The crypto market has retreated to support levels while awaiting data

Market overview

The crypto market capitalisation fell by 1.1% to $2.63T as investors moved away from risk assets in response to US inflation data. However, the market remains within the consolidation range seen over the last few days, indicating a wait-and-see attitude. At this stage, it is too early to speak of a repeat reversal from the resistance zone, where the market also reversed in May.

Bitcoin fell below $77K on Thursday, hitting an eight-day low, against the backdrop of a sharp rise in US government bond yields following a surge in producer prices, which reinforced expectations of a Fed rate hike. On the weekly charts, BTC is pulling back from the 50-week moving average, undermining the bulls’ efforts. Nevertheless, the price of the leading cryptocurrency is currently finding support from buyers at the lower boundary of the consolidation range.

Ethereum has been trading sideways for some time, unable to establish above $2.5K. Resistance for Ethereum is intensifying at the 200-week moving average, which the leading altcoin has been unable to break through. The situation is further exacerbated by the 50-week moving average falling below the 200-week moving average, forming a ‘death cross’. However, similar signals in 2019 and 2023 did not trigger an intensified sell-off. Conversely, breaking above the longer of these moving averages has triggered rallies on six occasions. 

News background

CryptoQuant highlights the high proportion of large BTC transfers to exchanges, which are often followed by coin sales. Furthermore, the negative Coinbase premium indicates weak demand in the US.

According to Anthony Pompliano, CEO of ProCap Financial, Bitcoin is poised for a major rally following a recent 24.8% seven-day rise. Data on liquidations and the inflow of institutional capital provide further confirmation of the bulls’ strength.

The Bank for International Settlements (BIS) has warned of risks to financial stability due to the boom in investment in artificial intelligence. A correction in the AI market could trigger a global financial crisis.

Bitwise is closing its Dogecoin ETF ten months after its launch. The company attributed the closure to a lack of investor interest. Since the fund’s launch, the meme coin has lost more than 45% of its value. Two other Dogecoin ETFs from different companies remain on the market.  

Summary: The crypto market has fallen amid US inflation and rising yields. BTC is holding its support level, while ETH is stuck below resistance; the news suggests a cautious stance.