Uphill Battle
Crypto markets remained bearish in June after May’s broad market sell off. All crypto sectors reported negative returns month-over-month; even the best performers posted losses exceeding -18%. Meme and metaverse coins performed only slightly better than ETH (-47%), privacy coins (-43%) and BTC (-40%).
Have the tides turned or will the uphill battle continue? In Kraken Intelligence’s latest Market Outlook Report, Uphill Battle, the team recaps June’s market action and looks ahead.
Losing ground
Historically speaking, June has tended to deliver positive returns for BTC. However, the leading cryptocurrency’s price fell by -38% this June to a 10-month low. Meanwhile, ETH’s price fell by -46% in June, as annualized volatility peaked to 122%, an 8-month high. Whale activity in BTC and ETH was relatively quiet as both the number of whales and their holdings decreased slightly.
DeFi’s top tokens reported major losses ranging between -5% and -47% month-over-month, as AAVE (-47%) and CRV (-47%) led to the downside. NFT market activity slowed down over the same period: average daily users, average transactions and average volumes fell by -4.8%, -0.1% and -68.7%, respectively.
Making headlines
Red candles piled up across most cryptoassets in June amid macroeconomic uncertainty and industry challenges. Early in the month, the World Bank slashed its global growth forecast to 2.9% against a backdrop of rising inflation, falling equity markets and sinking crypto prices. Crypto lender Celsius paused all withdrawals, swaps and transfers between accounts, citing “extreme market conditions.” Three Arrows Capital, a Singapore-based hedge fund, was subject to $400M in liquidations triggered by margin calls in the wake of cryptoassets’ steep decline.
In the U.S., crypto made headlines as senators released the Responsible Innovation Act, which seeks to integrate digital assets into the traditional financial system and increase regulation for the crypto industry.
However, the news is not all bleak. Ethereum inched closer still to the much anticipated Merge as the Ropsten testnet successfully transitioned from proof-of-work to proof-of-stake.
Thomas Perfumo, Head of Kraken Intelligence, recently joined Jill Malandrino on Nasdaq TradeTalks to discuss the events that unfolded in June:
Want to learn more about what went down and what’s ahead? Read the Kraken Intelligence report, Uphill Battle, to understand what’s moving the crypto market.
These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, or hold any digital asset or to engage in any specific trading strategy. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your crypto assets and you should seek independent advice on your taxation position.
