Market sentiment turns cautious as BTC falls below $58,000
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Market sentiment turns cautious as BTC falls below $58,000
U.S. stocks continued to rise, but the crypto market failed to gain momentum.
Navigating Web3 tides with focused insightsBy Mary Liu, TechFlow
Latest data shows that U.S. retail sales rose 1% month-on-month in July to $709.7 billion, indicating continued strength in consumer spending and the labor market, easing concerns about an economic downturn. U.S. equities extended gains, with the Dow Jones Industrial Average up 1.3%, the S&P 500 rising 1.6%, and the Nasdaq climbing 2.3% by Thursday’s close—marking six consecutive days of gains for both the S&P 500 and Nasdaq.
However, the crypto market failed to gain momentum. During early trading, Bitcoin bulls pushed the price above $60,000 before a sharp reversal; midday saw a rapid 4.7% drop, bringing prices to their lowest level since early August's market panic. At the time of writing, Bitcoin was trading at $57,584, down 2.35% over 24 hours.
Altcoins broadly declined. Among the top 200 tokens by market cap, Mog Coin (MOG) dropped 17%, Dymension (DYM) fell 12.2%, and Popcat (POPCAT) declined 11.6%.
The total cryptocurrency market capitalization currently stands at $2.02 trillion, with Bitcoin holding a 55.7% market share.
Spot Market Daily Volume Declines
Data from The Block shows that the seven-day moving average of Bitcoin trading volume has fallen from $19.62 billion to $11.5 billion over the past week. The seven-day moving average of total spot market volume across major exchanges including Binance and Coinbase also dropped from over $60 billion last Thursday to more than $36 billion today.
Crypto Traders Remain Cautious
With global economic data remaining volatile, cryptocurrency markets are currently underperforming relative to the Nasdaq. According to Thursday’s Coinbase Weekly report, participants in the crypto market are expected to remain cautious.
Coinbase analyst David Duong said: "We expect market participants to remain cautious regarding their risk exposure over the coming weeks. Currently, ETH and Solana show higher sensitivity to the broader crypto market, with beta values of approximately 0.85 and 0.83, respectively." Analysts noted that ETH and Solana have been key "beta coins" in the crypto market, exhibiting greater volatility than the overall market.
Eliézer Ndinga, Head of Strategy and Business Development at 21Shares, stated that recent inflation data indicate a cooling yet stable inflation environment—a critical development for the crypto market, especially following last week’s broad market weakness. However, BTC did not respond positively to this week’s inflation data and instead trended downward while U.S. stocks rose. Inflation data released Wednesday showed that the U.S. core consumer price index rose at its slowest year-over-year pace since 2021.
Ndinga added: "As inflation has come in as expected, the likelihood of a 25-basis-point rate cut by the Federal Reserve has increased, which could support risk assets. However, Bitcoin and Ethereum reacted negatively immediately after the rate cut, possibly because the market had hoped for a more dovish stance from the Fed."
The CME FedWatch tool indicates that traders are pricing in a 74% probability of a 25-basis-point rate cut in September and a 26% chance of a 50-basis-point reduction.
Bitcoin Still on Track to Reach $150,000
TradingView analyst TradingShot noted: "Bitcoin closed higher last month (July), and although August started with a significant decline, the market successfully recovered much of the lost ground before mid-month. This suggests strong buying interest at the 0.786 Fibonacci retracement level of Bitcoin’s all-time high (ATH) from 2021."
TradingShot analyzed BTC’s current monthly chart and the "bullish crossover" in MACD.
He said: "Over the past decade, we’ve only seen this pattern five times—and each occurred during a bull cycle. The most recent instance was in June 2023. Needless to say, BTC experienced a notable rally afterward (the first leg of the bull cycle)."
He pointed out: "From a cyclical timing perspective, the June 2023 crossover resembles bullish crossovers in November 2019 and December 2015. Those formed 25 months and 23 months, respectively, after the prior cycle peak, and in both cases, BTC peaked exactly 24 months (731 days) later."
TradingShot emphasized that the June 2023 MACD bullish crossover "formed 19 months after the previous cycle peak, so if it follows prior peak patterns, Bitcoin should reach its peak around June 2025."
Referring to a "more conservative path within the upward channel," TradingShot said: "If BTC reaches the upper boundary of the dashed channel, its price would hit $150,000—a very attractive level at which to start taking long-term profits."
Regarding catalysts for fueling the next crypto bull run, Charles Edwards, founder of Capriole Fund, highlighted “explosive” global money supply growth in a post on X.
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