There has been a resurgence in the cryptocurrency market for the past two weeks, with Bitcoin, Ethereum, and the crypto total market cap currently up 3.81%, 6.94%, and 2.84% respectively this week. But just how high is this short-term bullish rally going to go?
Cryptocurrency Total Market Cap Technical Analysis and Prediction
Currently, at $813 billion, the crypto total market cap is trying to break out from a 4-week range of $727 billion to $824 billion. With the move for the past two weeks not confirmed by volume, a market correction might be imminent. Here’s why.
RSI
RSI40 has been showing a lot of significance this year with the area previously acting as both support and resistance. As of writing, the crypto total RSI is at 37.19. Traders should assume that a reaction around this area is highly likely.
MACD
Recently, the volume has been slowly decreasing and the moving averages are trading close to each other. If this continues, traders should look out for a possible bearish crossover.
Support and Resistances
There are several key levels to look out for in the crypto total market cap charts. If the price successfully breaks out from the range of $727 billion to $824 billion and RSI40, the next target is breaking $850 billion to $860 billion. RSI50 must also be reclaimed. If the price goes further, traders should look for the EMA20 and the descending trendline for the next possible resistance.
Cryptocurrency Market Fundamental Analysis
Powell’s speech
After Federal Reserve Chair Jerome Powell implied that the central bank would decelerate its rate-hiking campaign, stocks rallied broadly. The S&P 500 rose 3.09%, the Dow Jones Industrial Average gained 2.18%, and the Nasdaq Composite advanced 4.41%. The Russell 2000, which is made up of smaller companies, rallied 2.72%.
Powell’s comments gave investors hope that the central bank is done raising rates and could even lower them if needed. That optimism led to price increases in shares of large technology companies, which had been seen as at risk of a slowdown if the Fed continued to raise rates. The optimism spread to the cryptocurrency markets in turn.
In a blog post, trader Jon Wolfenbarger said he believes that a major bear market selloff is due to happen soon due to ongoing Fed rate hikes going into a recession, and that the S&P 500, which the crypto market is closely tied to, could fall by as much as 43% when the market bottoms next year. Wolfenbarger suggests that risk-averse investors who want to wait out the bear market until the next bull market starts can buy safe and relatively high-yielding Treasury bills and floating rate notes.
He further adds that ETFs, such as the SPDR Bloomberg 3-12 Month T-bill ETF BILS and the WisdomTree Floating Rate Treasury Fund ETF USFR, would be suitable for this purpose.
Another good idea is to diversify one’s portfolio and when investing in cryptos, choose some lower cap coins and coins in presale that have strong fundamentals.
The Uncertainty of the Bear Market
In a world where a single tweet could possibly pump or dump the market, it’s essential to do your research and invest in coins that are backed by a solid team, utility, and funding. We have rounded up a list of 5 different cryptocurrencies that fit these criteria and are due to take off in 2023.
Dash 2 Trade (D2T)
Dash 2 Trade is a trading intelligence platform that helps investors get real-time analytics and social trading data. The D2T token pays for monthly subscription fees to use the Dash 2 Trade platform, which operates on Ethereum. The sale has so far raised more than $7.6 million dollars. Early next year, it will be listed on BitMart and LBANK Exchange giving early investors an opportunity to make some money back from their investment.
Non-fungible tokens are an integral component of any play-to-earn ecosystem, and RobotEra uses them to great effect. In the game, you’re tasked with rebuilding planet Taro, and part of that includes creating your own NFT-tied robot companions as well as the land that they can construct home bases on. Robot companions are essentially digital helpers that can assist players in multiple ways throughout their journey on Planet Taro. Creation tools provided by RobotEra enable users to design and craft their own custom robot companion, which can then be traded in the marketplace.
Play-to-earn (P2E) games often have issues both recruiting new gamers and retaining current ones. By having a free-to-play component, Calvaria allows people to learn about cryptocurrency gaming with no risk or investment attached. This approach lets gamers play for fun while still getting every feature that the P2E version offers. An additional benefit is that they will be able to compare their earnings in real-time against other players who bought the NFT deck of cards – giving insight into what could’ve been earned.
Calvaria is not only attracting new crypto gamers but also incentivizing them to stick around for the long term. This is essential in building value for the $RIA token. By playing the free version, players will fall in love with the game and will be more likely to switch to the paid version once they understand how it works. They are also more likely than average players to keep playing and investing so they can increase their own NFTs’ values.
