Some signals suggest a possible recovery in the cryptocurrency market in the second half of the year, especially in light of recent decisions by the Federal Reserve (Fed) and other key indicators.
What to expect from the decentralized market and how to navigate best in this evolving scenario?
What is happening in the crypto market? Historically, the Fed’s interest rate cuts have coincided with a surge in BTC prices.
This phenomenon is often referred to as the “second halving phase” or “post-halving” by various market experts.
The halving event reduces the Bitcoin mining reward by half and historically has led to significant price increases in the following months.
But could this cycle be different? Currently, the cryptocurrency market capitalization is fluctuating within an increasingly tight price range, indicating an accumulation (or distribution) phase.
Market sentiment, measured by the Fear & Greed Index of the CMC, has shifted from a situation of fear or neutrality to renewed confidence (Greed).
This indicator is crucial as it reflects investors’ risk attitude; an increase in greed indicates a higher propensity to buy.
The volatility of BTC options is substantially decreasing.
While some see this as a sign of disinterest from traders, others interpret it as a renewed calm that can pave the way for increased market confidence.
The open interest, measuring the total number of open derivative contracts, continues to follow a positive trend, ruling out a lack of interest in the market.
It’s worth noting that recently, BTC failed to maintain support around $66,000 following the FOMC’s decision to keep rates unchanged.
This coincided with a rise in high-tech prices on the stock market and a slight pullback in US small caps.
This correlation raises many questions and remains partly unexplained, considering that the likelihood of a rate cut in September has become virtually certain according to the Fed Watch Tool of the CME.
Even Ethereum (ETH) is showing a similar trend to BTC, and the dominance of altcoins, though slightly, is gaining ground against BTC.
This indicates a potential appreciation of the entire decentralized market, suggesting that not only Bitcoin but also other cryptocurrencies could benefit from an upcoming rally.
On the on-chain transactions front, not everything is rosy.
The Mt.
Gox issue remains a concern.
Mt.
Gox, once the world’s largest Bitcoin exchange, transferred around $3 billion in Bitcoin.
This could potentially introduce a large amount of BTC into the market, creating selling pressure and negatively impacting the price.
The information and considerations contained in this article should not be used as the sole or primary basis on which to make investment decisions.
The reader maintains full freedom in their investment choices and full responsibility for executing them, as only they know their risk tolerance and time horizon.
The information in the article is provided for informational purposes only, and its disclosure does not constitute an offer or solicitation to the public for savings.
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