The crypto market is once again awaiting a signal from the stock markets

Market overview

The cryptocurrency market capitalisation fell by 0.6% over the past 24 hours to $2.59 trillion. Leading the gains are the anonymous Zcash (+9.1%), Theta (+6.2%), and Cosmos (+3.6%). Among the underperformers are Toncoin (−1.8%), despite positive news, as well as the major players Ethereum (−1.5%) and Polkadot (−1.2%). Meanwhile, the US S&P 500 is hovering around 7,100, whilst the Nasdaq 100 is testing new highs at 27,000. It appears that the crypto market is once again waiting for a boost from the stock markets to continue its climb.

Bitcoin continues to consolidate around $78K. Attempts to push prices below $77K have met with confident buying. The leading cryptocurrency remains in an uptrend that began in early April, with fairly active buying on dips, and the price is currently roughly in the middle of this channel, which ranges from $75.6K to $80.5K. If this pace continues, it will take just over two weeks to reach the 200-day moving average, but we expect to see an acceleration in growth soon, along with more intense fluctuations in key indicators of the long-term trend.

News background

QCP Capital believes that the Bitcoin rally is temporary and will not alter the bearish trend of recent months. Risky assets are feeling more confident solely due to the extension of the truce and the stance of Federal Reserve Chair nominee Kevin Warsh, who has confirmed the agency’s complete independence.

The options market also does not confirm a trend reversal. Short-term volatility remains low, and downside protection remains in demand.

At K33 Research, they are more confident that the rally in the leading cryptocurrency will continue. The divergence between BTC’s rise and negative funding rates makes the market tactically vulnerable to a short squeeze. However, the $79K–$80K zone presents a barrier, as it coincides with the realised price of short-term holders — a group of investors more likely to sell as prices rise. CryptoQuant also refers to the $80K level as a “critical inflexion point”.

A 50% correction in the leading cryptocurrency from its October highs could lead to new highs — the stronger the pullback, the more powerful the subsequent rally, said Morgan Creek co-founder Anthony Pompliano. According to him, “Bitcoin has become the king of safe havens in all kinds of chaos”.

Recent attacks on the Drift and Kelp protocols, following which users withdrew more than $15 billion from the DeFi sector, may temporarily dampen Wall Street firms’ interest in blockchain technologies, according to Jefferies.