IMPT is a blockchain-based platform that makes buying and selling carbon credits much easier. IMPT was created with the Ethereum blockchain in order to make the carbon credit market accessible to more people.
By integrating with a shopping platform and using NFTs to make it easy to buy and sell carbon credits, IMPT makes it easy for interested individuals and businesses to get involved in carbon offsetting, creating a snowball effect that encourages other individuals and companies to do the same.
IMPT is the native token of the project and investing in it is the best way for anyone to get involved. The digital asset is currently available for presale. In less than three months, over $13.4 million has been raised via presale stage 1 at a price of $0.023 per token, with the next stage seeing an increase to $0.028 .
The Lucky Block (LBLOCK) project is the latest crypto initiative with a focus on lottery and gambling. The online casino offers a wide range of games from over 100 game providers, including poker, slots, and live casino games. LBLOCK describes itself as a platform where everyone is a winner, and they intend to implement a global lottery system via blockchain protocols.
Lucky Block makes it easy for users to fund their accounts using a credit or debit card. The company plans to add Google Pay, Apple Pay, and other payment options in the near future as well. Lucky Block also has great customer service, which is a huge bonus. They’re committed to helping customers 24/7 via email and live chat.
The market is currently in a news-driven environment where the prices of cryptocurrencies have been determined by news agenda rather than fundamentals.
Bitfinex analysts have warned crypto investors to be cautious as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.
In the latest Bitfinex Alpha report, experts deemed the market’s reaction this week critical, especially as supply alleviated over the weekend could return when traditional markets open.
“No Man’s Land”
Since Saturday, bitcoin has risen almost 10% from $57,600 to $63,000, closing last week in the green. The asset has surged above the 125-day range low of $60,200, which it broke through earlier this month after news of the German government’s massive BTC selling hit the market.
Market sentiment began to improve after reports that wallets linked to the German government were almost empty. However, the positive sentiment may not be sustained for long as the BTC the German authorities moved to trading desks and exchanges are yet to be sold.
While the supply from Germany appears to have been factored into bitcoin’s market price, Bitfinex analysts believe the end of selling pressure depends on how the involved trading desks execute their trades in the coming days.
Although the shift in sentiment underscores the market’s capacity to integrate new information and adjust expectations quickly, analysts think the market’s reaction over the first two trading days of the week cannot be overlooked for two reasons.
First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends are usually favorable for markets, especially on Saturdays when supply pressure seems to subside.
“We are now in no man’s land until we get clear resolution above or below this level,” the analysts said.
A News-Driven Environment
Besides the potential resistance level and three-month weekend trading pattern, the market is currently in a news-driven environment, where the prices of cryptocurrencies have been determined by news agendas rather than fundamentals.
Since selling pressure concerns are not yet completely obsolete due to upcoming Mt Gox creditor distributions, Bitfinex analysts expect such headlines to continue to have some impact on price movements. As such, the analysts urged investors to exercise caution in their trading strategies.
BlackRock’s IBIT led with $117.25 million in inflows on July 15, also being the most traded Bitcoin ETF.
The US spot Bitcoin ETFs recorded a daily net inflow of $301 million on July 15th. This extended their winning streak to seven consecutive days amidst a broader market recovery.
None of the ETFs recorded outflows for the day.
Bitcoin ETFs Rake in $16.11B in Net Inflows Since Jan
According to the data compiled by SoSoValue, BlackRock’s IBIT, the top spot Bitcoin ETF by net asset value, recorded the largest net inflows of the day at $117.25 million. IBIT was also the most actively traded Bitcoin ETF on Monday, with a volume of $1.24 billion. Ark Invest and 21Shares’ ARKB came in close behind with net inflows of $117.19 million.
Fidelity’s FBTC experienced net inflows of $36.15 million on Monday, while Bitwise’s BITB saw $15.24 million in inflows. VanEck’s HODL, Invesco and Galaxy Digital’s BTCO, and Franklin Templeton’s EZBC funds also recorded net inflows. Meanwhile, Grayscale’s GBTC and other ETFs, such as Valkyrie’s BRRR, WisdomTree’s BTCW, and Hashdex’s DEFI, registered no flows for the day.
A total of $2.26 billion was traded on Monday. The trading volume for these ETFs was less than in March when it exceeded $8 billion on some days. Meanwhile, these funds have collectively attracted $16.11 billion in net inflow since their January launch.
