Bitcoin, Ethereum Rally Nudge Crypto Market to $2.21trn
Bitcoin and Ethereum, along with bargain hunting in other top altcoins, drove momentum in the cryptocurrency market, with top digital assets extending their weekly gains as investor sentiment improved.
The total cryptocurrency market capitalisation increased to $2.21 trillion. Bitcoin price increased slightly, trading at approximately $64,400, while Ethereum saw a 1.7% gain.
Sector performance was mixed but generally positive, with the Real World Asset (RWA) category leading with a 3% increase, while most other sectors posted gains between 0% and 2%.
Bitcoin’s 7-day performance (+2.04%) is leading the market. Social media is buzzing with bullish technical analysis, with traders eyeing a breakout above $65K to trigger a short squeeze toward $67K.
While no new policy was announced today, the market remains buoyed by the historic SEC/CFTC joint framework, which classified major assets such as BTC and ETH as digital commodities.
This provides a backdrop of regulatory clarity.
The “Clarity Act,” a pivotal bill to establish a comprehensive regulatory framework for digital assets in the US, faces a narrow window for passage.
Legislative staff are working to merge Senate versions of the bill, but it must be brought to a floor vote before the August recess, after which political focus will shift to midterm elections.
Key disagreements persist, including a “safe harbour” provision for software developers and the inclusion of ethics rules restricting crypto trading by government officials.
The failure to pass this legislation would prolong the current environment of regulatory uncertainty, leaving crypto firms exposed to “regulation-by-enforcement.”
The outcome represents a major event risk for the market, as its passage could unlock significant institutional investment by providing legal clarity, while its delay would perpetuate ambiguity.
The immediate path hinges on Bitcoin’s price action. The market cap is currently testing the 23.6% Fibonacci retracement level at $2.21T, with the yearly high at $2.27T.
The bullish case requires holding above the $64K support level. The key near-term trigger is a reversal in ETF flows, which saw net outflows yesterday. The market is in a delicate balance, needing a catalyst to sustain momentum.
The uptick is a combination of Bitcoin reclaiming key technical levels and a market slowly rotating into altcoins amid a favourable regulatory landscape. The next leg higher likely hinges on whether institutional ETF flows turn positive BTC, ETH, XRP Rally Amid US Fed Hawkish Signal