Market Wrap: Bitcoin Erases Weekly Losses, but Skepticism Remains

Hi, I'm Jimmy He, here to take you through the day's crypto market highlights and news.

Bitcoin (BTC) climbed for a third consecutive day, erasing this week’s early losses.

The largest cryptocurrency by market capitalization rose 1.5% over the past 24 hours and was recently trading at about $21,000.

Some analysts are still wary of bitcoin’s surge amid a market that’s averse to risk, with inflation hitting a 40-year high on Wednesday and the troubled crypto lender Celsius Network filing for bankruptcy on Wednesday.

Craig Erlam, a senior market analyst at Oanda, wrote that bitcoin’s recent resilience doesn’t necessarily mean a further recovery.

“The near-term outlook is still a concern given the broader risk environment and reports of bankruptcies in the industry,” Erlam wrote. “If anything, the latter could be a bigger concern if [bitcoin] does eventually break lower.”

The U.S. dollar index (DXY), a measure of the greenback relative to a basket of foreign currencies, is approaching highs unseen since 2002, Glassnode wrote in a newsletter.

The rise is driven by either a strengthening demand for USD-denominated fixed-income securities as the U.S. Federal Reserve raises interest rates or the depreciation of foreign currencies such as the euro, which recently dropped to a 20-year low of $1.0002 against the dollar.

The DXY has a predominantly negative correlation with bitcoin prices, and so further index increases could spell price declines for the cryptocurrency.

Most altcoins were in the green, with QNT leading the charts, up 13% over the past 24 hours. Ether (ETH) was up 4.6%.

Today’s edition of Market Wrap was produced by Sage D. Young.

Bitcoin mining-rig prices slumped to nearly two-year lows as Celsius Mining filed for bankruptcy on Wednesday alongside its parent company, Celsius Network.

The mining unit had filed a confidential S-1 draft registration with the U.S. Securities and Exchange Commission in March to take the company public and said last year that it had invested $500 million in its North America bitcoin mining operations.

Now, Celsius Mining is selling its rigs at a heavily discounted rate per terahash (TH).

“A person familiar with the situation told CoinDesk that Celsius Mining auctioned off thousands of its newly purchased mining rigs in June, with the first batch of 6,000 selling for $28/TH and a second group of 5,000 changing hands at $22/TH,” Aoyon Ashraf reported.

According to Luxor Mining’s hashrate index data, mining rigs were trading at around $50-$60/TH in June, double Celsius’ auction price.

A Glassnode report last month showed bitcoin miners’ total revenue had fallen 57% since the cryptocurrency’s all-time high while network difficulty had risen by 132%.

“This substantial jump in difficulty suggests that existing miners have expanded their operations, and new miners have joined the network despite a massive income reduction. As such it is likely that recent capital expenses on mining hardware and facilities could add continued pressure to miners’ balance sheets,” Glassnode wrote.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.