The cryptocurrency market traded lower on Wednesday, with Bitcoin going as low as $30,235 and Ether under $1,900. However, Thursday started on a bullish note, with Bitcoin surging to $31,480 and Ether jumping to almost $1,960 before retracing a bit.
As of writing, BTC is trading at $31,220, and Ether is at $1,940, according to CoinGecko.
The volatility started the day prior after the release of the minutes from Junes Federal Open Market Committee (FOMC) meeting that showed that almost all Fed officials judged that additional increases in the target federal funds rate during 2023 would be appropriate.
With some Fed officially even favoring a rate hike in June, this hawkish tone put pressure on not just crypto but also stocks ahead of the June jobs report scheduled for release on Friday.
Recent stress tests on banks showing that they are well-positioned to weather a severe recession and continue lending to qualified households may also propel FOMC to aggressively raise rates to bring down inflation without casting the US economy into recession.
The decline in Bitcoin price started during the July 4 holiday in the US, which resulted in July Bitcoin futures prices trading weaker in early trading on Wednesday, according to Kitco senior technical analyst Jim Wyckoff.
The current pause and choppy trading at higher price levels is not bearish and suggests the bulls are storing up energy for another push higher in the near term, he said. The bulls have the firm overall near-term technical advantage.
On the upside, Bitcoin has resistance around $34.4k, so if BTC does continue upwards, we can at least see it test $35k in the near future. Going higher would see a strong resistance zone around $37k, breaking which can see the price seek liquidity around $48k. But such spikes in price also increase the likelihood of a correction. This means testing the support levels below $30k.
While the crypto sector started the day in the mix, derivatives markets have been signaling bullishness. Futures open interest (OI) for Bitcoin is now north of $12 billion, up from $10.4 billion at the beginning of June, albeit a bit lower than $13.4 billion on June 29, according to on-chain analytics firm Glassnode.
Crypto data provider CCData also revealed that institutional investors have been busy trading crypto futures, so much so that the Chicago Mercantile Exchange (CME) saw its best June for Bitcoin futures volumes, rising an astounding 28.6% to $37.9 billion. Eth-based instruments also saw a 10.8% increase, with over 97,000 ETH Futures contracts traded in June.
The USD value of the volume traded also jumped substantially, with BTC- and ETH-backed products collectively recording a 24.6% pump, with $46.8 billion changing hands the highest number since May 2022.
Bitcoin has been enjoying gains since last month, when it first surged above $31k in mid-June following multiple spot Bitcoin ETF filings, and has remained mostly stable despite the positive investor sentiment. The unveiling of a quantitative easing program in China is another positive, while the crypto market sees increased regulatory clarity in Singapore, Korea, and Thailand.
Interestingly, Prime Minister contender Pita Limjaroenrat, the leader of Thailands Move Forward Party, has been found to hold crypto, according to disclosures filed. His thousands of dollars worth of crypto is split between BTC, ETH, BNB, and ADA.
Amidst this, late on Wednesday, Larry Fink, the CEO of the $8.5 trillion asset manager BlackRock, gave the catalyst for the latest price action when he said in an interview that crypto could revolutionize finance.
We believe that if we can create more tokenization of assets and securities thats what bitcoin is it could revolutionize finance, said Fink, adding: Instead of investing in gold as a hedge against inflation, a hedge against the onerous problems of any one country, or the devaluation of your currency whatever country youre in, lets be clear, bitcoin is an international asset, its not based on any one currency and so it can represent an asset that people can play as an alternative.
As Bitcoin made attempts at recovery, altcoins experienced a sell-off, with Kaspa down the most among the top 100 cryptocurrencies by 8.3% in the past 24 hours. Radix, Fantom, Stellar, Gate, Woo Network, and Mina also recorded losses.
When it comes to the 24-hour gainers, the likes of FSX (8.6%), SOL (7.6%), CMOP (5.3%), PEPE (5.1%), Neo (4.2%), Monero (3.7%), and Maker (3%) are enjoying the greens. This has the total crypto market cap up by 2% to $1.256 trillion. However, it is the popular forks of the majors, Bitcoin and Ethereum, that are leading these performers.
Bitcoin fork Bitcoin Cash (BCH) has been enjoying an uptrend for the past 15 days. During this period, the digital asset has rallied 180%. BCH is also up 11.5% against USD on Thursday to now trade at $295.60. BCH is also up 8.8% against BTC, and its trading volume soaring by 143.9% to $1.18 bln from a day ago.
