Market Deep Dive: Crypto Market Dynamics From Sideways Trading To Regulatory Moves

From last Friday until Thursday, BTC traded in a tight range between $25,600 and $26,100, only dipping last Friday and Wednesday evening to the 25,400 levels. Since last Friday, ETH was also trending sideways until Thursday in the $1,600-$1,650, and only managed to break through on Wednesday to $1,670 after Cathie Wood’s ARK Invest and 21Shares submitted a filing to the SEC seeking regulatory approval for a Spot Ethereum ETF. Despite the news, the ETH price returned to its range within an hour. On late Thursday afternoon, during Asia open, BTC experienced slight gains, potentially driven by talks of global crypto regulation highlighted in a recent G20 paper. BTC then left this range and is trading currently in the $26,150-$26,450 boundaries, while ETH was not able to fully break through the upper range, forming a band around $1,640-$1,660 levels.
On the altcoin side, market activity remains subdued with spot market volumes hitting a four-year low last month at $475 billion. In a significant move for the crypto industry, the Financial Accounting Standards Board (FASB) revised the accounting treatment for digital assets, allowing them to be marked at fair market value, promoting broader crypto adoption. Then again, the PERP token of the Perpetual Protocol surged by more than 200% over the past few days (peaking at 1.25), experiencing both record volumes and record open interest.
On the macro side, Tuesday highlighted a shift from potential rate hikes to potential rate cuts in the US, with 10-year rates rising to 4.25%, influenced by Fed Governor Waller’s comments. European PMI data (Composite, Services and Construction PMI all lower than forecasts) weighed on the markets, causing major global indices to decline and the USD to strengthen.
By Wednesday, a robust Non-Manufacturing ISM performance (act. 54.5, exp. 52.5) pushed the 10-year rate to 4.30%, causing US indexes to dip. However, the final S&P Global Services PMI dropped slightly to 50.5 from 51.0, highlighting caution in assessing the ISM outcome. Notably, Apple grappled with China’s iPhone ban for officials, while China’s trade data showed lesser-than-expected declines (Exports YoY: act. -8.8%, exp. -9.2% / Imports: -7.3%, exp. -9.0%).
Come Thursday, dovish tones from Fed Speakers caused the 10-year yield to lose some of its earlier weekly gain (down to 4.22%). Again, Apple’s vulnerabilities in the Chinese market, and a wide sell-off in chip stocks remained a focal point.
While overnight Japan showed weak GDP numbers (GDP YoY act. 4.8%, exp. 6.0%), this morning Germany released CPI numbers in line with forecasts at 6.1% YoY and 0.3% MoM. Furthermore, French industrial production in July surged by 0.8%, significantly outpacing the anticipated 0.1% growth, causing European stocks to rise in the morning.
All in all, this week was not marked by big macro data and economic events, while the upcoming week promises heightened activity with a focus on US CPI on Wednesday, US PPI, and the ECB interest rate decision on Thursday. With the Fed’s emphasis on data-driven decisions, all eyes will be on inflation metrics, alongside a 65% anticipation of the ECB holding rates steady on Thursday.
A brief look at the volatility landscape reveals that BTC’s 30-day at-the-money implied volatility has stayed flat at 35% (+1% WoW; mainly increased due to yesterday’s rally -3% during the week), while ETH’s is slightly lower at 30% (-1% WoW). Even with yesterday’s price rise, traders have taken a more bearish stance in the medium term as the 25-delta skew for the 7- to 90-day range is trending lower and remains in negative territory (i.e. puts cost more than calls).

Read more News here.

Möchten Sie das volle Potenzial digitaler Assets ausschöpfen?

Unser Newsletter hält Sie auf dem Laufenden