Bitcoin down 5% after 10-day rally
09:17, 2 August 2021
Bitcoin (BTC) dipped below $40,000 and was trading down over 5% in the last 24 hours as of Monday morning (9:30 UTC+1). This price correction comes after the leading cryptocurrency’s longest rally in years, as bitcoin closed in the green for ten consecutive days.
Bitcoin had gained over 40% since 20 July, when its price held above the $29,000 support level, and briefly climbed above $42,000 over the weekend.
The recent price evolution has given bitcoin holders a boost of confidence and the Crypto Fear & Greed Index went out of the 'Fear' zone for the first time since mid-May, according to Bybt.com data.
Positive evolutions throughout the market
As usual, the sustained bitcoin rally has reverberated throughout the crypto market and pushed up the prices of most other crypto coins.
Ethereum (ETH) saw its price increase by 50% from its 20 July low to over $2,600. Binance coin (BNB) and Cardano (ADA) both gained approximately 30%.
The total cryptocurrency market capitalisation stood at over $1.6trn on Monday, 2 August, up from under $1.2trn on 20 July, which stands for an overall market increase of about a third, based on Coinmarketcap.com data.
Still, the capitalisation is far from the peak of over $2.5trn touched in the first half of May, and bitcoin’s price is about 38% below the all-time record $64,000 that it reached in April this year.
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Regulatory pressure
Last week’s crypto rally came against a rather negative background, as US regulators have mounted their pressure on cryptocurrencies.
The most important initiative in this sense is a bipartisan draft bill by the US Senate, which aims to partly finance about $1trn worth of infrastructure investments with a new tax on crypto transactions, according to Coindesk.com.
“The incredible winning streak comes at a very strange time when the FUD is thick, especially from the US government who've turned increasingly negative on the crypto industry over the last few weeks,” Mati Greenspan, founder and CEO of financial advisory firm Quantum Economics, wrote in his latest newsletter.
In an Op-Ed in the Financial Times, former PIMCO CEO Mohamed El-Erian argues in favour of a more open approach by western governments to crypto and its potential to transform finance, economy and society at large, in contrast to China’s forceful top-down vision.
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