Bitcoin's price dropped below $65,000 due to the Federal Reserve's interest rate decision and geopolitical tensions in the Middle East.
CryptoQuant's CEO says that whales are accumulating altcoins, especially Solana, Polygon, and Cardano.
Token Terminal says that the DeFi market is showing signs of recovery, with general active loans and TVL on the rise.
The crypto market is going through one of its most trying times as analysts and speculators anticipate the last leg of the current bull cycle.
Bitcoin and the altcoin market, in particular, have been through several ups and downs, influenced by a combination of macroeconomic factors, investor behaviour, and the general sentiment of the industry.
Here are three of the most important updates you need to know about.
Between 31 July and 1 August, Bitcoin crashed below the $65,000 mark in the wake of the US Federal Reserve's decision to maintain current interest rates.
This decline was also worsened by the rising geopolitical tensions in the Middle East, allowing Bitcoin to hit a $64,549 low on 31 July.
It is important to note that, according to data from TradingView and CoinMarketCap, this price was the lowest the cryptocurrency had been at since 25 July.
Bitcoin’s price performance
The cryptocurrency’s price rebounded soon after this to $65,000 and then fell back to the $63,000 - $64,000 range, causing a staggering $300 million worth of liquidations across the market.
The Federal Open Market Committee's decision to keep interest rates between 5.25% and 5.5% was much expected by the market, with its current chair, Jerome Powell, noting that the US economy is expanding at a "solid pace".
Furthermore, GDP growth and Private Domestic Final Purchases (PDFP) are showing encouraging signs despite how spending growth has slowed.
Meanwhile, in the Altcoin market, the whales are starting to position themselves for the next incoming rally, according to a recent tweet from CryptoQuant CEO Ki Young Ju.
Ju highlighted this trend through the 1-Year Cumulative Buy/Sell Quote Volume, which measures the difference between buy and sell limit orders over one year.
According to Ju, the whales are prone to using limit orders to avoid slippage, which makes their movements easier to track.
The rising level of this metric, therefore, shows that these investors are increasing their buy-limit orders and are forming "strong buy walls".
In essence, the altcoins are set to boom—but which ones should smaller investors double down on?
According to Ju, some of the top altcoins that these whales are most interested in include Solana, Polygon, Cardano, Cosmos, PancakeSwap, My Neighbor Alice, Ampera, Ankr Protocol, and Chilliz token.
On the other hand, cryptocurrencies like XRP, Chainlink (LINK), BNB, Compound Finance (COMP), Bancor Network (BNT), and Aave are currently at the other end of the spectrum and aren't seeing many futures buy orders.
Further down the road, there are now more indicators that the market is strengthening.
Defi, in particular, appears to be recovering, with key indicators like active loans and TVL across several protocols showing impressive recoveries from their previous lows in 2023.
Token Terminal drew attention to this trend, highlighting that active loans in DeFi have returned to levels not seen since early 2022.
This metric now stands at approximately $13.3 billion after peaking at $22.2 billion during the 2021 crypto bull run.
Following the 2022 bear market, the active loans metric dropped from $22.2 billion in March to as low as $3.1 billion by January 2023.
At the time, Defi appeared to be dead. However, current metrics show that a recovery is ongoing from last year's lows, indicating that investors are now taking more loans (possibly to open more crypto positions), a major sign of an incoming bear market.
Token Terminal highlights that DeFi TVL also took a massive hit after crashing by around 80% from its November 2021 peak of $180 billion.
This crash took the metric down to around $37 billion by October 2023, only last year.
The Defi TVL resurgence
The Defi TVL resurgence
Source: DefiLlama
However, the sector has recovered immensely since then, with a staggering 160% increase to a collective $95.6 billion, according to DefiLlama.
Overall, Bitcoin may be down at present. However, the signs of a reversal in the general market remain promising.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.