Cryptocurrency Market Reversal: What Happened in the Last Week of July?

1. A Review of Cryptocurrency Market

The overall market for cryptocurrencies showed a huge contrast around July 20th. Bitcoin has bottomed out before, falling below 30,000 to 28,000 at one point. But just when the market believed that the subsequent rally was a normal overshoot rebound, Bitcoin’s prices rebounded strongly, by more than 5% on July 21st. The price of Bitcoin climbed for the next five days, rising to 35,000 on July 25th. In fact, on July 26, the price jumped even more with a maximum gain of 12.49%. The market shows a bullish trend, with Bitcoin testing the $40,000 resistance level for the first time. In the following days, it constantly tested around 40,000, and successfully exceeded $42,000 on July 31st. So what happened on July 21st? What happened on July 26th?

2.7/21: The Bitcoin World Stop The Falling

On July 21st, the Bitcoin World invited Twitter founder Jack Dorsey, ARK founder Cathy Wood and Tesla CEO Elon Musk, who led the multi-bitcoin campaign. Musk said that SpaceX and he himself held Bitcoins, Ethereum and dogecoins, but, bitcoins were worth much more than Ethereum and dog coins. Musk also mentioned that Tesla, SpaceX and others would not sell bitcoin while adding that if clean energy issues improved, Tesla may resume accepting BTC. Since its inception, Kathy Wood has been focusing on Bitcoin and was investing in GBTC from as far back as 2015, with Ark’s investment topics including genetic technology, robotics, artificial intelligence, energy storage and blockchain technology. Ark currently holds a large number of Bitcoin (GBTC) and Coinbase stock positions.

Undoubtedly, the Bitcoin World has injected confidence into the falling bitcoin and cryptocurrency markets, which have reacted to the news with a normal overshoot rally. CEO of social giant Twitter, Jack Dorsey also publicly announced on July 23rd that BTC would be an “important part” of the company’s future, and he plans to integrate BTC into Twitter’s special attention, subscriptions paid tweets and more. Square, the mobile payment company founded by Dorsey, has been involved in Bitcoin payment solutions since 2014.

3.7/26: Fake news: Amazon may accept Bitcoin payments this year

On July 26th, an anonymous source inside Amazon told CityAM that the company planned to accept bitcoin payments by the end of 2021. Amazon’s previously announced hiring of digital currency and blockchain product owners also seems to support the news, with Amazon’s recruitment of digital currency and blockchain product owners to be part of Payments Acceptance and Experience. 

According to a February survey of 1,000 U.S. consumers by Dealaid.org, 60.2% want more companies to accept BTC payments, with Amazon, Apple and Wal-Mart the companies consumers most likely to receive BTC payments. So if Amazon does accept BTC shopping, the benefits could be stronger than Tesla.

Although an Amazon spokesman denied the reports on July 27, it responded in an email:

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon.”

But Amazon’s news still weighed heavily on the market on July 26, with the BTC’s price peaking at $39,799 that morning, up by 12.49%. It must be noted that this is the biggest intraday gain since May, and ETH’s price rising 9.18% from $2,189 to $2,390. Other mainstream cryptocurrencies are up about 10%.

4.True Reaction False News, Investors Still not far away

Amazon’s disinformation has failed to dampen the cryptocurrency market triggered by fake news, with BTC holding steady at 38,000 after a brief correction on July 27. In terms of cryptocurrencies, this is partly due to Tesla’s second-quarter results on July 27, which showed that Tesla did not sell or buy new bitcoins and still holds $1.3 billion worth of bitcoins. Meanwhile, we also believe that the NFT sector’s explosion also fueled this strong rebound in BTC, along with Axie Infinity’s total revenue of $196.9 million over the past 30 days, according to Token Terminal.

source: TokenTerminal

The NFT’s summer is coming, and the concepts of GameFi and SocialFi have given off-market or empty investors hope of a bull market recovery. In terms of macro environment, the rebound in the cryptocurrency market also seems to be inseparable from the global stock market crash in the last week of July, and that was solely because of the unexpected Delta outbreak which spirals out of control, Sino-US relations friction and policy risks as well as other factors. Nonetheless, the Cryptocurrency market has once again become a safe haven for investors’ funds.

5.Risk Tips:

1.On July 25, Derbit’s blockbuster bullish trend broke out, and ETH Option Flows sold 20,000

The day before the sudden rise of Bitcoin on July 26, the blockbuster Bitcoin transaction broke out on July 25, and the blockbuster bullishness of Bitcoin continued to be hot, with 3000 contracts accounting for 36%. As time goes by, the exercise price becomes more and more imaginary. The time limit is getting farther and farther, and the IV is getting higher and higher.

Source： Greeks. live

The Ethereum block, which had been silent for many days, also became popular on July 25. The bullish block traded 20,000 coins, accounting for 32% of the total. It was mainly based on the short-term virtual value. It appeared when the market fluctuation was not obvious. Bulk bullish transactions are both an early warning and a signal.

Source： Greeks. live

2.On August 1, Derbit bulk bearish outbreak, ETH Option Flows traded 22400

The price of ETH successfully broke through 2500 on August 1 and is expected to rise above 2600. At the same time, the London upgrade of Ethereum will also arrive on August 4. Rewinding to August 1st, Ethereum’s bulk bearish transaction broke out, with 22,400 contracts, accounting for 26%. The bullish block of 11,650 contracts was eclipsed, and the call options dominated the trading market for multiple consecutive days. Mid- and long-term virtual value bearish transactions were strong. At the end of the year, more than 9,000 800P contracts were traded, with a turnover of 116%. However, under the strong rally, appears bulk purchase deep out-of-the-money options. The intention behind and the judgment on the market are worthy of attention.

Source： Greeks. live