By
Benjamin Njiri
April 23rd, 2024
With the US GDP shrinking and interest rates rising, the crypto market so far hasn’t given up to the macro uncertainty. August could be a month of volatility.
Despite the Fed rate hike and inflation, the cryptocurrency market cap continued to show strength last weekend. The broader crypto market with the growing prices has been holding strongly above the $1 trillion benchmark.
The recent move of prices shows that the crypto market has successfully managed to dodge the fears of inflation. Last week, Bitcoin gained 5% while ending the month of July with 18% gains. As of press time, Bitcoin is trading at $23,397 with a market cap of $446 billion.
On the other hand, Ethereum (ETH) was trading close to $1,700 levels and has registered a more than 66% rally from its July low. Other altcoins like Solana (SOL), Polygon (MATIC), and Avalanche (AVAX) also made strong moves last month.
Last week, the United States reported that its GDP dropped 0.9% during the second quarter of 2022. With the second consecutive quarterly drop in the US GDP, it means that the US has entered a technical recession.
Where Are Crypto Market Prices Heading from Here?
The crypto market has been closely following the equity market in its recent move. All three indices on Wall Street have been showing strength recently. On the technical chart, Nasdaq 100 has formed a bullish candle while hinting that cryptocurrencies might follow a similar move going ahead.
Nasdaq 100 putting in a bullish engulfing candle!
This could bode well for equities, and when equities do well so does #crypto! pic.twitter.com/4aSvGuDWob
— Lark Davis (@TheCryptoLark) August 1, 2022
Last week, Cumberland shared its opinion noting that digital assets were in a “bizarre no-man’s-land”. Commenting on the broader crypto space, it further added:
“Apart from the merge, most upcoming fundamental catalysts fall squarely into the legal & regulatory category. Stablecoin legislation appears to have been delayed until after the summer recess, but the SEC’s ongoing actions are top of mind for holders of length in the space”.
It further added that as the “macro fog dissipates,” more capital will flow into newly emerging trades. Thus, cryptocurrencies could potentially benefit from any improvement in the macro environment.
But for the month of August, crypto market volatility can continue. “Bitcoin jumped +18% in July after @santimentfeed‘s NVT model’s growing #bullish divergence in May & June finally saw a price bounce come to fruition. With a neutral signal now as prices have risen and token circulation has declined slightly, August can move either direction,” reported on-chain data provider Santiment.