Key Points
- Bitcoin [BTC] and Ethereum [ETH] experienced volatility in July, with BTC gaining 2.95% and ETH losing 5.88%.
- Expectations for a potential Federal Reserve rate cut in September could boost market liquidity and be favourable for cryptocurrencies.
The cryptocurrency market experienced volatility in July, with Bitcoin [BTC] and Ethereum [ETH] showing mixed results.
Federal Reserve and Crypto Market
The Federal Reserve maintained the benchmark interest rate at a 23-year high for the eighth consecutive time. In the aftermath of this decision, Bitcoin [BTC] traded relatively unchanged.
The Federal Open Market Committee (FOMC) met market expectations by maintaining the federal funds rate at 5.25%-5.50%. Traders are now looking forward to the first potential rate cut of the year in September.
FOMC Chair Jerome Powell hinted at an ongoing discussion about a possible rate cut in September, depending on strong economic growth figures. Such a decision could increase market liquidity and generally favour cryptocurrencies.
July’s Crypto Trends
Bitcoin experienced a slight pullback towards the end of July, erasing some gains. However, it managed a 2.95% return across the month, setting the stage for potential new yearly price highs.
Ethereum [ETH], on the other hand, lost 5.88% during the same period, despite positive influences like US-based spot Ether ETFs going live. The ETH/BTC ratio fell by 10.72% by the end of July.
In terms of large-cap altcoins, MANTRA [OM] and Helium [HNT] were the best performers in July, with returns of 44% and 36%, respectively.
Outlook for August
Last month saw a trend of bargain hunting, with addresses holding at least 0.1% of BTC’s circulating supply adding roughly 84,000 BTC to their stashes. This marked the highest accumulation pace since October 2014.
Accumulation by whale and shark investors historically suggests anticipation of a breakout to the upside from the current ranges. Renewed capital inflows into the crypto market further support this bullish sentiment.
Bitcoin has been trading between $58,000 and $70,000 for five months. The prevailing resistance at $69,600 is a key target for bullish traders, as overcoming it would bring the $72,000 level into view.
However, bears have successfully defended the upper boundaries of the current consolidation range, indicating that a strong catalyst is needed for BTC price to overcome this hurdle.
