Crypto pulls back, but greed lingers

Market overview

The crypto market capitalisation is 2% higher than a week ago, but at $2.86T it is 3.7% below last Wednesday's peak. Cryptocurrencies are pulling back after a sharp rally, but so far this is not happening as sharply as in metals, let alone bonds. It is logical to expect a technical retest of the previous local highs in the $2.75T–$2.80T range. Only a sustained fall below this level should be viewed as a warning sign that a medium-term peak is forming. Although the trend over the past 24 hours has been predominantly downward, some coins continue to rise. The top gainers were The Graph (+18.1%), Immutable (+9.7%) and Hedera (+3.5%). The biggest fallers were Uniswap (−9.7%), Bitcoin Cash (−9.6%) and Dash (−6.9%). 

The sentiment index stood at 74 on Monday, remaining on the verge of entering the 'extreme greed' zone. This is a commendable sign of resilience against the backdrop of a price pullback and stands in striking contrast to the 'fear' that has characterised the stock market for the past 20 days. 

Bitcoin has pulled back to $83K, testing the lower boundary of last week's consolidation range. As with the market as a whole, a retest of the $82K region, where peaks were formed in May and early September, is entirely to be expected under current conditions. Such a sell-off from the highs relieves localised overheating, allowing short-term buyers to lock in some profits. Looking ahead, a sustained return to prices below $80K would be an important signal that the market is not ready to move higher for some time yet. If, however, this consolidation is soon followed by a new bullish momentum, it could send the leading cryptocurrency well above $90K. 

News background

According to SoSoValue, net inflows into spot BTC ETFs jumped to $2.39 billion over the week. Inflows into spot Ethereum ETFs in the US totalled $689.9 million. 

Crypto whales with holdings of between 100 and 1,000 BTC increased their reserves by 113,950 BTC to 5.24 million coins between 15 July and today. Santiment believes this is 'smart money' whose behaviour is worth monitoring. 

JPMorgan cites $85K as the average cost basis for mining 1 BTC. If the leading cryptocurrency fails to rise above this level again, pressure on miners and the risk of forced sales could increase. 

Only 3.49% of Ethereum's total supply remains on major exchanges, down 1.16 percentage points since 1 June amid rising staking volumes and the use of ETH in decentralised finance (DeFi), according to Santiment's calculations. 

The US SEC has updated its frequently asked questions on crypto-assets. According to the document, token buybacks, the development of an existing network, and the promotion of its features do not, in themselves, make a coin a security. Liquid staking assets may also be considered digital commodities in some cases.

Summary: The crypto market has pulled back from its peaks but is holding its ground: BTC is testing support at $82–83K, as inflows into ETFs and whale activity are sustaining interest.