The cryptocurrency market has been experiencing a downturn, with the global crypto market cap decreasing by 6.15% to $1.04 trillion.
The last time the total market cap of the cryptocurrency market was lower than the current level was on May 28, 2023. On that day, the total market cap was approximately $1.042 trillion, slightly lower than the current market cap of $1.043 trillion. (source: coinmarketcap) This indicates that the market has been relatively stable over the past couple of weeks, despite the recent downturn.
The leading cryptocurrency, Bitcoin (BTC), has seen a decrease of 4.06% in the last 24 hours, bringing its price to around $25,604.75. Ethereum (ETH), the second-largest cryptocurrency, has also experienced a decline, with its price falling by 6.02% to around $1,741.42.
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Show more +The Reasons Behind the Downturn
The crypto market’s decline can be attributed to several factors. One of the main reasons is the regulatory actions by the U.S. Securities and Exchange Commission (SEC) against the industry’s biggest exchanges, Binance and Coinbase. This has created a sense of uncertainty in the market, leading to a decrease in prices.
Another significant factor is the decision by Robinhood to delist certain tokens, namely Cardano (ADA), Solana (SOL), and Polygon (MATIC), from its online trading platform beginning June 27. These tokens, deemed “unregistered securities” in the SEC lawsuits, were among the worst performers on June 10, with ADA, SOL, and MATIC falling 22%, 25%, and 30% on the day, respectively.
Additionally, reports of Binance dumping $4.4 billion in crypto assets in recent weeks may have also contributed to the downward price pressure. The Bitcoin price drop also caught bullish options traders by surprise, liquidating long positions worth over $340 million in just 24 hours.
What to Expect in the Upcoming Days
Despite the current downturn, there are signs that the market could rebound. The duration of the crypto market decline has coincided with an increase in the supply of Tether (USDT), the largest stablecoin by market capitalization. This suggests that there are considerable flows from cryptocurrencies to Tether addresses, which could indicate that investors are preparing to buy back into the market when the time is optimal.
However, from a technical perspective, the crypto market cap has broken below its key long-term support of the 200-week exponential moving average (200-week EMA), which raises its downside prospects in 2023. If the market cap declines further below the 200-week EMA, it could potentially reach a market cap of $875 billion next, down 25% from current levels.
On the other hand, bulls will argue that the weekly chart has painted an inverse-head-and-shoulders (IH&S) pattern, whose price target for 2023-2024 sits around $2.23 trillion, more than double the current worth.
In conclusion, while the cryptocurrency market is currently experiencing a downturn, there are signs of potential recovery. However, the market remains volatile and unpredictable, and investors should conduct their own research and exercise caution when making investment decisions.
