Bitvavo Market News - Uncertainty pushes bitcoin price down

Market-wide, prices have fallen significantly over the past week. Bitcoin and ether are down around 16% from their peak, with many altcoins down more than twice that. There isn't a specific cause; rather, it is general concerns and uncertainties that are driving prices down. More on this in this edition of Bitvavo Market News.

Market update

The crypto market is experiencing a slump. On Monday morning, the price of bitcoin fell to €57,000, marking a 13% decline from two weeks ago. This drop brings us, for the second time, to the bottom of the price range that has persisted for nearly four months, with a record high of €67,500 and a low of €56,000.

This period of consolidation mirrors that of last summer. During that time, the price remained stagnant for more than half a year, twice hitting the bottom of the price range. Similarly, the largest cryptocurrency dipped below its 40-day average twice, just as it has now.

Various news events are cited as explanations for the weak market, such as the German government selling confiscated bitcoins, however, this sale involves only a few thousand bitcoins. It appears that concerns and uncertainty are the primary factors driving the market down, rather than actual events. Nonetheless, sentiment tends to follow price: if the price rebounds sharply after hitting a low, concerns will be quickly forgotten.

The rest of the crypto market is faring much worse than bitcoin. The total market value of all altcoins outside the top 10 has dropped by over 40% from the peak. Additionally, these prices have also fallen below longer-term averages, such as the 200-day average. Bitcoin and ether, meanwhile, remain above this point.

The chart below shows Solana's price, which is currently resting on an area that was previously provided support twice. This is around 40% below the peak at €188. If this support zone does not hold, then a significant move lower seems inevitable.

One positive exception among altcoins is ether. Ethereum's currency is benefiting from upcoming ETFs and the dismissal of the SEC's lawsuit. With a 17% drop from its peak, it is in a similar position to Bitcoin. If the market rebounds in the coming weeks and enters a new upward trend, it could benefit Ether and other projects in the Ethereum ecosystem.

Featured

TON demonstrates impressive growth

TON is short for the The Open Network. As the name suggests, this blockchain is connected to Telegram, the popular chat app used by more than 900 million people each month to read and send messages.

Six years after its launch, the network finally seems to be coming to life with the number of daily active users increasing from 10,000 to over 350,000 since the beginning of 2024. This represents a 3,500% growth in just six months.

Source: TokenTerminal

This growth is reflected in the transaction volume processed by TON, which has been steadily increasing since early 2023, but has seen significant acceleration in 2024. In the second quarter alone, the network processed transactions worth $1.6 billion.

Source: CryptoQuant

What does this mean for the price, then? Well, this rose 384% over the same period, from $1.47 to $7.12 making TON one of the best performers of 2024.

TON's growth stems from its association with Telegram. While Telegram itself does not formally play a key role in the network, the institution driving its development appears to maintain strong ties to the company. Through this institution, Telegram appears to be executing its original plan: the integration of TON deep into the messaging app. This intention was emphasized when Telegram announced in February its intention to share ad revenue with TON owners.

Ethereum ETF launch close at hand

One month after the SEC first expressed positive comments on pending ether fund applications, ETF specialists are showing renewed interest. In recent weeks, the regulator has provided applicants with constructive feedback, which is much faster than expected. This development ensured that all updated applications were submitted to the SEC's inbox by last Friday. "6 weeks ago today, spot eth ETFs were hopium..." wrote Nate Geraci. "*Could* launch in next week or so."

More good news for ether owners last week.

Two months ago, Consensys, a major software company instrumental in the ongoing development of Ethereum, was served with a Wells notice from the regulator. In normal circumstances, this signals an impending SEC lawsuit. In the case of Consensys, the focus would likely involve the classification of ether, its distribution into circulation, and the operation of Ethereum 2.0, where participants can earn rewards through staking on the network.

Last Wednesday, lawyers for Consensys received a letter from the regulator stating that the intended lawsuit had been withdrawn. While the SEC did not formally comment on the classification of ether, this withdrawal, along with the launch of ether funds, is seen as a significant development for ether fans. As far as they are concerned, ether, like bitcoin, is a digital commodity.

In other news

• North America's first Solana ETF filed. Fund manager 3iQ is seeking to deliver the QSOL fund into the Canadian market. Following the launch of ether funds, some analysts expect attention to shift to Solana. The company is capitalizing on this by submitting this application. The tokens purchased by the fund are actively staked, providing shareholders with an additional expected return of 6-8%.

• Game developer Konami launches NFT platform on Avalanche. Konami is a familiar name in the gaming world, known for popular titles such as Metal Gear Solid, Silent Hill, and Castlevania. The company has now unveiled "Resella". This platform allows for the issuance and trading of in-game items and other assets as NFTs. Konami states that users do not need a Web3 wallet nor are there any "complex" cryptocurrency transactions. All interactions are paid for in Japanese yen.

• German authorities have sold a portion of seized bitcoins. According to analysis firm Arkham, the German authorities have sold a portion of seized bitcoins amounting to $325 million worth of Bitcoin over two days. These bitcoins were confiscated in 2020 during the shutdown of the illicit website Movie2k.to. This sale reportedly involved about 10% of the total seized loot, which was originally 50,000 BTC. Germany's current plans for the proceeds from the sale remain undisclosed.

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