What’s Next For Bitcoin?
Earlier this month, bitcoin’s price decline was mainly due to fears of massive selling pressure from Mt. Gox and the German government’s BTC sales.
But the assassination attempt on pro-crypto former US President and presumptive Republican candidate Donald Trump at Saturday’s rally seemed to spark a recovery in the world’s largest digital asset, and experts are bullish on the asset’s price trajectory going forward. Bitcoin surged more than 9% over the past week and was currently trading slightly below $64,000.
Veteran trader Peter Brandt discussed bitcoin’s price outlook, suggesting a potential major rally. He referred to a pattern he terms “Hump->Slump->Bump->Dump->Pump” and highlighted that the July 5 double top attempt was a bear trap, confirmed by the July 13 close. He sees a likely continued upward trend but warned that a close below $56,000 would negate this bullish view.
“Bitcoin $BTC could be unfolding its often-repeated Hump…Slump…Bump…Dump…Pump chart construction. Jul 5 attempt at the double top was a bear trap, confirmed by Jul 13 close. Most likely scenario now is that bears are trapped. Close below $56k negates this interpretation”
PeckShield alert reveals LI.FI’s protocol vulnerability is similar to a March 2022 attack, with the same bug recurring.
The decentralized finance (DeFi) platform LI.FI protocol has suffered an exploit amounting to over $8 million.
Cyvers Alerts reported detecting suspicious transactions within the LI.FI cross-chain transaction aggregator.
LI.FI Issues Warning After $8 Million Exploit
LI.FI confirmed the breach in a statement on July 16 via X: “Please do not interact with any http://LI.FI powered applications for now! We’re investigating a potential exploit.” The team clarified that users who did not set infinite approval are not at risk, emphasizing that only those who manually set infinite approvals seem to be affected.
According to Cyvers Alerts, more than $8 million in user funds have been stolen, with the majority being stablecoins. According to on-chain data, the hacker’s wallet holds 1,715 Ether (ETH) valued at $5.8 million and USDC, USDT, and DAI stablecoins.
Cyvers Alerts advised users to revoke relevant authorizations immediately, noting that the attacker is actively converting USDC and USDT into ETH.
Crypto security firm Decurity provided insights into the exploit, stating that it involves the LI.FI bridge. “The root cause is a possibility of an arbitrary call with user-controlled data via depositToGasZipERC20() in GasZipFacet, which was deployed 5 days ago,” Decurity explained on X.
“In general, the risks behind routers, cross-chain swaps, etc. are about token approvals. Raw native assets like (unwrapped) ETH are safe from these kinds of hacks b/c they don’t have approvals as an option. Most users & wallets also no longer do “infinite approvals” which gives a smart contract total control on removing any amount of their tokens. It’s important to understand which tokens you’re approving to which contracts.
This dashboard looks for all transactions of a user that intersects Lifi. Not all of these transactions indicate risk- but you can see how, broadly, integrations & layers of tech (like how Metamask bridge uses Lifi on BSC) can complicate how users do or don’t put their assets at risk. Revoke Cash is the most well known approval manager app.
But it’s also good security practice to simply rotate your address. New addresses start with 0 approvals, so starting fresh by moving your tokens to a fresh address is another good security practice.” – commented Carlos Mercado, Data Scientist at Flipside Crypto.
Recent Exploit Mirrors March 2022 Attack
Further analysis by PeckShield alert revealed that the vulnerability is similar to a previous attack on LI.FI’s protocol that occurred on March 20, 2022. That incident saw a bad actor exploit LI.FI’s smart contract, specifically the swapping feature, before bridging.
The attacker manipulated the system to call token contracts directly within their contract’s context, making users who had given infinite approval vulnerable. This exploit resulted in the theft of approximately 205 ETH from 29 wallets, affecting tokens such as USDC, MATIC, RPL, GNO, USDT, MVI, AUDIO, AAVE, JRT, and DAI.
“The bug is basically the same. Are we learning anything from the past lesson(s)?” PeckShield Alert said in a July 16 X post.
Following the 2022 incident, LI.FI disabled all swap methods in its smart contract and worked on developing a fix to prevent future vulnerabilities. However, the recurrence of a similar exploit raises concerns about the platform’s security measures and whether adequate steps were taken to address the vulnerabilities identified in the previous breach.
LI.FI is a liquidity aggregation protocol that allows users to trade across various blockchains, venues, and bridges.
