Crypto Markets Gain 2.8% as Bitcoin Hits Two-Week High

Crypto markets have been relatively stable over the past week, with major indexes approaching all-time highs in traditional markets due to easing tensions in the Middle East and hopes for a Federal Reserve rate cut later this year. However, crypto markets have remained mostly flat, with digital asset markets gaining slightly during early Asian trading on Monday morning to reach $3.46 trillion in total capitalization.

Bitcoin has reached a two-week high, tapping $108,750 in early trading on Monday, but faced resistance and fell back to $108,500. The asset has struggled at this level at least five times over the past week. Ethereum, on the other hand, has reached its support-turned-resistance level of $2,500 on Monday morning after a 2.8% gain. Altcoins were mostly in the green with minor gains, with Hyperliquid (HYPE) leading the pack, adding 7.5% on the day to top $40.

The Federal Reserve's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, indicated that price increases accelerated in May, sparking concerns about inflation. This development could influence the cryptocurrency market, as investors often turn to Bitcoin and other digital assets as hedges against inflation. The rise in the core PCE index suggests that the Federal Reserve may need to adjust its monetary policy, which could in turn affect the broader financial markets, including cryptocurrencies.

Bitcoin and other major cryptocurrencies, such as Ethereum and Dogecoin, have seen significant price movements in recent weeks. According to an analyst, the sell pressure on the largest cryptocurrency, Bitcoin, may be fading away. This shift in market sentiment could be attributed to growing institutional interest and increasing adoption of Bitcoin. The market's optimism and the potential for further price appreciation could drive more investors to enter the cryptocurrency space, leading to increased demand for digital assets.

The cryptocurrency market is also influenced by geopolitical tensions and regulatory uncertainties. Recent cooling of geopolitical tensions in the Middle East has led to a roughly 10% increase in Bitcoin prices since Sunday. This indicates that global investors are closely monitoring geopolitical developments and adjusting their positions accordingly. Additionally, regulatory uncertainties and the potential for scams remain significant risks for investors in the cryptocurrency market. Some platforms are more secure than others, and investors must exercise caution when choosing where to invest their funds.

Looking ahead, experts believe that the cryptocurrency market is entering a new growth cycle, potentially peaking between 2024 and 2025. This aligns with the historical four-year cycle observed in the crypto market. If institutional investors decide to boost their crypto allocation, even by a small amount, it could have a significant impact on the price of Bitcoin and other digital assets. The market's optimism and the potential for further price appreciation could drive more investors to enter the cryptocurrency space, leading to increased demand for digital assets.

Economic events in the coming week include the release of June’s ISM Manufacturing Purchasing Manager’s Index (PMI) on Tuesday, which shows business conditions in the manufacturing sector and serves as a significant leading indicator of overall economic conditions. Job openings data is also due on Tuesday, which could reflect conditions in the labor market. Wednesday and Thursday will see more labor market reports, with nonfarm payrolls and unemployment figures released. These reports represent the number of new jobs created during the previous month, along with the percentage of people actively seeking employment. They are significant economic indicators, as the shift in the number of jobs is strongly associated with overall economic health. June’s ISM Services PMI, due on Thursday, will reflect business conditions in the services sector and is another leading economic indicator. Traditional markets are closed on Friday for the July 4 celebrations as we enter the second half of the year.