These gains came as Bitcoin became the center of institutional attention as well as increasing BCH trading volumes on South Korean exchanges. Additionally, the launch of Citadel Securities, Fidelity Digital Assets, and Charles Schwab-backed EDX Markets, which supports BCH along with BTC, ETH, and LTC, contributed to the uptrend.
The price action led traders betting against Bitcoin cash to lose the highest amount in over two years as BCH surged to the $320 level last week. According to Coinalyze data, shorts and longs cumulatively lost over $25 million on BCH-tracked futures, which may also have contributed to the sudden spike.
This week, funding rates have fallen negative across all exchanges that list BCH futures, indicating that short traders are willing to pay long traders to remain in their positions.
BCH wasnt alone, though. Another Bitcoin fork, Bitcoin SVs (BSV) price, also jumped by 125% between June 20 and July 1. BSV is up 9.5% against USD and is currently trading at just above $46, while its trading volume increased by 12.30% to $40.6 mln. BSV is also in the green by 6.9% against BTC.
Just like Bitcoin forks are enjoying an uptrend, Ethereums fork Ethereum Classic (ETC) has also started rising in value.
ETC is the 26th largest cryptocurrency, with a market cap of $2.8 billion. And at the time of writing, ETC has been trading at $19.81, up 4.1% against USD, 1.6% against BTC, and 2.38% against ETH. During this period, the trading volume for the altcoin only increased by 0.3% to $140 million.
In the past week, the price of ETC has recorded 9% gains and 15.5% in the last two weeks. However, 2023 wasnt really a good year for this altcoin as ETC only registered gains of 25.73% so far this year. While the price did rise, the price has been stuck in the $15 to $24 range during this time.
Over this past year, ETC jumped 31.2% while losing 88.14% of its value since hitting its all-time high (ATH) at $167 in May 2021.
Besides the general positive momentum in the broad crypto market, ETC price may be rising in line with ETH, which is up 62% year-to-date (YTD), much like how BCH and BSV jumped alongside BTC. However, compared to Bitcoins 86.42% upside in 2023, BCH has rallied 205.7% and BSV 10.23%.
ETC is the native cryptocurrency of Ethereum Classic, a blockchain project that was created when the second-largest crypto, Ethereums blockchain, split into two separate chains in 2016. The split was due to a disagreement among members of its community regarding how to handle the massive hack on a decentralized Ethereum-based platform called The DAO.
A year after Ethereum was launched, the network saw one of its most successful ICOs, The DAO, which accumulated 11 million ETH from over 18,000 investors, and even got hacked. Many community members proposed rolling back the Ethereum blockchain to rescue the affected investors, while others argued that doing so would set the wrong precedent for future bailouts. The majority of the community voted to restore the lost funds through a hard fork, which split the chain into two separate networks.
After the fork, the old chain became known as Ethereum Classic, which has a relatively small community and believes in the principle that Code is Law. When the split happened, those who held ETH received the exact same amount of ETC in their wallets for free. During the bull run of 2017, ETCs price went to hit its then peak of $42, only to crash as low as $3 during the following crypto-wide bear market.
Unlike Ethereum, which doesnt have a hard cap on how many native tokens will be created, Ethereum Classic made changes to its monetary policy to be deflationary, meaning the number of tokens created decreases over time to make it a better store of value. ETCs supply is capped at 210.7 million, and its block reward declines by 20% every 5 million blocks.
However, Ethereum Classic remains a security concern. In August 2020, the blockchain suffered three 51% attacks in August 2020 with Terry Culver, CEO of ETC Labs, said at the time that the threat of 51% attacks on Proof of Work blockchains is a universal problem and introduced a series of defensive mining measures.
While ETCs price continues to see bursts of momentum whenever bullish sentiments return to the crypto market, Ethereum Classic continues to struggle with adoption. Much like how Bitcoin hard forks activity and usage level is nowhere near the crypto king, ETC doesnt enjoy a considerable use case or user base either.
That said, ETC closed off June with a 13% increase in price, and if Ethereum Classic manages to keep up with this momentum, it can surge even more in July. On the other hand, if selling pressure prevails instead, the ETC price could drop to the $18 level.
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