The total cryptocurrency market cap has fluctuated in the 17% range in the $840 billion to $980 billion range over the past 28 days. Price action is relatively tight given the intense uncertainty surrounding recent market selling triggers and the controversy surrounding Three Arrows Capital.
Total cryptocurrency market cap, billion USD. Source: TradingView
From July 4-11, Bitcoin (BTC) gained a modest 1.8% while the price of Ether (ETH) held steady. More importantly, the entire cryptocurrency market has fallen by 50% in just three months, which means that traders are giving higher odds of a breakout of the descending triangle formation below the $840 billion support.
Regulatory uncertainties continue to weigh on investor sentiment after the European Central Bank (ECB) released a report concluding that a lack of regulatory oversight has fueled the recent collapse of the algorithmic stablecoin. As a result, the European Central Bank recommended supervisory and regulatory measures to contain the potential impact of stablecoins on the financial systems of European countries.
On July 5, John Cunliffe, the Bank of England’s Deputy Governor for Financial Stability (BoE), recommended a set of regulations to address risks in the cryptocurrency ecosystem. Cunliffe called for a regulatory framework similar to traditional finance to protect investors from irrecoverable losses.
Few mid-sized altcoins rose and sentiment improved slightly
Bearish sentiment has dissipated from late June according to the Fear and Greed Index, a data-driven gauge of sentiment. The index reached a record low of 6/100 on June 19 but improved to 22/100 on July 11 as investors started to build confidence at the bottom of the market cycle.
Fear and Greed Index in Cryptography. Source: Alternative.me
Here are the winners and losers from the past seven days. Note that a handful of medium-cap cryptocurrencies are up 13% or higher despite increasing their overall market capitalization by 2%.
Weekly winners and losers among the top 80 coins. Source: Nomex
Aave (AAVE) gained 20% as the lending protocol announced plans to launch an algorithmic stablecoin, a proposal that is under the sway of the Decentralized Independent Community Organization.
Polygon (MATIC) is up 18% after projects previously operating in Terra (LUNA) – now called Terra Classic (LUNC) – the ecosystem began to migrate to Polygon.
Chiliz (CHZ) is up 6% after the Socios.com app announced community-related features to boost user engagement and integration with certified third-party developers.
The demand for flow and derivatives in Asia is neutral and balanced
The OKX Tether (USDT) premium measures the difference between China-based peer-to-peer trades and the official US dollar currency. The excessive hashing demand for the cryptocurrency is putting pressure on the index above the fair value at 100%. On the other hand, bear markets are likely to drown out the Tether (USDT) market supply, causing a discount of 4% or higher.
