Crypto Relief Rally Runs Out of Steam as $50B Exits Market
The bullish momentum seen in the crypto market throughout July seems to be waning as a new month begins.
Crypto markets have fallen 3.7% over the past 24 hours, dropping the total market cap back below $1.1 trillion again.
Since the weekend’s seven-week high, more than $50 billion has exited the space in what appears to be a cooling of the bear market’s relief rally.
Markets were unaffected by the double whammy of macroeconomic news last week as the US Federal Reserve raised interest rates and the country slipped into a technical recession.
However, the bears seem to be back in control of things today as cryptocurrencies are a sea of red.
Bear market relief rally
On-chain analytics provider Glassnode took a look at technical indicators in its “Week On-chain” report to determine whether “it’s a relief rally in the bear market or the start of a sustained bullish impulse.”
Despite the recent rally, Bitcoin price action has remained range-bound since the epic crash in mid-June. It has failed to break above the key resistance at just above $24,000 and has fallen back below $23,000 today.
Glassnode confirmed this, stating that “current network activity suggests that there is still little influx of new demand.” It added that transactions have been sideways to slightly lower, indicating that only the “stable base of higher conviction traders and investors remains.”
Poor demand for transactions, address activity and low fees indicate that things are “firmly in bear market territory.”
Bitcoin is currently trading right at its 200-week moving average at $22,872, and just above the realized price, which is $21,816 according to Woo Charts.
The Glassnode data analyzes last week’s actions in the crypto market and, however, has not taken into account the last two days of decline, which is likely to be even more bearish.
Altcoins in red
Bitcoin’s 2.3% daily decline is not as bad as its brethren are suffering. Ethereum, which has been driving market momentum recently, has lost 7% on the day falling to $1,576 at press time according to CoinGecko.
Binance Coin (BNB), Cardano and Solana are all down 4%-6% while Polkadot (DOT) has dumped 12.7% on the day.
All indications on the chain suggest that the recent rally has only been a slight relief to the bear market, and further declines are likely as the crypto winter drags on.
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