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▲ Crude oil, international oil prices, Bitcoin (BTC)/AI-generated image ©
The cryptocurrency market is attempting a limited rebound over the weekend, but it has not yet escaped the correction trend that has continued for the past week. Geopolitical instability surrounding the expiration of the ceasefire between the US and Iran, coupled with concerns about the hawkish monetary policy of the US Federal Reserve (Fed), appears to be weighing down investor sentiment.
According to CoinMarketCap data, as of 10:21 AM on the 16th (KST), the total cryptocurrency market capitalization increased by 0.17% from 24 hours ago to $2.17 trillion. The market's representative index, CMC20, rose by 0.12% over the day to 128.21, but it has fallen by 2.50% over the past 7 days.
Looking at just this day, the market is closer to a flat range than a sharp decline. However, considering both weekly returns and investor sentiment, it can be assessed that a risk-averse atmosphere still dominates the market.
◇ Bitcoin at $63,000... Most Major Coins Down Weekly
Bitcoin, the top cryptocurrency by market capitalization, traded at $63,004.35. While its 24-hour change was a 0.10% increase, virtually holding steady, it fell by 2.98% over the past 7 days. Its market capitalization was approximately $1.26 trillion, and its 24-hour trading volume was recorded at $9.9 billion.
On the 9th, Bitcoin recorded $64,844.89 in CoinMarketCap's historical snapshot. As its price fell to the $63,000 level within a week, attempts to recover $65,000 have been thwarted.
Ethereum fell by 0.01% over 24 hours to $1,879.90 and declined by 1.98% over the week. XRP rebounded by 0.50% in a day but dropped by 3.53% weekly, showing a relatively significant decline among major virtual assets.
Solana rose by 0.02% over 24 hours to $75.29 but declined by 0.82% over the past 7 days. Dogecoin also fell by 0.54% in a day and 1.17% over the week, reflecting dampened meme coin investor sentiment.
In contrast, BNB and Tron rose by 0.56% and 0.69% respectively on a weekly basis. Hyperliquid, at $56.95, saw the most prominent gains among top market cap coins, rising by 1.07% in a day and 3.36% over the week. Amid a general market weakness, selective buying appears to have flowed into certain exchange and decentralized derivative-related assets.
◇ Fear Index at 36... Altcoin Season Loses Direction Too
The Fear & Greed Index, which reflects market sentiment, remained in the 'Fear' zone at 36. The Altcoin Season Index scored 50 out of 100, indicating a neutral level where neither Bitcoin nor altcoins have secured a clear advantage.
The 24-hour liquidation volume was $47.02 million, a 70.16% decrease compared to the previous comparison period. Given that no large-scale forced liquidations occurred despite recent price declines, it is difficult to see a cascade collapse of leveraged positions as the primary cause of this correction.
Instead, analysis suggests it's closer to a result of weakening new buying interest in a weekend market with reduced trading volume, and investors reducing positions ahead of macroeconomic uncertainties. While reduced liquidations could signify a moderation of short-term volatility, it is also interpreted as a sign that active risk appetite has not yet revived.
◇ Three Negative Factors Weighing Down the Crypto Market: Iran, Oil Prices, and the Fed
The first backdrop to the recent cryptocurrency market weakness is geopolitical uncertainty surrounding the United States and Iran. The ceasefire, based on the memorandum of understanding for the cessation of hostilities between the two countries, is set to expire on the 17th, US Eastern Time. If the ceasefire extension or subsequent agreement fails, tensions in the Middle East could escalate again, potentially leading to a rise in international oil prices.
The conflict surrounding the Strait of Hormuz and rising oil prices impact cryptocurrencies not as a direct negative factor, but through a path of 'rising oil prices → increased inflation concerns → upward pressure on US interest rates → weakened preference for risky assets.' Recently, it has been analyzed that the stalemate between the US and Iran has stimulated oil prices and interest rate hike expectations, thereby weakening investor sentiment for risky assets like Bitcoin.
The second variable is the Fed's monetary policy. On the 19th, the Fed will release the minutes from the Federal Open Market Committee (FOMC) meeting held on July 28-29. As there were members at that meeting who opposed freezing interest rates and advocated for a 25bp hike, the minutes are expected to reveal how widely the preference for tightening was spread within the committee.
If the minutes are interpreted as more hawkish than expected, US Treasury yields and the dollar could rise, creating additional downward pressure on Bitcoin. Conversely, if the assessment is that arguments for interest rate hikes were limited to the views of a few members, there could be room for a relief rally across risky assets. According to the Fed's official schedule, the minutes from the July meeting are also set to be released on the 19th at 2 PM (US Eastern Time).
The third concern is the slowdown in US consumer spending. US retail sales, announced on the 14th, decreased by 0.6% from the previous month, increasing caution regarding the economy and corporate earnings. If major retailers like Walmart, Target, and Home Depot report weak earnings this week, investor sentiment across risky assets could contract again.
◇ This Week's Outlook... Focus on $63,000 Support and $65,000 Recovery
This week's short-term watershed moment for the Bitcoin market is expected to be whether the $63,000 level can be defended. As the current price is closely aligned with this level, volatility could rapidly increase if geopolitical tensions or hawkish FOMC minutes coincide.
If $63,000 breaks, a re-test of recent lows could occur. Especially if a decline accompanied by trading volume occurs while the Fear & Greed Index is already down to 36, investor sentiment could further deteriorate.
Conversely, if the US and Iran extend the ceasefire or find a clue to de-escalate the conflict, and the FOMC minutes are interpreted as less hawkish than market concerns, Bitcoin could re-test the $64,800-$65,000 range. This price range was where Bitcoin resided last week and serves as a benchmark for assessing the recovery of short-term investor sentiment.
Altcoins are likely to show more selective movements than Bitcoin. With the Altcoin Season Index remaining at 50, it's too early to conclude that a full-scale altcoin rotation has begun. Assets with their own growth drivers, like Hyperliquid, may continue their relative strength, but those with significant weekly declines, such as XRP and Dogecoin, need to be cautious of volatility until a Bitcoin rebound is confirmed.
Ultimately, the cryptocurrency market this week is expected to react more sensitively to macroeconomic events than to charts themselves. The direction of the US-Iran ceasefire, international oil prices, the FOMC minutes on the 19th, and Walmart's earnings on the 20th are key variables that will sequentially determine the market's direction.
Considering the current indicators, the market is closer to a 'wait-and-see phase amidst fear' rather than a 'capitulation phase.' While a slight increase in 24-hour market capitalization and a decrease in liquidation volume somewhat reduce the likelihood of a sharp further decline, it is difficult to definitively call a trend reversal until Bitcoin recovers $65,000.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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