The crypto market’s rebound picked up momentum on July 29, with its intraday gains influenced by former president Donald Trump’s pro-crypto comments at the Bitcoin 2024 conference in Nashville, Tennessee.
The total market capitalization has dropped by approximately 0.62% in the last 24 hours to reach $2.39 trillion on July 29. The market has been marred with volatility with Bitcoin (BTC) rising first to a high just below $70,000 before correcting to the current level of $66,773, a 1.62% drop over the last 24 hours.
Let’s look at factors driving Bitcoin’s volatility today.
Donald Trump’s pro-crypto comments spur a market recovery
Former US president and Republican presidential candidate Donald Trump made bold promises during his speech at the Nashville Bitcoin 2024 Conference on July 27. Trump promised not to sell the 200,000 BTC confiscated by the US government and instead turn it into a strategic reserve if elected in November.
Independent presidential candidate Robert F. Kennedy Jr. and Senator Cynthia Lummis also spoke at the conference about establishing a strategic Bitcoin reserve for the US.
“I never thought that I would see the end game play out so soon for Bitcoin,” declared crypto influencer Lark Davis in his latest YouTube video.
Davis was referring to the latest market developments, with Bitcoin and cryptocurrencies becoming an issue in this year’s elections in the United States.
According to McKenna, general partner at Arete_xyz, a US Bitcoin strategic reserve would literally be the endgame, cementing the “Bitcoin Standard” for the next 100 years.
“Lads, I think you just long BTC and never close it.”
Macroeconomic policies priced in
A closer analysis of the crypto market’s recent performance reveals that it has begun gaining strength ahead of the Federal Open Market Committee (FOMC) meeting scheduled for July 31. The outcome of the FOMC meeting is likely priced in, as market participants expect the Fed Funds Target Range (FFTR) to remain unchanged at 5.25% – 5.50%.
Data from CME Group’s FedWatch Tool showed the odds of rates staying the same this month are nearly 96%. Conversely, they have fully priced in at least two rate cuts, 89.6% and 94.5% chance of rate cuts at the FOMC meetings on Sept. 18 and Nov. 7, respectively.
Market participants also expect crypto prices to respond to Fed Chair Jerome Powell’s comments after the FOMC meeting this week. His statement can dictate longer-term expectations for economic policy simply by the tone of language used.
This week, US jobless claims data will also be released, providing even more scope for surprise crypto market moves.
The Fed’s decision on rate cuts and macroeconomic data are the key focus for crypto and risk-asset traders, as they affect overall investment liquidity.
Crypto investment funds see weekly inflows of $245 million
The bullish performance in the crypto market mirrors increased interest from institutional investors. According to the latest report by CoinShares, crypto investment products saw inflows totaling $245 between July 22 and July 26.
According to CoinShares’ “Digital Asset Fund Flows Weekly” report, published on July 29, year-to-date inflows have exceeded $20.4 billion and total assets under management have surpassed $99 billion as institutional investors increase exposure to Bitcoin and Ether through spot ETFs.
CoinShares Head of Research James Butterfill said,
“The launch of the US spot-based Ethereum ETFs saw some of the largest inflows since December 2020, with newly issued ETFs seeing US$2.2bn inflows, but incumbent outflows offset this with net outflows over all of US$285m.”
The crypto asset management firm also attributed the positive flows to the recent pro-crypto comments from US presidential candidates, which may have renewed investor confidence.
“We believe the US electioneering comments around Bitcoin as a potential strategic reserve asset, and the increased chances for a September 2024 Fed rate cut are the likely reason for renewed investor confidence.”
Related: US national debt passes $35T — 5 Things to know in Bitcoin this week
From a technical perspective, crypto market gains on July 29 are part of a recovery trend inside a prevailing ascending channel pattern.
The crypto market tested the channel’s lower trendline as support for the fourth time over the last five days, recording a series of higher lows. As of July 29, the market is visibly repeating the fractal, eyeing the middle boundary of the channel at around $2.47 trillion as its immediate upside target.
A decisive close above the middle boundary could cause the market to pursue a run-up toward the channel’s upper trendline, akin to its recent bounces. The upper trendline aligns with $2.59 trillion, which has served as resistance since March.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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