The crypto world is a rollercoaster! Despite a strong US economy, Bitcoin plays it cool while Ethereum and other altcoins take a dip. What does this mean for the future of digital assets? An analyst reveals a crucial ETH level to watch for a “real breakout.” Are we heading for a major shift?

The cryptocurrency market presented a complex picture this week, showcasing varied reactions to a robust rebound in the U.S. economy. While major U.S. economic indicators pointed towards significant growth, the digital asset landscape saw Bitcoin maintain a relatively flat trajectory, consolidating its position, even as several prominent altcoins experienced notable declines.

Ethereum, a key player in the altcoin space, faced a significant downturn, dropping below the $4,500 mark. This decline represented a loss of over 10% since it reached a new record high just earlier in the week. XRP and Dogecoin followed a similar pattern, both recording losses, indicating a broader bearish sentiment among some of the top digital currencies, although Solana did buck the trend with a notable gain.

This period also highlighted a subtle but significant shift in market dominance. Bitcoin’s long-standing share in the total cryptocurrency market continued its narrowing trend, signaling a gradual decentralization of market influence. Concurrently, Ethereum’s market dominance saw an uptick, rising to 13.9%, suggesting growing investor confidence or utility in the second-largest cryptocurrency by market capitalization.

In a groundbreaking development that underscores the growing intersection of traditional finance and digital innovation, the U.S. government took a progressive step by integrating its Gross Domestic Product (GDP) numbers onto the blockchain for the first time. This move aligns with a broader national strategy aimed at cementing the country’s status as a global “crypto capital,” leveraging distributed ledger technology for enhanced transparency and efficiency in economic data reporting.

Market participants also observed substantial liquidation events, with over $250 million being wiped from the cryptocurrency market within a 24-hour period. Long liquidations constituted more than 60% of this figure, pointing to a squeeze on bullish positions. Despite this, Bitcoin’s open interest saw a modest increase of 0.30%, correlating with its spot price, while a segment of top Binance traders opted to reduce their long exposure to Bitcoin, contributing to a prevailing “Neutral” market sentiment.

The backdrop to these cryptocurrency movements was a strong performance by the U.S. economy, which experienced a remarkable 3.3% growth in the second quarter. This robust expansion significantly surpassed the figures from the previous quarter, marking it as the most substantial quarterly growth observed since the third quarter of 2023, providing a bullish macro-economic context that surprisingly did not uniformly lift all digital assets.

Analyzing broader market dynamics, CryptoQuant’s research offered a critical perspective, noting that “bull phases are often accompanied by more than 90% of supply being in profit.” The analysis further indicated that a drop below this 90% threshold has historically often signaled the commencement of a corrective phase, irrespective of its duration, urging investors to consider these supply-side metrics carefully.

Focusing specifically on Ethereum’s immediate future, a widely recognized cryptocurrency analyst and trader provided key insights following the coin’s recent rejection from its 2021 highs. The analyst emphasized the importance of observing “weekly closes above the previous all-time high [$4,891.70]” as the definitive confirmation required for a “real breakout” to be validated, advising caution and strategic monitoring of this pivotal price level for potential long-term trends in digital assets.