July in a Nutshell: 1-minute Recap of Monthly Highlights
Last 30 days the crypto market saw an 11.4% drop in market capitalization, driven by the upcoming Mt. Gox BTC distributions and large BTC transfers by the U.S. and German governments. BTC experienced significant sell-offs, worsening market sentiment. However, VanEck and 21Shares filing for the first Solana ETFs in the U.S. provided a glimmer of hope.
Key Highlights of Month
In June, the crypto market faced significant downward momentum, culminating in an 11.4% decline in total market capitalization. Despite a strong start to the month, major sell-offs and large-scale liquidation events occurred due to key factors. These included the upcoming Mt. Gox repayment distributions scheduled for July and the transfer of substantial BTC quantities by governments such as Germany and the United States to centralized exchanges, fueling concerns of a potential sell-off. On a positive note, asset managers VanEck and 21Shares filed for the first Solana ETFs in the U.S., providing some optimism amidst the challenging market conditions.
📉Crypto Market in June: Overall Decline
The crypto market experienced a significant downturn in June, with total market capitalization falling by 11.4%.
⚠Impact of Mt. Gox and Governments on BTC Market
BTC saw a substantial decline following the announcement of Mt. Gox’s upcoming distribution of over 140,000 BTC in July. Negative market sentiment was further fueled by reports of the U.S. and German governments moving large amounts of BTC to centralized exchanges.
⛏️Miner Sales and Halving Consequences
Since November 2023, Bitcoin miners have consistently been net sellers, leading to the lowest miner BTC balances in over 14 years. This trend is driven by the latest Bitcoin halving in April, which reduced the block reward from 6.25 BTC to 3.125 BTC. The reduced income has forced many miners to sell their holdings to survive. This has also led to a wave of mergers and acquisitions in the sector, including deals from Hut 8, CleanSpark, and Core Scientific.
🚀Growth of the TON Ecosystem
The TON ecosystem has seen increased activity over the past month, with daily active addresses reaching a record high of nearly 578,000 on June 14. Key drivers include the success of The Open League, Binance’s integration of USDT on the network, and Pantera Capital’s new funding initiative to boost investments in TON.
🏁Competition in the Restaking Sector:
EigenLayer’s market dominance dropped to a low of 92.2%, indicating increased competition in the restaking sector. Although smaller in scale, both Karak and the Paradigm-backed Symbiotic achieved notable growth: Symbiotic hit its initial $200M deposit cap in just one day, while Karak’s TVL exceeded $1B for the first time. Despite this, EigenLayer’s first-mover advantage suggests that Karak and Symbiotic still have considerable work to do to advance further in this rapidly evolving sub-sector.
Market Developments
BTC
Amidst the market-wide sell-off, most of the top ten coins by market capitalization ended June in the red. The decline was influenced by the announcement of Mt. Gox’s repayment distributions and the movement of large amounts of BTC to centralized exchanges by various governments, sparking fears of a massive sell-off. BTC itself experienced a 10.9% decline due to these factors, with additional pressures from the U.S. and German governments transferring BTC to exchanges.
ETH
ETH had a challenging June with a 10.0% decline. Positive developments like the SEC concluding its investigation into Consensys and Ethereum 2.0, and progress in the spot Ethereum ETF approval process, were overshadowed by a new SEC lawsuit against Consensys and Ethereum staking platforms Lido and Rocket Pool, affecting ETH’s momentum.
TON
TON outperformed the market, reaching an all-time high of $8.24 and closing June with a 17.5% gain. The surge in DeFi TVL to $700M was largely driven by “The Open League,” a long-term incentive program supported by ecosystem grants and community incentives, which successfully attracted inflows across several sectors.
BNB
BNB showed relative resilience, starting June with a rally to an all-time high of $720.67 but eventually retracing by 18.8% to close the month in the red. Similarly, XRP experienced volatility, ending June with a 9.0% decline.
ADA & SOL
ADA and SOL experienced declines of 14.0% and 16.2% respectively. However, SOL rallied towards the end of June due to the introduction of the first spot Solana ETFs in the U.S. by VanEck and 21Shares, alongside other key developments like “Blinks,” a technology for cryptocurrency transactions, and new investments from the Solana startup accelerator.
AVAX, SHIB & DOGE
AVAX recorded a 23.0% decline, while SHIB and DOGE faced significant retracements of 27.7% and 34.8% respectively. As highly volatile assets, these memecoins bore the brunt of the market downturn, underperforming the broader market amidst the sell-off.
Monthly change in crypto market capitalization (%)
Monthly crypto market capitalization decreased by 11.4% in June.
Key Events to Keep an Eye on in June
July began on a bearish note with the first crypto crash of 2024, catching markets off guard. The sudden downturn has instilled fear in investors, as indicated by the fear and greed index dropping below 30. Crypto’s market cap has dipped below $2 trillion for the first time since February. Bitcoin is striving to maintain its position above $54,000, while altcoins have seen significant declines exceeding 15% over the past week.
Short-Term Rally Anticipated
July is expected to be a period of volatility in the cryptocurrency market, according to expert analysis. BTC could temporarily rise to around $60,000 during the month, but this is likely to be a short-lived rally before another decline to below $50,000. Markus Thielen, founder of 10x Research, highlighted a technical base forming in the $55,000-$56,000 range.
Seasonal Trends and Market Pressure
Simultaneously, seasonal trends pointing to weaker returns in the third quarter are adding pressure to Bitcoin. Vetle Lunde, senior analyst at K33 Research, mentioned that the market will face selling pressure from government entities and Mt. Gox refund recipients throughout the summer. Estimates suggest this could involve 75,000 to 118,000 BTC, valued between $4.3 billion to $6.8 billion at current prices.
Prolonged Market Conditions
Lunde further predicts that these flows will weigh on market performance in the coming months, extending the period of choppy market conditions potentially until October. The combination of technical factors and seasonal weaknesses sets a cautious tone for July’s cryptocurrency landscape.
Main Events scheduled for this month:
- July 10: Dash halving
- July 11: US Consumer Price Index and inflation data release
- July 12: Sentencing of Alexander Vinnik in the BTC-e case
- July 14: Seventh anniversary of Binance’s founding
- July 29: Sentencing of Abraham Eisenberg, participant in the 2022 Mango Markets attack
- July 30: Ninth anniversary of Ethereum’s creation
- July 31: US Federal Reserve meeting on the key rate
- July: Compensation payments begin in the Mt. Gox case.
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