Macro crypto currency market outlook

Bitcoin remains confined to a well-defined uptrend, with setbacks exceptionally well supported into dips. The most recent round of meaningful weakness has bottomed out at $53,500 and a higher low is now sought out ahead of an eventual push to a fresh record high. Above the $73,840 record high from March would open the next measured move upside extension targeting $95,000. Only a weekly close back below $53,500 would delay the bullish structure.

There were plenty of headlines to chew on throughout the month of July, though in the end, price action was choppy and there were no major breakouts. Bitcoin was able to put in some modest gains, while ETH didn’t really go anywhere at all. Technically speaking, both markets are trading in healthy uptrends and both markets are keeping their sights set on fresh record highs.

Fundamentally, there were three big drivers of price action in July. The most interesting takeaway about this is that all three drivers were crypto specific, which in and of itself was impressive, as it reflects a maturing asset class increasingly less reliant on global macro fundamentals.

As far as the drivers go, the first was the story around the Mt. Gox repayments and anticipated selling pressure this would introduce into the market. And while we did see selling pressure as the repayments were made, the event was well telegraphed, and there was plenty of demand from medium and longer-term players happy to build exposure into dips.

The second driver of price action was the ETH ETFs. We finally saw the ETH ETFs go live and the market was able to celebrate the event. However, much like with the bitcoin ETFs, a lot of the initial flow was about market participants looking to exit their pre-existing Grayscale exposure given the less favorable pricing structure. On net, however, flows ex-Grayscale were positive, something that should really excite investors going forward.

The final major driver of price action came from the political front. Donald Trump upped his support for crypto assets and made strong commitments to support the space should he be elected President. The news was unsurprisingly well received and also helped to put more pressure on the Democrats to reconsider what has been thought of as a less crypto friendly position.

Looking ahead, we suspect there will continue to be healthy demand for crypto assets. We believe there will be more room for the market to rally as the Mt. Gox repayments lighten up and the Grayscale ETH ETF selling is completed. Historically speaking, August has been a positive month for bitcoin, with the crypto asset gaining 6% in August since 2017. There is also evidence to suggest positive effects from the latest bitcoin halving will start to take hold now that we’re outside of 100 days since the event.