The crypto market finds the capitalization of 1000 billion: another trap for the industry?

The market cap of cryptos has had a flash rally in recent days. This event, which appears to be an important step in the recovery of the industry, could be a real downfall.

The strong comeback of the crypto industry?

After a long slack period punctuated by investor rejection, do cryptocurrencies mean the end of the crypto winter? This is what one would think at first glance because all the indicators are there.

Indeed, the crypto market found a capitalization of more than $1 trillion on Monday, July 18. What a relief from the industry after the flashy fall of the latter, which happened at the end of June. The market capitalization of digital currencies was then at its lowest level since last November. It didn’t take long for the market to recover from this bad patch.

If the phenomenon had followed Bitcoin’s downward progression at the time, this month’s marked rise is no exception to the rule. Indeed, the small orange coin managed to hold itself around $20,700, an amount considered a major resistance. The first cryptocurrency experienced a strong rebound that pushed its price to $22,000. At the time of writing this article, Bitcoin is worth close to $23,400.

Ethereum is unbeatable with a 9% rebound at the start of the week. A trend that the rest of the digital currencies quickly followed. The phenomenon is now a great relief on the market. In fact, it means that the sales waves that shook prices have finally come to an end. Investors therefore seem to have regained the confidence they lacked and are starting to buy back a few coins. A phenomenon that has been adopted by the Fear and Greed index, whose indicators have gone from “extreme fear” to “anxiety”.

However, the end of winter is not yet expected

Despite this apparent market recovery, it is worth remembering that the end of the crisis has not yet been confirmed. If the public slowly resumes its investment habits, a relapse is not impossible. Similarly, while Bitcoin now enjoys an enviable position, the rest of crypto is still in the red.

Analysts say Bitcoin’s flash rally is just a booby trap. So it could be temporary and investors of the moment could soon bite their fingers. So the crypto winter is not over yet as some turnarounds can still take place.

However, not all experts are so pessimistic. According to analyst Kaleo, the chances of Bitcoin dropping below $19,000 are almost non-existent. On the contrary, the little orange piece would start its big comeback.

Source: Kaleo Twitter account

An optimism echoed by Xavier Fenaux, trader at Interactiv Trading, during an intervention for BFM Crypto. According to him, the worst would be over and Bitcoin’s correlation with traditional markets would confirm this.

We have seen that traditional markets reacted not too badly to the inflation announcement in the United States last week. It was quite a good surprise, quite unexpected. The market is already projecting itself on 2023 and with that the “worst” has already been priced in.

Excerpt from Xavier Fenaux’s intervention for BFM Crypto

An enthusiasm that could predict both the worst and the best for the coming weeks. The forecasts of the experts should therefore be taken with a grain of salt and caution is advised for those who want to invest.

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