Crypto Market Review, July 8th

Bitcoin surprised cryptocurrency investors with its unexpected 9% rally that pushed the first cryptocurrency above $ 22,000, which could be the beginning of the aforementioned potential rally that the weakening of the US dollar and the volatility spike would cause.

Two reasons behind potential rally

As previously mentioned on U.Today, the US dollar is still the main source of pressure on the cryptocurrency market, as investors still prefer less risky alternatives to volatile assets such as Bitcoin or Ethereum.

But the comfortable position of the US dollar could have a temporary effect on the cryptocurrency market, as the Fed’s hawk cabinet may not provide fuel for the world’s leading currency rally long enough, especially if the regulator calms down on upcoming interest rate hikes.

With the weakening of the US dollar, we will most likely see Bitcoin outbreaks in the coming weeks, as it is already looking for volatile features that will break the two-week series of anemic performance.

As the technical analysis suggests, Bitcoin successfully broke up from the pennant previously highlighted by Peter Brandt and rushed towards $ 22,000. Unfortunately, the lack of inflow to the market and low open interest BTC fell below the local resistance of $ 21,800.

The central moment for Ethereum

The second largest cryptocurrency on the market reaches the central resistance on the chart as the network’s financial performance is weaker than ever. According to Token Terminal data, Ethereum generated around $ 23.8 million in supply side and protocol revenue in July, making it the worst month since the summer of 2020.

The main reason behind a rapid decline in the network’s revenue is the massive outflow of funds from the Defi and NFT industries that carried the Ethereum bull run in 2021. The last blow that pushed Ethereum down was the lack of activity around the Web3 industry which should have been the next the driver of the cryptocurrency market.

On the daily chart, Ethereum has reached the local resistance of $ 1,250 and is currently unable to break through. The $ 1200 reversal will most likely push it back to the consolidation channel for a few more days.

Current state of the cryptocurrency market

In general, the cryptocurrency industry remains under heavy macroeconomic pressure as demand for risk exposure remains at an extremely low level compared to 2021, which is caused by constant interest rate increases and a bleeding stock market. The majority of financial analysts expect a gradual improvement until mid-2023.