The bullish momentum seen in the cryptocurrency market throughout July seems to be waning as a new month begins.
Crypto markets fell 3.7% in the past 24 hours, bringing the total market capitalization back below $1.1 trillion.
Since the weekend and their seven-week high, more than $50 billion has come out of the space in what appears to be a cool bear market relief rally.
Markets were unaffected by the double whammy of macroeconomic news last week as the US Federal Reserve raised interest rates and the country slipped into a technical recession.
However, the bears seem to be in control of things again today as cryptocurrencies are a sea of red.
Bear Market Relief Rally
On-chain analytics provider Glassnode took a look at the technical indicators on “A week in a chain”, report to ascertain whether “this is a bear market relief rally or the start of a sustained uptrend”.
Despite the recent rally, Bitcoin price action has remained range-bound since its epic crash in mid-June. It failed to break above key resistance just above $24,000 and has fallen back below $23,000 today.
Glassnode confirmed this, stating that “current network activity suggests there remains little inflow of new demand yet.” He added that trading was sideways to slightly lower, which is indicative that only a “steady base of higher conviction traders and investors” remains.
Weak trading demand, directional activity, and low supplies are all indications that things are “firmly within bear market territory.”
Bitcoin is currently trading right at its 200-week moving average at $22,872 and just above its Realized Price, which is $21,816 according to Woo Charts.
Glassnode’s data analyzes the past week’s cryptocurrency market action and has not taken into account the past two days of declines, however, which are likely to be even more bearish.
Altcoins in the red
Bitcoin’s daily drop of 2.3% is not as bad as its siblings are suffering. Ethereum, which has been driving the market momentum recently, lost 7% on the day to $1,576 at press time, according to CoinGecko.
Binance Coin (BNB), Cardano and Solana are down 4%-6% while Polkadot (DOT) dumped 12.7% on the day.
All indications on the chain suggest that the recent rally was only a brief reprieve from the bear market, and further declines are likely as the cryptocurrency winter drags on.
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