marked the second month of range-bound trading for bitcoin (BTC) as the bulls and bears battled for control between $30 000 and $42 000. BTC retreated 50% from its April high of $65 000.

Despite slipping to a five-month low of $28 816, a modest rally in the last week of June rescued what might have been a disastrous month for BTC, which ended the month just 6% down on the start.

“The BTC bulls successfully defended $30 000 support on several occasions in June, but such doesn’t rule out the possibility of a drift lower in the month(s) ahead,” says Kraken Intelligence.

“Headlines out of China [imposing bans on bitcoin mining] spooked the market in May and June, making newcomers fearfully question what impact the second-largest economy could have on crypto assets.

“But when looking back as far as 2013, one will find that negative headlines out of China only temporarily weigh on the market.”

Read: China’s Bitcoin crackdown sets up record tweak to mining puzzle

BTC volatility hit a peak in June, notwithstanding a 36% drop in trading volumes. Volatility has since started to cool off.

Movement

BTC’s share of the crypto market slipped to 39.6% in May, but later recovered to 48.3% as market participants cycled back into BTC in the face of a market-wide sell-off.

Ethereum’s (ETH) slump was even more dramatic, trading down from a May high of more than $4 000 to $1 700, a drop of 58%. The price has since recovered to $2 300. The number of r/Ethereum subreddit subscribers surpassed the one million mark, signalling growing interest and adoption of the second-largest crypto asset by market cap.

‘Gas’ fees, or the price of transacting on the Ethereum network, dropped 97% between May and June due to the rollout of infrastructure upgrades and lower demand for network usage (such as for decentralised finance, non-fungible tokens, or NFTs, and decentralised exchanges).

Read: Crypto exchange’s plan to disrupt the payments market kicks off

Cardano (ADA) outperformed many of its peers in June, despite dropping 20%, in part due to the realisation of the long-held promise of delivering smart contracts (contracts that are executed by software rather than intermediaries and lawyers).

Overall, June was a month of market-wide derisking, prompting market participants to flock to BTC, the crypto market’s safe haven asset, says Kraken Intelligence.

After two months in the doldrums, NFTs stole the spotlight in June as the best performing sector with a 13% loss, the smallest loss of all crypto assets for the month. Kraken says this outperformance is explained by celebrity adoption, capital investment and ongoing innovation.

Bitcoin still has some ‘fear factor’

Though there has been some recovery in the BTC price, it still remains in the ‘Fear’ zone, according to Kraken Intelligence, while the accompanying market dominance chart shows BTC hovering around 50% of the total crypto market in terms of market cap.

Source: Kraken

China may have gone frosty on cryptos, but El Salvador has granted it legal tender status, Mexico is looking at broader adoption, and the Indian government is reportedly looking at classifying BTC as an asset class, moving away from its initial plan to impose an outright ban on private crypto.

MicroStrategy, whose CEO Michael Saylor has championed BTC, completed its $500 million offering of secured notes due in 2028 at an annual interest rate of 6.125%. The company says it plans to sell up to $1 billion in stock to buy even more BTC.

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“Articles” like this advertorial should be marked as sponsored content. Because really, offering El Salvador as a counterbalance to China, is just pathetic.

please just stop. These articles makes Moneyweb looks like an average amateurish website. It is already sad enough that SA Rugby is so out of money that they need to be sponsored by Luno!

Oh really, lets have this conversation in a years time.

Yeah, let’s have this conversation a year from now with all the cynics. If I did not jump off their ship that’s going nowhere where would I be now, crying tears.

Heres a comment of mine from a past moneyweb crypto article. Enjoy.

So how much would my investment of hundred thousand rand invested in Ethereum be now when the crypto was hundred dollars sometime last year March 2020. What’s the bloody price now. even with all the horrendous price fluctuations the past years? I gather, based on proper analysis and research of technology trends, that by December this year into 2022, next year the price will be $10 000 or more, due to the system’s network affect. Yes, there will be corrections, even a high chance of another horrendous crash, no doubt. Been through these crashes before, it comes with the territory, and the technology just seems to push ahead. Who said great change does not come with great scary upheaval inbetween? But, my goodness, opportunity abounds plenty in this space. If one can just puts some effort into understanding the space, and what is going on, how it works, instead of being cynical – the opportunity cost of being cynical in situations like this is just too high. Cheers, I need to go and check my investment.

Nice comment. I think there’s a simple question you can ask.

Is the age of cryptos over, or has it scarcely begun?

Shibaswap just launched

End of comments.

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