BTC is range-bound, shrugging off the weakness in equities

Market overview

The crypto market capitalisation has changed little over the past 24 hours, remaining close to $2.19T. Still, polarisation within the market has intensified, widening the trading range of the most actively traded coins. The top three performers were IOTA (+3.9%), Polkadot (+2.8%) and Hedera (+2.5%); the three worst performers were Immutable (-5.6%), Near Protocol (-3.6%) and Internet Computer (-2.9%). Once again, the crypto market showed a negative or virtually non-existent correlation with the equity market, which saw a significant sell-off on Tuesday.

Bitcoin touched the $65K level at the start of US trading on Tuesday, but was subsequently met with cautious yet fairly persistent selling pressure, pushing the price down to $64.3K. A sequence of lower local highs and higher lows suggests that the battle is centred around the $63.7K level. We will only be able to say that BTC has chosen a direction once it breaks out of the $62.7K-$65.3K range. Although the short-term divergence between Bitcoin and equities is nothing new, a sustained decline in equities will drag cryptocurrencies down with it, starting with the flagship asset.  

News background

Bitcoin is showing gains on some days, but continues to underperform the stock market. Over the past three months, BTC has outperformed the S&P 500 index in only 37.8% of trading sessions, a six-year low, according to Glassnode.

Bitcoin funding rates have returned to this year’s highs, reaching a 20-month peak. Sentiment in the derivatives market is positive for the leading cryptocurrency, with the majority of traders opening long positions, according to CryptoQuant.

There are currently 9.57 million bitcoins in private wallets, representing 45.6% of the total supply of the leading cryptocurrency, according to River’s calculations. Of these, 1.62 million BTC (7.7%) are considered irretrievably lost. Centralised crypto exchanges hold 2.91 million BTC (13.9%), while third-party custodial services control 4.66 million BTC (22.2%). Exchange-traded funds (ETFs) hold 1.51 million BTC (7.2%), while public companies hold 1.05 million BTC (5%).

Harvard maintained its investment ($101.4 million) in BlackRock’s Bitcoin ETF at the end of the second quarter. Before this, its holdings in the fund had been reduced for two consecutive quarters.

Bitmine increased its Ethereum purchases by a third last week. The company purchased an additional 9,926 ETH, bringing the total amount of Ethereum in its reserves to nearly 5.82 million coins. To reach its target of acquiring 5% of the Ethereum supply, the company needs to purchase a further 220,000 ETH.  

Summary: The crypto market is stable at $2.19T, with BTC range-bound between $62.7K and $65.3K. Derivatives are supporting a bullish sentiment, but institutional flows remain mixed.