‘Crypto Is Dead’ Calling Exaggerated, Says Analyst As Bitcoin (BTC), Ethereum (ETH) Hold It Together
Most major coins were trading lower Thursday night as the global cryptocurrency market capitalization fell 1.2% to $1.06 trillion at press time.
|Coin||24 hours a day||7 days||Price|
|Cryptocurrency||24-hour % change (+/-)||Price|
|Trust Wallet Token (TWT)||+11.6%||$1.16|
|1 inch mesh (1 INCH)||+7.3%||$0.84|
See also: Best USDC interest rates
Why it matters: Risk assets had not been adjusted at press time, with Bitcoin and Ethereum stepped in the red, while stock futures were in the green. S&P 500 and Nasdaq futures were up 0.2% and 0.3%, respectively, at press time.
Edward Moyaa senior market analyst at OANDA, said that while Bitcoin’s correlation with stocks remains intact, the digital asset has underperformed in recent sessions.
“A surge in expectations of Fed rate hikes has limited how high Bitcoin can go now, but as long as traders are confident that the peak in Treasury yields will remain in place, Bitcoin may have already bottomed,” Moya wrote in a note seen by Benzinga.
However, Moya is bullish on cryptocurrencies as a whole. “Calls that crypto is dead have been exaggerated. In fact, crypto is alive and well.”
The analyst’s optimism was based on Coinbase Global Inc COIN announce a collaboration with Black stone which would give the latter’s investment management platform direct access to cryptocurrencies.
Meanwhile, the yield on 10-year Treasury notes fell 5.3 basis points to 2.696% on Thursday. The gap between the two-year and 10-year Treasury yields closed by 35.7 basis points to reach the lowest inversion since 2000, Reuters reported. Stocks have largely ignored this inversion, according to Moya.
Delphi Digital pointed out in a note that historical data shows that when the Fed Funds rate is above the neutral rate, “recessions tend to occur.”
Interest rate neutrality means that further interest rate increases from the US central bank will lead to restrictive measures.
The difference between Fed Funds rate vs. Neutral Rate Ad Inflation — Courtesy Delphi Digital
“Economic factors such as stock market cap-to-GDP, consumer sentiment with the unemployment rate, and declining GDP suggest that the current market movement is a bear market rally,” the independent research shop said.
Cryptocurrency trader Justin Bennett said its total market cap could touch $1.15 trillion if it recovers levels of $1.05 trillion.
$TOTAL has continued support for over $1.035T.
Recover $1.05T in the coming days and $1.15T is likely next.
Conversely, a close below $1.035T would be bearish.#crypto $BTC $ETH pic.twitter.com/5wtQTEcdaA
— Justin Bennett (@JustinBennettFX) 5 August 2022
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