Crypto took the stock market rally with caution

Market overview

The crypto market capitalisation has risen by 1% over the past day to $2.21T, returning to the levels seen at the end of last month. Over the past 24 hours, the top performers among the most actively traded altcoins were Theta (+5.6%), SushiSwap (+4.2%) and Aptos (+3.2%). The biggest declines were seen in Aave (-3.4%), Basic Attention Token (-3.2%) and Algorand (-2.7%). The recovery in risk appetite across global markets has once again had a knock-on effect on cryptocurrencies, as hopes for the imminent adoption of the CLARITY Act fade and shares are increasingly seen as a competitor, drawing interest and capital away from cryptocurrencies.

Bitcoin approached $65K, its highest level in five days. This achievement does not seem particularly significant against the backdrop of the impressive rally in US equity markets and the surge in precious metals prices on Wednesday. It appears that traders in the leading cryptocurrency do not consider this surge in risk appetite to be favourable for cryptocurrencies. In previous prolonged downtrends, confident buying by a broad range of participants began after the 200-day moving average turned upwards and the price consolidated above it. This approach does not allow one to buy at the lowest price, but it optimises the duration of the drawdown, given market uncertainty.  

News background

The crypto market is in the late stages of a bear market but has not yet bottomed out, according to Glassnode, citing a composite indicator of 45 Bitcoin on-chain metrics. Weekly inflows into spot Bitcoin ETFs have resumed, while the number of active addresses and adjusted transaction volumes on the BTC network has risen sharply. Wintermute echoes this view, noting that major cryptocurrencies have remained resilient amid macroeconomic turmoil. Selling pressure is nearing exhaustion.

Prolonged regulatory uncertainty is holding back some professional investors from investing in cryptocurrencies, Bitwise notes. Consideration of the CLARITY Act in the US Senate may be postponed until September or December. Polymarket estimates the probability that the bill will be signed into law by the end of this year at 15%, down from 82% in February.

According to Lookonchain, Strategy and MARA have transferred 7,030 BTC, worth around $450 million, to new addresses. This may indicate a readiness to sell the asset. MARA remains among the top five corporate holders of Bitcoin.

The collapse of the AI bubble is inevitable, according to BitMEX co-founder Arthur Hayes. In such a scenario, reminiscent of the 2008 mortgage crisis, the authorities will be forced to prop up the financial system with new economic stimulus programmes, causing Bitcoin to rise to $1 million. 

Summary: The crypto market is rising slightly in line with risk appetite, but BTC is lagging behind equities. Regulatory uncertainty and potential BTC sell-offs are dampening optimism.