The cryptocurrency market is stagnating, lagging its competitors

Market overview

The cryptocurrency market capitalisation has changed little over the past day, fluctuating around $3.5 trillion. The cryptocurrency fear index has fallen to 15, its lowest level since 4 March. Notably, the cryptocurrency market has been left out of the recent rally in precious metals and stock indices. If this is not an attempt by whales to lock in profits from the rally since April or even from the growth of the last two years, then it is an alarming signal of deep-seated risk aversion that is about to manifest itself in larger markets.

Bitcoin continues to struggle to remain within the bull market on weekly timeframes, trying to stay above the 50-week moving average. Last week's close was on the edge and attempts to develop an offensive this week are running into sell-offs, despite the favourable external backdrop. The previous such transition occurred at the end of 2021, and so far, everything aligns with the 4-year halving cycles that many were quick to dismiss.

News background

Over the past three months, a clear break has occurred in the correlation between Bitcoin and the stock market. The S&P 500 stock index has risen 7% during this time, while BTC has lost 15%. Judging by four years of close correlation, it can be argued that Bitcoin is currently undervalued, according to Santiment.

Jan3 founder Samson Mow attributes Bitcoin's decline to a massive sell-off by investors who bought it over the past 12 to 18 months. They are rushing to lock in profits amid rumours of an imminent bearish trend in the crypto market.

The crypto market's growth phase is nearing its end, so it is time for investors to consider locking in profits and reducing the share of crypto assets in their portfolios, according to Morgan Stanley, which cites a four-year cycle that the cryptocurrency market has consistently followed since 2009.

The bitcoin mining industry is facing a difficult period due to growing competition and declining profitability, said MARA CEO Fred Thiel. According to him, only those miners who have access to cheap energy or new business models will survive.

According to SoSoValue, spot Solana ETFs in the US have attracted more than $350 million in 11 trading sessions. The steady inflow of funds into new SOL ETFs came as a surprise to the market. The results significantly exceeded initial conservative forecasts, according to LVRG Research.

Visa has unveiled a pilot project called Visa Direct, which allows US customers to make direct cross-border payments in USDC stablecoin to recipients' wallets. The initiative is aimed at content creators and freelancers.

The crypto industry is entering a new phase of capital raising. The launch of Coinbase's ICO platform is expected to be a key event in this trend, according to Bitwise. The exchange will select and launch one verified project per month.