The crypto market holds its ground despite the stock market slump

Market overview

The crypto market capitalisation remained at $2.19T, showing little change over the past 24 hours, despite fairly volatile movements in the stock market. The market remains above its 50-day moving average, continuing to signal a fundamental shift in the medium-term trend towards bullishness. The divergence from the equity market, which had worked against cryptocurrencies at the start of the year, has now become a boon amid the sharp sell-off in the Nasdaq tech index. Among the most actively traded coins, performance ranges from a decline of around 2.5% for Dash and Aave to gains of 4% for Uniswap and 2.1% for Zcash. 

Bitcoin is trading at around $64K on Thursday morning, finding support from buyers on dips towards $63K, but lacking the fundamental grounds to resume its upward trend amid the sell-off in the equity market. This is the flip side of the abundance of institutional investors in the leading cryptocurrency. When risk-off sentiment takes hold, it is not only overbought shares that come under pressure, but also cryptocurrencies and metals.

The Ethereum chart has been tracing a near-perfect uptrend for the fourth week in a row. It appears that this trend of methodical buying on dips began as early as the start of June, but a significant downward move at the end of last month disrupted the beauty of the initial picture. Could this be driven by BitMine’s commitment to buying, which is sustaining interest amongst a wider circle of speculators?  

News background

According to CryptoQuant, spot trading volumes for Bitcoin on major crypto exchanges have fallen by 75% from peak levels at the end of 2024.

In July, spot trading activity in the crypto market approached its lowest levels since November 2023, notes K33 Research. Weak activity is also evident in derivatives. July is historically the quietest period of the year for the crypto market in terms of trading volumes.

Institutional investors are adopting a passive stance: ETF inflows are weak, and major players are awaiting clearer signals from the Fed regarding the key interest rate, according to Millpay.

Crypto traders are increasingly opting to trade traditional assets rather than cryptocurrencies. This trend began to develop in earnest following the escalation of the conflict in the Middle East in February, and by July it had become almost universal.

According to Lookonchain, a wallet linked to Arthur Hayes, co-founder of the BitMEX crypto exchange, purchased 3,298 Ethereum for $6.39 million. In June, by contrast, Hayes’s wallets were selling off Ether.  

Summary: The crypto market is stable at $2.19 trillion: BTC is holding steady around $64K, while Ethereum maintains its uptrend, but low trading volumes and institutional inactivity are holding back growth.