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COMP and AAVE in Red as BTC Loses Support at $29K, Tainting ‘Green’ July Record

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Bitcoin Price

Bitcoin price fell sharply late Monday after an early quiet market display, confirming a somewhat-expected red monthly close.

Bitcoin and Ether still subdued heading into new month

The flagship cryptocurrency printed three successive red candles on the BTC/USD 1-hr chart in the last three hours of the day and set a month-low of $28,801 per CoinMarketCap data. Monday's close represented a 4% decline across the month – the first in any July since 2019.

BTC/USD chart. Source: TradingView

Bitcoin (BTC) started bouncing higher hours into the new month and was trading marginally above $28,900 at the time of writing. Perceptibly, Bitcoin has been muted in the current range for several weeks with many traders retreating to await the next price volatility triggers.

Rocket Pool (RPL) trades in green as most alts cool

The majority of altcoins including Ethereum have posted equally lackluster performances during this period. Ether (ETH) dropped to a four week-low of $1,818 late Monday before recovering slowly to $1,834 where it was spotted at press time. Rocket Pool (RPL) has stood out as the only notable top gainer among mid and large cap alts on Tuesday, trading 11.64% higher in the last 24 hours.

To learn more about Rocket Pool, check out our Investing in Rocket Pool guide.

Compound (COMP) and Aave (AAVE) have, on the other hand, registered the biggest losses on the day – down 14% and 10% respectively in the same period. The declines observed across the lending protocol tokens are a ripple effect of the exploit on Curve Finance. Curve founder Michael Egorov holds a significant ~$168 million lending position on Aave against CRV tokens which has put the tokens under pressure.

To learn more about Compound, visit our Investing in Compound guide.

Market outlook delivers mild sense of calm

Europe-based digital assets investment firm CoinShares earlier observed that crypto asset investment products had a dull week with minor outflows of $21 million. Remarkably, sentiment among speculators has in contrast remained supportive notwithstanding the latest marketwide dip. The crypto fear and greed index has moved up by three points this week and was at a neutral 53 points on Tuesday.

Fear and Greed index graph

The losses tracked in the crypto market this week come on the heels of an exploit on popular DEX protocol Curve Finance which saw ~$42 million stolen from its stablecoin pools on Sunday. Concerns around the state of the DeFi niche rose further following early Tuesday reports of an attack on the LeetSwap DEX running on Coinbase's layer 2 network, Base.

NFT trading activity declined sharply in July

In the NFTs niche, sales and trading volumes contracted in July across all top six blockchains. NFT sales fell by 23% on Ethereum, 49% on Bitcoin's Ordinals ecosystem, 51% on Solana, 41% on Polygon, 14% on BNB Chain and 10% on ImmutableX per CryptoSlam data.

The combined NFT sales volume in July totaled $493 million down from $643 million and $711 million in June and May respectively. The total number of unique participants – buyers and sellers – remained fairly unchanged.

NFT sales in June and July. Source: CryptoSlam

Despite tracking successive daily inscriptions record in July, the hype around Ordinals has continued fading. The daily Ordinal inscriptions count logged a new daily record of more than 422,000 over the weekend. Still, sales volumes have been depressed by declining demand and low prices.

Ordinals daily and cumulative inscriptions. Source: Dune Analytics

The Ordinals trading volume across July cumulated to just shy of $65 million, a pronounced decline from $120 million in June 2023. The numbers of unique sellers and buyers shrunk as well from over 54,000 for each side in June to 29,093 sellers and 27,335 buyers last month.

To learn more about Bitcoin, check out our Investing in Bitcoin guide.