Bitcoin is hovering around $29,000 within two weeks, but market analysts forecast more disturbing decreases.
Breaking through $30,000 remains challenging as the largest cryptocurrency has been stuck at around $29,000 over the last two weeks, according to on-chain data. Bitcoin is trading at $29,003 at the writing time, a 2.02% decrease within 24 hours.
Bitcoin’s market capitalization fell below $564 billion, while the 24-hour cryptocurrency trading volume plunged 14.16% to $33.48 billion. The total cryptocurrency market capitalization reached $1.16 trillion, a 2% decline in one day.
Why is The Market Down?
As Bitcoin’s price hits a roadblock, altcoins face headwinds. The altcoin leader Ethereum is reportedly down 1.41% amid a wave of Ethereum ETFs filings.
By the end of July, Volatility Shares allegedly filed for a new Futures ETF called “Ether Strategy ETF.” Following Volatility’s move, other institutions, including Bitwise, Roundhill, VanEck, Proshares, Grayscale, and Direxion. Despite the recent movement, Ethereum doesn’t gain the upper hand.
Other altcoins are in the red. Specifically, BNB is down 2.26%, XRP is down 4.51%, ADA is down 3.75%, and DOGE is down 4.66%
The reasons why the crypto market is down, according to market analysts, lie in the recent attacks targeting DeFi protocols on Curve Finance and the macro scenario.
The current low inflation and steady growth economic landscape could benefit risk assets, including cryptocurrencies, as it would give the Federal Reserve room to lower interest rates. However, there are concerns that the crypto rally could stall in the near future if the Fed continues to raise interest rates or if the tightening of monetary policy has already pushed the economy into a recession.
As inflationary pressures have shown signs of cooling down, many believe the tightening process may end. This sentiment had initially contributed to the rally in the cryptocurrency market earlier this year, along with optimism surrounding the potential licensing of spot Bitcoin exchange-traded funds (ETFs) in the United States.
However, after these developments, the momentum in the cryptocurrency market has faltered. Several factors have influenced this trend, including regulatory uncertainties on digital assets within the U.S. and issues within the decentralized finance (DeFi) sector, which have impacted investor sentiment and trading activities.
Curve Finance, a well-known decentralized protocol for stablecoins, has been in the spotlight after a recent hack involving the Vyper programming language.
There are concerns that this incident could potentially lead to significant selloffs and trigger a domino effect across the entire crypto market, reminiscent of the fallout that occurred after the collapse of LUNA during a similar period last year.
Curve DAO token ($CRV) lost 22.18% of its value in 7 days, according to data from CoinMarketCap.
MicroStrategy Bought Additional Bitcoin
MicroStrategy, a renowned Bitcoin holder with a significant Bitcoin vault valued at over $4.5 billion, remains steadfast in its commitment to holding Bitcoin. Despite the challenges the cryptocurrency market faces, billionaire Michael Saylor’s company hasn’t backed down from its Bitcoin holdings.
According to Q2/2023 financial report, MicroStrategy continued to bolster its Bitcoin portfolio by purchasing an additional 467 Bitcoin (BTC) in July, amounting to a total cost of $14.4 million. This brought the company’s total Bitcoin treasury holdings to 152,800 BTC, acquired at an average purchase price of $29,672 per BTC, corresponding to a total value of $4.53 billion.
MicroStrategy intends to further enhance its Bitcoin holdings by investing an additional \ $750 million in the near future, as stated by the firm. Despite the challenging market conditions, the company believes in Bitcoin’s value as a strategic asset.
While ETFs are a hot topic, there are other macro factors in play. It appears that the interest rate cycle is about to flip, with the recent rate cut by Brazil’s central bank signaling that it may be time for lower rates globally.
Lower rates will likely push cryptos up, which could mark the end of the bear market.