Bitcoin, Ethereum, Dogecoin Lose Late-July Mojo: Crypto Could See ‘One Last Leg Up’ Before Things ‘Get Dicey Again,’ Says Analyst

By August 2, 2022DeFi
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Bitcoin, Ethereum, Dogecoin Lose Late-July Mojo: Crypto Could See 'One Last Leg Up' Before Things 'Get Dicey Again,' Says Analyst

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Major coins traded in negative territory on Monday evening as the global cryptocurrency market cap dropped 0.6% to $1.08 trillion at press time.

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Why It Matters: Bitcoin and Ethereum were in the red at press time.

The apex coin continued to track stocks, as the S&P 500 and Nasdaq futures were down 0.2% each, respectively.

The beginning of August has lacked the exuberance witnessed in the last week of July. That rally was due to the uncertainty in the backdrop of “potentially negative data being released, or an impactful event occurring," said GlobalBlock analyst Marcus Sotiriou in a note seen by Benzinga, adding that there’s a lack of buyers leading into such events.

“In addition to the market pricing in bad news, there is another reason, in my opinion, why global markets rallied last week,” said Sotiriou.

“The stock market bottomed in each recession when the Federal Reserve U-turned — by U-turning, I mean going from a stance of tightening monetary policy to accommodative monetary policy (this could be pausing rate hikes or even re-introducing rate cuts).”

Sotiriou said, “many buyers have started to price in the probability of the Federal Reserve U-turning in the coming months.”

OANDA senior market analyst Edward Moya said Wall Street still has the mindset that recent stock market gains were just a “bear market rally.”

On the rate-hike trajectory, Moya said, “The data-dependent Fed is still in a good position to deliver another massive rate increase, but expectations are anchoring them for a much slower pace after the September FOMC decision.”

On-chain data remains “lackluster” and the late July rally “has not yet seen a convincing follow through in observable demand activity,” wrote Glassnode in a weekly blog post.

The on-chain analysis company said, “Bitcoin blocks are partially empty, Ethereum gas prices are at multi-year lows, and the rate of EIP1559 burning is at all-time lows.” The EIP1559 is a reference to an Ethereum fee burning mechanism.

As an example of the lackluster on-chain activity, Glassnode shared Bitcoin’s “number of active addresses,” which the company said remained firmly in a well-defined downtrend channel.

“With exception of a few activity spikes higher during major capitulation events, the current network activity suggests that there remains little influx of new demand as yet."

Bitcoin: Number Of Active Addresses, Courtesy — Glassnode

Cryptocurrency trader Justin Bennett tweeted that the total market cap could see “one last minor leg up” before “things get dicey again.” The analyst says the $1.15 trillion level is the one to keep an eye on.

Maybe one last minor leg up before things get dicey again.

$1.15T on $TOTAL is one to watch.

Holding above $1.05T support for now.#Bitcoin #crypto

— Justin Bennett (@JustinBennettFX) August 1, 2022

Chartist Ali Martinez said that Bitcoin is on top of stable support between the $17,000 and $23,000 levels where 3.4 million addresses purchased $2.14 million of the apex coin. The important resistance level is between $31,000 and $41,000, where 5.37 million addresses previously purchased 2.55 million BTC.

Data shows #Bitcoin sits on top of stable support between $17K and $23K, where 3.4 million addresses bought 2.13 million $BTC.

On the flip side, the most important resistance level is between $31K and $41K, where 5.37 million addresses had previously purchased 2.55 million #BTC.

— Ali Martinez (@ali_charts) August 1, 2022

© 2022 Benzinga does not provide investment advice. All rights reserved.

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