Crypto Market Review, July 28

Arman Shirinyan

Bitcoin goes back to $23,000, Ethereum avoids correction, but it might be nothing but bull trap

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The United States of America has officially entered the recession as the recently dropped GDP numbers are negative for the second quarter in a row, which technically means that the country is officially in a sharp economic decline. But despite the confirmation of the crisis, both crypto and financial markets remain unfazed.

Bitcoin rally is worrying signal

Bitcoin’s reaction to the official recession confirmation and another large rate hike is bizarre, considering the initial movement of the asset on the market after we saw the first rate hike. Back then, the cryptocurrency market entered a strong downtrend that resulted in a 40% retrace and the prolonged consolidation that we are seeing today.

The swift pump to $23,000 may have been a massive misleading indicator for beginner investors that would consider a price increase during a bad macro environment as the end of the bear market and a return to “normal conditions.”

Bitcoin Chart
Source: TradingView

Unfortunately, fundamental metrics like trading volume, market inflows and other indicators that track the behavior of larger investors that actually shape the cryptocurrency market are still showing signs of a bear market.

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The majority of institutional investors are still staying away from investing in digital assets and only provide insignificant inflows into the market.

For example, Cathie Wood’s Ark Investments recently dropped their Coinbase stock holdings, which means that the biggest funds in the world are still looking for a way to shed their exposure to the cryptocurrency market despite the short-term recovery we are seeing today.

Ethereum and altcoins are also in danger

Ethereum is also one of the coins that managed to get back above the $1,600 threshold, which initially seemed like an impossible to point to break through. But the surprising behavior of Bitcoin investors allowed Ether to easily reach an old local high.

Unfortunately, the upcoming Merge update is not enough to keep Ethereum afloat as industry-related risks are still pushing investors away from the market, as mentioned above.

At press time, Ethereum is trading at $1,622 and losing around 1% of its value in the last 24 hours.