The price of Bitcoin is stuck in a range, but a number of big altcoins are showing signs of a possible breakdown. The stock markets in the United States are on the way to getting better. Last week was the best week for the S&P 500 Index (SPX) since June. It went up 2.50 percent. Even though BTC also tried to make a relief rise, the bulls couldn’t keep it up. In the end, Bitcoin lost 0.5% over the course of the week. The Securities and Exchange Commission put off making a decision on all spot Bitcoin exchange-traded fund (ETF) applications, which was one of the main reasons Bitcoin lost some of its gains. But this hasn’t changed what experts think will happen.
Fundamental Updates
Let’s delve into the significant developments shaping the crypto market landscape:
- Polygon has announced the Chain Development Kit (CDK): Sandeep Nailwal, Polygon’s founder, launched their CDK on August 30th, a software suite that allows builders to customise and deploy their own Supernets with new capabilities from Polygon’s ZK technology. The CDK claims to increase scalability and unify liquidity across all Polygon 2.0 chains.
- Layer 2s: Arbitrum continues to be the most popular L2 with over 2.1 billion TVL, which is more than twice as much as Polygon and approximately thrice as much as Optimism. While newer L2s like Base and zkSync have TVLs of over 100 M, Mantle is only good for about 38.5 M.
- Hashkey began to accept BTC and ETH in Hong Kong: Hashkey started offering Bitcoin and Ether to retail clients in Hong Kong on August 28, much to the delight of the market. However, the impact of this new service remains to be seen, as investors are only permitted to invest up to 30% of their net worth in cryptocurrency when using the platform.
In terms of immediate price activity, the majors stayed flat. This was in stark contrast to the price reaction to the Greyscale vs. SEC litigation news. We believe it will be some time before we see positive price action driven by retail participants from Hong Kong and even China. It takes time to meet registration and regulatory requirements such as insurance, independent assessment reports, regulated custodians, and adherence to the FATF’s Travel Rule for transaction monitoring, among other things.
Key Data Points
- Total market capitalization: The total market capitalization of the crypto market is currently around $1.05 trillion. This is down by 80 billion from last week.
- Bitcoin dominance: Bitcoin dominance, which tracks the percentage of the total market capitalization that is held by Bitcoin, is currently at around 46.4%. This is 1.27% down from last week.
- ETH dominance: ETH dominance, which tracks the percentage of the total market capitalization that is held by Ethereum, is currently at around 18.2%. This is no net change from last week.
Bitcoin Price Analysis:
Bitcoin is currently trading close to the bottom of the significant range between $24,719 and $27,812. Bulls typically buy the decline near the support (low) and sell it close to the resistance (high) when the price trades inside a range. Bulls and bears will engage in a fierce battle at the $24,719 level. The selling is likely to pick up speed if this level is breached, and the BTC/USDT pair might plummet to the key support of $23,000. There is some little support near $24,000, but if demand doesn’t increase, it might not last very long.
BTC Technical Indicator:
Macro Updates:
- The Job Opportunities and Labour Turnover Survey (JOLTS) indicated 8.83 million job opportunities nationwide, below the market consensus of 9.17 million. This JOLTS number is the lowest in over 2.5 years.
- This leading indicator of employment shows diminishing labor demand. This data series has been declining since Q1 2022, despite a high amount of job postings due to the economic recovery.
- The US labor market is solid but growing slowly. Thus, as employment is closely linked to economic development and interest rate policy, it is important to watch for signals of weakening in global financial markets.
Bitcoin returns were -5.7% for this week. The Alpha Blue Chip Focused Strategy returns were 1.55% during the same period (31 August – 06 September). The Top Cap Digital Assets Strategy and Arbitrage Opportunities & Balanced Strategy returns were 1.87% and 1.55%, respectively.
