by Vincent Muthee
The crypto market plunge has eased off over the weekend following last week’s bloodbath. On the day, the market has gained $49.22 billion as investors regain confidence. Bitcoin (BTC) has also risen to $86,000 level after last week’s drop to $80,000.
Meanwhile, altcoins too are recovering in tandem with Bitcoin. Ethereum is up over 3% to $2,800 while XRP, BNB and Solana (SOL) are up 6.9%, 3.01% and 2.32% as of this writing. This rise has sparked hopes for a stronger. However, some market participants are still worried of a dead-cat bounce.
Crypto Market Gains $49.22B
As per data on TradingView, the total crypto market cap (TOTAL) has risen by 49.22 billion over the last 24 hours. This marks a 1.72% surge in that period pushing the TOTAL to $2.91 trillion.
If the current momentum continues, the market could recover towards $3.5 trillion. However, strong resistance points exist at $3.14T and $3.33T. A push past the psychological $3 trillion may trigger a stronger move towards these points.
In case momentum fails to hold, Bitcoin has support around $2.86 trillion. A plunge below this level may trigger a deeper dive confirming a dead-cat bounce.
Why is the Crypto Market Going Up Today?
One major reason as to why the price of Bitcoin and altcoins is going up today is because of dip buying. Over the last 24 hours, investors have shown signs of buying-the-dip after most cryptos went into the oversold territory.
Crypto market observer OxNobler recently observed that whales and institutions have been buying the dip going into the weekend. Strategy bought 7,600 BTC, Wintermute bought 10,000 BTC, Fidelity bought 1,500 BTC, Satoshi whale bought 457,000 ETH, while Bitwise bought 6,700 BTC.
Another reason is the return of leverage trading. According to data by Coinglass the futures Open Interest (OI) rose 2.17% on Sunday to reach $59.40 billion. This rise in open interest shows stronger demand among investors.
Additionally, crypto liquidations have eased. In the recent market, over $1 billion was wiped out of the market as major cryptocurrencies fell. However, liquidation data by Coinglass shows a significant drop as only $205.75 million in liquidations has been recorded over the last 24 hours. This drop in liquidations eases selling pressure thus creating stability in prices of major cryptocurrencies.
Is the Bloodbath Finally Over?
Since finding support at $80,000s range, Bitcoin has surged over 7% to reach $86,210 as of this writing. Altcoins too have risen in tandem with most top-cap altcoins recording over 3% surge.
However, as the market recovers, stronger inflows are required to push prices higher. Additionally, macro conditions have to be favorable to allow a stronger recovery. Without that, the recovery might turn out to be just a dead-cat bounce (DCB).
A dead-cat bounce is a situation whereby tokens just rebound briefly from a freefall making investors believe the downtrend is over, only for it to reoccur. This scenario often results in a bull trap resulting in deeper losses among retail investors who were finally starting to eye a bullish price movement.
Moving forward, investors must track capital inflow into Bitcoin as well as altcoins. Stronger buying from firms like Strategy, BitMine and others could signal a stronger recovery. However, investors must also be cautious until prices move above key moving averages.
#blockchain #crypto, #decentralized, #distributed, #ledger
