The crypto market opened the week in the red, with a significant sell-off sending prices plummeting. Bitcoin and Ethereum led the decline, hitting their lowest levels in seven months at $49,512 and $2,171 respectively. Altcoins fared even worse, with many experiencing 24-hour losses of up to 30%. Some have seen their value halve or even triple from their 2021 peaks.
The root cause of this significant decline is the Bank of Japan’s decision to raise interest rates from 0% to 0.25%. As a result, yen borrowers who previously didn’t pay interest now have to. Simultaneously, the Japanese yen strengthened against the US dollar.
This situation triggered a domino effect, leading to a sell-off as borrowers rushed to pay their interest. Consequently, the yield on 10-year US Treasury bonds and US stocks experienced a significant correction. Additionally, there was a massive sell-off by Jump Trading and outflows from Bitcoin spot ETFs.
However, on Tuesday morning (August 6), the crypto market experienced a collective rebound. BTC recovered to around $55,819, and ETH reached around $2,523.
The Pintu Academy team has compiled valuable insights from several crypto projects. We analyze that information to determine its potential impact on various asset prices. Will these be bullish or bearish catalysts? Find out in the following article.
It should be noted that all information in this Market Signal is intended for educational purposes, not as financial advice. Do your own research before making any financial decisions
Ethereum (ETH) ➡️ Bearish 📉
The launch of the spot Ethereum ETF did not turn out to be a positive catalyst for ETH. In fact, quite the opposite happened, as the price of ETH dropped sharply. At the time of writing, ETH is trading around $2,504. This is the lowest price since early January 2024 and represents a nearly 50% decline from its all-time high.
One trigger for ETH’s correction is the massive selling by several institutional investors. One that has attracted significant attention is the sell-off by Jump Crypto, a trading firm.
On-chain data shows that Jump Trading has sold $850 million worth of ETH since July 24, 2024. Coincidentally, the prices of ETH and other cryptocurrencies began to decline from that date. Despite this, Ethereum advocate Anthony Sassano argues that Jump Trading’s exit from the crypto market is one of the most bullish catalysts for ETH.
Many rumors are circulating that several crypto investment firms will sell their ETH holdings. If this happens, it will be challenging to see ETH recover from the downward pressure in the near future. However, this significant correction could be a good opportunity for dollar-cost averaging for those who still believe in ETH’s long-term prospects.
“They (Jump Trading) have been a parasite on the crypto industry for years. The industry will be much better off without them,” Sassano tweeted.
XAI (XAI) ➡️ Bearish 📉
XAI is poised for a potential bearish trend this week. The sentiment that might suppress its price is the upcoming XAI token unlock. This layer-3 protocol, specifically designed for AAA gaming, will unlock 35.88 million XAI tokens, or 6.90% of its total supply, for the team, investors, and the ecosystem.
Just recently, XAI had already unlocked 198.4 million tokens or 38.16% of its total supply. Since that token unlocks, the price of XAI has dropped from $0.34 to $0.199. Thus, the XAI token unlock this week amounts to $8.73 million.
With this token unlock, a sudden surge in XAI supply could put pressure on its price. Especially if investors and the team decide to sell their holdings.
Filecoin (FIL) ➡️ Uncertain⚖️
Filecoin is expected to be in the uncertain area this week. They plan to launch the Waffle update on August 6 (local time). This update aims to increase Filecoin’s efficiency and speed and expand its integration with a broader blockchain ecosystem.
According to the proposal, the Waffle update will have at least three impacts. First, adding storage will become more accessible and cost-effective, which is expected to accelerate network growth. Second, integration with Ethereum transactions will open up possibilities for cross-chain applications. Third, it will reduce the time it takes to confirm a transaction.
On paper, the Waffle update has the potential to be a positive catalyst as it strengthens Filecoin’s fundamentals. On the other hand, the update release is often associated with a “sell the news” event, which could potentially cause the price of FIL to decline. Currently, FIL is trading at Rp 54,789, up 2.59% in the last 24 hours.
zkSync (ZK) ➡️ Uncertain⚖️
ZK Chain, owned by Zksync, officially started operating on August 5, 2024, with the launch of the GRVT testnet. GRVT is a hybrid derivatives exchange based on the Validium ZK Chain, allowing off-chain order matching and on-chain settlement at a level of 600,000 TPS.
The public testnet aims to evaluate key account management, trading features, and test the GRVT self-custodial wallet using biometrics. By participating in the testnet, users have the opportunity to earn ZK tokens, GRVT points for airdrop distribution, and other rewards.
The presence of GRVT as the first ZKChain project on ZKSync could trigger volatility in the price of the ZK token, especially with the opportunity to earn ZK tokens through the testnet. On the other hand, the testnet also serves as a proving ground for the ZK Chain project to see if it meets expectations or falls short.
Crypto Performance Over the Past Week
Here are the best and worst performing cryptos on Pintu:
Cryptocurrencies With the Best Performance
- Magic Square (SQR): 🔼18,70% (Rp 1.630)
- Binary X (BNX): 🔼1.04% (Rp 22.646)
- AEUR (AEUR): 🔼1,00% (Rp 17.833)
Cryptocurrencies With the Worst Performance
- Lista Dao (LISTA): 🔽46,43% (Rp 8.198)
- Kamino (KMNO): 🔽44,79% (Rp 400)
- Pixelverse (PIXFI): 🔽43,28% (Rp 282)