Bitcoin and other major coins saw a spike in prices Thursday evening as the global cryptocurrency market cap increased 3.7% to $958.2 billion at press time.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
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Why It Matters: Cryptocurrencies were buoyant at press time, as other risk assets like U.S. stocks closed in the green.
The S&P 500 and Nasdaq ended the day higher by 1.5% and 2.3% each. At press time, S&P 500 and Nasdaq futures were down 0.2% and 0.3%, respectively.
Investors will keep an eye on consumer price index data due next week, which would be a cue on whether the U.S. Federal Reserve will continue to raise interest rates aggressively when its policymakers next meet on July 26-27. U.S. jobs data, meanwhile, will come out on Friday.
The liquidity contagion affecting cryptocurrency firms has been a driver of markets recently. Miners could be “next on the chopping block,” according to GlobalBlock analyst Marcus Sotiriou.
Sotiriou pointed to instances where miners have been selling a large number of Bitcoins to cover costs and debt while taking measures to stay afloat.
“They have been using derivatives to limit downside risk since fourth-quarter 2021. Crypto miners have been selling Bitcoin, due to their revenues slumping along with the bear market.”
However, the recent decline in oil prices could offer some relief as it could end up moderating energy costs for miners, according to Sotiriou.
Michaël van de Poppe tweeted that markets tend to "always" move in directions unexpected by the majority.
The markets tend to move in a direction the mass isn't expecting them to go.— Michaël van de Poppe (@CryptoMichNL) July 7, 2022
The Amsterdam-based trader noted there’s an “insane amount of liquidity” above BTC’s 200-Week moving average.
There's probably an insane amount of liquidity above the 200-Week MA.— Michaël van de Poppe (@CryptoMichNL) July 7, 2022
If #Bitcoin breaks that level, I'm assuming we'll probably be getting a run of $2-5K upwards in just a few days to $28-30K.
And then the sentiment will flip too.
“If [Bitcoin] breaks that level, I'm assuming we'll probably be getting a run of $2-5K upwards in just a few days to $28-30K.”
On the Ethereum side, 220,000 ETH moved to the exchanges on Wednesday, which, according to Santiment was the highest daily amount in 11 months. Thursday marked the largest ratio of ETH profit-taking vs. loss transactions since April.
#Ethereum saw a net of over 220k coins moving on to exchanges yesterday, the highest daily amount in 11 months. And thus far today, we're seeing the largest ratio of $ETH profit taking vs. loss transactions since April. Be cautious in these conditions. https://t.co/zGJYgf3RF9 pic.twitter.com/NtCZp5tyeM— Santiment (@santimentfeed) July 7, 2022
“Be cautious in these conditions,” said the market intelligence platform on Twitter.
On-chain analysis firm Glassnode tweeted that the stablecoin Tether (USDT) has been in “macro decline.” Over 2 years, USDT has fallen from 88.3% of the stablecoin market to 45.2% as of Thursday.
Over the last two years, the dominance of #Tether has been in macro decline.$USDT has fallen from 88.3% of the stablecoin market, to 45.2% today, now less than half of the market.$USDC dominance has grown 4.2x, $BUSD by 7.5x, and $DAI by 3.9x over the same 2y timeframe. pic.twitter.com/g7NqkIKtp8— glassnode (@glassnode) July 7, 2022
Conversely, the domination of the USD Coin (USDC) has risen 4.2x, Binance USD (BUSD) by 7.5x, and Dai (DAI) by 3.9x in a similar period.
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