After bottoming out at a two-month low of around US$25,400, Bitcoin recovered some losses on Thursday morning in Asia to trade around US$26,800. Ether also fell dramatically to a low of around US$1,550 before rebounding to just under the US$1,700 line. All other top 10 non-stablecoin cryptos logged losses as macroeconomic factors โ including the depreciation of the Chinese yuan and the bankruptcy of Chinese property giant Evergrande โ hit investor sentiment. Overall, investors liquidated $1 billion in cryptocurrencies, driving the total market capitalization to the edge of the psychologically important US$1 trillion threshold.ย
XRP led the losers, after a U.S. judge granted the U.S. Securities and Exchange Commission (SEC) approval to file a motion to appeal the recent favorable ruling for Ripple Labs regarding retail sales of token XRP. Meanwhile, the Forkast 500 NFT index dropped but a rise in transactions continued. U.S. stock futures steadied after Wall Street closed lower on Thursday. The release of minutes from the Federal Reserveโs July meeting continues to fuel concerns of more monetary tightening ahead
Bitcoin, Ether slide after giving up key support levels
Bitcoin slid 7.02% in the last 24 hours to US$26,819.27 as of 07:20 a.m. in Hong Kong, logging a weekly loss of 8.88%, according to CoinMarketCap data. The worldโs leading cryptocurrency hit a two-month low of US$25,409.11 on early Friday morning.
โDuring late US / early Asia trading volumes, Bitcoin prices broke the critical support level at US$28,000. We knew a crash (or sharp decline) could be coming,โ Markus Thielen, head of crypto research at digital asset service platform Matrixport, wrote in an emailed note.ย
โRealized volatility had hit 18%; the last time volatility was this low, in November 2018, Bitcoinโs 30-day realized volatility spiked to over 100% as prices crashed by 46%. In Bitcoin, sharp price declines have often followed low volatility periods. We are not predicting such a significant decline but expected, at least, a -13% decline (so far, prices are down -10%).โ
There is also the looming shadow of macro risks to consider, added Thielen.
โThe biggest is a potential devaluation of the Chinese Yuan, trading at the weakest level since 2007. In August 2015, when China devalued the Yuan for the last time, Bitcoin prices declined by -23% during the two weeks following the devaluation,โ he said.
Adding to the bearish sentiment in Bitcoin, a Friday report by The Wall Street Journal showed Elon Musk-founded rocket company SpaceX wrote down the value of its Bitcoin holdings by a total of US$373 million in the past two years.
โThis is really a past event (but) it is still news and investors understandably saw this as a bearish catalysis on top of macro moves,โ said Justin dโAnethan, head of APAC business development at Belgium-based crypto market maker Keyrock.
Along with Bitcoin, Ether dropped 5.64% to US$1,706.22 and lost 7.80% for the past seven days, after reaching a five-month low of US$1,551.71 on early Friday morning.
Other top 10 non-stablecoin cryptocurrencies all traded lower.
Cryptocurrencies saw a total liquidation of US$1 billion over the past 12 hours, with US$812.67 million of long positions โ positions where investors bet the cryptocurrency price will rise โ wiped out, according to data from crypto information platform CoinGlass.
Rippleโs XRP token led the losers, plunging 12.52% to US$0.5136 for a weekly loss of 18.85%.
In the on-going legal battle between Ripple Labs and the SEC, Judge Analisa Torres on Thursday granted the SECโs request to appeal an earlier summary judgement in favor of Ripple.ย
In June, Torres ruled that Rippleโs programmatic sales of XRP did not violate securities laws, while its sales to institutional investors did. The ruling was seen as a partial victory notched by Ripple. The SEC first sued the company in December 2020 for offering unregistered digital asset securities โ an allegation Ripple denies.
โThe request for appeal (even if granted) doesnโt change the fact that XRP is not a security. Thatโs not up for debate / trial,โ said Ripple Chief Executive Officer Brad Garlinghouse in a tweet on Wednesday.
According to Thursdayโs court filing, the SEC will file a motion for appeal on Friday, and Ripple has until September 1 to file its opposition papers.ย
The total crypto market capitalization dropped 5.69% in the past 24 hours to US$1.07 trillion โ close to the psychologically important US$1 trillion threshold โ while trading volume surged 78.91% to US$60.58 billion.
A bad day for NFTs despite all time transactions high
The main Forkast 500 NFT index dropped 0.37% in the past 24 hours to 2,445.03 as of 10:00 a.m. in Hong Kong, and fell 2.28% for the week. Forkastโs Ethereum and Solana NFT indexes logged gains, while the indexes for Polygon and Cardano dropped.
Wreck League, an NFT video game backed by Hong Kong-based gaming company Animoca Brands, launched its NFT mint on early Friday in Asia. But the collection has unperformed, struggling to sell more than a third of its offerings so far.
โItโs not a good day for NFTs,โ said Yehudah Petscher, NFT strategist at Forkast Labs. โIf anyone is wondering if traders are out of liquidity or conviction in the space, this just might be the answer.โย
The collectionโs struggles will impact on the wider market, Petscher added, as traders will look at Wreck League and lose confidence in other collectionsโ ability to sell.ย
Despite Wreck Leagueโs struggles, total NFT trading volume rose 30.97% in the past 24 hours to over US$18.69 million, according to data from CryptoSlam. Volumes on the Ethereum and BNB Chain rose, while Solana, Polygon, and Cardano blockchains posted declines.
Daily NFT transactions on Thursday surpassed Wednesdayโs record to hit another all-time-high of over 649,000. Those totals eclipsed the previous high of 595,000 logged on Feb. 25, 2022.ย
Meanwhile, the average NFT sales price stood at US$26.26, about one tenth of the average price for NFTs on Feb. 25, 2022. That crop signals โa major change in the NFT ecosystem,โ according to Petscher.
โThe NFT space is in the midst of having a shift in its identity, moving to high volume, low dollar sales, and this is exactly what will eventually lead NFTs to mass adoption,โ said Petscher.ย
โWill this be enough to start attracting mainstream attention though? I think not quite yet, but weโre getting much closer to that with realistic prices and recognizable brands,โ he added.
Despite the rise in transactions, NFT sellers lost over US$1.91 million in Thursday trading, the biggest loss since July 20.
As NFTs attract more institutional interest, McDonaldโs Corporationโs Singapore branch has teamed up with local entertainment company Bandwagon Labs for an NFT project based on the fast food chainโs Grimace character.
The mint of 2,000 Grimace-themed NFTs will go live on August 21. The NFTs are free to claim using the McDonaldโs mobile app in Singapore, but cannot then be transferred to other wallets.
Among NFT collections, Ethereum-based Bored Ape Yacht Club saw the largest 24-hour sales volume. The collection surged 367.71% to over US$2.22 million as its floor price dropped 11% in the past seven days.ย
Ethereum-based DeGods and Mythos Chain-based DMarket took the second and third places in terms of daily sales volumes.
(Updates with NFT section.)
