Cryptocurrency markets experienced a turbulent morning in Asia as Bitcoin, Ether, and most of the top ten non-stablecoin cryptocurrencies witnessed significant declines.
Bitcoin, hovering slightly above US$26,000, retraced most of its gains triggered earlier in the week by a favorable U.S. court ruling for Grayscale Investments in its Bitcoin ETF case against the SEC. Investors worldwide are now eagerly awaiting the U.S. payroll report for August in hopes of gaining insights into future interest rate policies.
Over the past 24 hours, Bitcoin plummeted by 4.42%, reaching US$26,042.84 by 07:00 a.m. in Hong Kong. For the week, Bitcoin’s performance showed a modest decline of 0.26%, according to CoinMarketCap data. This setback can be attributed to the U.S. Securities and Exchange Commission’s announcement of a delay in the decision on seven spot Bitcoin exchange-traded fund (ETF) applications, now postponed until October. Among those anxiously awaiting ETF approval are major asset management firms like BlackRock, WisdomTree, and VanEck. However, this delay has cast a shadow on market sentiment.
Benjamin Stani, Director of Business Development at Matrixport, a Hong Kong-based digital asset broker, remarked, “The pump we had from Grayscale-SEC news is now faded.” The market had been optimistic, hoping for a swift path forward after the Grayscale ruling and raising the probability of a spot ETF approval before year-end. However, with this delay, it appears that approval is not imminent.
Ether, the second-largest cryptocurrency, faced a 3.15% drop, falling to US$1,648.76 over the past 24 hours, resulting in a weekly loss of 0.33%. Analysts are closely monitoring technical signals for Ethereum, as it appears to be approaching a ‘death cross.’ This ominous pattern occurs when the short-term average falls below the long-term trend, typically indicating further losses ahead. Currently, the short-term 50-day average stands at 1808.3, while the 200-day average is at 1802.9.
Rachael Lucas, a crypto technical analyst at BTC Markets, cautioned, “It’s essential to consider these movements in the context of broader market dynamics, as the cryptocurrency space can be characterized by rapid price shifts.” Ether’s descent into negative territory on a weekly timeframe suggests a potential short-term pullback.
Several other top ten non-stablecoin cryptocurrencies experienced losses, with Solana’s SOL taking the lead with a 5.07% dip to US$19.81, its lowest level in over six weeks. Additionally, a U.S. court dismissed a class action lawsuit against Uniswap Labs, reinforcing the decentralized nature of cryptocurrency protocols and its implications for the industry.
This ruling is seen as a victory for decentralized finance (DeFi), with potential implications for regulatory clarity. Samer Hasn, a market analyst for online brokerage XS.com, emphasized the need for striking a balance between regulation and innovation in the DeFi space.
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The total crypto market capitalization fell by 3.46% to US$1.05 trillion, while trading volume increased by 16.61% to US$37.31 billion. Meanwhile, U.S. stock futures remained relatively stable after a mixed regular trading session on Thursday.
Economic indicators suggest a mixed outlook, with strong consumer spending but signs of an economic slowdown. The Federal Reserve’s aggressive tightening campaign may pause, with the potential for interest rate hikes being reevaluated in September.
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