This week, BCH is in the headlines. Fueled by the bullish sentiment on EDX markets’ support, BCH doubled its price within a week and reached a one-year high on Monday. Our desk observed an over 700% surge in BCH trading volume in the last 7 days.
Defi sectors also outperformed this week, with AAVE and SNX volume increasing by over 160%, and their prices were up over 6% in the last 7 days.
With the bullish news announced on Twitter that developers can now use the new overlay protocol, which will allow Stellar to scale significantly and enable efficient Soroban smart contract invocations, Stella (XLM) went up 16.1% over a week.
Convert Portal Volume Breakdown
This week, we observed almost 40% of the trading volume coming from crypto-to-stablecoin trades as traders converted cryptocurrencies back to stablecoins while the market was trading sideways.
As BTC hopped in the $1,500 range ($30k to $31.5k) in the last 7 days, we observed a higher trading volume percentage on conversion between cryptocurrencies and stablecoins.
Stablecoin swap volume percentage dropped below 10% after the market stabilized after the USDT de-peg happened last Friday.
Overall market sentiment
In the last 7 days, BTC was trading above the $30k level for most of the time. While BTC was bouncing within the $1,500 range, our desk found a negative correlation between BTC and US Dollar (DXY).
Now, BTC is trading sideways while forming a downward wedge. The $30k level is identified by the desk as a strong support zone. When the price of BTC falls below $30k, accumulation purchase power takes over and drives the price back up.
Some altcoins, including BCH and XLM, were recently in the headlines, and their prices surged as a result of the positive news, but BTC dominance is still at its highest level in the last 2 years. Until the BTC dominance drops back below 48%, we won’t see an altcoin season.
Macro at a glance
Last Thursday (2023-06-22), the Bank of England surprisingly raised the interest rate by 50bps instead of the estimated 25bps, to 5.00%. Before the BoE interest rate announcement, the UK disclosed the May CPI change as 8.7% YoY. By having a 50bps rate hike to tickle the domestic high inflation, the Bank of England shows a strong commitment to bringing down inflation.
Last Friday (2023-06-23), Germany released the Manufacturing PMI in June as 41.0, lower than the estimated 43.5 and the previous month’s 43.2. The UK also released their Manufacturing PMI reading in June as 46.2, lower than the estimated 46.8 and the previous month’s 47.1. Both the German and UK manufacturing PMI indicate that the manufacturing activity contraction continues, weighing on slow economic growth.
On Tuesday (2023-06-27), Durable Good orders in the US increased by 1.7% MoM in May, much better than the estimated -1.0% and last month’s 1.2%. Core Durable Good orders increased by 0.6%, higher than the estimated -0.1% and last month’s -0.6%. These two numbers suggest that US consumers expect the economy to improve in the near future. Moreover, Canada released its core CPI reading as 3.7% YoY in May, better than the estimated 3.9% and last month’s 4.1%. The Bank of Canada resumed the rate hike by 25bps to 4.75% on June 6, emphasizing the urgency to bring inflation back to 2%.
