Luke Weber, our most prolific crypto journalist, shares his insights into the current state of the cryptocurrency market.
Bitcoin came off after the all-time high of 123K USD on July 14th and the following week has seen trading volumes drop considerably. BTC dominance has dropped 5.9% in the past week, the largest drop since June 2022, which may mean the possible start of altcoin season.
Many market analysts would say that altcoin season has started as 75% of the top 100 coins have outperformed BTC over 90 days. The top 100 coins exclude stablecoins (Tether) and asset-backed tokens (WBTC). Meme coins have surged (PENGU, FARTCOIN, PEPE), which also has a negative effect on BTC and ETH has outperformed BTC in the past 90 days, most of it in the past week.
Other analysts rely on the indicator – Altcoin Season Index (ASI) which is currently around 55 and would have to be 75 to confirm altcoin momentum. Google searches for ‘altcoins’ has reached a 4-year high, coinciding with previous bull runs, which could represent speculative retail interest. Investors will have to closely track market volume on low/mid-cap tokens so that they don’t miss entry points should the market surge.
Will Bitcoin Continue to Surge?
Bitcoin has bounced around 118k USD in the past few days. There are signs of selling volatility and BTC is struggling to hold its current level of 118.2k USD. RSI has dropped in the past 24 hours, so there is bearish momentum with large investors taking profits at the current price. Analysts have stated that BTC is consolidating and that this phase is a natural progression for a bullish trend.
An interesting report came out this week that JP Morgan Chase may use BTC and ETH holdings to lend to clients. Lending against crypto would let clients use their BTC/ETH holdings to borrow loans. JP Morgan Chase already lets selected clients borrow against their ETFs. To move forward with their plan, the company needs to work out the technical issues of seizing crypto assets from clients who cannot repay their loans.
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A Great Week for Ethereum
While ETH has come off almost 3% today, it outperformed BTC and rose 23% this week. Inflows into ETH ETFs continue to rise and treasury companies are buying up large blocks of ETH cryptocurrency. Fidelity had the biggest ETF inflow on July 21st with 127m USD out of a total of 300m USD. Treasury companies have bought large amounts of ETH, ARK Invest buying into Bitmine (treasury firm) for 116m USD, Coinbase Global has 445m in holdings and the biggest treasury holder SharpLink has 846m USD.
Many stablecoins are built on ETH and it has drawn the attention of institutional investors as the regulatory framework in the U.S. starts to become a reality. Treasury firms are building up their reserves in anticipation of the U.S. House approving the bill.
Litecoin Soaring
Litecoin surged 14% over the weekend and is up 23% for the week. A major factor contributed to its sharp rise and the altcoin looks poised to go higher.
A company called MEI Pharma announced that they will launch a private placement to buy 100m worth of LTC. This buying strategy is similar to GameStop, Strategy and Trump Media when purchasing cryptocurrency. The company will raise funding through the private placement to buy up LTC, betting the price will rise significantly. Most altcoins follow BTC and with the GENIUS bill probably being passed soon, crypto (and LTC) could see a massive bull run.
The founder of Litecoin Charlie Lee, has joined the board of MEI furthering the commitment by the company to enter the world of digital assets. MEI Pharma was looking for a solution to their global payroll system and how to integrate crypto. LTC has low fees and very fast transaction times, making LTC a viable option. There is still the issue of volatility and LTC price swings could pose risks, which Mr. Lee will assist in finding solutions. Litecoin is starting to find its way into corporate finance and the venture with MEI could open the door for more Fintech startups to utilize the LTC framework for payroll solutions. LTC was trading at 114.70 USD at the time of writing.
Dogecoin Retreating…
Doge has retreated after surging 35% in the last week. The reason for the massive price increase was that a crypto mining company Bit Origin stated that they have initiated a 500m USD treasury project with the meme coin. Investors have turned to lesser-known coins that have real world use with stable infrastructures to solve real world problems. The move by Bit Origin is putting the spotlight on Doge and making it a treasury grade cryptocurrency, perhaps competing with ETH and BTC in the future. Bit Origin has bought 40.6m USD worth of Doge to start the treasury plan which is a bullish sign for other Doge investors. The trend of buying crypto for treasury positions is a growing among U.S. companies and this model could make Doge the first publicly traded Dogecoin treasury on the Nasdaq. Doge was trading at 0.2667 USD and starting to retreat from its 4-month high.
Ready to Move
There are 2 main factors pointing to a bull run in the coming week. The U.S. passed the GENIUS Act, the first comprehensive stablecoin regulation. This act will create licensing and regulatory requirements for stablecoins and setup a global standard for non-U.S. stablecoin issuers to sell in the U.S.
With the influx of institutional investors buying BTC such as JP Morgan Chase, a breakout is genuine possibility this week. BTC has retraced and is consolidating around 118k USD but is poised to hit new all-time highs. The current market is similar to the bull run of July 2022 and the recent massive increases of capital will drive the price action upward.
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