Bouncing Back

For the last few months, many in the crypto market have wondered if we were entering a bear market. A price surge in late July now has people asking, is the bull market back?

In our July monthly report, “Bouncing Back,” Kraken Intelligence examines BTC’s price swing from just below $30k to $42k to see if this rally is signaling the start of a new uptrend or if it’s a bull trap. With sentiment starting to flip and volatility set to pick up, Kraken Intelligence sees several bullish signals that suggest the ship is turning around.

Last month, our team outlined why the Grayscale Bitcoin Trust (GBTC) unlock may ultimately be a bullish catalyst despite what many market analysts proclaimed. These unlocks along with the much hyped “The B Word” conference were among several positive developments last month. 

Our team also found that whales and miners continue to accumulate BTC, which may precipitate a BTC supply shock. Coupled with BTC crossing above key technical levels these developments indicate bullish momentum could return and lift the entire market. 

Moving on, as Ethereum turned six years old in July, developments emerged that indicate the network’s transition from Proof-of-Work to Proof-of-Stake is closer and more bullish than ever. While nothing is imminent, ConsenSys researcher Mikhail Kalinin created a GitHub pull-request for EIP-367 – a signal that the PoS transition is moving forward. JPMorgan said ETH 2.0 staking could be a $40B industry by 2025 and Swiss bank Sygnum Bank announced that it had become the first bank to support client ETH staking.

In addition, we detail some noteworthy events in July:

  • Ongoing developments for ADA, DOT, DOGE, and UNI
  • More than $2B in shorts were liquidated as BTC rallied off July’s intra month low
  • Approximately 6.4M ETH 2.0 was staked in the ETH 2.0 contract, more than 800K of which came from Kraken clients
  • Fund flows and a technical uptrend against BTC indicates ETH demand is stronger than  BTC
  • Compound Finance launched Compound Treasury allowing corporations and institutions to earn interest on USD capital 
  • Silvergate took in $4.3B in new cryptocurrency deposits during Q2

Get a better sense for all that went down last month in crypto and what August’s historical price performance could mean for the month ahead.

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