Bitcoin remained around $65,000 on Monday, up about 4% from Friday. Crypto assets performed relatively steadily amid weakness in AI-related stocks like Nvidia, while Ethereum rose to a near two-month high. In the coming days, the Federal Reserve's interest rate decision, US inflation and GDP data, and earnings reports from several tech giants will be the market's focus.
Key price levels have not yet been broken.
Joel Kruger, market strategist at LMAX Group, said that the recent resilience of the crypto market amid volatility in traditional risk assets is a positive sign and suggests that the correlation between digital assets and traditional markets may be weakening.
He pointed out that Bitcoin needs to break out of its trading range since June to reach approximately $67,300. Ethereum faces a similar test, with the key level above $2,000. Tom Lee, Chairman of Bitmine and co-founder of Fundstrat, mentioned that Ethereum's recent strength relative to Bitcoin is seen as one of the signs of a bullish crypto market. On Monday, the ETH/BTC ratio rose to a three-month high.
Insufficient demand remains the main concern.
However, not all analysts agree that the market is poised for a breakout. Nansen senior research analyst Lai Sondergaard, who is involved in N-token issuance, stated that this rally lacks the buying support typically required for sustained upward movement.
He believes the current market is more likely to remain within a range than to build momentum for a new upward move. Nansen's baseline assessment remains that Bitcoin may fall back to the $52,000 to $58,000 range unless market conditions improve.
Data shows that approximately 9,000 bitcoins flowed out of exchanges over the past week, but open interest in bitcoin futures actually decreased as prices rose slightly, indicating that some traders were reducing their exposure rather than adding to their positions. Nansen also noted that order book data still shows net selling pressure in the market.
This week sees a flurry of macroeconomic and earnings releases.
Sondergaard stated that the Federal Reserve's interest rate decision and subsequent statements on Wednesday could set the short-term tone for risk assets. Thursday's release of US core PCE inflation data, second-quarter GDP figures, and earnings reports from Microsoft, Meta, Apple, and Amazon will also influence market risk appetite.
In addition, approximately $13 billion to $14 billion worth of Bitcoin and Ethereum options will expire on Friday, which could amplify short-term volatility.
- Stablecoins continue to flow into exchanges
- Spot Bitcoin ETF buying remains strong
- Long-term holders stop selling at a loss
For Nansen to adopt a more positive outlook, the market needs to see at least the aforementioned signals. Until these conditions are met, the firm is more inclined to view the recent rebound as a bounce following position adjustments rather than the start of a larger uptrend.
