Bitcoin traded flat on Wednesday morning in Asia as risk-aversion remained the market theme, though the token is managing to hold above US$29,000. Analysts say a possible extended legal fight between the U.S. regulator and Ripple Labs as well as comments from the Federal Reserve on the interest rate outlook expected later today is breeding caution. Ether also treaded water, while other leading tokens were a mixed picture. Dogecoin led the winners again on speculation it may be integrated into Twitter as the social media app gets revamped into a more general-purpose platform. Elsewhere, the Forkast 500 NFT index dipped and U.S. equity futures also fell after Wall Street closed higher on Tuesday.
Bitcoin lacking catalysts
Bitcoin inched 0.14% higher over the last 24 hours to US$29,222 as of 07:35 a.m. in Hong Kong, but lost 2.07% for the week, according to data from CoinMarketCap. After briefly falling to a monthly low of US$28,890 on Monday, the world’s leading cryptocurrency has seemingly found support around US$29,000.
“Several factors are currently affecting Bitcoin and cryptocurrencies, including concerns about the Ripple case resumption and investors’ speculation on Bitcoin investment funds,” Rania Gule, an analyst at Cyprus-headquartered multi-asset broker XS Group, said in an emailed comment.
The market is keeping a close eye on the Federal Reserve’s interest rate decision, while negative headlines about Binance, the world’s largest digital currency exchange, contributed to price declines across crypto, Gule added.
“The main trendline support currently stands at $26,800, and as long as Bitcoin remains above it, the trend is expected to be bullish,” said Gule.
The cautious trend was reflected in digital asset investment products that saw net outflows of US$6.5 million in the week ending July 21, following four prior weeks of consecutive inflows that totaled US$742 million, according to a Monday report from European cryptocurrency investment firm CoinShares.
Trading volumes in such investment products last week fell to US$1.2 billion, below the yearly average and down from US$2.4 billion the prior week, according to CoinShares. By regions, the U.S. and Canada saw 97% of the total outflows of US$21.7 million.
Bitcoin-backed investment products were the primary focus which saw US$13 million of outflows last week, while Ether-backed products logged an inflow of US$6.6 million, suggesting sentiment is improving around the second largest cryptocurrency.
Ether edged up 0.41% to US$1,857 in early trading in Asia on Wednesday, but remained 2.17% lower for the week.
Other top 10 non-stablecoin cryptocurrencies traded mixed, with Dogecoin, XRP, and Tron’s TRX logging gains, while the rest declined. Polygon’s Matic led the losers, falling 2.84% to US$0.7081 and down 4.12% for the week.
Dogecoin again headed the winners list on optimism it could become a feature in Twitter’s rebranding to X.com, which will include functions such as “payments/banking,” according to Twitter Chief Executive Officer Linda Yaccarino on Monday.
“Dogecoin rallied recently as speculation increased that the meme coin could be used as a payment mechanism for the rebranded Twitter platform,” said Markus Thielen, head of crypto research & strategy at digital asset service platform Matrixport, in an emailed comment.
“As crypto is entering the summer lull that we initially expected for August, DOGE might be the summer’s highflyer as other crypto themes are taking a backseat.”
The total crypto market capitalization edged up 0.22% in the past 24 hours to US$1.17 trillion, while trading volume fell 27.41% to US$25.68 billion.