Following last week’s meltdown that chopped more than 30 percent off the value of prominent cryptocurrencies, including Bitcoin, the crypto market is now in the green after recovering more than $100 billion in the past week. This is coming after fears that the industry is in the midst of a cryptocurrency winter.
Crypto market situation
According to data from Coinmarketcap, the total value of the global cryptocurrency market cap has increased from $832 billion on June 19 to $957.68 billion at press time. Representing an addition of $125 billion and around a 14% increase in one week.
Flagship cryptocurrency, Bitcoin is trading at $21,374 well above the $17,000 level and up 6.67% in the previous week. Its market cap also went as low as $338 billion during the market turmoil, but it is now back to $407 billion.
The second-largest asset by market cap, Ethereum has climbed back above the crucial $1,200 level to trade at $1,228, up 13.93% in the last week, with a total market worth of $148 billion.
Other leading altcoins like BNB, XRP, ADA, SOL and DOGE have seen 15.67%, 14.51%, 7.78%, 26.28% and 32.51% increase in the last one week respectively.
What is the cause of this rise?
A University of Michigan survey last week disclosed that consumers’ expectations for future inflation were down from the previous reading.
Stocks on the traditional markets rose following that and cryptocurrencies are known to have been following the trends and patterns of the crypto market in recent times.
Another moral booster is that traders and investors are finding comfort in signs that the global economy is cooling and the federal reserve might be able to tone down its monetary hawkishness later in the year.
What comes next?
In spite of the relative stability in the crypto market, experts are still keeping a close watch on key market indicators for signals that prices may have reached a bottom.
The mild gains are also coming despite the $100 million hack of the Harmony Network which is supposed to bring about fear in investing in the market.
This indicates that the greens look like a dead cat bounce (a short-term bullish action that is followed by a deep and intense market sell-off). Bitcoin support still appears wobbly below. And, another break below $20,000 could seriously undermine investor confidence.
Speaking about this, JPMorgan analyst, Nikolaos Panigirtzoglou, says bitcoin investors should be prepared for more selling pressure because miners may continue offloading their coins well into the third quarter of the year.
Also, Binance’s CEO, Changpeng Zhao in a recent interview with The Guardian said it may take a few months or years for Bitcoin to reach its all-time high of $69,000.
He also stated that the $20,000 level is not actually that low, highlighting his point by saying that if people in 2018 or 2019 were told that Bitcoin would trade at $20,000, they would be “very happy.”
CNBC’s ”Mad Money” host Jim Cramer says Bitcoin could experience a rally in the near term, although it might take years before the coin reaches its previous highs.
Although there are numerous predictions that the crypto market’s bottom may be near, there is still a great level of economic uncertainty.
Major market observers think that Bitcoin may still have further room for decline.
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