The crypto market is down today as traders assess the latest Curve Finance hack and the SEC’s potential to target all altcoins in the future.
Price trends across the cryptocurrency market remained skewed to the downside today as traders assessed a slew of negative fundamentals emerging across the industry.
Misleading news behind crypto market decline?
On Aug. 1, the crypto market’s net capitalization fell 2% to $1.16 trillion.
The move downward came a day after the Financial Times reported that the U.S.
Securities and Exchange Commission (SEC) had told Coinbase,
a U.S.-based crypto exchange, to delist all cryptocurrencies from its exchange barring Bitcoin (BTC).
However, Coinbase called the report inaccurate, explaining that the Financial Times omitted context regarding its conversations with the SEC.
The clarification did not help the crypto market recover, however, as Curve Finance’s $47 million hack over the weekend further strained its upside prospects. The market’s valuation has dropped by nearly 3.75%, or $43 billion, since the exploit.
A stronger dollar is bad for crypto — again
A recent rally in the U.S. dollar index (DXY) further coincided with the crypto market’s losses.
On Aug. 1, the index climbed 0.57% to 102.43, its highest level in three weeks,
as investors continued reflecting on the last week’s rate hike. It has bounced
almost 3% from its lowest level on July 13, just when the crypto market peaked sessionally at $1.22 trillion.
The crypto market’s price decline could continue if its inverse correlation with the dollar persists.
Crypto market outlook for August
From a technical perspective, the crypto market’s valuation tests a reliable
short-term support level around $1.12 trillion, eyeing a bounce toward $1.18 trillion, which has served as resistance since March 2023.
On-chain data supports the upside outlook.
For instance, Santiment reports that the richest crypto wallets started
accumulating stablecoins in late July, just as the price of Bitcoin, the top cryptocurrency by market share,
dropped below its key psychological level of $30,000.
Conversely, a decisive close below $1.12 trillion could accelerate a drop toward its 200-day exponential
moving average (200-day EMA) near $1.09 trillion in August. That is akin to the performance in May and June earlier this year.