Bitcoin playing with $20,000

05 Jul 2022

Bitcoin playing with $20,000

The second quarter of 2022 is finally over. Bitcoin ended the quarter down 56%, the second-worst in its history and the worst in 11 years. The uncertain macroeconomic outlook and the contagion effects in the crypto market are likely not over, with another lending firm suspending trading this week. Bitcoin is still playing with the $20,000 level. After losing this level in the middle of last week, we saw a somewhat interesting close of June with an intraday price spike, followed by yesterday’s price action, which took us back above this "key" price level. Bitcoin ends the last seven days with a slight decline of 2.3%. Unsurprisingly, both Bitwise and Grayscale got their spot-based bitcoin ETF applications rejected last week. Grayscale answered by suing the SEC, and the fight for the first spot-based bitcoin ETF in the U.S. continues.

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Source: Tradingview (Coinbase, Binance US)

The top 3 coins by market cap have followed each other closely over the past seven days, with BNB slightly outperforming both BTC and ETH. ETH got hit harder during last week’s sell-off but has recovered strongly this week.

A positive start to July for altcoins

Bitcoin ended June with a decline of 37%, one of its worst months in history. Many hope for a rebound in July, and the start of the month looks positive, especially for altcoins. Bitcoin’s terrible performance in June continued into the first days of July, but the tide turned when we kicked off a new week. Bitcoin is now flat in July, with a small gain of 0.5% this month. Altcoins have seen a sharper recovery than bitcoin during the first days of July. While the movements are negligible this month, all the indexes we follow are outperforming bitcoin. In other words, the trend from June continues. The Mid Caps Index is the best performer in July (+5.0%), with the Small Caps Index (+4.9%) and the Large Caps Index (+3.1%) following closely.

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Source: Bletchley Indexes, Tradingview (Coinbase)

Unsurprisingly, the bitcoin dominance continues to decline. The overall changes in dominance are small this week, with BNB showing strength among the top 10. Except for BNB, stablecoins are the only ones increasing their market shares in the top 10 this week. Adding the outperformance from the smaller coins, this shows us that the first days of July have been focused on altcoins.

Sentiment changing? Highest in two months

The sentiment in the crypto market has been depressed for several months, but we’re seeing a slight improvement this week. After the Fear and Greed Index climbed to 19 yesterday, we’re at the highest point in two months. While we’re still comfortable in the “Extreme Fear” area, we’re now pushing towards the “Fear” area, and the market is slightly more optimistic than we’ve seen lately.

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Source: Alternative.me

Bitcoin volume back to average levels

After the massive spike in the bitcoin volume in June, we’re back to the average level just below $4 billion. It’s been a fairly flat week for the 7-day average bitcoin spot volume, which is a bit surprising after a somewhat volatile last week. However, Thursday and Friday saw volumes of around $5 billion, but this was countered by the drowsy weekend activity where we only saw daily volumes of around $2 billion. This was probably a result of the 4th of July weekend in the U.S., and Saturday saw the lowest daily volume since the first days of June.

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Source: Skew, Tradingview (Binance, Binance US, Bitfinex)

7-day volatility hits 3-month low

After an eventful start of last week, bitcoin spent several days in the lower $19k area, resulting in the 7-day volatility hitting the lowest level since early April. The volatility came back yesterday with bitcoin pushing up above $20k again, and we saw a daily return of almost 5%. The 30-day volatility has stayed high lately and is currently at 4.6%. Bitcoin had one of its worst months in history in June, and as the 30-day volatility shows, we’ve seen daily price moves of almost 5% on average, far above the normal levels of 2-3%. It would not be surprising to get a somewhat uneventful July after a hefty quarter in the crypto market and the summer kicking in.

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Source: Tradingview (Coinbase)

This was our weekly spot market update. Click here to read our update on the derivatives markets.