Bitcoin rose in July amid crypto crash
In association with Luno
Bitcoin has continued to establish itself above $20k this week, with the price hitting highs of more than $24k over the weekend. It’s since dropped back slightly, broadly staying in a zone between $22-23k as economic and geopolitical concerns continue to negatively impact traditional and crypto markets alike.
On the whole, July was a good month for Bitcoin, finishing up 17 per cent – a significant improvement on June’s 40 per cent drop. It marked the best month of the year so far for the largest cryptocurrency by market capitalisation, and the highest return since October 2021, with February and March the only two other months to have had positive returns since then. Are we on the road to recovery?
The price movements in crypto continue to echo traditional markets, which have also had a good week. Since last week’s announcement that the Fed was hiking interest rates by 75bps, the S&P 500 has climbed 5 per cent and Nasdaq by 6 per cent. However, they have also struggled to build on recent momentum amid increased geopolitical tensions between the US and China. The unease follows Beijing’s warning to the US House of Representatives Speaker Nancy Pelosi that she should not visit Taiwan during her tour of four Asian countries that began on Monday. On Tuesday, the futures tied to the S&P 500 fell 0.3 per cent, suggesting the mood had turned negative.
The Fear and Greed Index has looked a bit peppier of late though, suggesting improved investor sentiment. It sits at 31 on Tuesday after briefly hitting a top of 42 on Saturday. This marks the highest market sentiment peak since April. This slow market sentiment growth is in stark contrast to how the market sentiment rapidly exploded from the ‘extreme fear’ level to ‘extreme greed’ during the bull market of late 2021. Market participants are increasingly less bearish, but exercise caution after a traumatic start to the summer.