Bitcoin Market Cap Hits Lowest Since 2022 Start as Miners Enter Selling Spree
Bitcoin fell in early trading on Tuesday as investors await the release of July’s inflation report on August 10. BTC has been rejecting $24K for three sessions over the past month, which suggests that its technical resistance level is strong.
A Decline in Bitcoin’s Market Cap
According to data from TradingView, Bitcoin is facing increasing competition from other altcoins, indicating that the “alt season” is already here. Currently, BTC makes up around 41 percent of the market cap of all cryptocurrencies which is the lowest since the start of 2022.
As per Hashrate Index, the public bitcoin miners sold more of their digital currency in July than they bought. The total BTC sold was 5,340, while the amount mined was 3,478. Many experienced a demand response and curtailment due to the heatwaves that affected their regions.
Following the collapse of the Terra Classic, altcoin markets have rallied significantly. Bitcoin’s return from its 18-month lows in June has also boosted the sector. While Bitcoin is still the king of cryptocurrencies, altcoins are starting to give the bulls a run for their money.
According to a report by CoinMarketCap, Bitcoin’s market share has dropped to its lowest point since January. It noted that the increasing competition from other altcoins has led to the emergence of the largest digital asset, Ethereum. As of June 19, Ethereum’s market cap had risen to 19%.
The Altcoin Season Index has also supported the case for investing in altcoins. It measures the performance of different cryptocurrencies during the “altseason.” With a normalized score of 94, the index is currently showing its strongest season signs.
The closer the score is to zero, the more it favors Bitcoin over altcoins. According to the Altcoin Season Index, 75% of the Top 50 cryptocurrencies performed better than Bitcoin last season. Alt season refers to the past 90 days.
Betting on the Merge
According to Matteo Bottacini, the upcoming merge on the Ethereum network is the main topic of discussion. The basis for the spread between the futures price and the spot price of Ether has widened. For instance, in September, the spread between the futures price and the spot price of Ether was $10, while in December, it was $40.
In addition, he said that the rumors about the possible existence of a fork of ETH and a proof-of-stake coin have caused traders to sell the spot market and buy the long-term future. Withholding ETH will allow you to receive the asset that may be valuable.
Ken Worthington, an analyst at JPMorgan, said on Monday that the anticipation of the upcoming blockchain technology event known as the merge helped drive the price of Ether higher in July. After two tests were conducted, the price of Ether increased by 70%.
Justin Sun, the founder of blockchain project Tron, said in an interview with the TV network CoinDesk that he supports the idea of a post-merger fork of Ethereum. He noted that the proof-of-work method is very important to the platform.
According to Daniel Kuhn, a financial analyst at CoinDesk, the average cost of a transaction on the Ethereum network is at its lowest level in two years. He noted that the average cost of a transaction is around 12.5 gwei. It means that, at the end of July, only about half of the ETH needed to run the network was used.
Inflation Figures Not Swaying the Markets
Although investors were relatively calm during the first trading day of the week, they remained on the lookout for potential volatility ahead of the release of US inflation data on August 10. The S&P 500 and the Nasdaq Composite Index only saw a 0.4% gain.
Despite the relatively calm market conditions, the Twitter account BTCfuel noted that the recent losses in China could trigger a new wave of volatility in the cryptocurrency markets. It warned that the country’s economic slowdown could trigger a similar move in the US.
Regarding inflation, some experts noted that the price increases could be slowing down due to declining commodities. Others noted that Elon Musk, the CEO of Tesla, believed that the company’s price increases could also be moderating.
