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Bitcoin’s Upturn: Unlikely in the Near Future?

Introduction

In 2023, Bitcoin and Ether had a fantastic start, but lately, they’ve been a bit stuck. It seems like Bitcoin might even experience its second monthly drop this year.

The Current Crypto Slowdown

As we approach the end of July, Bitcoin and Ether seem to be slowing down. Bitcoin’s monthly performance has been a letdown, following a similar trend throughout 2023.

The Bitcoin Fear & Greed Index, which measures how investors are feeling, has gone down from 64 to 50 in a week. This shows that traders are feeling unsure, which matches the current quiet in the market.

With July nearing its end, Bitcoin’s daily returns have been at a low of negative 0.096%, marking it as one of the worst-performing months in 2023. Ether’s also been down, with average daily returns of negative 0.07%, making it likely to see its first monthly loss this year.

Usually, July is a good month for Bitcoin and Ether, with positive average daily gains.

Loss of Correlation

Interesting to note is that Bitcoin and Ether have stopped following the usual financial markers. They’re no longer moving in sync with things like traditional stocks. Also, Bitcoin is no longer moving in the opposite direction to the U.S. Dollar Index, which means it’s not acting as a protection against inflation as it used to.

The only remaining link is between Bitcoin and Ether themselves, but even this has dropped to 70% this year from the usual 90%.

Apart from in January and March, the daily performances of Bitcoin and Ether have been quite flat this year, making it clear that their good performance in 2023 is mostly due to a great first quarter.

Where Are The New Catalysts?

In mid-June, Bitcoin value went up 20% after BlackRock filed for a Bitcoin ETF. But since then, nothing new has come up to shake the market, and it doesn’t look like anything will anytime soon. The upcoming jobless claims numbers might give us a bit more insight into the overall economic situation, but it’s hard to say if they’ll have a big impact on crypto.

A Glimmer of Hope?

If you’re looking for a positive sign, the CoinDesk Indices Trend Indicator (BTI) for Bitcoin and Ether is showing an “uptrend”. However, because this is calculated using short-term averages, it might quickly switch to neutral.

Conclusion

Bitcoin and Ether started off strong this year but seem to be slowing down now. Changes in how they’re correlating with other markets and a lack of new market catalysts might be causing this. The current signs point to a continued slowdown, but only time will tell how these cryptocurrencies will do in the coming months.

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