Crypto markets slide as the Mt.Gox overhang looms over BTC 📉

Hola folks!

Welcome to this week's crypto market update, where we will discuss the state of the global crypto market, what has spooked it, and the probable green shoots in the coming week. 

The crypto market is on uncertain ground amid the Mt. Gox distribution and the German and the US governments transferring their crypto holdings to exchanges for a potential liquidation. The prospect of increased supply has spooked crypto investors. 

Read on to learn more about the tokens that took the hardest hit and how some tokens showed surprising positive action in the past week.

Crypto markets continued to underperform and traded flat with a downward bias last week. Despite no new demand triggers for BTC, there's a lot of negative sentiment around the supply overhang caused by the Mt.Gox distribution. In addition to the threat of $8bn worth of sell pressure from Mt.Gox users, the German and US governments have been moving BTC to exchange wallets for potential selling, resulting in additional weakness in prices. 

Market leaders BTC and ETH continued to be on a weak footing, with some reversal in the downward trend over the weekend, trading close to the $63k and $3.5k levels, respectively. However, the overall crypto market cap was more resilient, and there were several pockets of positive price action, which made it bounce back above the $2.45trn level. 

Interestingly, the week saw an uptick in the ETH/BTC ratio, as ETH prices traded better compared to the fall in BTC prices, as anticipation for the ETH Spot ETF trading gains more investor interest, with Galaxy predicting $15bn worth of inflows by 2025.

On similar grounds, Solana's SOL (up 15%) was an outlier to the soft prices of other major tokens, as prominent player VanEck filed for a Spot SOL ETF in the US following the launch of Canada's first spot SOL ETF the previous week.

The broader crypto markets were a sea of red for most of the week, as most altcoin tokens traded sideways with a downward bias. However, as the market leaders staged a comeback over the weekend, so did the broader crypto token universe, with some specific triggers resulting in outsized returns. 

Some of the more established projects have started attracting investor interest, with Avalanche's AVAX, Maker's MKR, and Aave's AAVE reporting sharp gains of 15% during the weekend's comeback of buying demand. 

The biggest drop was in certain sub-categories that had previously run up a lot in prices, including AI and meme coins, but they too made a comeback later in the week. SingularityNET, Fetch.ai, and Ocean Protocol, which are headed for a merger under the Artificial Superintelligence Alliance (ASI token), dumped more than 10% during the week, but Akash Network's AKT was an outlier, surging by 1/3rd in prices. 

Similarly, even as most meme tokens traded flat, certain ecosystem-specific tokens saw massive positive gains, like BRETT on Base, BONK and WIF on Solana, and PEPE on Ethereum. 

Telegram's TON was back in the green last week as its active users and Dapp ecosystem continued to grow. Polkadot's DOT jumped on the back of a proposal to slash unstaking time to two days. Kaspa's KAS, too, surged in price after BTC Miner Marathon mined $15m of the token to diversify its revenue. Injective's INJ jumped after announcing a strategic DeFi partnership with Andromeda.

• ETH $3,483 ⏫ 3.17%

• SOL $147.92  ⏫  17.86%

• AVAX $29.79  ⏫ 22.62%

• TON $7.69 ⏫ 6.02%

(All data here is as of 2.00 p.m., 1 July 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Asset manager VanEck filed for a Solana (SOL) exchange-traded fund (ETF), the first such registration in the US, just six days after 3iQ filed for a similar product in Canada.. Read more here. 

• The US SEC returned the S-1 forms to prospective Ethereum ETF issuers in the latest round of back and forth before they go effective. The forms were handed back with light comments, according to a source at one issuer. Read more here.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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