Bitcoin trades flat after losing US$31,000 peg; Solana gains; Polygon, BNB lead losers
Bitcoin and Ether traded little changed on Wednesday morning in Asia, while the rest of the top 10 non-stablecoin cryptocurrencies were mixed. Bitcoin fell back under US$31,000, but its dominance in total crypto market cap is gaining, a sign of market recovery. Solana added to its gains this week, while Polygon’s Matic and the BNB tokens led the daily losers list. Bitcoin Cash has taken the number 12 spot in the list of top tokens by market cap after its listing on the new EDX Markets exchange.
Crypto price pause
Bitcoin fell 1.0% over the last 24 hours to US$30,801 at 07:20 a.m. in Hong Kong, shaving its weekly gain down to 0.39%, according to data from CoinMarketCap. On Tuesday, the price of the world’s largest cryptocurrency reached US$31,371, its highest since June 2022, on the back of optimism about spot Bitcoin exchange-traded fund applications by a raft of Wall Street heavyweights, including Blackrock.
The level of Bitcoin dominance sits near 50%, which is the highest since April 2021. Alex Kuptsikevich, senior market analyst at FxPro, says this price uptrend in Bitcoin is a typical market recovery pattern in which the most significant asset in the sector attracts buyers first.
“It will probably take about a year of Bitcoin price recovery before crypto enthusiasts start looking for one with higher risk, pushing altcoins higher and leading to a new wave of capitalisation swell,” said Kuptsikevich, in an email statement. He said he doesn’t see altcoins rallying before November.
Bitcoin’s recent price recovery was sparked by Blackrock, the world’s biggest asset manager, filing an application last month to launch a Bitcoin ETF and refiling it again after the U.S. Securities and Exchange Commission (SEC) indicated it lacked details.
Several other U.S.-based asset managers, such as Fidelity Investments and WisdomTree, have filed their own Bitcoin ETFs, suggesting mainstream finance recognizes the Bitcoin opportunity and wants to offer clients the access to its price movements without actually owning the token.
Ether, the second-largest cryptocurrency by market cap, looked to be on a run to break US$2,000 this week, but fell back 0.81% to US$1,941 today after a gain of 2.64% for the past seven days.
The other top 10 cryptocurrencies by market capitalization traded mixed to flat, with Solana leading gainers with a 2.0% rise to US$19.45. The token has surged 15.35% in the past week.
Polygon’s Matic and Binance’s BNB token were amongst the losers — Matic lost 1.99% to US$0.6981, though it’s still up 4.29% for the week. BNB lost 1.68% to US$242.83, cutting its weekly gain to 1.81%.
Altcoins have suffered from the SEC’s crackdown on tokens that they deem financial securities. Solana, Cardano, Polygon and BNB were among those that the regulator named as unregistered securities in its lawsuits filed against the Coinbase and Binance.US exchanges in early June.
While these altcoins have partially recovered after an initial plunge following the SEC suits, several trading platforms including California-based Robinhood Markets Inc., Israel-based eToro and UK’s Revolut ceased support or limited access to some of these tokens for their U.S.-based customers.
Bitcoin Cash climbed to become the twelfth largest non-stablecoin cryptocurrency by market capitalization on CoinMarketCap at US$53.8 billion. The Bitcoin spin-off is one of the four cryptocurrencies listed on EDX Markets, the Wall Street-backed, compliance-focused crypto exchange that launched on June 20 in the U.S.
Bitcoin Cash had a market capitalization of US$20.6 billion and was valued at US$106.34 on June 19. It has since surged 160% to US$276.87. It dipped 1.70% in the last 24 hours.
The total cryptocurrency market cap fell 0.80% to US$1.21 trillion in the last 24 hours, while crypto trading volume fell 22.22% to US$31.14 billion, according to CoinMarketCap data.
Azuki dents NFT sentiment
The indexes are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.
The Forkast 500 NFT index rose 1.28% in the 24 hours to 07:45 a.m. in Hong Kong to 2,783.58, but logged a loss of 3.17% for the week. The two Forkast indexes measuring the performance of Ethereum and Polygon NFT markets rose.
However, despite moderate gains in the indexes on Wednesday morning, the NFT market overall remains in a downtrend, said Yehudah Petscher, NFT Strategist at Forkast Labs, the parent company of Forkast.News.
“The Forkast 500 NFT Index reflects declining sales prices across collections on all chains, but it’s Ethereum that’s really dragging the market down with it,” said Petscher, pointing to the recent problems with the Azuki NFT collection.
“Azuki’s struggles exasperated the already struggling market … Azuki’s new Elementals mint was supposed to be a boom for NFTs and instead was a bust, becoming a catalyst that drove NFT collections down to all-time lows.”
Azuki NFT creator Chiru Labs debuted its latest Elementals collection last Tuesday, to much negative response from the community, who deemed it almost identical to the original Azuki collection.
While the team behind Azuki posted an public apology to buyers on Twitter, dissatisfied Azuki holders formed the Azuki DAO last week and passed a vote on Monday to launch a lawsuit against Chiru Labs, claiming the 20,000 ETH (US$39 million) the company holds should be returned to the DAO.
LegalDAO, the decentralized autonomous organization formed in 2020 by a group of legal professionals, said Tuesday that it will help Azuki DAO in the effort to claim the 20,000 ETH.
By NFT collections, Bored Ape Yacht Club topped the trading volume rankings on Cryptoslam with US$3 million, but the volume was down 18.97% on the day. Mutant Ape Yacht Club, another Yuga Labs’ Ethereum-based collection, saw its volume grow 11.94% to US$2.39 million to place second in the rankings.
Total NFT trading volume dropped 9.24% to US$31.5 million. Volume on Ethereum fell 9.17% to US$22.7 million according to Cryptoslam data. Volume on the Bitcoin network gained 3.73% to US$3.19 million, while volumes on Polygon, Solana and BNB all plunged.
U.S. equity futures drop during holiday
U.S. stock futures dipped as of 10:45 a.m. in Hong Kong ahead of the restart of trading in the U.S. following the July 4 public holiday.
Futures on all three indexes – Dow Jones Industrial Average, S&P 500 futures and Nasdaq – declined but by less than 1%.
Asian equities opened lower Wednesday morning. The Shanghai Composite fell 0.5%, Hong Kong’s Hang Seng dipped 1.3%, Japan’s Nikkei 225 index edged down 0.3%. South Korea’s Kospi also lost 0.08%.
The Caixin China General Composite purchasing managers’ index (PMI) — a measure of the performance of both the manufacturing and services sectors in China — dropped to 52.5 in June from 55.6 the previous month. This marks the sixth consecutive month of expansion for China’s private sector. However, the growth rate was the slowest since January.
Employment in China also returned to growth, as the service sector created more jobs following a drop in manufacturing payrolls, according to Trading Economics.
In the U.S., New York Federal Reserve President John Williams’ speaks on Wednesday and may provide an update on the Fed’s view of inflation. The Fed will also release its June meeting minutes on Wednesday, where it decided to leave interest rates unchanged between 5% and 5.25%.
The Federal Reserve’s next meeting on rates is July 26. The CME FedWatch Tool predicts a 87.4% chance for a 25-basis-point rate increase, down from 89.9% on Tuesday. The likelihood the Fed won’t increase is now at just 12.6%.
(Updates to add equities section)
