The Bitcoin (BTC) posted a 17% gain in July, making it the largest cryptocurrency’s best month since October last year, though analysts speculate that the bear market for these assets may continue.
This weekend, BTC topped $24,000, its highest level since mid-June, while Ether – the second largest cryptocurrency on the market – posted a 70% jump last month, its best level since January 2021.
Bitcoin had dipped below $20,000 in late June and July amid concerns over rising interest rates and inflation, as well as internal cryptocurrency issues such as the implosion of the Terra ecosystem. Luna and the hedge fund Three Arrows Capital.
While it is a long way off the all-time high of around $69,000 in November, it has started to show some strength of late as the stock market recovers. In fact, in July, the S&P 500 index gained 9%, the most since November 2020.
Even so, Bitcoin is hitting some major resistance points and its recent rally might be leglessaccording to Katie Stockton, co-founder of Fairlead Strategies, a research firm focused on technical analysis.
“Bitcoin remains a useful indicator of risk appetite as one of the most volatile risk assets,” Stockton said, noting that “the implications are that the rally will fade in the coming days, regardless of the breakout in the SPX.” “.
“August promises to be just as harrowing for Bitcoin with more bouts of volatility guaranteed”Antoni Trenchev, co-founder and managing partner of cryptocurrency lender Nexo, told Bloomberg.
In fact, he noted that it is “leaning toward a repeat of July resistance over June capitulation” after “Bitcoin absorbed last week’s macro hit” from the Federal Reserve rate hike and data showing The US economy shrank for the second consecutive quarter.
“Cryptocurrencies and stocks have been positively correlated with each other, and that has been especially the case for mega-caps.” Jake Gordon of Bespoke Investment Group in a note late last week, citing strong results from large-cap tech companies, which “likely helped drive risk sentiment to push crypto higher.”
The reason why we are not bullish on cryptocurrencies yet is because there are no business models that we are aware of that generate revenue outside of other crypto applications.
However, he said that “as digital assets become a more mature asset class with the entry of institutional investors, a lot of on-chain adoption and development, over time you will see people looking at digital assets. from a different perspective.”