The crypto market is nervous, despite record highs in equities

The crypto market is nervous, despite record highs in equities

Market Overview

The crypto market capitalisation fell by 1.6% to $2.54 trillion, coming under pressure despite new record highs in US stock indices. This continues the range-bound trading that has persisted for over a month, but the market is now at the lower end of the range. Over the past 24 hours, the top performers were the relatively small-cap Internet Computer (+14.6%), Filecoin (+5.9%) and Cosmos (+4.4%), which were catching up with the latest wave of growth. The biggest declines in our list of the most liquid coins were seen in Near Protocol (-7.8%), Zcash (-6.8%) and VeChain (-4.3%).

The sentiment index has returned to extreme fear territory, falling to 25. As with cryptocurrency market capitalisation, current levels are at the lower end of the range seen since mid-April. If cryptocurrencies are once again acting as a barometer of sentiment in global financial markets, this looks like an early signal of a reversal towards profit-taking. Perhaps investors prefer to take their money off the table ahead of the start of summer, beginning with the riskiest segment.

Bitcoin has fallen below $76K, losing over 2% from Tuesday’s peak, dropping below the 50-day moving average, and cautiously extending Wednesday’s early-session decline. Significant horizontal support that halted the sell-off in May lies near current levels and offers a glimmer of hope for bulls in the near term.

News Background

According to CoinShares, global investment in crypto funds fell by $1.467 billion last week, hitting its lowest level since January. Investments in Bitcoin fell by $1.315 billion (the largest decline this year), and in Ethereum by $223 million. Investments in altcoins rose by $32 million in XRP, $8 million in Solana, $9 million in Near, and $3 million in Sui.

The total outflow of $2.54 billion over two weeks indicates a deepening and broadening flight from risky assets, despite progress in implementing the CLARITY Act, CoinShares notes.

Following the $1.5 billion buyback of its own bonds, Strategy’s total debt has fallen to $6.7 billion. The return on Bitcoin assets per share has risen by 0.7 percentage points since the start of the year to 13.3%. Strategy did not purchase any cryptocurrency last week, but small public companies acquired 602.6 BTC worth approximately $46 million.

Spot Bitcoin trading volumes fell by 10% over the past week, whilst futures open interest dropped by 3.5%, according to Glassnode.

Ethereum continues to show weakness against the backdrop of statements by the project’s co-founder, Vitalik Buterin, regarding a change in the Ethereum Foundation’s (EF) strategy, notes analyst Ali Martinez. The EF plans to reduce its role in the ecosystem and focus on critical tasks.

The total market capitalisation of stablecoins has hit a new all-time high, reaching $323 billion. This figure exceeds the official foreign exchange reserves of 95 countries.

The FxPro Analyst Team