Crypto: Bears remain in control

Market overview

The crypto market has lost just over 2% compared to its level seven days ago. However, there were signs of a positive trend on Monday, as the market capitalisation rebounded from a local low of $2.16T to $2.18T. The market continues to hover around its 50-day moving average, consolidating within a very narrow range despite the weakening dollar and a rally in the equity market. Among the top cryptocurrencies over the past 24 hours, the top gainers were Zcash (+4.8%), Dash (+2.4%) and Near Protocol (+1%). Declines affected roughly twice as many coins, with the biggest losses seen in Cosmos (-3.8%), Aptos (-2.7%) and Filecoin (-2%). 

Bitcoin has been trading below its 50-day moving average for the fourth day in a row, after an earlier attempt to break above it, followed by a pullback to $63.3K. On weekly timeframes, the leading cryptocurrency remains below the 200-week MA. Thus, the bears are confirming their dominance in both the medium-term and ultra-long-term trends. It will only be possible to speak of a breakout from consolidation and expect increased volatility once the price breaks out of the $62–65K range. 

News background

Claims that the crypto market is dead or nearing its end are appearing with increasing frequency on social media. Santiment believes that this situation, against a backdrop of growing pessimism, may be attractive to long-term buyers.

The crypto market has entered the final phase of the bear cycle. According to estimates by DeFi Report, around 85 per cent of the cycle is already behind us, and how the situation develops from here will depend on global macroeconomic events.

Under a new methodology, the Bitcoin treasuries of Strategy and Metaplanet could be excluded from MSCI indices for holding non-operating assets. No decision has been made yet, and MSCI is gathering feedback until 30 September, promising to publish the results by 16 October. JPMorgan previously estimated a potential outflow from Strategy’s securities under such a scenario at $2.8 billion.

According to estimates from Miner Weekly, public Bitcoin miners have reduced their hash rate by 21 per cent over three quarters due to redeploying capacity to AI infrastructure. The current decline is attributed to a weak mining economy and competition for capital and electricity from the AI sector.

FG Nexus, which held 50,000 ETH, sold off its entire cryptocurrency holdings and wound up its Ethereum strategy less than a year after its launch. The total net loss from holding crypto assets reached $45.2 million. Income from staking amounted to just $144,000.

Hyperscale Data has reduced its Bitcoin reserves to approximately 275 BTC after selling around 685 BTC. The proceeds will be used to develop a data centre in Michigan, service debt and cover other expenses. The company will continue to mine Bitcoin and expects to build up its reserves over time. 

Summary: The crypto market remains under pressure: Bitcoin is trading below key moving averages, bears are in control of the trend, and news is fuelling investor caution.