Price performance of the cryptocurrencies may have been lackluster over the past month, but some of the industry developments have lifted animal spirits, and optimism may be gradually returning to the crypto market after May’s crash from all-time highs, said a report.
According to Kraken Intelligence, El Salvador made headlines worldwide after it adopted bitcoin as an official national currency, parachain auctions launched on Kusama, and the non-fungible token (NFT) sector, which has been lagging, bounced back with strong fundraising rounds.
The report highlighted that last month was the third most volatile June when looking as far back as 2011, second to 2019 (100%) and 2011 (278%), and was 10 percentage points more volatile than usual.
Similarly, last month was the third-worst performing June on record behind 2018 (-15%) and 2013 (-31%). The month also came in well below the average and median return of 10% and 2%, respectively.
“When looking at bitcoin’s historical volatility in July, one will see that the month is, on average, 20 percentage points less volatile than June at 67%. As it relates to historical performance, one will see that bitcoin returns, on average, 10% in July and has a median reading of 14%. If one were to assume that history will repeat in July, we could expect the cryptocurrency to trend modestly higher month-on-month (MoM) as volatility dwindles and consolidation persists,” Kraken Intelligence’s market recap and outlook report read.
The world’s biggest crypto currency was trading 2% higher at $34,934, at around 6.15pm, as per CoinGecko.com. The digital coin is still 46% lower compared to its all-time high of $64,804.72, which was hit on 14 April 2021.
June marked the second month of range-bound trading for bitcoin as the bulls and the bears battled for control between $30,000 and $42,000; despite slipping to a five-month low of $28,816 and trading down as much as 23% intra-month. A modest rally in the last week of June, however, minimized the month’s loss to 6%.
Kraken believes that despite bitcoin successfully defending $30,000 support on several occasions in June, it can’t be ruled out that the digital asset will not drift lower in the months ahead.
“Accordingly, market participants should keep a close eye on bitcoin’s 50-week simple moving average (SMA), 100-week SMA, logarithmic regression support, and 200-week SMA,” the cryptocurrency exchange’s report said.
The report also highlighted those negative headlines out of China only temporarily weigh on the crypto market.
“When looking as far back as 2013, one will find a myriad of headlines out of China that speak to the country’s distaste for crypto assets. While many of these news announcements were followed by bitcoin’s slumping in the day, week, and month that followed, bitcoin has tended to continue pressing higher in subsequent months,” the report said.
Bitcoin mining crackdowns in China over the past few weeks have partially fueled the decline in the second half of June. On 18 June 2021, Sichuan officials requested energy companies to stop supplying miners.
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